IRDM Q4 Earnings Top on IoT Strength, Revenues Lag, Stock Soars 21%

Core Insights - Iridium Communications (IRDM) reported Q4 2025 EPS of 24 cents, exceeding the Zacks Consensus Estimate by 4.4%, but down from 32 cents in the prior year [1] - Total revenue for the quarter was $212.9 million, flat year over year, and missed consensus estimates by 3% [2] - Service revenue growth of 3% year over year to $158.9 million was driven by higher subscriber engagement, contributing 75% to total revenues in Q4 [3][10] Revenue Breakdown - Commercial service revenue increased by 3% year over year to $131.2 million, accounting for 62% of total revenue, supported by a 4% rise in voice and data revenue and an 11% increase in commercial IoT revenue [4] - Hosted payload and other data services revenue fell 13% year over year to $13.4 million, primarily due to a delay in a PNT deployment [5] - Government service revenue rose 3% to $27.6 million, driven by a contractual rate increase under the EMSS contract with the U.S. Space Force [5] Subscriber and Equipment Sales - Subscriber equipment sales declined 21% to $17 million, aligning with the company's outlook for normalized annual equipment sales of $80–$90 million [6] - Total billable subscribers reached 2,537,000, up 3% from the prior year, with commercial IoT representing 83% of commercial subscribers [12] Financial Performance - Total operating expenses were $157.7 million, down from $160.9 million in the prior year, mainly due to lower R&D costs [11] - Operational EBITDA (OEBITDA) was $115.3 million, down 2% year over year, impacted by a $3 million inventory charge [11] - Iridium expects 2026 OEBITDA of $480–$490 million, reflecting a $17 million cash compensation impact [16] Market Reaction - Following the earnings announcement, IRDM's shares rose 21.3% to close at $22.39 on February 12, despite a 30% decline over the past year compared to the Zacks Satellite and Communication industry's growth of 168% [7]