The American satellite operator announced net income of $8.7 million for 2022, compared to a net loss of $9.3 million in 2021. Iridium’s total revenue of $721 million; $534.7 million of service revenue, and $182.3 million of revenue related to equipment sales and engineering and support projects.
Iridium’s revenues increased 24% in 2022 versus 2021, $614.5 million. Service revenues jumped by 8% over the same period. The trajectory of this growth is obviously good news, with the improvement occurring primarily from higher service revenue and greater equipment sales. Overall, the firm ended 2022 with 1,999,000 total billable subscribers, which compares to 1,723,000 in 2021. Total billable subscribers grew 16% year-over-year, driven by growth in its commercial IoT segment.
From a maritime perspective, things are looking good for Iridium. Breaking out from the company’s overall publicly released financial statements. Valour Consultancy estimated Iridium generated roughly $43 million from its high-speed L-band maritime connectivity services in 2021, excluding equipment sales. This figure also excludes its mid-band and low-band revenues typically used for IoT purposes. Reflecting on its performance for 2022, we think the figure is likely to be greater than $51 million.
A few interesting maritime connectivity takeaways:
- In 2020, its billable subscribers were around 11,700 vessels. This jumped to 13,200 in 2021 and resided around 15,000 at the end of 2022. This is getting close to the number of FBB vessels Inmarsat now serve (minus those used as a backup to FX).
- Iridium is going to continue focusing on service revenue growth in 2023; primarily focusing on maritime, land mobile, aviation and IoT. The firm expects to replicate the double-digit growth seen in 2022 for the upcoming 12 months.
- Valour Consultancy predicts more than 17,000 Iridium-served vessels globally by the end of 2023.
- In the final quarter of 2022, Iridium reported maritime revenues of $13.9 million, up 22% from 2021. The justifications for this growth were attributed to its Certus 200 and 700 services to ships which have returned to normal business as usual. What is interesting on this point is that we believe Iridium’s maritime service revenues grew faster than the overall company’s service revenues in the final quarter of 2022.
- Furthermore, new maritime activations continue to be driven by the adoption of Iridium Certus terminals; either served as a standalone solution for smaller vessels or paired as a companion to VSAT terminals on larger ships. This is noted with the increase of 1,800 new terminals over the course of 2022.
- Another interesting point, the company highlighted the benefits of upgrades by existing subscribers from its legacy Iridium OpenPort service to Certus which will have a bigger ARPU per subscription. During the earlier launch periods of Certus, the company was initially worried it might cannibalise its OpenPort business by introducing Certus. However, Certus is still growing new business, and also upgrading its legacy OpenPort subscribers to more lucrative ARPUs on Certus. Without giving away too much, OpenPort subscribers outnumbered Certus subscribers at the beginning 2022. This balance flipped by the summer and we will see Certus subscriber numbers accelerate further from OpenPort subscribers.
- In addition, with growing interest and demand in Starlink Maritime’s services, we believe Iridium Certus will become a first to mind companion solution for the LEO service. Certus is planned to be GMDSS certified by the end of 2024.
- One point of potential concern, Iridium continues to encourage reseller partners to broadened distribution of its new Iridium Certus 200 services and terminals. The key question is how this will affect it its ARPU levels for its MSS service?
For more information about the maritime connectivity market and the performance of the industry, please contact: info@valourconsultancy.com
