Anp🅰️nman
AST SpaceMobile Research
Rocket Lab's Iridium deal should be great for the company if it maintains Iridium's revenue and takes out some costs. A pro forma analysis on consensus estimates shows Iridium improves Rocket Lab's margins and profitability in exchange for slower top-line growth. Per the proxy, Street consensus appears to have baked in and discounted Iridium's projections including Aireon, though the pro forma figures exclude the $367M paid to NAV Canada. x.com x.com
Rocket Lab paid up for Iridium as a seasoned dealmaker, buying exclusivity and certainty so it would not lose the deal after Globalstar went to Amazon. Per the S-4 merger proxy, it raised its bid from $42.50 in stock to $52 and finally $54, half cash and half stock, while Party A, likely SpaceX, offered $41-45 in cash and went no further. A deal at $45-50 was probably possible, but paying a premium for exclusivity happens all the time in M&A. Rocket Lab has been a well-run company. x.com x.com x.com
Iridium's L-band spectrum, PNT and acquired Aireon still have substantial value, despite stalled growth and rising leverage. Third-quarter revenue rose 8% to $245.7 million and subscribers grew 6%; reported net income nearly tripled to $106.9 million, with the attached results attributing much of that gain to the Aireon acquisition. x.com
Rocket Lab's growing Space Systems business positions it to provide more than launches for the space economy. It generated $189.5M in Q2, 81% of revenue; if its pending Iridium acquisition closes, it would gain a global satellite communications network. At about $51, this is one of the most compelling long-term opportunities in the space sector over 3-5 years, provided it keeps executing. Neutron's launch has slipped to 2027, and execution risks remain. x.com x.com x.com
Rocket Lab's deal to buy Iridium partly with its own stock confirms the stock is worth very little. Per @junkbondinvest, Rocket Lab is paying $8 billion in enterprise value, $54 a share, half in cash and half in Rocket Lab stock. Using an overvalued currency to buy something with real value is accretive and minimizes the loss for shareholders, following the playbook of SPCX buying Cursor. x.com x.com
Rocket Lab's record Q2 and Iridium deal show it becoming an end-to-end space and defense platform that can capture more value than a launch-only company. Q2 revenue hit a record $234M, up 62%, and backlog a record $2.36B after over $1B of new contracts. Iridium adds over $870M of annual L-band revenue tied to government and enterprise. Launch revenue fell 30% sequentially largely because more HASTE defense work is recognized over time; Mynaric integration weighs on near-term margins. x.com
Rocket Lab's roughly $8B Iridium purchase changes what it is: it now owns the only global satellite network and the spectrum under it, so it can design, build, launch and operate under one roof. The deal bolts about $872M of revenue at a 57% margin onto a story that was mostly backlog. The rocket gets headlines; the network is the toll. x.com
Rocket Lab's vertical integration is structurally diluting the margins that made it special. Q3 GAAP gross margin is guided to 29-31% from 36.1%, and purchase accounting from Mynaric and Motiv explains at most a third of the drop. Per management, components earn over 70% margins while satellite platforms run in the mid-30s, and the growth is in platforms. Neutron sells full-price $50-55M slots but has never flown, so its value as a second launch source remains unrealized. x.com
Rocket Lab's 58% drop from its high on the Iridium deal financing is the entry for a five-year hold. The $8B Iridium acquisition adds a 66-satellite constellation with over $870M of annual revenue, turning a launch company into an end-to-end space business. Revenue grew 62% to $234M last quarter, backlog rose 137% to $2.36B with a record 90+ launches booked, Electron is 13 for 13 this year, and Neutron is targeted for the pad in Q4. x.com
Rocket Lab's acquisition of Iridium is the bold move management should make with a premium equity currency, buying an attractive satcom platform. It paid over 2x the per-MHz price of the EchoStar and Globalstar deals for Iridium's L-band spectrum, but gains a brand, commercial and government customers and a profitable business. Revenue roughly doubles, cutting the 2027 revenue multiple from about 37x to 25x. The valuation is still spicy and assumes execution on Neutron, satcom and integrations. … Show more
No rocket or space company anywhere makes money, making the 'space is the future' investment pitch a bad bet. SpaceX is shown at -$4.9B; Rocket Lab, AST SpaceMobile, Intuitive Machines, Firefly Aerospace and Planet Labs also have negative figures, ranging from -$131.20M to -$618.76M. x.com
Rocket Lab's $8 billion purchase of Iridium creates the Pentagon's preferred SpaceX alternative that actually wins contracts. Combining launch capability with Iridium's legacy low-Earth-orbit constellation and Pentagon relationships is the real story behind the deal, which @lorengrush covers. The boring space trade outperforms. x.com
