Rocket Lab Is Buying Iridium, and Guess What? Iridium Just Beat Earnings!
Key PointsRocket Lab announced plans to buy Iridium Communications in June.
Iridium Communications (IRDM +1.39%) reported its Q3 2026 earnings on October 20, with shares hovering around $44.18 at the start of the trading week and closing at $44.25 by Wednesday. Meanwhile, Rocket Lab (RKLB +2.69%) experienced a 4.5% increase in stock price following Iridium's earnings announcement. This is because Rocket Lab has agreed to purchase Iridium in an $8 billion deal.
Iridium exceeded Wall Street's predictions, reporting $0.98 per share in profit, compared to the anticipated $0.34 per share, based on $245.7 million in sales. The company's success can be attributed to its acquisition of Aireon, a space-based air traffic surveillance company, which contributed to a significant portion of its 8% year-over-year revenue growth.
With Iridium's acquisition of Aireon, Rocket Lab will own the world's only space-based ADS-B air traffic surveillance system, positioning them for expansion into satellite-based IoT, direct-to-cell communications, and positioning, navigation, and timing (PNT) markets. Analysts predict Iridium's earnings will reach over $210 million next year, with free cash flow growing by 28% to $379 million.
These positive projections indicate that Rocket Lab should become profitable and have positive free cash flow in 2027, thanks to its acquisition of Iridium.
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