Iridium Communications Inc. (Nasdaq: IRDM) announced its financial results for the fourth quarter and full-year 2023, along with its guidance for the full-year 2024. In the fourth quarter of 2023, the company reported a net income of $38.0 million, or $0.30 per diluted share, compared to a net loss of $0.8 million, or $0.01 per diluted share, in the same period of 2022. Operational EBITDA for the quarter was $114.1 million, showing a 7% increase from the prior-year period.
The fourth-quarter total revenue stood at $194.7 million, with $148.0 million from service revenue and $46.7 million from equipment sales and engineering and support projects. Service revenue, representing recurring income from Iridium’s growing subscriber base, accounted for 76% of total revenue.
The company closed the quarter with 2,279,000 total billable subscribers, reflecting a 14% year-over-year growth, driven by increased commercial IoT demand. For the full year 2023, Iridium reported a net income of $15.4 million, or $0.12 per diluted share, compared to $8.7 million, or $0.07 per diluted share, in 2022. Total revenue for 2023 reached $790.7 million, a 10% increase from the previous year.
Matt Desch, CEO of Iridium, stated that 2023 was a successful year marked by robust commercial services growth, with subscriber expansion across all commercial service lines. The company’s strong cash flow supported a return of over $310 million to shareholders, including approximately $65 million in dividend payments for 2023.
In the fourth quarter of 2023, Iridium extended the estimated useful lives of its satellites by five years, from 12.5 years to 17.5 years, impacting the timing of certain revenue and expense items. Desch highlighted that this change validates the expectations for Iridium’s extended capital expenditure holiday.
Commercial service remained the largest segment, representing 62% of total revenue in the fourth quarter, with revenue reaching $121.5 million, a 10% increase year-over-year. The commercial IoT data segment showed significant growth, with revenue reaching $36.1 million, a 12% increase from the previous year.
The U.S. government service revenue remained flat at $26.5 million in the fourth quarter under the Enhanced Mobile Satellite Services contract. Iridium’s government business ended the quarter with 145,000 subscribers, a 3% increase from the year-ago period.
Equipment revenue for the fourth quarter was $15.7 million, compared to $39.3 million in the prior-year quarter. Engineering and support revenue increased to $31.1 million during the fourth quarter, primarily due to heightened activity with the U.S. government.
For the full-year 2024, Iridium expects total service revenue growth between 4% and 6% and Operational EBITDA between $460 million and $470 million. The company plans to increase its quarterly dividend to $0.14 per share starting with the second quarter of 2024, reflecting a 5.8% full-year dividend increase. The Board of Directors also aims for net leverage to be below 2.5 times Operational EBITDA between 2026 and 2029.
