Iridium Communications Q1 2025: Unpacking Contradictions on Tariffs, Demand, and Growth Prospects

Impact of tariffs on demand, Iridium D2D expectations, IoT subscriber growth, tariffs and cost impact, contribution of Satelles to hosted payload are the key contradictions discussed in Iridium Communications' latest 2025Q1 earnings call.



Revenue and Service Growth:
- Iridium Communications reported revenue of $127.5 million for Q1, with a 4% increase in commercial service revenue.
- The growth was driven by strength in IoT and Iridium PNT segments, reflecting ongoing demand for personal satellite communication services and the impact of new contracts.

Tariff Impact and Mitigation Strategy:
- Iridium anticipates potential tariff costs of approximately $3 million under a 10% tax scenario and $6 million to $7 million under a 36% tax scenario.
- The company plans to mitigate these costs by expanding its use of third-party logistics partners in Europe, focusing on non-U.S. customer shipments, which account for 75% of total shipments.

Government Services and Contracts:
- Iridium's government service revenue increased modestly to $26.8 million, supported by a step-up in its EMSS contract with the U.S. government.
- This growth is attributed to a step-up in contract levels and ongoing government partnerships, particularly with the Department of Defense.

Engineering Support and Space Development Agency:
- Engineering and support revenue rose to $37.5 million, up from $30.4 million the previous year, driven by work with the Space Development Agency and new contract awards.
- The increase highlights Iridium's involvement in cutting-edge satellite technologies and government projects, providing insights into evolving satellite technologies.