MCLEAN, Virginia – Iridium Communications Inc. (NASDAQ:) shares rose 7.5% after reporting first-quarter 2024 results that showed revenue exceeding analysts’ expectations. The company, known for its global satellite communications for voice and data, reported net income of $19.7 million, or $0.16 per diluted share, in line with analysts’ estimates of $0.16 per share. However, revenue for the quarter reached $203.9 million, beating the consensus estimate of $194.05 million.
Compared to the same quarter last year, Iridium’s total revenue decreased 1%, primarily due to lower hardware revenue. Despite this, services revenue, which makes up the bulk of the company’s operating revenue from its expanding subscriber base, grew 7% year over year and accounted for 73% of total revenue for the quarter. The company ended the quarter with 2,333,000 total paying subscribers, up 14% year-over-year, driven by commercial IoT growth.
CEO Matt Desch attributed the strong service revenue growth to the company’s strong subscriber base and demand for Iridium’s mission-critical applications. “Subscriber growth and demand for Iridium’s mission-critical applications are driving new service development and free cash flow,” Desch said.
The recent acquisition by Satelles, Inc., completed April 1, positions Iridium as a leading provider of satellite timing and location services. Desch expressed his enthusiasm for the acquisition, stating, “As the prevalence of GPS jamming and location spoofing grows, our new satellite time and location service will enable us to protect critical infrastructure and expand robust time synchronization for businesses and governments around the world. “
Iridium reaffirmed its 2024 guidance, expecting overall service revenue growth of 4% to 6%, with prior year service revenue of $584.5 million. Full-year 2024 operating EBITDA (Adjusted EBITDA) guidance is $460 million to $470 million, down from $463.1 million for 2023.
The positive market reaction, as evidenced by a 7.5% rise in Iridium shares, reflects investor confidence in the company’s financial performance and strategic initiatives.
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