MCLEAN, Va. — Global mobile satellite company Iridium Communications reported Tuesday revenue and operational EBITDA increases for the first quarter of 2020 but an overall net loss, and the company has updated its full-year 2020 outlook due to the impact of Covid-19.
The company’s total revenue for the first quarter of 2020 was US$145.3 million, which consisted of US$116 million in service revenue and US$29.3 million in revenue related to equipment sales and engineering and support projects. Total revenue increased 9% from the first quarter of 2019, while service revenue grew 8% year-over-year. Service revenue is primarily recurring revenue from Iridium’s growing subscriber base and represents 80% of total revenue for the first quarter of 2020.
Iridium’s total net billable subscriber additions for the first quarter of 2020 were 32,000, and the company ended the quarter with 1,332,000 total billable subscribers, which is a 16% increase from its 1,151,000 total billable subscribers at the end of the first quarter of 2019. Iridium attributed the increase in subscribers primarily to growth in commercial and government IoT customers.
Operational EBITDA for the first quarter of 2020 was US$92.1 million, as compared to US$78 million for the same quarter of 2019, representing a year-over-year increase of 18% and an OEBITDA margin of 63%. The company’s OEBITDA benefitted primarily from strength in commercial and government service revenue, says the news release.
The company’s net loss for Q1 2020 was US$31.7 million, as compared to a net loss of US$18 million in the first quarter of 2019. Iridium says this increase in net loss was primarily the result of debt extinguishment costs associated with the company’s refinancing of its senior unsecured notes.
“In the first quarter, Iridium delivered solid growth in total revenue and billable subscribers, driven by strong gains in service revenue, engineering and support services, and equipment sales. New revenue from Iridium Certus broadband, along with increases in contractual revenue from the U.S. government and Aireon also aided our results,” said Matt Desch, CEO of Iridium.
Commenting on the impact of Covid-19 to the company, Desch said: “In March we began to see a reduction in the pace of subscriber additions, and heard from some of our many partners about varying levels of business impact depending on their industry. Into April, these trends accelerated. While we continue to forecast overall growth in service revenue and OEBITDA for 2020, we are updating our full-year outlook to account for these unfavorable impacts.”
He added: “Iridium’s satellite services are used for mission-critical applications across the globe, and our revenue base has, historically, been more resilient than many businesses to exogenous shocks and economic cycles, though the current economic shutdown is unprecedented. The timing of the shutdown coincides with Iridium’s peak season and will impact us accordingly. Still, we remain confident in Iridium’s ongoing financial position and our capacity to generate significant free cash flow.”
More for information about Iridium’s first quarter 2020 financial results, please click here.
