Iridium Communications Inc. IRDM and General Dynamics Mission Systems (“GDMS”) have jointly received a $491.6 million contract modification from the Space Development Agency (“SDA”) for its Ground Management and Integration (GMI) program, which supports the Proliferated Warfighter Space Architecture (PWSA).

Iridium's share of this total is valued at $239 million over five years. This recent award builds on the initial Operations and Integration Contract awarded in 2022, which focused on creating ground entry points, establishing operations centers and managing network operations and systems integration services.

Under this new contract modification, the GDMS-Iridium team will develop an advanced, forward-compatible ground system, working closely with SDA and other stakeholders. The firms will focus on integrating this ground enterprise with SDA's Tranche 2 constellation. This initiative will include a full spectrum of services, such as engineering design, analysis, testing, maintenance, infrastructure management and site support. 

Iridium emphasized its dedication to providing SDA and warfighters with an “innovative and effective ground system,” drawing on its vast expertise in commercial LEO development and operations.

Iridium’s Engineering and Support Unit Driven by SDA Deals

Iridium’s engineering and support business is being driven by lucrative deal wins from the U.S. government, particularly the ongoing projects of the SDA. In June 2024, Iridium reinforced its relationship with the U.S. government by signing a new five-year contract worth nearly $94 million. This ECS3 contract, with a potential total value of $103 million, is expected to support the EMSS program through 2029, providing a stable revenue stream over the long term. These recent contract wins will help the company boost its revenues and improve financial performance in the long term.

Iridium’s third-quarter 2024 revenues of $212.8 million increased 8% year over year. Engineering and support revenues surged 22% to $30.7 million. Iridium anticipates further revenue growth in this segment in 2024, fueled by ongoing projects under the SDA contract.

Iridium Communications Inc Price and Consensus

Iridium Communications Inc price-consensus-chart | Iridium Communications Inc Quote

However, weak demand trends in the Equipment business pose headwinds. Iridium expects equipment sales for 2024 to be lower year over year, aligning with pre-2022 levels.

IRDM’s Zacks Rank & Stock Price Performance

IRDM currently carries a Zacks Rank #4 (Sell). Shares of the company have lost 24% in the past year against the sub-industry's growth of 3.4%.

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Stocks to Consider

Some better-ranked stocks from the broader technology space are Itron, Inc. ITRI, Cirrus Logic, Inc. CRUS and SS&C Technologies Holdings, Inc. SSNC.  ITRI presently sports a Zacks Rank #1 (Strong Buy), whereas SSNC & CRUS carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Itron is a technology and services company and one of the leading global suppliers of a wide range of standard, advanced, and smart meters and meter communication systems. It delivered an earnings surprise of 57%, on average, in the trailing four quarters. In the last reported quarter, ITRI pulled off an earnings surprise of 26%. 

Cirrus Logic’s performance is driven by increasing shipments in the smartphone market. Steady momentum in the laptop market and standout next-generation flagship smartphone design cushion the top line. CRUS delivered an earnings surprise of 56.6%, on average, in the trailing four quarters.

SS&C Technologies Holdings delivers investment and financial management software and related services focused exclusively on the financial services industry. It delivered an earnings surprise of 3.1%, on average, in the trailing four quarters. In the last reported quarter, SSNC pulled off an earnings surprise of 4.9%.

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