On July 23, 2024, Iridium Communications Inc (IRDM, Financial) released its 8-K filing detailing the financial results for the second quarter of 2024. Iridium Communications Inc offers voice and data communications services and products to businesses, U.S. and international government agencies, and other customers on a global basis. The company is a provider of mobile voice and data communications services through a constellation of low earth-orbiting satellites. Iridium's solutions are ideally suited for industries such as maritime, aviation, government/military, emergency/humanitarian services, mining, forestry, oil and gas, heavy equipment, transportation, and utilities. Iridium also provides service to subscribers from the U.S. Department of Defense, as well as other civil and government agencies around the world. The Company operates in one business segment, providing global satellite communications services and products.
Performance Overview
Iridium Communications Inc (IRDM, Financial) reported a net income of $32.3 million, or $0.27 per diluted share, for Q2 2024, a significant turnaround from a net loss of $30.7 million, or $0.24 per diluted share, in Q2 2023. This performance was bolstered by a year-over-year decrease in depreciation expense and the prior year's write-off of the company’s remaining ground spare.
The company achieved total revenue of $201.1 million, slightly below the analyst estimate of $201.85 million. This revenue consisted of $152.5 million from service revenue and $48.6 million from equipment sales and engineering and support projects. Service revenue, which is primarily recurring, grew by 5% year-over-year and accounted for 76% of the total revenue for the quarter.
Key Financial Achievements
Iridium's operational EBITDA for Q2 2024 was $114.0 million, a slight decrease from $115.8 million in the same period last year. The company ended the quarter with 2,413,000 total billable subscribers, a 13% increase from the previous year, driven by growth in commercial IoT.
“Iridium’s strong capital position continues to support our return of capital to shareholders. During the quarter, we repurchased three percent of our shares and increased our quarterly dividend to common shareholders,” said Matt Desch, CEO, Iridium.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Total Revenue | $201.1 million | $193.1 million |
| Net Income (Loss) | $32.3 million | $(30.7) million |
| Operational EBITDA | $114.0 million | $115.8 million |
Balance Sheet and Cash Flow
Capital expenditures for the quarter were $12.4 million, including $1.2 million in capitalized interest. The company ended the quarter with gross Term Loan debt of $1.6 billion and a cash and cash equivalents balance of $63.5 million. Iridium utilized cash from its upsized Term Loan to complete the acquisition of Satelles in April.
Subscriber Growth and ARPU
Iridium's commercial service revenue was $126.0 million, up 6% from the previous year, driven by growth in IoT data and voice and data services. The company’s commercial IoT data revenue grew by 20% to $41.6 million, with subscribers increasing by 16% to 1,837,000. Average revenue per user (ARPU) for commercial IoT data was $7.70, up from $7.48 in the prior year.
Government Service Revenue
Government service revenue remained flat at $26.5 million, reflecting the contractual rate in the Enhanced Mobile Satellite Services (EMSS) contract with the U.S. Space Force. The company ended the quarter with 142,000 government subscribers, a slight increase from 141,000 in the prior-year quarter.
Outlook
Iridium reiterated its full-year 2024 outlook, expecting total service revenue growth between 4% and 6% and full-year operational EBITDA between $460 million and $470 million. The company also updated its longer-term guidance on net leverage, aiming to fall below 2.0 times EBITDA by the end of the decade.
For more detailed insights and analysis, visit GuruFocus.com.
Explore the complete 8-K earnings release (here) from Iridium Communications Inc for further details.
