Iridium Reports Net Income Decrease but Total Revenue Increase

Iridium Communications has reported financial results for the first quarter of 2018 and affirmed its full-year 2018 and long-range outlook. Net income was $11.5 million, compared to $37.9 million for the first quarter of 2017. This decrease in net income was primarily the result of a $25 million increase in depreciation and amortization expense compared to the period last year, and the recognition of a $14.2 million gain in the prior year period triggered by the company’s insourcing transaction with Boeing.

Operational Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) for the first quarter was $68.5 million, as compared to $64.3 million for the prior-year period, representing a year-over-year increase of 6 percent and an operational EBITDA margin of 57 percent. Operational EBITDA benefitted from higher equipment sales and continued growth in Internet of Things (IOT) data business.

Iridium reported first-quarter total revenue of $119.1 million, which consisted of $89.7 million of service revenue and $29.4 million of revenue related to equipment sales and engineering and support projects. Total revenue increased 14 percent from the comparable period of 2017, while service revenue grew 10 percent from the year-ago period. Service revenue, which represents primarily recurring revenue from Iridium’s growing subscriber base, was 75 percent of total revenue for the first quarter of 2018.

The company ended the quarter with 996,000 total billable subscribers, compared to 869,000 for the year-ago period and is up from 969,000 for the quarter ended Dec. 31, 2017. Total billable subscribers grew 15 percent year-over-year, driven by growth in commercial IOT and government customers. The company currently has more than one million subscribers.