Iridium Communications has reported financial results for Q1 of 2020 and updated its full-year 2020 outlook. Net loss was $31.7m, or $0.24 per diluted share, for Q1 of 2020, as compared to a net loss of $18.0m, or $0.18 per diluted share, for Q1 of 2019.
This increase in net loss was primarily the result of debt extinguishment costs associated with Iridium’s refinancing of its senior unsecured notes. Operational EBITDA (OEBITDA) for Q1 was $92.1m, as compared to $78.0m for the prior-year period, representing a year-over-year increase of 18% and an OEBITDA margin of 63%. OEBITDA primarily benefitted from strength in commercial and government service revenue.
Iridium reported Q1 total revenue of $145.3m, which consisted of $116.0m of service revenue and $29.3m of revenue related to equipment sales and engineering and support projects.
Total revenue increased 9% from the comparable period of 2019, while service revenue grew 8% from the year-ago period. Service revenue, which represents primarily recurring revenue from Iridium’s growing subscriber base, was 80% of total revenue for Q1 of 2020.
The company ended the quarter with 1,332,000 total billable subscribers, which compares to 1,151,000 for the year-ago period and is up from 1,300,000 for the quarter ended December 31, 2019. Total billable subscribers grew 16% year-over-year, driven by growth in commercial and government IoT customers.
Commenting on the results, Matt Desch, CEO, Iridium. Desch said: “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 US government and Aireon also aided our results. Iridium is pleased to have completed all planned refinancing activities in recent months, and we remain confident in our ability to generate significant free cash flow in 2020 and beyond. Accordingly, we continue to be committed to undertake shareholder-friendly activities in due course.”
Desch added that the business was also impacted by the pandemic.
“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 unfavourable impacts. 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.”
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