Iridium Communications (Nasdaq: IRDM) saw its engineering and support revenue increase 74 percent to $31.1 million during the fourth quarter of 2023, driven by a rise in U.S. government activity, and posted a record total revenue of $790.7 million for the full year, up 10 percent from the prior-year period.
The McLean, Virginia-based satellite communications company said Thursday it expects its engineering and support sales to rise in 2024 as it continues work on a contract with the Space Development Agency.
The company’s U.S. government business recorded $26.5 million in Q4 service revenue, reflecting the contractual rate in its seven-year, $738.5 million Enhanced Mobile Satellite Services contract with the U.S. Space Force. The business had 145,000 government subscribers at the end of the fourth quarter with internet-of-things data subscribers accounting for 57 percent of that number.
Total Q4 revenue reached $194.7 million, including $148 million in service revenue. Iridium saw its total billable subscribers grow 14 percent year-over-year to 2.28 million, driven by its commercial IoT business.
The company performed a review of its satellite constellation’s estimated life, which has now been increased by five years to 17.5 years.
“We reevaluate that assessment periodically, and our most recent review in the fourth quarter prompted us to update the constellation’s estimated life, which we now believe will perform well through at least 2035,” Iridium CEO Matt Desch said at an earnings call Thursday. “That’s great news and continues to support our expectations of a CapEx holiday through the rest of this decade. The updated assessment also reflects the successful launch of five additional spares in 2023 and the overall performance of the constellation since its initial launch.”
Desch, a 2024 Wash100 awardee, told analysts that Iridium plans to ramp up its spending on research and development efforts in 2024 and expand into “a few product areas that position us to capitalize on longer-term growth opportunities.”
“We want to maintain our lead in traditional areas of growth like IoT, mid-band data, and U.S. government services, and we also plan to undertake initiatives that augment future business growth,” Desch stated. “Together, we believe these efforts will allow us to reach our long-term service revenue guidance of about $1 billion in 2030.”
The chief executive noted that strong cash flow enabled Iridium to return more than $310 million of capital to shareholders in 2023, including approximately $65 million in dividend payments.
