Satellite communications provider Iridium reported Q2 CY2026 results beating Wall Street’s revenue expectations, with sales up 3.8% year on year to $225.2 million. Its GAAP profit of $0.09 per share was 65.7% below analysts’ consensus estimates.
Iridium (IRDM) Q2 CY2026 Highlights:
- Revenue: $225.2 million vs analyst estimates of $221.8 million (3.8% year-on-year growth, 1.5% beat)
- EPS (GAAP): $0.09 vs analyst expectations of $0.26 (65.7% miss)
- Adjusted EBITDA: $119.1 million vs analyst estimates of $121.5 million (52.9% margin, 2% miss)
- Operating Margin: 15.1%, down from 23.2% in the same quarter last year
- Subscribers: 2.63 million, up 703,000 year on year
- Market Capitalization: $5.01 billion
Company Overview
With a constellation of 66 low-earth orbit satellites providing coverage to every inch of the planet, Iridium Communications NASDAQ:IRDM operates a global satellite network that provides voice and data services to customers in remote areas where traditional telecommunications are unavailable.
Revenue Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.
With $884.2 million in revenue over the past 12 months, Iridium is a small player in the business services space, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and numerous distribution channels. On the bright side, it can grow faster because it has more room to expand.
As you can see below, Iridium’s sales grew at a solid 8.3% compounded annual growth rate over the last five years. This is an encouraging starting point for our analysis because it shows Iridium’s demand was higher than many business services companies.
We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. Iridium’s annualized revenue growth of 5.3% over the last two years is below its five-year trend, but we still think the results were respectable.
This quarter, Iridium reported modest year-on-year revenue growth of 3.8% but beat Wall Street’s estimates by 1.5%.
Looking ahead, sell-side analysts expect revenue to grow 2.6% over the next 12 months, a slight deceleration versus the last two years. This projection is underwhelming and suggests its products and services will see some demand headwinds. At least the company is tracking well in other measures of financial health.
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Adjusted Operating Margin
Adjusted operating margin is one of the best measures of profitability because it tells us how much money a company takes home after subtracting all core expenses, like marketing and R&D. It also removes various one-time costs to paint a better picture of normalized profits.
Iridium has been a well-oiled machine over the last five years. It demonstrated elite profitability for a business services business, boasting an average adjusted operating margin of 18.2%.
Analyzing the trend in its profitability, Iridium’s adjusted operating margin rose by 15.8 percentage points over the last five years, as its sales growth gave it immense operating leverage.
This quarter, Iridium generated an adjusted operating margin profit margin of 22.8%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Iridium’s full-year EPS flipped from negative to positive over the last five years. This is encouraging and shows it’s at a critical moment in its life.
Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.
Iridium’s EPS grew at a decent 11.3% compounded annual growth rate over the last two years, higher than its 5.3% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
Diving into Iridium’s quality of earnings can give us a better understanding of its performance. While we mentioned earlier that Iridium’s adjusted operating margin was flat this quarter, a two-year view shows its margin has expandedwhile its share count has shrunk 11.3%. Improving profitability and share buybacks are positive signs for shareholders as they juice EPS growth relative to revenue growth.
In Q2, Iridium reported EPS of $0.09, down from $0.20 in the same quarter last year. This print missed analysts’ estimates, but we care more about long-term EPS growth than short-term movements. Over the next 12 months, Wall Street expects Iridium’s full-year EPS to grow 24.4% from $0.88 to $1.09.
Key Takeaways from Iridium’s Q2 Results
It was encouraging to see Iridium beat analysts’ revenue expectations this quarter. On the other hand, its EPS missed. Overall, this quarter could have been better. The stock remained flat at $47.49 immediately following the results.
The latest quarter from Iridium’s wasn’t that good. One earnings report doesn’t define a company’s quality, though, so let’s explore whether the stock is a buy at the current price. When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. .