Iridium Reports Subscriber Growth, Minimizes COVID Impact on Second Quarter
Iridium released its Second Quarter (Q2) financial results on Tuesday, reporting total revenue of $140.2 million, a 2% decrease compared to the same time period in 2019. Iridium reported a net loss of $12.4 million, compared to a net loss of $18.1 million in Q2 2019. Total revenue consisted of $113.4 million of service revenue and $26.8 million of revenue related to equipment sales and engineering and support projects.
Iridium also grew its subscriber base 12% Year-Over-Year (YOY), ending the quarter with 1,362,000 subscribers, compared to 1,213,000 for the year-ago period and an increase of 30,000 from Q1 2020. The company said the growth was driven by commercial and government Internet of Things (IoT) customers. Specifically, commercial IoT data subscribers grew 20% from Q2 2019 to 863,000 customers, driven by consumer personal communications and tracking devices. In Q1 2020, Iridium reported a 16% YOY subscriber increase.
The company updated its 2020 outlook, forecasting total service revenue growth between 1% and 2% for full-year 2020. Total service revenue for 2019 was $447.2 million.
In the services segment, commercial service remained the largest part of Iridium’s business, representing 63% of the company’s total revenue during Q2. Commercial service revenue was up 2% from Q2 2019, due to an increase in revenue from hosted payload and other data services and broadband services, which was partially offset by lower data service usage associated with the COVID-19 pandemic.
CEO Matt Desch said that despite the pandemic, Iridium continues to see growth in subscribers, service revenue, and cash.
“As businesses around the world started to reopen in the second quarter, we’ve also seen some recovery in activity from our technology and distribution partners,” Desch said, adding: “With each passing month, we are getting increased visibility that allows us to refine our guidance for the year. Iridium is fortunate to provide mission-critical services across a broad array of industries, which has allowed our business to remain resilient in this environment. I think it’s notable that despite the economic slowdown, Iridium increased its cash position by more than $50 million in the second quarter, all of which came from operating activities. We expect to continue to generate significant free cash flow in 2020 and beyond.”