Rendering of Iridium’s constellation. Photo: Iridium

Iridium Communications reported record third quarter total revenue of $212.8 million, with higher commercial service revenue and government engineering revenue. Total revenue increased 8% versus the comparable period of 2023. The company reported its Q3 results on Thursday, and CEO Matt Desch spoke about the recently announced Iridium NTN Direct service in the works. 

Iridium updated its full-year outlook, targeting service revenue growth of 5% for 2024. Previous guidance was between 4% and 6% growth. 

Commercial IoT data continues to be a major driver of growth. Revenue in commercial IoT data was $43.7 million in Q3, up 14% from the year-ago period. Commercial IoT subscribers grew 14% from the year-ago period to 1,902,000 customers. Iridium said there is continued growth in consumer personal communication devices, along with commercial users. 

Hosted payload and other data services also saw growth — up 9% from the same time last year to $16.4 million in the quarter. This reflects higher revenue from Iridium’s growing PNT services, after Iridium acquired long-time partner Satelles and integrated the company’s Satellite Time and Location (STL) service earlier this year. 

Iridium’s commercial business ended the quarter with 2,341,000 billable subscribers, growth of 12% year-over-year, and growth of 70,000 subscribers during the quarter. 

Engineering and support revenue was $30.7 million during the third quarter, up 22% compared to the prior-year quarter due to a rise in activity with the U.S. government. This segment includes revenue from Iridium’s work with General Dynamics Mission Systems (GDMS) on the Ground Management and Integration (GMI) program for the Space Development Agency’s constellation. 

The SDA recently awarded GDMS and Iridium a modification to the cost-plus contract worth $491.6 million, of which $239 million will go to Iridium over five years. Iridium said it expects engineering and support revenue to increase in 2024 with expanded work on the SDA contract. 

In another sign of financial health, Iridium returned $146 million to shareholders through dividends and an expanded share repurchase program. Iridium repurchased 4.7 million shares during the quarter, which reduces its outstanding share count by about 4%. 

Desch commented this is a record number of shares retired for a single quarter since Iridium began its repurchase program. 

Iridium NTN Direct’s Global Play 

Desch addressed Iridium’s recently announced plans for Iridium NTN Direct, a standards-based direct-to-device service in the works. Iridium technology is slated to be included in 3GPP Release 19, paving the way for the company’s L-band frequencies to be accessible via industry standard chipsets. Release 19 is scheduled to be completed in the fourth quarter of next year. 

Desch believes Iridium’s service will work as a complement to other direct-to-device services like Starlink direct-to-device and AST SpaceMobile that will have regional service through collaboration with certain mobile network operators (MNOs). Iridium’s value is in having a global network, he said. 

“The people who buy our services are looking for a capability that works anywhere in the world, seamlessly,” Desch said. “Our IoT customers are not looking to have a technology that works in one country but not in another country.”

“You could see us in a smartphone or a watch along with those technologies,” he added. “They might provide more functionality in a couple of countries. But people will want to use our technology because it will work in the oceans, it will work in markets that will never have those capabilities.”