Iridium Communications Inc. (Nasdaq:IRDM) (“Iridium”) today
reported financial results for the fourth quarter of 2017, issued
its full-year 2018 guidance and updated its long-range
outlook. Net income was $141.9 million, or $1.10 per diluted
share, for the fourth quarter of 2017, as compared to net income of
$24.1 million, or $0.19 per diluted share, for the fourth quarter
of 2016. Operational EBITDA (“OEBITDA”)(1) for the fourth
quarter was $63.7 million, as compared to $61.3 million for the
prior-year period, representing a year-over-year increase of 4% and
an OEBITDA margin(1) of 55%. OEBITDA benefitted from
continued growth in the Company’s Internet of Things (“IoT”) data
business and from higher equipment sales.
Iridium reported fourth-quarter total revenue of $115.5 million,
which consisted of $91.4 million of service revenue and $24.0
million of revenue related to equipment sales and engineering and
support projects. Total revenue increased 7% versus the
comparable period of 2016, while service revenue grew 9% from the
year-ago period. Service revenue, which represents primarily
recurring revenue from Iridium’s growing subscriber base, was 79%
of total revenue for the fourth quarter of 2017.
The Company ended the quarter with 969,000 total billable
subscribers, which compares to 850,000 for the year-ago period and
is up from 949,000 for the quarter ended September 30, 2017.
Total billable subscribers grew 14% year-over-year, driven by
growth in commercial IoT and government customers.
Full-Year 2017 Iridium Business Highlights
For the full year, Iridium reported net income of $233.9
million, or $1.82 per diluted share attributable to common
stockholders, as compared to net income of $111.0 million, or $0.89
per diluted share attributable to common stockholders for
2016. The Company reported 2017 total revenue of $448.0
million, which was up 3% from the year-ago period. Total
revenue included $349.7 million of service revenue and $98.3
million of revenue related to equipment sales and engineering and
support projects. OEBITDA for 2017 was $265.6 million, a 4%
increase from $254.2 million in the prior-year, representing an
OEBITDA margin of 59%. Capital expenditures were $400.1
million for the full-year 2017.
“Iridium is executing well as we continue to move into the
Iridium® NEXT era. IoT remains a strong catalyst for
subscriber growth, and Iridium’s unique offering continues to
attract large, new business partners with growing satellite
requirements,” said Matt Desch, CEO, Iridium. Desch
continued, “The Company delivered 9% total service revenue growth
in the latest quarter and exceeded our full-year guidance for
Operational EBITDA in 2017. Momentum for services enabled by
the Iridium network, including personal tracking and real-time
asset telemetry, helped to fuel a 23% rise in commercial IoT
subscribers and drive total billable subscribers to a record
969,000 at year end.”
Commenting on Iridium NEXT, Desch said, “We made great progress
in 2017 on our next generation constellation, with four launches
and 40 satellites in orbit, including our most recent launch in
December. Thirty-two satellites are now in operation with
eight more drifting toward their intended orbital slots.”
Desch concluded, “Today, we issued 2018 full-year guidance and
updated our long-term outlook. We expect continued demand for
Iridium’s one-of-a-kind global solutions and new services available
with Iridium NEXT satellites will drive significant revenue and
subscriber growth for our Company.”
Fourth-Quarter Iridium Business Highlights
Service – Commercial
Commercial service remained the largest part of Iridium’s
business, representing 60% of the Company’s total revenue during
the fourth 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 $69.4 million, up 12% from last
year’s comparable period due to revenue from hosted payload and
other data services and to increased IoT revenues.
- Commercial voice and data subscribers rose from the year-ago
period to 359,000 customers. Commercial voice and data
average revenue per user (“ARPU”) was $42 during the fourth
quarter, compared to $41 in last year’s comparable period.
Commercial IoT data subscribers grew 23% from the year-ago
period to 510,000 customers. Commercial IoT data ARPU was $13
in the fourth quarter, compared to $14 in last year’s comparable
period.
- Iridium’s commercial business ended the quarter with 869,000
billable subscribers, which compares to 766,000 for the prior-year
quarter and is up from 854,000 for the quarter ended September 30,
2017. IoT data subscribers represented 59% of billable
commercial subscribers at the end of the quarter, an increase from
54% at the end of the prior-year period.
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. The Company operates through
two Defense Information Systems Agency (“DISA”) contracts, which
include a $400 million, five-year, fixed-price agreement for
satellite communications services and a $38 million multi-year
contract to support and maintain the Department of Defense’s
(“DoD”) dedicated gateway.
- Government service revenue was $22.0 million, consistent with
the prior-year period, as the final step up in the fixed fee under
the Company’s airtime services contract with DISA occurred in
2015.
- Iridium’s government business ended the quarter with 100,000
subscribers, which compares to 84,000 for the prior-year quarter
and is up from 95,000 for the quarter ended September 30,
2017. Government voice and data subscribers increased 18%
from the year-ago period to 52,000 as of December 31, 2017.
IoT data subscribers increased 20% year-over-year and continued to
represent 48% of government subscribers at year-end.
Equipment
- Equipment revenue was $19.4 million during the fourth quarter,
up 18% from the prior-year period, reflecting heightened sales from
hurricane-related activity.
- The Company forecasts lower equipment sales in 2018.
Engineering & Support
- Engineering and support revenue was $4.7 million during the
fourth quarter, down 32% from the prior-year quarter, primarily due
to the episodic nature of government-sponsored projects.
Capital expenditures were $109.4 million for the fourth quarter
and primarily related to spending for the Company’s next-generation
satellite constellation, Iridium NEXT. The Company ended the
fourth quarter with a cash and marketable securities balance of
$297.6 million and credit facility gross debt of $1.8
billion. Net debt was $1.5 billion, calculated as $1.8
billion of credit facility gross debt and $55.6 million of Thales
bills of exchange, less $297.6 million of cash and marketable
securities, as well as $102.4 million in restricted cash.
2018 Outlook
The Company issued its full-year 2018 outlook for total service
revenue growth and OEBITDA. Based on expectations
that approximately $14 million in hosting revenues from Aireon will
be recognized, the Company expects:
- Total service revenue growth between 10% and 12% for the
full-year 2018.
- Full-year 2018 OEBITDA between $280 million and $290
million. OEBITDA for 2017 was $265.6 million.
The Company also announced that it believes it has reached an
agreement in principle with its credit facility lenders to solidify
its liquidity position. Pursuant to this agreement, the
Company would be required to raise additional debt by July 2018,
and the lenders would delay a portion of the principal repayments.
The proceeds of this capital raising and delayed principal
payment schedule would provide the Company with sufficient cash to
meet its needs, including principal and interest payments under its
credit facility, for the next several years, even in the absence of
any hosting fee payments from Aireon.
Long-Range Outlook
The Company updated its long-range outlook for total service
revenue growth and peak net leverage, while affirming its guidance
for OEBITDA margin, cash taxes, and 2019 net leverage. Given
our expected completion of the Iridium NEXT system in 2018, the
Company expects:
- Total service revenue of approximately $440 million for the
full-year 2019.
- OEBITDA margin of approximately 60% in 2019.
- Negligible cash taxes through approximately 2020.
- Peak net leverage of 6.0x to 6.5x OEBITDA in 2018.
- Net leverage of approximately 4.5x OEBITDA in 2019.
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, Iridium NEXT revenue and expenses
(for periods prior to the deployment of Iridium NEXT only), loss
from investment in Aireon, share-based compensation expenses, the
impact of purchase accounting, and non-cash gain from the Boeing
transaction. Iridium NEXT revenue and expenses were excluded
from Operational EBITDA through 2017. In 2018, Iridium NEXT
revenues and recurring Iridium NEXT expenses (recurring Iridium
NEXT expenses are not part of the approximately $3 billion
construction cost of Iridium NEXT (the “Construction Costs”)) will
no longer be excluded in calculating Operational EBITDA. U.S.
GAAP requires that certain of the Construction Costs be
expensed. These certain Construction Costs, which beginning
in 2018 will principally consist of in-orbit insurance, will
continue to be excluded from the calculation of Operational EBITDA
through 2019. 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, and the Company’s calculations thereof may not be
comparable to similarly titled measures reported by other
companies. By eliminating interest, income taxes,
depreciation and amortization, Iridium NEXT revenue and expenses
(for periods prior to the deployment of Iridium NEXT only), loss
from investment in Aireon, share-based compensation expenses, the
impact of purchase accounting, and non-cash gain from the Boeing
transaction, the Company believes the result 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. However, there is no standardized measurement of
Operational EBITDA, and Operational EBITDA as the Company presents
it may not be comparable with similarly titled non-GAAP financial
measures used by other companies. 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. It also excludes expenses in connection
with the development, deployment and financing of Iridium NEXT and
the loss from investment in Aireon. 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, revenues and operating
profit, to measure operating performance. Please refer to the
schedule below for a reconciliation of consolidated GAAP net income
to Operational EBITDA and Iridium’s Investor Relations webpage at
www.iridium.com 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 2018
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.
|
|
|
|
|
|
|
|
|
Iridium Communications Inc. |
|
Supplemental Reconciliation of GAAP Net Income to
Operational EBITDA |
|
(In thousands) |
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
GAAP net income |
$ |
141,877 |
|
|
$ |
24,103 |
|
|
$ |
233,856 |
|
|
$ |
111,032 |
|
Interest income,
net |
|
(1,417 |
) |
|
|
(676 |
) |
|
|
(4,328 |
) |
|
|
(2,934 |
) |
Income taxes |
|
(154,479 |
) |
|
|
17,846 |
|
|
|
(114,284 |
) |
|
|
67,133 |
|
Depreciation and
amortization |
|
65,615 |
|
|
|
11,806 |
|
|
|
122,266 |
|
|
|
49,394 |
|
Iridium NEXT expenses,
net |
|
7,965 |
|
|
|
4,614 |
|
|
|
23,316 |
|
|
|
16,732 |
|
Share-based
compensation |
|
4,119 |
|
|
|
3,806 |
|
|
|
15,806 |
|
|
|
13,689 |
|
Non-cash purchase
accounting |
|
- |
|
|
|
(204 |
) |
|
|
- |
|
|
|
(825 |
) |
Non-cash gain on Boeing
transaction |
|
- |
|
|
|
- |
|
|
|
(11,003 |
) |
|
|
- |
|
Operational EBITDA |
$ |
63,680 |
|
|
$ |
61,295 |
|
|
$ |
265,629 |
|
|
$ |
254,221 |
|
|
|
|
|
|
|
|
|
Conference Call Information
As previously announced, the Company will host a conference call
to discuss its results at 8:30 a.m. ET on Thursday, February 22,
2018. Callers should dial (877) 334-1964 (U.S. only) or (631)
291-4574 (from outside the U.S.) to access the call. The
conference call ID is 2659408. The conference call will also
be simultaneously webcast on Iridium’s Investor Relations webpage
at www.iridium.com. An archive of the webcast will be
available following the live conference call.
About Iridium Communications
Inc.
Iridium® is the only mobile voice and data satellite
communications network that spans the entire globe. Iridium
enables connections between people, organizations and assets to and
from anywhere, in real time. Together with its ecosystem of
partner companies, Iridium delivers an innovative and rich
portfolio of reliable solutions for markets that require truly
global communications. The company has a major development
program underway for its next-generation network – Iridium
NEXT. Iridium Communications Inc. is headquartered in McLean,
Va., U.S.A., and its common stock trades on the NASDAQ Global
Select Market under the ticker symbol IRDM. For more
information about Iridium products, services and partner solutions,
visit www.iridium.com. IRDM-F
Forward-Looking Statements
Statements in this press release that are not purely historical
facts may constitute forward-looking statements as defined in the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements include statements regarding Iridium’s expectations with
respect to total service revenue growth, OEBITDA and hosted payload
revenues, including from Aireon, for 2018; service revenue, OEBITDA
margin, cash taxes and leverage over the longer-term; the timing of
Iridium NEXT launches and the prospects for related services,
including IoT; anticipated equipment revenue, and its agreement in
principle with its credit facility lenders to solidify its
liquidity position. Forward-looking statements can be
identified by the words “anticipates,” “may,” “can,” “believes,”
“expects,” “projects,” “intends,” “likely,” “will,” “to be” and
other expressions that are predictions or indicate future events,
trends or prospects. These forward-looking statements involve known
and unknown risks, uncertainties and other factors that may cause
the actual results, performance or achievements of Iridium to
differ materially from any future results, performance or
achievements expressed or implied by such forward-looking
statements. These risks and uncertainties include, but are not
limited to, uncertainties regarding customer demand for Iridium’s
products and services, including demand from the U.S. Government;
Iridium’s ability to maintain the health, capacity and content of
its current satellite constellation; the manufacture and launch of
and transition to Iridium NEXT; Iridium’s ability to finalize its
agreements with its credit facility lenders and to raise additional
debt, and the development of and market for Iridium’s products and
services, as well as general industry and economic conditions, and
competitive, legal, governmental and technological factors. Other
factors that could cause actual results to differ materially from
those indicated by the forward-looking statements include those
factors listed under the caption “Risk Factors” in the Company’s
Form 10-K for the year ended December 31, 2017, filed with the
Securities and Exchange Commission (“SEC”) on February 22, 2018, as
well as other filings Iridium makes with the SEC from time to
time. There is no assurance that Iridium’s expectations will
be realized. If one or more of these risks or uncertainties
materialize, or if Iridium’s underlying assumptions prove
incorrect, actual results may vary materially from those expected,
estimated or projected. Iridium’s forward-looking statements are
based on information available to it as of the date of this press
release and speak only as of the date of this press release, and
Iridium undertakes no obligation to update forward-looking
statements.
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|
|
Iridium Communications Inc. |
Condensed Consolidated Statements of Operations |
(In thousands) |
|
|
|
Three Months Ended December 31, |
|
2017 |
|
2016 |
Revenue |
|
|
|
|
|
|
|
Service
revenue |
|
|
|
|
|
|
|
Commercial |
$ |
69,437 |
|
|
$ |
62,197 |
|
Government |
|
22,000 |
|
|
|
22,000 |
|
Total
service revenue |
|
91,437 |
|
|
|
84,197 |
|
Subscriber equipment |
|
19,377 |
|
|
|
16,389 |
|
Engineering and support service |
|
4,655 |
|
|
|
6,863 |
|
Total
revenue |
|
115,469 |
|
|
|
107,449 |
|
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
|
Cost of
services (exclusive of depreciation and amortization) |
|
21,187 |
|
|
|
16,671 |
|
Cost of
subscriber equipment sales |
|
11,287 |
|
|
|
10,488 |
|
Research
and development |
|
5,025 |
|
|
|
4,469 |
|
Selling,
general and administrative |
|
26,306 |
|
|
|
22,419 |
|
Depreciation and amortization |
|
65,614 |
|
|
|
11,806 |
|
Total
operating expenses |
|
129,419 |
|
|
|
65,853 |
|
|
|
|
|
|
|
|
|
Gain on
Boeing transaction |
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
Operating income
(loss) |
|
(13,950 |
) |
|
|
41,596 |
|
|
|
|
|
|
|
|
|
Other income
(expense) |
|
|
|
|
|
|
|
Interest
income, net |
|
1,417 |
|
|
|
676 |
|
Undrawn
credit facility fees |
|
- |
|
|
|
(170 |
) |
Other
expense, net |
|
(69 |
) |
|
|
(153 |
) |
Total
other income, net |
|
1,348 |
|
|
|
353 |
|
|
|
|
|
|
|
|
|
Income
(loss) before income taxes |
|
(12,602 |
) |
|
|
41,949 |
|
Benefit
(provision) for income taxes |
|
154,479 |
|
|
|
(17,846 |
) |
Net income |
|
141,877 |
|
|
|
24,103 |
|
Series A
preferred stock dividends, declared and paid |
|
- |
|
|
|
1,750 |
|
Series B
preferred stock dividends, declared and paid |
|
- |
|
|
|
2,109 |
|
Series A
preferred stock dividends, undeclared |
|
1,750 |
|
|
|
- |
|
Series B
preferred stock dividends, undeclared |
|
2,109 |
|
|
|
- |
|
Net income attributable
to common stockholders |
$ |
138,018 |
|
|
$ |
20,244 |
|
|
|
|
|
|
|
|
|
Operational EBITDA |
$ |
63,680 |
|
|
$ |
61,295 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Iridium Communications Inc. |
Condensed Consolidated Statements of Operations |
|
|
|
(In
thousands) |
|
|
|
|
|
|
Year Ended December 31, |
|
2017 |
|
2016 |
Revenue |
|
|
|
Service
revenue |
|
|
|
Commercial |
$ |
261,735 |
|
|
$ |
246,822 |
|
Government |
|
88,000 |
|
|
|
88,000 |
|
Total
service revenue |
|
349,735 |
|
|
|
334,822 |
|
Subscriber equipment |
|
77,119 |
|
|
|
74,211 |
|
Engineering and support service |
|
21,192 |
|
|
|
24,607 |
|
Total
revenue |
|
448,046 |
|
|
|
433,640 |
|
|
|
|
|
Operating
expenses |
|
|
|
Cost of
services (exclusive of depreciation and amortization) |
|
80,396 |
|
|
|
64,958 |
|
Cost of
subscriber equipment sales |
|
44,445 |
|
|
|
44,286 |
|
Research
and development |
|
15,247 |
|
|
|
16,079 |
|
Selling,
general and administrative |
|
84,405 |
|
|
|
82,552 |
|
Depreciation and amortization |
|
122,266 |
|
|
|
49,394 |
|
Total
operating expenses |
|
346,759 |
|
|
|
257,269 |
|
|
|
|
|
Gain on
Boeing transaction |
|
14,189 |
|
|
|
- |
|
|
|
|
|
Operating income |
|
115,476 |
|
|
|
176,371 |
|
|
|
|
|
Other income
(expense) |
|
|
|
Interest
income, net |
|
4,328 |
|
|
|
2,934 |
|
Undrawn
credit facility fees |
|
(25 |
) |
|
|
(1,346 |
) |
Other
income (expense), net |
|
(207 |
) |
|
|
206 |
|
Total
other income, net |
|
4,096 |
|
|
|
1,794 |
|
|
|
|
|
Income
before income taxes |
|
119,572 |
|
|
|
178,165 |
|
Benefit
(provision) for income taxes |
|
114,284 |
|
|
|
(67,133 |
) |
Net income |
|
233,856 |
|
|
|
111,032 |
|
Series A
preferred stock dividends, declared and paid |
|
1,750 |
|
|
|
7,000 |
|
Series B
preferred stock dividends, declared and paid |
|
2,109 |
|
|
|
8,436 |
|
Series A
preferred stock dividends, undeclared |
|
5,250 |
|
|
|
- |
|
Series B
preferred stock dividends, undeclared |
|
6,327 |
|
|
|
- |
|
Net income attributable
to common stockholders |
$ |
218,420 |
|
|
$ |
95,596 |
|
|
|
|
|
Operational EBITDA |
$ |
265,629 |
|
|
$ |
254,221 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Iridium Communications Inc. |
|
Summary
Revenue and OEBITDA Highlights |
|
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
|
|
|
Year Ended December 31, |
|
|
|
|
|
2017 |
|
2016 |
|
% Change |
|
|
2017 |
|
2016 |
|
% Change |
|
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service
revenue(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voice and
data and IoT data service |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voice and
data |
$ |
45,353 |
|
|
$ |
44,189 |
|
|
3 |
% |
|
$ |
177,686 |
|
$ |
177,666 |
|
0 |
% |
|
IoT
data(2) |
|
19,525 |
|
|
|
16,750 |
|
|
17 |
% |
|
|
74,142 |
|
|
65,523 |
|
13 |
% |
|
Hosted
payload and other data service (3) |
|
4,558 |
|
|
|
1,258 |
|
|
262 |
% |
|
|
9,908 |
|
|
3,633 |
|
173 |
% |
|
Total
commercial data service |
|
69,437 |
|
|
|
62,197 |
|
|
12 |
% |
|
|
261,735 |
|
|
246,822 |
|
6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Government service revenue(4) |
|
22,000 |
|
|
|
22,000 |
|
|
0 |
% |
|
|
88,000 |
|
|
88,000 |
|
0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
service revenue |
|
91,437 |
|
|
|
84,197 |
|
|
9 |
% |
|
|
349,735 |
|
|
334,822 |
|
4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscriber equipment |
|
19,377 |
|
|
|
16,389 |
|
|
18 |
% |
|
|
77,119 |
|
|
74,211 |
|
4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineering and support(5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
1,119 |
|
|
|
377 |
|
|
197 |
% |
|
|
3,109 |
|
|
2,245 |
|
38 |
% |
|
Government |
|
3,536 |
|
|
|
6,486 |
|
|
-45 |
% |
|
|
18,083 |
|
|
22,362 |
|
-19 |
% |
|
Total
engineering and support |
|
4,655 |
|
|
|
6,863 |
|
|
-32 |
% |
|
|
21,192 |
|
|
24,607 |
|
-14 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenue |
$ |
115,469 |
|
|
$ |
107,449 |
|
|
7 |
% |
|
$ |
448,046 |
|
$ |
433,640 |
|
3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operational
EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operational EBITDA |
$ |
63,680 |
|
|
$ |
61,295 |
|
|
4 |
% |
|
$ |
265,629 |
|
$ |
254,221 |
|
4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures (6) |
$ |
109,395 |
|
|
$ |
173,896 |
|
|
|
|
|
$ |
400,107 |
|
$ |
405,687 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net debt
(7) |
$ |
1,455,591 |
|
|
$ |
1,254,294 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash,
cash equivalents, and marketable securities |
$ |
297,626 |
|
|
$ |
410,495 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit
facility |
$ |
1,800,000 |
|
|
$ |
1,777,789 |
|
|
|
|
|
|
|
|
|
|
|
Deferred
financing costs |
|
(96,445 |
) |
|
|
(120,644 |
) |
|
|
|
|
|
|
|
|
|
|
Credit
facility, net |
$ |
1,703,555 |
|
|
$ |
1,657,145 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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) Hosted payload and other services consist primarily of
services that do not have traditional billable subscribers, but are
based on capacity. 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. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) Government service revenue consists of voice and M2M data
subscription-based services provided to agencies of the U.S.
government through prime contracts or subcontracts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5) Engineering and support includes maintenance services to
the U.S. government's dedicated gateway in Hawaii and engineering
services to assist customers in developing new technologies for use
on Iridium Communications Inc.'s satellite system. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6) Capital expenditures based on cash spent in the respective
period. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7) Net debt is calculated by taking the sum of the gross
credit facility and Thales bills of exchange, less cash and cash
equivalents, marketable securities, and the debt service reserve
for the credit facility. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Iridium
Communications Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscriber
Highlights |
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands, except
ARPU) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, |
|
|
|
|
|
|
|
|
|
|
|
2017 |
|
2016 |
|
% Change |
|
|
|
|
|
|
|
|
Billable
Subscribers (1)(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
|
|
|
|
|
|
|
|
|
|
|
|
Voice and
data and IoT data service |
|
|
|
|
|
|
|
|
|
|
|
|
|
Voice and
data |
|
359 |
|
|
|
353 |
|
|
2 |
% |
|
|
|
|
|
|
|
IoT
data |
|
510 |
|
|
|
413 |
|
|
23 |
% |
|
|
|
|
|
|
|
Total
commercial voice and data and IoT data service |
|
869 |
|
|
|
766 |
|
|
13 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Government |
|
|
|
|
|
|
|
|
|
|
|
|
|
Voice and
data and IoT data service |
|
|
|
|
|
|
|
|
|
|
|
|
|
Voice and
data |
|
52 |
|
|
|
44 |
|
|
18 |
% |
|
|
|
|
|
|
|
IoT
data |
|
48 |
|
|
|
40 |
|
|
20 |
% |
|
|
|
|
|
|
|
Total
government voice and data and IoT data service |
|
100 |
|
|
|
84 |
|
|
19 |
% |
|
|
|
|
|
|
|
Total
billable subscribers |
|
969 |
|
|
|
850 |
|
|
14 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
|
|
|
Year Ended December 31, |
|
|
|
|
2017 |
|
2016 |
|
% Change |
|
|
2017 |
|
2016 |
|
% Change |
|
Net Billable
Subscriber Additions |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
|
|
|
|
|
|
|
|
|
|
|
|
Voice and
data and IoT data service |
|
|
|
|
|
|
|
|
|
|
|
|
|
Voice and
data |
|
(9 |
) |
|
|
(5 |
) |
|
-80 |
% |
|
|
6 |
|
|
2 |
|
200 |
% |
IoT
data |
|
24 |
|
|
|
15 |
|
|
60 |
% |
|
|
97 |
|
|
54 |
|
80 |
% |
Total
commercial voice and data and IoT data service |
|
15 |
|
|
|
10 |
|
|
50 |
% |
|
|
103 |
|
|
56 |
|
84 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Government |
|
|
|
|
|
|
|
|
|
|
|
|
|
Voice and
data and IoT data service |
|
|
|
|
|
|
|
|
|
|
|
|
|
Voice and
data |
|
3 |
|
|
|
1 |
|
|
200 |
% |
|
|
8 |
|
|
4 |
|
100 |
% |
IoT
data |
|
2 |
|
|
|
1 |
|
|
100 |
% |
|
|
8 |
|
|
8 |
|
0 |
% |
Total
government voice and data and IoT data service |
|
5 |
|
|
|
2 |
|
|
150 |
% |
|
|
16 |
|
|
12 |
|
33 |
% |
Total net
billable subscriber additions |
|
20 |
|
|
|
12 |
|
|
67 |
% |
|
|
119 |
|
|
68 |
|
75 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
|
|
|
Year Ended December 31, |
|
|
|
|
2017 |
|
2016 |
|
% Change |
|
|
2017 |
|
2016 |
|
% Change |
|
ARPU(2)(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
|
|
|
|
|
|
|
|
|
|
|
|
Voice and
data |
$ |
42 |
|
|
$ |
41 |
|
|
2 |
% |
|
$ |
42 |
|
$ |
42 |
|
0 |
% |
IoT
data |
$ |
13 |
|
|
$ |
14 |
|
|
-7 |
% |
|
$ |
13 |
|
$ |
14 |
|
-7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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. |
|
Investor Contact:Kenneth LevyIridium Communications Inc.+1 (703)
287-7570ken.levy@iridium.com
Press Contact:Jordan HassinIridium Communications Inc.+1 (703)
287-7421jordan.hassin@iridium.com
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