Iridium Communications Inc. (NASDAQ:IRDM) reported first-quarter results on Thursday that fell short of profit expectations, even as revenue edged past analyst forecasts, sending shares lower in premarket trading.
The stock dropped 5.22% following the announcement.
Earnings disappoint despite modest revenue growth
The satellite communications company posted adjusted earnings per share of $0.20, missing the consensus estimate of $0.33.
Revenue came in at $219.1 million, slightly above the $218.93 million expected and up 2% from $214.9 million in the same period last year. Service revenue, which accounts for 72% of total revenue, also rose 2% year-on-year to $158.0 million, supported by subscriber growth.
Profit and EBITDA decline
Net income fell to $21.6 million, or $0.20 per diluted share, compared with $30.4 million, or $0.27 per diluted share, a year earlier.
Operational EBITDA decreased 5% to $116.3 million from $122.1 million, primarily due to a $4.2 million increase in accrued expenses linked to a shift toward fully cash-based annual incentive compensation.
Management highlights growth initiatives
“2026 is off to a solid start, as we continue to grow service revenue and introduce new products, like our next-generation IoT platform,” said Matt Desch. “We continue to invest in key areas of differentiation, which offer attractive opportunities for growth, including IoT, PNT, national security missions and aviation safety services.”
Subscriber growth supports revenue
Total billable subscribers reached 2,555,000 at the end of the quarter, up 5% from 2,443,000 a year earlier, driven primarily by expansion in commercial IoT services.
Commercial service revenue increased 2% to $130.4 million, while government service revenue rose 3% to $27.6 million.
Mixed performance across segments
Equipment revenue declined 13% to $20.2 million, while engineering and support revenue grew 9% to $40.8 million.
Outlook unchanged
Iridium reaffirmed its full-year 2026 guidance, expecting service revenue growth ranging from flat to 2% and operational EBITDA between $480 million and $490 million.
The midpoint of $485 million reflects a $17 million impact from the revised compensation policy.