Iridium Forecasts $1B Service Revenue in 2030, Hints at Narrowband IoT Ambitions
Iridium Communications will hit $1 billion in annual service revenue in 2030, CEO Matt Desch projected during the company’s investor day presentation on Thursday, setting a bold revenue target for the company. Desch said this revenue growth over the next seven years has the capacity for $3 billion in shareholder returns through 2030.
The company reported $721 million in revenue in 2022, and has been on a nine-year revenue growth streak. Iridium is in the midst of a CapEx holiday after completing its network upgrade, and the company won’t need to spend money on a next-generation network until at least 2031, Desch said.
Shedding light on the company’s outlook on acquisitions, Desch said the company is not particularly interested in M&A and doesn’t need to make acquisitions for inorganic growth.
“We’re definitely not interested in acquiring partners,” he said. “It’s a challenging way to screw up your go-to-market model. We think that the way we go to market, the relationship [and] growth we have with new partners has been optimal. We’re not going to pick off lower-margin solutions.”
Instead, Iridium is considering its own investment in narrowband IoT [NB IoT], for use cases like agriculture and asset tracking. Desch described this type of IoT as low average revenue per user, high latency with low cost end user devices, different from the company’s “premium IoT.” This is the type of connectivity that satellite IoT startups are going after, and Desch pointed to consolidation in that market, and the challenges running some of those businesses. SpaceX acquired Swarm, for example, but ended IoT device sales.
Iridium sees long-term product promise in the NB IoT standard.
“We have the most powerful network already,” Desch said. “If we could implement 5G narrowband IoT directly on our network, that would be the most efficient way [into this market, versus] putting a small investment into one of these companies that may or may not be successful.”
Absent an official announcement, Desch said Iridium is in the “very early stages” of looking at this approach. He said if Iridium were to make a move in this area, it would be the “superior” offering because of Iridium’s low latency and large partner ecosystem.
To reach $1 billion in service revenue in 2030, Desch outlined a number of growth vectors: IoT and personal communications; direct-to-device; voice and push-to-talk; midband; broadband; U.S. government service; alternative PNT; and investments and acquisitions. He highlighted Iridium’s current investments in Aireon and Satelles and DDK.
The company’s biggest area of growth is IoT and Iridium has over 4 million IoT modules on its network, Desch said. He particularly highlighted potential in the land mobile and heavy equipment sector, reporting that Iridium has deals with more than half of the top 25 heavy equipment OEMs around the world.
There were no updates in the direct-to-device area, Iridium is looking to its partner Qualcomm on what smartphone manufacturers will adopt the satellite-to-cell chip.
“We’re quite excited about global SOS and messaging services,” Desch said. “We believe they’re going to be required for devices on a regional basis. Definitely, Apple is driving the market and we think that others are going to have to react to differentiate.”
Correction: A previous version of this story gave an incorrect name for one of Iridium’s investments. Iridium is invested in Satelles.