Iridium Communications eclipsed 2 million active subscribers at the start of 2023, which doesn’t sound like a lot in the big scheme of things.
However, Iridium CEO Matt Desch noted that it took the company 18 years to acquire its first million customers in 2018, so it’s encouraging to see the bump in recent years.
Iridium launched its satellite network in the late 1990s, but it’s seeing some newfound attention in recent times.
One of the reasons for the interest is the impending rollout of new consumer satellite-to-smartphone services. Iridium is in that camp, having announced a deal with Qualcomm last month, joining the likes of Apple, which launched an SOS service with the iPhone 14 using Globalstar’s satellite network.
“I’m kind of rooting for Apple to be very successful because I think it will create even more demand across the ecosystem around this service platform to create more opportunity for everybody to demonstrate the value of satellite connectivity to the masses,” Desch said during the company’s earnings call today.
Qualcomm initially will make the platform available for premium Android smartphone OEMs, but the expectation is there will be other chips in the portfolio for more affordable smartphones, laptops and other devices in the not-too-distant future.
Satellite connectivity was not included in the recent Samsung Galaxy S23 series, but Desch speculated that it was probably too late to be included and he’s hopeful it will be in future versions of the device.
Iridium, which uses the L-band, for years was associated with high-end satellite phones for industries like maritime and aviation, but it’s also in the IoT space, where it’s serving companies like John Deere and moving to higher speeds.
Iridium recently announced Iridium Go Exec, which is an update to its 2014 Iridium Go product. It’s basically a hot spot that can connect to Iridium’s constellation of 66 satellites, and it’s smaller than a Starlink dish. Its portability means it can be transported in a backpack and carried from a boat to a beach or from a vehicle into the field.
Outlook and Q4 earnings
Rising interest rates and inflation are not dampening Iridium’s outlook, Desch said. “In fact, we’re guiding to another strong year of service revenue growth in 2023,” he said during the company’s earnings call today.
For the fourth quarter of 2022, Iridium reported a net loss of $0.8 billion, which compares with a net loss of $5.9 million in the year-ago quarter. Total revenue for the fourth quarter of 2022 was $193.8 million, which consisted of $136.8 million of service revenue and $57 million of revenue related to equipment sales and engineering and support projects.
Total revenue increased 24% versus the comparable period of 2021, while service revenue grew 8% from the year-ago period. Service revenue, which represents primarily recurring revenue from Iridium's growing subscriber base, was 71% of total revenue for the fourth quarter of 2022.
The company ended the quarter with 1,999,000 total billable subscribers, which compares to 1,723,000 for the year-ago period and is up from 1,973,000 for the quarter ended September 30, 2022. But, as Desch said at the beginning of the earnings call, the company already added almost 20,000 in the first part of 2023, so it’s off to the races.