Iridium announces second-quarter 2020 results; Updates 2020 Outlook
Iridium Communications Inc. (Nasdaq:IRDM) ("Iridium") today reported financial results for the second quarter of 2020 and updated its full-year 2020 outlook. Net loss was $12.4 million, or $0.09 per diluted share, for the second quarter of 2020, as compared to net loss of $18.1 million, or $0.16 per diluted share, for the second quarter of 2019. This decrease in net loss was primarily the result of lower net interest expenses related to the refinancing of Iridium's credit facility and high-yield notes from the year ago period and a decline in in-orbit insurance costs and research and development expenses. Operational EBITDA ("OEBITDA")(1) for the second quarter was $85.3 million, as compared to $85.1 million for the prior-year period, representing an OEBITDA margin(1) of 61%.
Iridium reported second-quarter total revenue of $140.2 million, which consisted of $113.4 million of service revenue and $26.8 million of revenue related to equipment sales and engineering and support projects. Total revenue decreased 2% versus the comparable period of 2019, while service revenue grew by 2%. Service revenue, which represents primarily recurring revenue from Iridium's growing subscriber base, was 81% of total revenue for the second quarter of 2020.
The Company ended the quarter with 1,362,000 total billable subscribers, which compares to 1,213,000 for the year-ago period and is up from 1,332,000 for the quarter ended March 31, 2020. Total billable subscribers grew 12% year-over-year, driven by growth in commercial and government IoT customers.
"Despite the headwinds caused by the global pandemic, Iridium continues to grow subscribers, service revenue and cash," said Matt Desch, CEO, Iridium. Desch continued, "As businesses around the world started to reopen in the second quarter, we've also seen some recovery in activity from our technology and distribution partners."
Commenting on the full-year outlook, Desch added, "With each passing month, we are getting increased visibility that allows us to refine our guidance for the year. Iridium is fortunate to provide mission-critical services across a broad array of industries, which has allowed our business to remain resilient in this environment. I think it's notable that despite the economic slowdown, Iridium increased its cash position by more than $50 million in the second quarter, all of which came from operating activities. We expect to continue to generate significant free cash flow in 2020 and beyond."