Iridium Communications Inc. (“Iridium”) today reported strong financial results for the first quarter of 2011 and updated its outlook for the full-year 2011. Net income was $8.3 million for the first quarter of 2011, as compared to a net loss of $1.3 million for the first quarter of 2010.
Operational EBITDA (“OEBITDA”) for the first quarter was $43.1 million, as compared to $33.5 million for the prior-year period, representing year-over-year growth of 29 percent and an OEBITDA margin of 47 percent. OEBITDA benefited from solid growth in commercial service, government service and equipment revenue.
Iridium reported first-quarter total revenue of $91.3 million, which consisted of $61.2 million of service revenue and $30.1 million of equipment and engineering and support revenue. Total revenue grew 12 percent versus the comparable period of 2010, while service revenue increased 12 percent from the year-ago period. Service revenue, which represents primarily recurring revenue from Iridium’s growing subscriber base, was 67 percent of total revenue for the first quarter of 2011.
The Company ended the quarter with 447,000 total billable subscribers, which compares to 359,000 for the year-ago period and 427,000 for the quarter ended December 31, 2010. Total billable subscribers grew 25 percent year-over-year, driven by ongoing strength in machine-to-machine (“M2M”) data, handheld voice, Netted Iridium and Iridium OpenPort® customers.
Capital expenditures were $56.2 million for the first quarter and primarily related to spending for the Company’s next-generation satellite constellation, Iridium NEXT, and upgraded ground network infrastructure at its commercial gateway. The Company ended the first quarter with a cash and cash equivalents balance of $103.9 million and gross debt of $183.4 million. Net debt was $79.5 million.
“We’re off to a strong start in 2011, as we continue to benefit from a high-quality and diversifying revenue profile that is moving beyond voice to fast-growing data services,” said Matt Desch, Iridium’s chief executive officer. “Commercial M2M subscribers grew 62% year-over-year, and we’re capturing more data revenue from the Iridium OpenPort terminals we’ve shipped to our maritime customers. The rapid adoption of our Iridium 9602 short-burst data (“SBD”) transceiver has been so strong that it led to an upward revision of our equipment revenue outlook for 2011, as significant sales volumes more than offset the lower price of this device compared to its predecessor.”
Desch continued, “We’ve also sustained our leading competitive position in the handheld voice market, increasing commercial voice subscribers 12% year-over-year on strong handset unit sales growth of 39%. The Iridium 9555 phone remains the ‘gold standard’ for mobility, reliability and global coverage, but we’re not stopping here as the market leader. Innovation will define our future path in this business, and we expect to broaden our product portfolio with greater choices and enhanced features.“