Executive Summary
Iridium Communications delivered a solid QQ3 2025 performance with revenue of $226.9 million, up 6.66% year-over-year and 4.62% quarter-over-quarter. Gross profit reached $176.2 million, yielding a robust gross margin of 77.63%, while EBITDA was $125.8 million (EBITDA margin 55.43%). Operating income stood at $70.1 million (operating margin 30.88%), and net income was $37.1 million, yielding a net margin of 16.36% and basic EPS of $0.35. The quarter reflects continued demand for Iridium’s core voice and data satellite services, as well as contributions from IoT, M2M, and hosted payload/data offerings embedded in a diversified product suite.
Profitability expanded modestly on favorable mix and disciplined cost management. Total operating expenses were $106.1 million, with interest expense of $24.96 million and depreciation & amortization of $52.98 million. Income before tax was $47.86 million and after a $10.00 million tax expense, net income was $37.13 million. Earnings-per-share advanced to $0.35, up strongly on a YoY basis (YoY EPS up 66.7%). Cash generation remained healthy, with operating cash flow per share of $0.95 and free cash flow per share of $0.75, highlighting Iridium’s ability to fund growth while returning value less than 1% annual dividend yield.
From a balance sheet perspective, liquidity remains solid (current ratio 2.67; quick ratio 1.94) but leverage is notable (debt ratio 0.709; debt/equity 4.02; long-term debt to capitalization 0.801). Interest coverage is 2.81x, signaling manageable fixed charges given current earnings power. The company’s cash metrics (cash per share $0.83) and capex coverage ratio of 4.68x indicate capacity to invest in growth assets while preserving liquidity. The valuation remains reasonable relative to earnings and cash flow, with P/E around 12.5x and EV/EBITDA near 28.4x, reflecting Iridium’s niche position in a capital-intensive, government- and enterprise-facing satellite services market. Looking ahead, Iridium’s growth levers include IoT/M2M devices, hosted payload/data services, and ongoing government/government-related opportunities, which could support steady topline growth and cash flow in the mid-term, subject to budget cycles and geopolitical factors.
Key Performance Indicators
Key Insights
Revenue: USD 226.935 million; YoY +6.66%, QoQ +4.62%.\nGross Profit: USD 176.173 million; YoY +12.83%, QoQ +7.88%; Gross Margin 77.63%.\nEBITDA: USD 125.794 million; EBITDA Margin 55.43%.\nOperating Income: USD 70.085 million; Operating Margin 30.88%.\nNet Income: USD 37.127 million; Net Margin 16.36%.\nEPS (basic/diluted): USD 0.35; YoY growth 66.67%; QoQ growth 75.00%.\nExpenses: R&D USD 4.944 million; SG&A USD 35.508 million; Other expenses USD 65.636 million; Total operating expenses...
Financial Highlights
Revenue: USD 226.935 million; YoY +6.66%, QoQ +4.62%.\nGross Profit: USD 176.173 million; YoY +12.83%, QoQ +7.88%; Gross Margin 77.63%.\nEBITDA: USD 125.794 million; EBITDA Margin 55.43%.\nOperating Income: USD 70.085 million; Operating Margin 30.88%.\nNet Income: USD 37.127 million; Net Margin 16.36%.\nEPS (basic/diluted): USD 0.35; YoY growth 66.67%; QoQ growth 75.00%.\nExpenses: R&D USD 4.944 million; SG&A USD 35.508 million; Other expenses USD 65.636 million; Total operating expenses USD 106.088 million; Interest USD 24.955 million; Depreciation & Amortization USD 52.975 million.\nLiquidity & Leverage: Current ratio 2.67; Quick ratio 1.935; Cash ratio 0.857. Debt ratio 0.709; Debt/Equity 4.02; Interest Coverage 2.81x.\nCash Flow & Per-Share Metrics: Operating Cash Flow per Share USD 0.950; Free Cash Flow per Share USD 0.747; Cash per Share USD 0.834. Dividend Payout Ratio 43.3%; Dividend Yield 0.87%.\nValuation & Efficiency: Price-to-Sales 8.16x; Price-to-Book 4.11x; Price-to-Earnings 12.47x; EV/EBITDA 28.41x. Asset Turnover 0.0889; Receivables Turnover 2.40x; DSO 37.48 days. Capex Coverage 4.68x; Dividends/Capex Coverage 2.68x.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
226.94M |
6.66% |
4.62% |
| Gross Profit |
176.17M |
12.82% |
7.88% |
| Operating Income |
70.09M |
27.77% |
39.45% |
| Net Income |
37.13M |
51.87% |
69.00% |
| EPS |
0.35 |
66.67% |
75.00% |
Key Financial Ratios
operatingProfitMargin
30.9%
operatingCashFlowPerShare
$0.95
freeCashFlowPerShare
$0.75
dividendPayoutRatio
43.3%
Management Commentary
Earnings call transcript not provided in the supplied data. No management quotes or thematic explanations from a QQ3 2025 call were available for synthesis. If a transcript is supplied, I will extract themes by topic (strategy, operations, market conditions) and provide context for each quote.
Forward Guidance
No formal forward-looking targets were disclosed in the provided data set for QQ3 2025. Nevertheless, the implied trajectory suggests ongoing growth opportunities in Iridium’s core satellite communications segments, particularly IoT/M2M and hosted payload/data services, supported by a high gross margin and solid liquidity. Based on the business mix and the secular trends toward connected devices and remote-first operations for government and enterprise customers, the trajectory could support mid-single-digit revenue growth with continued EBITDA stability if OpEx remains disciplined. Key factors to monitor include: (1) government and defense budget cycles and international contract awards, (2) customer adoption of IoT/M2M solutions and data services, (3) progression of hosted payload capabilities, and (4) balance sheet deleveraging or refinancing plans to mitigate rising interest costs. Management visibility on capex plans, backlog, and potential re-pricing of services would be critical to refine the outlook.