Iridium Communications Inc.

Iridium reported first-quarter 2026 OEBITDA of $116.3 million, down 5% from the prior-year period, with the decline largely tied to a $4.2 million Q1 impact from moving annual incentive compensation to cash; that change is expected to reduce 2026 OEBITDA by $17 million. Service revenue increased 2% to $130.4 million, including voice and data revenue of $57.4 million (+3%), commercial IoT revenue of $46.0 million (+5%), commercial broadband revenue down 5%, hosting and other data revenue of $14.8 million, government service revenue of $27.6 million, subscriber equipment sales of $20.2 million, and engineering and support revenue of $40.8 million. Cash and cash equivalents were $111.6 million at March 31, net leverage was 3.4x OEBITDA, and quarterly CapEx was $30 million. For 2026, management reaffirmed flat to 2% service revenue growth, OEBITDA of $480 million to $490 million, pro forma free cash flow of about $318 million, and CapEx consistent with 2025 levels to support Iridium NTN Direct.

Matthew Desch framed the quarter as a solid start, saying results were where the company expected them to be and emphasizing strong partner activity. His strategy message centered on four growth pillars: IoT, PNT, national security missions, and aviation safety, with multiple new products expected to expand the addressable market. He was notably upbeat about the Iridium 9604, the new PNT ASIC, and NTN Direct, while stressing that Iridium is positioned as complementary to larger direct-to-device players rather than in direct conflict with them.

Vincent O'Neill focused on the mechanics behind the quarter and the guidance. He said OEBITDA fell to $116.3 million partly because of the $4.2 million Q1 effect of the new cash incentive compensation policy, and that the change will have a $17 million full-year impact in 2026. He also highlighted service revenue of $130.4 million, cash of $111.6 million, net leverage of 3.4x OEBITDA, $30 million of Q1 CapEx, and reaffirmed the full-year targets for flat to 2% service revenue growth, $480 million to $490 million of OEBITDA, and about $318 million of pro forma free cash flow.

Analysts pressed management on the Amazon-Globalstar deal, spectrum value, and whether it changes Iridium’s competitive position. Desch said it validates the value of MSS spectrum and should expand the market, but he did not think it changes Iridium’s competitive setup much because Iridium is focused on differentiated markets like aviation, national security, PNT, and IoT. Questions also focused on the timing and shape of PNT monetization; management reiterated the $100 million annual revenue target by 2030, said growth could be both “chunky” and subscriber-based, and confirmed a larger PNT order is not included in guidance yet.