Iridium Reports Financial Results for First Quarter
Tuesday, April 23, 2019 | Comments

Iridium Communications reported financial results for the first quarter of 2019 and affirmed its full-year 2019 outlook. Net loss was $18 million for the first quarter compared with net income of $11.5 million for the first quarter of 2018.

This decrease in net income was primarily the result of a $34.5 million increase in depreciation and amortization expense compared with the year-ago period.

Iridium reported first-quarter total revenue of $133.7 million, which consisted of $107 million of service revenue and $26.7 million of revenue related to equipment sales and engineering and support projects. Total revenue increased 12% from the comparable period of 2018, while service revenue grew 19% from the year-ago period. Service revenue, which represents primarily recurring revenue from Iridium's increasing subscriber base, was 80% of total revenue for the first quarter of 2019.

The company ended the quarter with 1.151 million total billable subscribers, which compares to 996,000 for the year-ago period and is up from 1.121 million for the quarter ended Dec. 31. Total billable subscribers increased 16% year-over-year, driven by growth in commercial and government internet of things (IoT) customers.

Commercial service remained the largest part of Iridium's business, representing 64% of the company's total revenue during the first quarter. The company's commercial customer base is diverse and includes markets such as maritime, aviation, oil and gas, mining, recreation, forestry, construction, transportation and emergency services.

Commercial service revenue was $85 million, up 25% from last year's comparable period due to revenue from hosted payload and other data services, telephony pricing action and increased IoT revenues. Government service revenue was $22 million, consistent with the prior-year period, under the company's fixed fee contract with the U.S. government. Iridium's government business ended the quarter with 115,000 subscribers, which compares with 104,000 for the year-ago period and is up from 113,000 at end-2018.

Equipment revenue was $21 million during the first quarter, down 19% from the prior-year period. The company continues to forecast lower equipment sales in 2019. Engineering and support revenue was $5.7 million during the first quarter, compared to $3.6 million in the prior year's quarter, primarily because of the episodic nature of government-sponsored projects.

Capital expenditures were $34.6 million for the first quarter and primarily related to spending for the company's recently completed, next-generation satellite program.

The company ended the first quarter with credit facility gross debt of $1.7 billion and a cash and cash equivalents balance of $275.7 million. Net debt was $1.6 billion, calculated as $1.7 billion of credit facility gross debt and $360 million of unsecured notes, less $275.7 million of cash and cash equivalents, as well as $193 million in restricted cash.

The company affirmed its full-year 2019 outlook and continues to expect total service revenue of about $440 million for the full-year 2019.

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