Iridium Reports $8.7 Million in Net Income for 2022 (Image Credit: Payload)
Iridium Communications reported net income of $8.7 million on record total revenue of $721.0 million in 2022. Revenue was up by 17% over 2021, a year in which the company suffered a net loss of $9.3 billion.
“2022 was another strong year for Iridium, driven by continued strong subscriber growth and revenue gains across all business lines,” said Matt Desch, CEO, Iridium. Desch added, “Our strong liquidity position and growth in free cash flow supported ongoing return of capital to shareholders, including the initiation of dividends in 2023.”
“It’s exciting to unveil our partnership with Qualcomm that can dramatically expand the reach of our network to new consumer smartphones using the Snapdragon Satellite platform. This should be available starting later this year and cement Iridium as a big player in the emerging satellite direct-to-device market, as well as offer a path to connect other consumer applications in the future.”
Iridium said total revenue included $534.7 million of service revenue and $186.3 million of revenue related to equipment sales and engineering and support projects.
Iridium said it expected service revenue growth of 9 to 11 percent for 2023.
Iridium Communications Inc.
Condensed Consolidated Statements of Operations
(In thousands)
| Three Months Ended December 31, 2022 | Three Months Ended December 31, 2021 | |||
| Revenue | ||||
| Service revenue | ||||
| Commercial | $ | 110,274 | $ | 100,244 |
| Government | 26,500 | 26,500 | ||
| Total service revenue | 136,774 | 126,744 | ||
| Subscriber equipment | 39,252 | 19,464 | ||
| Engineering and support service | 17,810 | 9,679 | ||
| Total revenue | 193,836 | 155,887 | ||
| Operating expenses | ||||
| Cost of services (exclusive of depreciation and amortization) | 31,341 | 25,236 | ||
| Cost of subscriber equipment sales | 25,630 | 12,133 | ||
| Research and development | 5,748 | 3,729 | ||
| Selling, general and administrative | 36,599 | 27,950 | ||
| Depreciation and amortization | 75,745 | 76,165 | ||
| Total operating expenses | 175,063 | 145,213 | ||
| Operating income | 18,773 | 10,674 | ||
| Other expense, net | ||||
| Interest expense, net | (18,100) | (15,893) | ||
| Loss on extinguishment of debt | (1,187) | — | ||
| Loss on equity method investments | (1,402) | — | ||
| Other income (expense), net | 387 | (192) | ||
| Total other expense, net | (20,302) | (16,085) | ||
| Loss before income taxes | (1,529) | (5,411) | ||
| Income tax benefit (expense) | 721 | (473) | ||
| Net loss | $ | (808) | $ | (5,884) |
| Operational EBITDA | $ | 107,007 | $ | 93,428 |
Iridium Communications Inc.
Condensed Consolidated Statements of Operations
(In thousands)
| Year Ended December 31, 2022 | Year Ended December 31, 2021 | |||
| Revenue | ||||
| Service revenue | ||||
| Commercial | $ | 428,721 | $ | 388,104 |
| Government | 106,000 | 103,887 | ||
| Total service revenue | 534,721 | 491,991 | ||
| Subscriber equipment | 134,714 | 92,071 | ||
| Engineering and support service | 51,599 | 30,438 | ||
| Total revenue | 721,034 | 614,500 | ||
| Operating expenses | ||||
| Cost of services (exclusive of depreciation and amortization) | 115,137 | 97,020 | ||
| Cost of subscriber equipment sales | 86,012 | 53,376 | ||
| Research and development | 16,218 | 11,885 | ||
| Selling, general and administrative | 123,504 | 100,474 | ||
| Depreciation and amortization | 303,484 | 305,431 | ||
| Total operating expenses | 644,355 | 568,186 | ||
| Operating income | 76,679 | 46,314 | ||
| Other expense, net | ||||
| Interest expense, net | (65,089) | (73,906) | ||
| Loss on extinguishment of debt | (1,187) | (879) | ||
| Loss on equity method investments | (1,496) | — | ||
| Other income (expense), net | 107 | (417) | ||
| Total other expense, net | (67,665) | (75,202) | ||
| Income (loss) before income taxes | 9,014 | (28,888) | ||
| Income tax benefit (expense) | $ | (292) | $ | 19,569 |
| Net income (loss) | $ | 8,722 | $ | (9,319) |
| Operational EBITDA | $ | 423,999 | $ | 378,207 |
Iridium Communications Inc.
Summary Revenue and OEBITDA Highlights
(In thousands)
| Three Months Ended December 31, 2022 | Three Months Ended December 31, 2021 | % Change | Year Ended December 31, 2022 | Year Ended December 31, 2021 | % Change | |||||||
| Revenue | ||||||||||||
| Service revenue(1) | ||||||||||||
| Commercial service revenue | ||||||||||||
| Voice and data | $ | 49,491 | $ | 45,140 | 10 % | $ | 193,112 | $ | 175,584 | 10 % | ||
| IoT data(2) | 32,158 | 28,901 | 11 % | 125,015 | 110,919 | 13 % | ||||||
| Broadband(3) | 13,942 | 11,459 | 22 % | 51,143 | 42,990 | 19 % | ||||||
| Hosted payload and other data service(4) | 14,683 | 14,744 | 0 % | 59,451 | 58,611 | 1 % | ||||||
| Total commercial service revenue | 110,274 | 100,244 | 10 % | 428,721 | 388,104 | 10 % | ||||||
| Government service revenue(5) | 26,500 | 26,500 | 0 % | 106,000 | 103,887 | 2 % | ||||||
| Total service revenue | 136,774 | 126,744 | 8 % | 534,721 | 491,991 | 9 % | ||||||
| Subscriber equipment | 39,252 | 19,464 | 102 % | 134,714 | 92,071 | 46 % | ||||||
| Engineering and support(6) | ||||||||||||
| Commercial | 3,553 | 1,635 | 117 % | 7,833 | 4,613 | 70 % | ||||||
| Government | 14,257 | 8,044 | 77 % | 43,766 | 25,825 | 69 % | ||||||
| Total engineering and support | 17,810 | 9,679 | 84 % | 51,599 | 30,438 | 70 % | ||||||
| Total revenue | $ | 193,836 | $ | 155,887 | 24 % | $ | 721,034 | $ | 614,500 | 17 % | ||
| Operational EBITDA | ||||||||||||
| Operational EBITDA | $ | 107,007 | $ | 93,428 | 15 % | $ | 423,999 | $ | 378,207 | 12 % | ||
| Other | ||||||||||||
| Capital expenditures(7) | $ | 26,511 | $ | 14,131 | $ | 71,267 | $ | 42,147 | ||||
| Net debt(8) | $ | 1,335,855 | $ | 1,300,212 | ||||||||
| Cash, cash equivalents and marketable securities | $ | 168,770 | $ | 320,913 | ||||||||
| Term Loan | $ | 1,504,625 | 1,621,125 | |||||||||
| Deferred financing costs | (17,440) | (23,109) | ||||||||||
| Term Loan, net | $ | 1,487,185 | $ | 1,598,016 |
Notes
| (1) | Service revenue consists of primarily subscription-based services which often generate a long-term recurring revenue stream from subscribers. |
| (2) | IoT data service provides a two-way short burst data transmission between Iridium Communications Inc.’s network and a telemetry unit, which may be located, for example, on a container in transit or a buoy monitoring oceanographic conditions. |
| (3) | Broadband is comprised of Iridium OpenPort® and Iridium Certus. |
| (4) | Hosted payload and other services consist primarily of services that do not have traditional billable subscribers. Hosted payload services consist of hosting and data services to our payload customers, Aireon and Harris. Other services include primarily Iridium Communications Inc.’s one-way satellite timing, location, and authentication services (STL) which provides position, navigation and timing technology. |
| (5) | Government service revenue consists of voice and IoT data subscription-based services provided to agencies of the U.S. government through prime contracts. |
| (6) | Engineering and support includes maintenance services to the U.S. government’s dedicated gateway and engineering services to assist customers in developing new technologies for use on Iridium Communications Inc.’s satellite system. |
| (7) | Capital expenditures based on cash spent in the respective period. |
| (8) | Net debt is calculated by taking the sum of the gross Term Loan B and gross drawn Revolving Facility, less cash, cash equivalents and marketable securities. |
Iridium Communications Inc.
Subscriber Highlights
(In thousands, except ARPU)
| As of December 31, 2022 | As of December 31, 2021 | % Change | ||||
| Billable Subscribers (1) (2) | ||||||
| Commercial | ||||||
| Voice and data, IoT data and Broadband service | ||||||
| Voice and data | 397 | 370 | 7 % | |||
| IoT data | 1,448 | 1,193 | 21 % | |||
| Broadband (4) | 15.0 | 13.2 | 14 % | |||
| Total commercial voice and data, IoT data and Broadband service | 1,860 | 1,576 | 18 % | |||
| Government | ||||||
| Voice and data and IoT data service | ||||||
| Voice and data | 60 | 65 | -8 % | |||
| IoT data | 79 | 82 | -4 % | |||
| Total government voice and data and IoT data service | 139 | 147 | -5 % | |||
| Total billable subscribers | 1,999 | 1,723 | 16 % |
| Three Months Ended December 31, 2022 | Three Months Ended December 31, 2021 | % Change | Year Ended December 31, 2022 | Year Ended December 31, 2021 | % Change | |||||||
| Net Billable Subscriber Additions | ||||||||||||
| Commercial | ||||||||||||
| Voice and data. IoT data and Broadband service | ||||||||||||
| Voice and data | (4) | (2) | -100 % | 27 | 20 | 35 % | ||||||
| IoT data | 36 | 37 | -3 % | 255 | 231 | 10 % | ||||||
| Broadband | 0.3 | 0.2 | 50 % | 1.8 | 1.5 | 20 % | ||||||
| Total commercial voice and data, IoT data and Broadband service | 32 | 35 | -8 % | 284 | 252 | 13 % | ||||||
| Government | ||||||||||||
| Voice and data and IoT data service | ||||||||||||
| Voice and data | (2) | — | NM | (5) | 3 | -267 % | ||||||
| IoT data | (4) | (2) | -100 % | (3) | (8) | 63 % | ||||||
| Total government voice and data and IoT data service | (6) | (2) | -200 % | (8) | (5) | -60 % | ||||||
| Total net billable subscriber additions | 26 | 33 | -21 % | 276 | 247 | 12 % |
| Three Months Ended December 31, 2022 | Three Months Ended December 31, 2021 | % Change | Year Ended December 31, 2022 | Year Ended December 31, 2021 | % Change | |||||||
| ARPU (2) (3) | ||||||||||||
| Commercial | ||||||||||||
| Voice and data | $ | 41 | $ | 41 | — % | $ | 42 | $ | 41 | 2 % | ||
| IoT data | $ | 7.50 | $ | 8.20 | (9) % | $ | 7.89 | $ | 8.58 | (8) % | ||
| Broadband | $ | 313 | $ | 292 | 7 % | $ | 302 | $ | 288 | 5 % |
Notes
| (1) | Subscribers as of the end of the respective period. |
| (2) | Billable subscriber and ARPU data is not applicable for Hosted payload and other data service revenue items and is excluded from presentation above. |
| (3) | Average monthly revenue per unit, or ARPU, is calculated by dividing revenue in the respective period by the average of the number of billable subscribers at the beginning of the period and the number of billable subscribers at the end of the period and then dividing the result by the number of months in the period. |
| (4) | Broadband is comprised of Iridium OpenPort® and Iridium Certus. |
