The quarter fell well below published expectations. Revenue was $64.8 million versus a published consensus of roughly $72.9 million, while EPS was negative $0.23 versus an expected negative $0.07. The revenue miss is still meaningful even after adjusting for the $6.6 million of out-of-period wholesale revenue recorded in the prior-year quarter: on that basis, second-quarter revenue would have been approximately $71.4 million, modestly below consensus. (Financial Highlights; Service revenue discussion)
| Metric | Q2 2026 | Q2 2025 / expectation | Read-through |
|---|---|---|---|
| Total revenue | $64.8M | $67.1M / ~$72.9M consensus | 11% below consensus |
| Adjusted EBITDA | $26.0M | $35.8M | Down 27% year over year |
| Net income attributable to common shareholders | $(29.2)M | $16.6M | Reversed to a loss |
| Diluted EPS | $(0.23) | $0.13 / $(0.07) consensus | Missed by $0.16 |
| Adjusted free cash flow | — | — | $43.5M in H1 versus $77.9M in H1 2025 |
Underlying commercial growth was not enough to offset legacy churn and timing effects. Commercial IoT subscribers increased to 580,427 from 534,505, and equipment sales rose 21%, but SPOT and Duplex subscribers continued to decline. Wholesale capacity revenue fell 5% in the quarter because of reimbursement timing and the unusually favorable prior-year comparison. (Service revenue by category; Average subscribers; Management discussion of results)
Profitability deteriorated beyond the revenue miss. Adjusted EBITDA declined to $26.0 million as higher network, XCOM development, legal and professional costs more than offset the benefit of lower stock compensation and depreciation. The operating loss was $4.8 million, while interest expense rose to $20.7 million and foreign-currency results swung sharply negative; these pressures drove a $26.5 million net loss. (Financial Highlights; Adjusted EBITDA reconciliation; Income Statement)
Liquidity remains supported by customer-funded infrastructure cash, but internally generated cash weakened. First-half adjusted free cash flow fell to $43.5 million from $77.9 million, and cash declined to $409.8 million from $447.5 million at year-end while principal debt increased to $423.7 million from $410.0 million. The company is still spending heavily on replacement satellites and network infrastructure, making the weaker cash conversion an important offset to the headline H1 revenue growth. (Adjusted free cash flow reconciliation; Balance Sheet; Cash Flow discussion)
The Amazon transaction update is steady rather than a new positive surprise. The HSR waiting period expired on July 17, 2026, but FCC and international approvals remain outstanding, with closing still expected in 2027 and tied partly to satellite milestones. That reduces uncertainty at the margin, but it does not offset a quarter that materially missed operating expectations. (Transaction Update)
Read the original 8-K on SEC EDGAR ↗