Iridium Reports Record Revenue in 2020, Initiates Share Buyback
Iridium Communications capped off a year of subscriber growth with a record total revenue in 2020 of $583.4 million, and initiated a $300 million share repurchase program to reward shareholders. The company released its Fourth Quarter (Q4) and full year results on Thursday, reporting $146.5 million in Q4 revenue, a 5% increase compared to the same time period in 2019. Net loss was $7.9 million for Q4 2020, compared to net loss of $107.9 million for Q4 2019.
The company ended the quarter with 1,476,000 total billable subscribers, a growth of 14% year-over-year, driven by growth in commercial Internet of Things (IoT) and government business.
Commercial service remained the largest part of Iridium’s business, representing 62% of the company’s total revenue during Q4. Commercial service revenue in the quarter was $91.1 million, up 3% from the year prior. Commercial voice and data subscribers were down 1% from the year-ago period due to the COVID-19 pandemic.
Iridium continues to see a boost in commercial IoT subscriptions, which grew 20% in Q4 2020 compared to Q4 2019, to 962,000 customers. IoT data subscribers represented 73% of billable commercial subscribers at the end of the quarter, an increase from 69% at the end of the prior-year period.
Voice and data and IoT data make up most of commercial service revenues, but broadband and hosted payloads saw the greatest revenue gains for commercial services during the quarter, 18% and 19% respectively. Iridium reported $9.6 million in broadband revenue, and $14.3 million in hosted payload revenue. Iridium attributed this increase to the activations of the Iridium Certus broadband service, and increased Aireon data service fees.
Government service revenue was $25.8 million in Q4, a 3% increase from Q4 2019, reflecting increased revenue from a contractual step up in the Enhanced Mobile Satellite Services (EMSS) contract with the U.S. Space Force. Iridium’s U.S. government business ended the quarter with 152,000 subscribers.
CEO Matt Desch said on Thursday’s investor call that the financial transformation Iridium undertook over the past few years is complete, as it hit the two-year anniversary of the completion of the Iridium NEXT constellation.
“Iridium’s transformation to a strong, profitable, and growing cash flow generator is complete. Today, our company generates over 200 million in annual pro forma free cash flow, our net leverage has fallen dramatically, and we continue to drive double-digit subscriber growth and new revenues from our upgraded network,” Desch said.
He continued: “Investors have noticed this too, pushing our enterprise-to-EBITDA multiple in line with comparable growth-oriented, strong free-cash-flow companies, further differentiating Iridium from the traditional financial profile and competitive position of other satellite companies.”
The company issued guidance forecasting service revenue growth of 3% for 2021.