TAMPA, Fla. \u2014 Iridium\u2019s shares closed down more than 7% Oct. 23 after the satellite operator lowered its full-year service revenue outlook again, while withdrawing its $1 billion target for 2030 amid mounting competition from SpaceX.<\/p>\n
The company now expects 3% service revenue growth for 2025, down from 3-5% previously and well below its earlier 5-7% range.\u00a0<\/p>\n
Service revenue for the three months to Sept. 30 grew 3% year-on-year to $165.2 million, representing 73% of total revenue, which climbed 7% to $226.9 million.<\/p>\n
However, Iridium CEO Matt Desch said it will suspend its stock buyback program and pivot toward long-term strategic growth, citing SpaceX\u2019s blockbuster spectrum acquisition<\/a> from Echostar last month. That deal, worth more than $17 billion, is set to supercharge SpaceX\u2019s Starlink direct-to-device (D2D) service, encroaching on parts of Iridium\u2019s business.\u00a0<\/p>\n \u201cWe acknowledge that more competition is coming to our corner of the satellite market,\u201d Desch said during the company\u2019s earnings call.<\/p>\n \u201cWe take this increased competition seriously, and believe that this development will affect us as early as the latter years of this decade, and most certainly into the 2030s.\u201d<\/p>\n Changing the status quo<\/strong><\/p>\n He said SpaceX\u2019s deal \u201cwill likely be disruptive to the status quo and will hasten the introduction of a global service that, over time, will connect new smartphones configured to use this spectrum.\u201d\u00a0<\/p>\n It could also accelerate the adoption of Internet of Things (IoT) monitoring and tracking devices that better compete with Iridium\u2019s global IoT service, he added.<\/p>\n But even still, Desch said Iridium will benefit from its long history of providing communications, and the company\u2019s widespread partner network, as it proactively seeks ways to shore up its business.<\/p>\n He said the company remains committed to making its constellation of 66 low Earth orbit satellites compatible with 5G standards used by mass-market devices, enabling them to access messaging and alert services outside cellular coverage from next year.<\/p>\n While SpaceX\u2019s mass-market ambitions could overlap with consumer IoT segments, Desch said the D2D market is \u201cnot a one-player wins all\u201d competition.<\/p>\n Iridium is currently conducting in-orbit tests for its upcoming NTN Direct service as traction builds with telcos, he added, citing a recent roaming agreement<\/a> with Germany\u2019s Deustche Telekom.<\/p>\n The company also continues to expect to generate between $1.5 billion and $1.8 billion in free cashflow between 2026 and 2030, providing fuel for potential acquisitions.<\/p>\n Ready for deals<\/strong><\/p>\n Desch said the company is open to a transformational deal, but is not looking to deviate from its current business, including the commercial IoT segment driving subscriber growth.<\/p>\n He also pointed to a potential role in the U.S. government\u2019s multibillion-dollar Golden Dome missile defense program, and floated the possibility of Iridium\u2019s next-generation constellation being a hosted payload on another operator\u2019s network.<\/p>\n Responding to an analyst\u2019s question, Desch said Iridium would be open to a sale to maximize shareholder value.<\/p>\n \u201c[T]here\u2019s only so many of us that do have spectrum,\u201d he said.\u00a0<\/p>\n \u201cWe obviously have an important position there, and so if someone really wanted to do it globally, we could obviously be part of that.\u201d<\/p>\n