Rocket Lab is betting $8 billion on Iridium Communications through a cash-and-stock acquisition at $54 per share, adding Iridium’s global satellite network and recurring service revenue to Rocket Lab’s launch and spacecraft manufacturing business. The deal includes $27 per share in cash plus a variable amount of Rocket Lab stock. Iridium’s board has unanimously recommended approval, with a special shareholder meeting scheduled for September 24, 2026, and closing expected by mid-2027 pending competition, foreign-investment, and communications approvals.
The two companies reported contrasting but complementary second-quarter financials. Rocket Lab posted record quarterly revenue of $234 million, up 62% year over year, and a record backlog of $2.36 billion, up 137%. It continues to invest heavily in Neutron, its reusable medium-lift rocket, with first-flight hardware expected at the launch pad in Q4 2026. Iridium generated $225.2 million in quarterly revenue and $119.1 million in operational EBITDA, with 72% of revenue coming from service-based sources. Iridium ended the quarter with 2.627 million billable subscribers, up 6% from the prior year.
The strategic rationale is vertical integration. Iridium brings a low-Earth-orbit constellation, globally synchronized L-band spectrum, and access to more than 500 partners in maritime, aviation, defense, and government markets. The U.S. Government accounted for roughly 17% of Iridium’s second-quarter service revenue, and the company expects to sign an Enhanced Mobile Satellite Service contract with the U.S. Space Force by March 2027. Rocket Lab says owning the network will let it design, produce, launch, and operate satellite systems itself, capturing more economic value.
Raymond James analyst Brian Gesuale initiated coverage with a Buy rating and an $80 price target, about 30% above Rocket Lab’s recent level of $62.95. The stock has fallen 46% over three months, pressured by a broader space-sector selloff following the SpaceX IPO, even though Rocket Lab’s results beat expectations. Gesuale projects Rocket Lab will reach positive free cash flow in 2028, ahead of SpaceX’s expected 2030, and forecasts pro forma revenue of about $2.9 billion by 2028 including Iridium. Wall Street remains bullish overall: 83% of analysts rate RKLB a Buy, with an average price target near $112.
