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Iridium (IRDM) Q1 Earnings Match Estimates, Revenues Down Y/Y
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Iridium Communications (IRDM - Free Report) reported earnings per share (EPS) of 16 cents for first-quarter 2024, which matched the Zacks Consensus Estimate of earnings of 16 cents. The company reported earnings of 8 cents in the prior-year quarter.
Management noted that earnings benefited due to continued growth in total commercial services. Additionally, the company's expected satellite useful lifetimes have changed, which has resulted in a year-over-year decrease in depreciation expense.
Quarterly revenues were $203.9 million, down 0.7% from the year-ago levels. The downside can be attributed to a weakness in equipment revenues. However, the top line surpassed the Zacks Consensus Estimate by 3.6%.
Iridium Communications Inc Price, Consensus and EPS Surprise
Total Service revenues rose 6.6% year over year to $148.5 million. Strong recurring revenues from a growing subscriber base resulted in the upside. Service revenues contributed 73% to total revenues in the first quarter. Our estimate for the metric was $147.7 million.
Solid performance in commercial broadband, voice and data, and IoT contributed to the segment’s top-line performance.
Subscriber Equipment revenues fell 40% year over year to $24.9 million. Engineering and Support Service revenues rose 25% to $24.9 million from the prior-year levels, mainly due to increased government activity.
Other Details
Total operating expenses were $154.1 million, down 15.4% from the prior-year quarter, primarily due to lower depreciation and amortization costs.
Operational EBITDA (OEBITDA) improved 3% year over year to $111.9 million. Operating income reached $49.7 million compared with $23.1 million in the year-ago quarter.
As of Mar 31, 2024, the company had 2,333,000 billable subscribers, up 13.8% compared with 2,051,000 at March 2023-end. The year-over-year gain was backed by strength in commercial IoT.
As of Mar 31, 2024, cash, cash equivalents and marketable securities were $174 million, with $1.62 billion of net debt. Capital expenditures were $14.5 million in the quarter under review.
In the first quarter of 2024, IRDM repurchased 1.9 million shares worth $56.6 million. On Jul 28, 2023, it announced that its board of directors was authorized to repurchase an additional $400 million of the company’s shares through Dec 31, 2025. As of Mar 31, 2024, it had shares worth $277.4 million under the repurchase program.
In the first quarter, the company completed the acquisition of Satelles, Inc., which is a leading provider of secure satellite-based time and location (STL) services. The buyout has enhanced Iridium’s solution portfolio with advanced STL services, which is now referred to as Iridium STL.
Guidance
Management expects total Service revenue growth between 4% and 6% for 2024. OEBITDA is projected to be in the range of $460-$470 million.
Zacks Rank and Other Stocks to Consider
Iridium currently sports a Zacks Rank #1 (Strong Buy).
The Zacks Consensus Estimate for Synopsys’ 2024 EPS has decreased 0.7% in the past 60 days to $13.28. SNPS’s long-term earnings growth rate is 17.5%.
Synopsys’ earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, delivering an average surprise of 4.1%. SNPS shares have risen 56.1% in the past year.
The Zacks Consensus Estimate for PINS’s 2024 EPS has increased 0.7% in the past 60 days to $1.34. PINS’s long-term earnings growth rate is 20.1%.
Pinterest’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, delivering an average earnings surprise of 37.4%. Shares of PINS have gained 13% in the past year.
The Zacks Consensus Estimate for ANET’s 2024 EPS has increased 0.4% in the past 60 days to $7.49. ANET’s long-term earnings growth rate is 17.5%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in each of the last four quarters, delivering an average earnings surprise of 13.3%. Shares of ANET have gained 62.7% in the past year.
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Iridium (IRDM) Q1 Earnings Match Estimates, Revenues Down Y/Y
Iridium Communications (IRDM - Free Report) reported earnings per share (EPS) of 16 cents for first-quarter 2024, which matched the Zacks Consensus Estimate of earnings of 16 cents. The company reported earnings of 8 cents in the prior-year quarter.
Management noted that earnings benefited due to continued growth in total commercial services. Additionally, the company's expected satellite useful lifetimes have changed, which has resulted in a year-over-year decrease in depreciation expense.
Quarterly revenues were $203.9 million, down 0.7% from the year-ago levels. The downside can be attributed to a weakness in equipment revenues. However, the top line surpassed the Zacks Consensus Estimate by 3.6%.
Iridium Communications Inc Price, Consensus and EPS Surprise
Iridium Communications Inc price-consensus-eps-surprise-chart | Iridium Communications Inc Quote
Total Service revenues rose 6.6% year over year to $148.5 million. Strong recurring revenues from a growing subscriber base resulted in the upside. Service revenues contributed 73% to total revenues in the first quarter. Our estimate for the metric was $147.7 million.
Solid performance in commercial broadband, voice and data, and IoT contributed to the segment’s top-line performance.
Subscriber Equipment revenues fell 40% year over year to $24.9 million. Engineering and Support Service revenues rose 25% to $24.9 million from the prior-year levels, mainly due to increased government activity.
Other Details
Total operating expenses were $154.1 million, down 15.4% from the prior-year quarter, primarily due to lower depreciation and amortization costs.
Operational EBITDA (OEBITDA) improved 3% year over year to $111.9 million.
Operating income reached $49.7 million compared with $23.1 million in the year-ago quarter.
As of Mar 31, 2024, the company had 2,333,000 billable subscribers, up 13.8% compared with 2,051,000 at March 2023-end. The year-over-year gain was backed by strength in commercial IoT.
As of Mar 31, 2024, cash, cash equivalents and marketable securities were $174 million, with $1.62 billion of net debt. Capital expenditures were $14.5 million in the quarter under review.
In the first quarter of 2024, IRDM repurchased 1.9 million shares worth $56.6 million. On Jul 28, 2023, it announced that its board of directors was authorized to repurchase an additional $400 million of the company’s shares through Dec 31, 2025. As of Mar 31, 2024, it had shares worth $277.4 million under the repurchase program.
In the first quarter, the company completed the acquisition of Satelles, Inc., which is a leading provider of secure satellite-based time and location (STL) services. The buyout has enhanced Iridium’s solution portfolio with advanced STL services, which is now referred to as Iridium STL.
Guidance
Management expects total Service revenue growth between 4% and 6% for 2024. OEBITDA is projected to be in the range of $460-$470 million.
Zacks Rank and Other Stocks to Consider
Iridium currently sports a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks from the broader technology space are Synopsys (SNPS - Free Report) , Pinterest (PINS - Free Report) and Arista Networks (ANET - Free Report) . Each stock presently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Synopsys’ 2024 EPS has decreased 0.7% in the past 60 days to $13.28. SNPS’s long-term earnings growth rate is 17.5%.
Synopsys’ earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, delivering an average surprise of 4.1%. SNPS shares have risen 56.1% in the past year.
The Zacks Consensus Estimate for PINS’s 2024 EPS has increased 0.7% in the past 60 days to $1.34. PINS’s long-term earnings growth rate is 20.1%.
Pinterest’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, delivering an average earnings surprise of 37.4%. Shares of PINS have gained 13% in the past year.
The Zacks Consensus Estimate for ANET’s 2024 EPS has increased 0.4% in the past 60 days to $7.49. ANET’s long-term earnings growth rate is 17.5%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in each of the last four quarters, delivering an average earnings surprise of 13.3%. Shares of ANET have gained 62.7% in the past year.