Photo: Iridium

Iridium Communications posted 8% year-over-year revenue growth in the second quarter of 2025, but trimmed its outlook for service revenue growth for the full year. 

Iridium had been projecting revenue growth of 5% to 7% for this year, and dropped that projection on Thursday to 3% to 5%. Iridium’s stock dropped 20% after the results on Thursday. 

CEO Matt Desch told investors that some maritime broadband customers who used Iridium as a primary mode of connectivity are transitioning to Starlink or VSAT services. In addition, Iridium had some reductions in voice subscriptions from canceled USAID programs, and some PNT revenue moving to 2026.

“While it’s never been a primary growth factor for our 2030 service revenue target, [maritime] remains an important service, particularly as we have become a trusted companion solution for Starlink and other VSAT services,” Desch said. “The trade down we are seeing from some subscribers who’ve been using Iridium as a primary service and now moving to use us as a backup continues at a quicker pace than we had expected.” 

Desch said the maritime conversions are likely to shave a percentage point from the company’s service revenue growth this year, but maritime broadband will remain a “strong contributor” to long-term cash flow. Broadband overall is less than 10% of Iridium’s business. 

Despite the change in service revenue outlook, Iridium reported Q2 revenue of $216.9 million, an 8% increase from the same time period last year. 

Service revenue made up 72% of company revenue, and grew 2% from the same time last year. 

A large part of growth in the quarter was due to engineering and support revenue — up 62% year-over-year to $41.9 million, primarily with increased activity with the U.S. government and its Space Development Agency ground services contract. 

Government service revenue grew 1% to $26.8 million in Q2 with a rate increase in Iridium’s EMSS contract in September 2024.

“Over the past year, we’ve announced a number of new contracts with the USG that enabled greater use of our network, and we believe our relationship with the DoD has never been stronger,” Desch said. “It’s no accident that our development work with them has grown over the years and we’ve and that we’re increasingly being asked to do more. You see this clearly in our expanding engineering and support revenue, and we expect to see in other aspects of our business going forward.” 

Leadership also reiterated the long-term outlook to hit $1 billion in service revenue in 2030. Desch said three core pillars that will drive revenue and subscriber growth are PNT from last year’s Satelltes acquisition; upcoming standards-based direct-to-device service Iridium NTN Direct; and its expanding IoT portfolio. 

Iridium is still forecasting double-digit growth in commercial IoT in 2025, expecting a step up in a contract with a “large IoT partner” in the second half of this year. 

Desch said that in the first half of the year, Iridium has certified 35 new devices for partners to deploy across different industries. 

“We are targeting specific industries and adding new partners to address the needs of industries that are only now exploring satellite solutions,” he said. “We have continued to add to our global ecosystem of business partners, adding nearly 50 new business relationships since the start of 2025. This is how we’ve always grown — getting new products in the hands of new partners to take us into new industries.”