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Iridium announces second-quarter 2021 results; Updates 2021 outlook

Iridium Communications Inc. today reported financial results for the second quarter of 2021 and updated its full-year 2021 outlook. Net income was $3.8 million, or $0.03 per diluted share, for the second quarter of 2021, as compared to net loss of $12.4 million, or $0.09 per diluted share, for the second quarter of 2020. This change in net income was primarily the result of growth in total revenue driven by strength in recurring service revenue. Operational EBITDA (“OEBITDA”)(1) for the second quarter was up 11% to $94.8 million, as compared to $85.3 million for the prior-year period, representing an OEBITDA margin(1) of 63%. The change in OEBITDA primarily resulted from strong service revenue.

Iridium reported second-quarter total revenue of $149.9 million, which consisted of $121.3 million of service revenue and $28.6 million of revenue related to equipment sales and engineering and support projects. Total revenue and service revenue both increased 7% versus the comparable period of 2020.  Service revenue, which represents primarily recurring revenue from Iridium’s growing subscriber base, was 81% of total revenue for the second quarter of 2021.

The Company ended the quarter with 1,616,000 total billable subscribers, which compares to 1,362,000 for the year-ago period and is up from 1,518,000 for the quarter ended March 31, 2021. Total billable subscribers grew 19% year-over-year, driving growth across all service categories.

“Demand for Iridium’s services have never been better, as close to 100,000 new users joined our network in the second quarter.  This revenue growth, especially in IoT and broadband, is indicative of the power of Iridium’s global partner ecosystem who embed us into innovative applications and products,” said Matt Desch, CEO, Iridium. Desch continued, “Iridium delivered strong revenue growth in the second quarter, driven by rebounds in IoT and commercial voice and data, and continued strength in broadband.”

Commenting on its full-year outlook, Desch added, “In light of our strong subscriber growth during the first half of the year, we are raising our full-year outlook for service revenue growth to between 4% and 5%.  This upward revision reflects the demand we are seeing across many industries for Iridium® solutions and bodes well for continued growth as we move into the future.”

Iridium Business Highlights
Service – Commercial
Commercial service remained the largest part of Iridium’s business, representing 64% of the Company’s total revenue during the second quarter. The Company’s commercial customer base is diverse and includes markets such as maritime, aviation, oil and gas, mining, recreation, forestry, construction, transportation and emergency services. These customers rely on Iridium’s products and services as critical to their daily operations and integral to their communications and business infrastructure.

  • Commercial service revenue was $95.6 million, up 8% from last year’s comparable period due to an increase in revenue from IoT, broadband and voice and data services, which offset lower hosted payload and other data services.
  • Commercial voice and data subscribers were up 5% from the year-ago period to 365,000 subscribers with the return of seasonal business. Commercial voice and data average revenue per user (“ARPU”) remained at $40 during the second quarter.
  • Commercial IoT data subscribers grew 26% from the year-ago period to 1,085,000 customers, driven by consumer personal communications and tracking devices. Commercial IoT data ARPU was $8.69 in the second quarter, compared to $8.91 in last year’s comparable period. The decrease in ARPU resulted primarily from the effect of the increased proportion of personal communications subscribers using lower ARPU plans. This effect was offset somewhat by increased usage by aviation subscribers given the increase in air traffic from last year’s second quarter.
  • Commercial broadband revenue was up 25% to $10.6 million, compared to $8.5 million in the year-ago period. This rise was primarily attributable to ongoing adoption of Iridium Certus® broadband service. Commercial broadband average revenue per user (“ARPU”) was $289 during the second quarter, compared to $258 in last year’s comparable period.
  • Iridium’s commercial business ended the quarter with 1,463,000 billable subscribers, which compares to 1,223,000 for the year-ago period and is up from 1,365,000 for the quarter ended March 31, 2021. IoT data subscribers represented 74% of billable commercial subscribers at the end of the quarter, an increase from 71% at the end of the prior-year period.
  • Hosted payload and other data service revenue was $14.4 million in the second quarter compared to $15.4 million in the prior-year period. This change was due primarily to a true-up in the prior year period related to the L3Harris payload.

Service – Government

Iridium’s voice and data solutions improve situational awareness for military personnel and track critical assets in tough environments around the globe, providing a unique value proposition that is not easily duplicated.

Under the Enhanced Mobile Satellite Services contract (the “EMSS Contract”), a seven-year, $738.5 million fixed-price airtime contract with the U.S. Air Force Space Command signed in September 2019, Iridium provides specified satellite airtime services, including unlimited global standard and secure voice, paging, fax, Short Burst Data®, Iridium Burst®, RUDICS and Distributed Tactical Communications System services for an unlimited number of Department of Defense and other federal government subscribers. Iridium also provides maintenance and support work for the U.S. government’s dedicated Iridium® gateway under two other contracts with the U.S. Air Force Space Command. Iridium Certus airtime services are not included under these contracts and may be procured separately for an additional fee.

  • Government service revenue was $25.8 million in the second quarter compared to $25.0 million in the prior-year period, reflecting the first step up in revenue under the Company’s EMSS Contract.
  • Iridium’s government business ended the quarter with 153,000 subscribers, which compares to 139,000 for the year-ago period and was unchanged from the quarter ended March 31, 2021. Government voice and data subscribers increased 7% from the year-ago period to 64,000 as of June 30, 2021. Government IoT data subscribers increased 13% year-over-year to 89,000 and represented 58% of total government subscribers, an increase from 57% at the end of the prior-year period.


  • Equipment revenue was $21.8 million during the second quarter, compared to $19.8 million in the prior-year’s quarter.

Engineering & Support

  • Engineering and support revenue was $6.8 million during the second quarter, compared to $7.0 million in the prior-year quarter, primarily due to the episodic nature of contract work.

Capital expenditures were $9.8 million for the second quarter, which includes $0.7 million of capitalized interest. The Company ended the second quarter with gross debt of $1.63 billion and a cash, cash equivalents and marketable securities balance of $219.4 million, for a net debt balance of $1.41 billion.

During the quarter ended June 30, 2021, the Company repurchased 1.7 million shares of its common stock under its previously announced $300 million share repurchase program at a total purchase price of $63.2 million. As of June 30, 2021, $177.6 million remained available and authorized for repurchase under this program.

2021 Outlook

The Company updated its full-year 2021 outlook for total service revenue and currently anticipates:

  • Total service revenue growth of between 4% and 5% for full-year 2021 (previous outlook was for total service revenue growth of approximately 3%). Total service revenue for 2020 was $463.1 million.
  • Full-year 2021 OEBITDA between $365 million and $375 million. OEBITDA for 2020 was $355.6 million.
  • Negligible cash taxes in 2021. Cash taxes are expected to be negligible through approximately 2023.
  • Net leverage of below 3.5 times OEBITDA at the end of 2022, assuming $300.0 million in share repurchases. Net leverage was 3.9 times OEBITDA at December 31, 2020.

(1)   Non-GAAP Financial Measures & Definitions

In addition to disclosing financial results that are determined in accordance with U.S. GAAP, the Company provides Operational EBITDA and Operational EBITDA margin, which are non-GAAP financial measures, as supplemental measures to help investors evaluate the Company’s fundamental operational performance. Operational EBITDA represents earnings before interest, income taxes, depreciation and amortization, share-based compensation expenses and, for periods presented through the first quarter of 2020 only, certain expenses associated with the construction of the Company’s Iridium NEXT satellite constellation, primarily in-orbit insurance. The Company considers the loss on early extinguishment of debt to be financing-related costs associated with interest expense or amortization of financing fees, which by definition are excluded from Operational EBITDA. Such charges are incidental to, but not reflective of, the Company’s day-to-day operating performance. The Company also presents Operational EBITDA expressed as a percentage of GAAP revenue, or Operational EBITDA margin. Operational EBITDA, along with its related measure, Operational EBITDA margin, does not represent, and should not be considered, an alternative to U.S. GAAP measurements such as net income or loss. In addition, there is no standardized measurement of Operational EBITDA, and the Company’s calculations thereof may not be comparable to similarly titled measures reported by other companies. The Company believes Operational EBITDA is a useful measure across time in evaluating its fundamental core operating performance. Management also uses Operational EBITDA to manage the business, including in preparing its annual operating budget, debt covenant compliance, financial projections and compensation plans. The Company believes that Operational EBITDA is also useful to investors because similar measures are frequently used by securities analysts, investors and other interested parties in their evaluation of companies in similar industries. As indicated, Operational EBITDA does not include interest expense on borrowed money, the payment of income taxes, amortization of the Company’s definite-lived intangible assets, or depreciation expense on the Company’s capital assets, which are necessary elements of the Company’s operations. Since Operational EBITDA does not account for these and other expenses, its utility as a measure of the Company’s operating performance has material limitations. Due to these limitations, the Company’s management does not view Operational EBITDA in isolation, but also uses other measurements, such as net income (loss), revenues and operating profit, to measure operating performance. Please refer to the schedule below for a reconciliation of consolidated GAAP net income (loss) to Operational EBITDA and Iridium’s Investor Relations webpage at for a discussion and reconciliation of this and other non-GAAP financial measures. We do not provide a forward-looking reconciliation of expected full-year 2021 Operational EBITDA guidance as the amount and significance of special items required to develop meaningful comparable GAAP financial measures cannot be estimated at this time without unreasonable efforts.

Conference Call Information

As previously announced, the Company will host a conference call to discuss its results at 8:30 a.m. Eastern Time on Tuesday, July 20, 2021. Callers should dial 1-412-902-6740 to access the call.  The conference call will also be simultaneously webcast on Iridium’s Investor Relations webpage at An archive of the webcast will be available following the live conference call. PR Newswire


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