- Total Subscribers Approximately 320,000; Up 37% for 2008 over 2007
- Revenue Up 14% From Fourth Quarter 2007; Up 23% for 2008
- Operational EBITDA Up 33% From Fourth Quarter 2007; Up 42% for 2008
- Net Income Down 83% From Fourth Quarter 2007; Up 23% for 2008
- Iridium Network Proves Resilient in Wake of Satellite Collision
- GHQ Transaction Process Continuing
BETHESDA, Md., Feb. 26 /PRNewswire/ -- Iridium Satellite LLC (Iridium) today announced financial results for the quarter and the year ended December 31, 2008. Fourth quarter results included approximately 320,000 subscribers, revenue of $76.8 million, operational EBITDA of $25.0 million and net income of $1.5 million.
As of December 31, 2008, Iridium had approximately 320,000 subscribers worldwide, an increase of 37% over the December 31, 2007 total of approximately 234,000. Revenue for the year 2008 was $320.9 million, a 23% increase over 2007 revenues of $260.9 million. Operational EBITDA for the year 2008 was $108.2 million, a 42% increase compared to operational EBITDA of $76.5 million for 2007.(1) For 2008, Iridium posted $53.9 million in net income, a 23% increase over 2007. During 2008, Iridium experienced growth in revenue for the full year in all of its verticals: handsets; industrial, maritime and aviation; machine-to-machine (M2M) and government.
Iridium's 2008 record revenues of $320.9 million were driven by strong growth in all three of its key markets: commercial services; government services; and subscriber equipment. Commercial services revenue was $133.2 million for the year, a 32% increase over the $101.2 million of revenues in 2007. Subscriber equipment revenue was $119.9 million for 2008, an 18 % increase over the $101.9 million of revenue for the prior year. Government services revenue was $67.8 million for 2008, a 17% increase over the $57.9 million of revenue for 2007.
Revenue in the fourth quarter of 2008 was $76.8 million compared to $67.3 million in the fourth quarter of 2007, an increase of 14%. Fourth quarter 2008 operational EBITDA was $25.0 million, a 33% increase compared to $18.7 million for the same period of the prior year. Net income during the fourth quarter of 2008 was $1.5 million, an 83% decrease as compared to fourth quarter 2007 net income of $9.2 million. This decrease was primarily driven by expenses associated with the development of Iridium NEXT, the company's next generation satellite constellation, and one-time costs associated with the GHQ transaction.
'Iridium's fourth quarter results were extremely strong, notwithstanding the challenging macroeconomic environment,' said Matt Desch, chief executive officer, Iridium Satellite. 'The company posted revenues and operational EBITDA in the fourth quarter of 2008 that exhibited continued steady growth over our 2007 fourth quarter numbers. Our performance is an indicator of the resilience of Iridium's business model and the fundamental importance of our service to businesses, governments and individuals across the world.'
Growth Highlights
As previously reported, Iridium introduced its new global handset in October 2008. 'Market reception to the Iridium 9555 has been very positive,' said Don Thoma, executive vice president, marketing, Iridium. 'Iridium continues to command a premium in the market as it is the only mobile communications service that literally offers coverage everywhere in the world. Plus, our customers like the fact that the new Iridium 9555 is smaller, more powerful, loaded with features and can still withstand the tough environments where many of them use their phones.'
The company continued to experience strong growth in the maritime market with its existing offerings and also commenced service for its first Iridium OpenPort(TM) units, the company's new, enhanced bandwidth satellite communications service for the maritime market. 'Iridium OpenPort is an excellent alternative to incumbent, higher priced services offered by our competitors,' said Thoma. 'Iridium designed OpenPort to provide our maritime customers with data services at a market-redefining price point. It is the right solution for maritime customers managing through this difficult economy.' OpenPort bundles data with multiple lines for voice calling, an industry first.
Contributing to Iridium's opportunity for future growth are new regulatory mandates in the maritime, aviation and other industries, designed to enhance the safety of vessels, aircraft and personnel traversing and working in remote or isolated parts of the world. For example, the Maritime Safety Committee (MSC) recently issued a new regulation under the International Convention for the Safety of Lives at Sea (SOLAS), published by the International Maritime Organization (IMO). It requires every ship meeting certain specifications to have a Long Range Identification and Tracking (LRIT) device. As Iridium is the only communications service in the world to operate reliably north and south of 70 degrees latitude, the company is well positioned to meet this mandate of maritime customers. 'Currently, we have certified the LRIT devices of three Iridium partner companies and more are in the certification process. We continue to work with these partners as the flag countries responsible for capturing and responding to tracking and distress signals complete the build-out of the systems required to ensure LRIT compliance,' said Thoma.
Iridium also continued to see growth in the business and general aviation markets during the year, and the company made substantial progress in 2008 toward its goal of certification to provide Iridium-based safety services to the aviation industry.
