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Iridium's Q3 Earnings Beat on Higher Revenues, Stock Soars 11%
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Iridium Communications (IRDM - Free Report) reported earnings per share (EPS) of 21 cents for the third quarter of 2024, beating the Zacks Consensus Estimate by 5%. The company incurred a loss of 1 cent per share in the prior year quarter.
Stay up-to-date with all quarterly releases: See ZacksEarnings Calendar.
Management attributed the significant improvement in earnings to healthy growth in service revenues, engineering and support revenues, and equipment sales. Also, lower operating expenses due to a decline in depreciation costs stemming from extended satellite lifespans further contributed to the bottom-line expansion.
Quarterly revenues were $212.8 million, up 8% from the year-ago level. The uptick was driven by strength in the Commercial service segment and Government Engineering and support service business. The Zacks Consensus Estimate was pegged at $205.7 million.
Total Service revenues rose 5% year over year to $159.9 million. Strong recurring revenues from increasing subscriber engagements led to the upside. Service revenues contributed 75% to total revenues in the third quarter. Our estimate for the metric was $155.5 million. The service revenue growth was further fueled by steady momentum in the commercial Internet of Things (IoT) and hosted payload and other data services sectors amid weakness in the commercial broadband sector.
Iridium Communications Inc Price, Consensus and EPS Surprise
Subscriber Equipment revenues rose 9% year over year to $22.2 million. Engineering and support revenue surged 22% to $30.7 million due to increased activity with the U.S. government, including expanded work on Space Development Agency contracts.
In response to the results, shares of IRDM jumped 11% in trading on Oct. 17 and closed the session at $33.6. Also, its shares were up 1.5% in the pre-market trading on Oct. 18. In the past year, shares have lost 23.3% against the Zacks sub-industry’s growth of 5.8%.
Image Source: Zacks Investment Research
Other Details
Total operating expenses were $157.9 million compared with $169.5 in the prior-year quarter, primarily due to lower depreciation and amortization costs.
Operational EBITDA (OEBITDA) increased 2.5% year over year to $124.4 million. Operating income came in at $54.9 million compared with $28.2 million reported in the year-ago quarter.
As of Sept. 30, the company had 2,482,000 billable subscribers, up 11% from 2,236,000 at the prior-year quarter end. The year-over-year gain was backed by strength in commercial IoT, with IoT data subscribers growing 14% to 1.9 million.
The commercial sector, in particular, saw significant growth, contributing to 2,341,000 billable subscribers, up from 2,094,000 in the previous quarter. Notably, IoT data subscribers represented 81% of billable commercial subscribers at the end of the quarter.
Liquidity
As of Sept. 30, total cash and cash equivalents were $159.6 million, with $1.7 billion of net debt. Capital expenditures were $18.6 million in the quarter under review.
In the third quarter of 2024, IRDM repurchased 4.7 million shares worth $128.6 million. On Sept. 19, 2024, it announced that its board of directors authorized the repurchase of an additional $500 million of the company’s shares through Dec. 31, 2027. As of Sept. 30, 2024, it had shares worth $552.2 million under the buyback program.
2024 Outlook Updated
Based on the strong third-quarter performance, Iridium has revised its full-year 2024 outlook. The company now expects total service revenue growth of about 5% for the year compared with the previous guidance of 4-6%.
Iridium also expects full-year OEBITDA to be between $465 million and $470 million, up from its previous range of $460 million to $470 million. The company anticipates cash taxes of less than $10 million annually through 2026 and projects net leverage below 4.0 times OEBITDA through 2026 and eventually below 2.0 times by the end of the decade.
BlackBerry reported breakeven second-quarter fiscal 2025 earnings, better than the company’s estimate of a loss per share of 2-4 cents. In the year-ago quarter, it reported a non-GAAP loss per share of 4 cents. The Zacks Consensus Estimate was pegged at a loss of 3 cents per share.
Shares of BB have lost 25% in the past year.
Badger Meter reported EPS of $1.08 for the third quarter 2024, beating the Zacks Consensus Estimate by 5.9%. Also, the bottom line compared favorably with the year-ago quarter’s EPS of 88 cents.
Shares of BMI have gained 48.3% in the past year.
America Movil reported net income per ADR of 11 cents for the third quarter 2024, up from 4 cents in the prior-year quarter.
Shares of AMX have gained 3.7% in the past year.
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Iridium's Q3 Earnings Beat on Higher Revenues, Stock Soars 11%
Iridium Communications (IRDM - Free Report) reported earnings per share (EPS) of 21 cents for the third quarter of 2024, beating the Zacks Consensus Estimate by 5%. The company incurred a loss of 1 cent per share in the prior year quarter.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Management attributed the significant improvement in earnings to healthy growth in service revenues, engineering and support revenues, and equipment sales. Also, lower operating expenses due to a decline in depreciation costs stemming from extended satellite lifespans further contributed to the bottom-line expansion.
Quarterly revenues were $212.8 million, up 8% from the year-ago level. The uptick was driven by strength in the Commercial service segment and Government Engineering and support service business. The Zacks Consensus Estimate was pegged at $205.7 million.
Total Service revenues rose 5% year over year to $159.9 million. Strong recurring revenues from increasing subscriber engagements led to the upside. Service revenues contributed 75% to total revenues in the third quarter. Our estimate for the metric was $155.5 million. The service revenue growth was further fueled by steady momentum in the commercial Internet of Things (IoT) and hosted payload and other data services sectors amid weakness in the commercial broadband sector.
Iridium Communications Inc Price, Consensus and EPS Surprise
Iridium Communications Inc price-consensus-eps-surprise-chart | Iridium Communications Inc Quote
Subscriber Equipment revenues rose 9% year over year to $22.2 million. Engineering and support revenue surged 22% to $30.7 million due to increased activity with the U.S. government, including expanded work on Space Development Agency contracts.
In response to the results, shares of IRDM jumped 11% in trading on Oct. 17 and closed the session at $33.6. Also, its shares were up 1.5% in the pre-market trading on Oct. 18. In the past year, shares have lost 23.3% against the Zacks sub-industry’s growth of 5.8%.
Image Source: Zacks Investment Research
Other Details
Total operating expenses were $157.9 million compared with $169.5 in the prior-year quarter, primarily due to lower depreciation and amortization costs.
Operational EBITDA (OEBITDA) increased 2.5% year over year to $124.4 million.
Operating income came in at $54.9 million compared with $28.2 million reported in the year-ago quarter.
As of Sept. 30, the company had 2,482,000 billable subscribers, up 11% from 2,236,000 at the prior-year quarter end. The year-over-year gain was backed by strength in commercial IoT, with IoT data subscribers growing 14% to 1.9 million.
The commercial sector, in particular, saw significant growth, contributing to 2,341,000 billable subscribers, up from 2,094,000 in the previous quarter. Notably, IoT data subscribers represented 81% of billable commercial subscribers at the end of the quarter.
Liquidity
As of Sept. 30, total cash and cash equivalents were $159.6 million, with $1.7 billion of net debt. Capital expenditures were $18.6 million in the quarter under review.
In the third quarter of 2024, IRDM repurchased 4.7 million shares worth $128.6 million. On Sept. 19, 2024, it announced that its board of directors authorized the repurchase of an additional $500 million of the company’s shares through Dec. 31, 2027. As of Sept. 30, 2024, it had shares worth $552.2 million under the buyback program.
2024 Outlook Updated
Based on the strong third-quarter performance, Iridium has revised its full-year 2024 outlook. The company now expects total service revenue growth of about 5% for the year compared with the previous guidance of 4-6%.
Iridium also expects full-year OEBITDA to be between $465 million and $470 million, up from its previous range of $460 million to $470 million. The company anticipates cash taxes of less than $10 million annually through 2026 and projects net leverage below 4.0 times OEBITDA through 2026 and eventually below 2.0 times by the end of the decade.
IRDM’s Zacks Rank & Stocks to Consider
Iridium currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the broader technology space are BlackBerry (BB - Free Report) , America Movil (AMX - Free Report) and Badger Meter, Inc. (BMI - Free Report) . BB presently sports a Zacks Rank #1 (Strong Buy), whereas AMX and BMI carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
BlackBerry reported breakeven second-quarter fiscal 2025 earnings, better than the company’s estimate of a loss per share of 2-4 cents. In the year-ago quarter, it reported a non-GAAP loss per share of 4 cents. The Zacks Consensus Estimate was pegged at a loss of 3 cents per share.
Shares of BB have lost 25% in the past year.
Badger Meter reported EPS of $1.08 for the third quarter 2024, beating the Zacks Consensus Estimate by 5.9%. Also, the bottom line compared favorably with the year-ago quarter’s EPS of 88 cents.
Shares of BMI have gained 48.3% in the past year.
America Movil reported net income per ADR of 11 cents for the third quarter 2024, up from 4 cents in the prior-year quarter.
Shares of AMX have gained 3.7% in the past year.