Iridium's Satellite Network Operating Center (SNOC). Photo: Iridium
Iridium Communications reported financial results for its Third Quarter (Q3) 2019 and updated its full-year 2019 outlook. The company reported $144.8 million in third quarter revenue, which consisted of $115.9 million of service revenue and $28.9 million of revenue related to equipment sales and engineering and support projects. Total revenue increased 6 percent versus the comparable period of 2018, while service revenue grew by 10 percent. Service revenue, which represents primarily recurring revenue from Iridium's growing subscriber base, was 80 percent of total revenue for the third quarter of 2019, up from 77 percent in the year-ago period.
Net loss was $18.0 million for Q3 2019, as compared to net loss of $12.9 million, for Q3 2018. This increase in net loss was primarily the result of a $12.4 million increase in depreciation and amortization expense compared to the year-ago period. Operational EBITDA for the third quarter was $88.5 million, as compared to $79.4 million for the prior-year period, representing a year-over-year increase of 11 percent and an OEBITDA margin of 61 percent. OEBITDA primarily benefitted from higher government service revenue and strong growth in commercial Internet of Things (IoT) and hosted payload. The company ended the quarter with 1,269,000 total billable subscribers, which compares to 1,092,000 for the year-ago period and is up from 1,213,000 for the quarter ended June 30, 2019. Total billable subscribers grew 16 percent year-over-year, driven by growth in commercial and government IoT customers.
"Continued momentum in service revenue and IoT subscriber growth through the third quarter gives us confidence in raising our full-year service revenue guidance," said Matt Desch, CEO, Iridium. Desch continued, "Having finalized a new Enhanced Mobile Satellite Services (EMSS) contract with the U.S. government in September, we look forward to closing very soon on a new credit facility, which will provide Iridium with more flexibility in leveraging its growing free cash flow and simplify its capital structure."