IRDM - Earnings call transcript Q4 2020 | Iridium Communications Inc.

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Operator

Good morning, everyone and welcome to the Iridium Corporation's Fourth Quarter 2020 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please also note, today's event is being recorded. At this time, I'd like to turn the conference call over to Mr. Ken Levy, Head of Investor Relations. ahead. go please Sir,

Kenneth Levy

morning to Good XXXX fourth earnings call. and Jamie. Iridium's welcome quarter Thanks,

this are to on will section morning's Desch, on you've is results me Joining call available I Q&A. morning's CFO, discussion our Iridium's trust Fitzpatrick. of earnings followed a which by and an our Relations Tom Today's this with the call opportunity Investor begin had of website. QX review our Matt CEO, release

caution to meaning over XXXX. that Matt, Securities things all turn to forward-looking the participants call like within Litigation I of contain may Before of our I'd Private Reform statements Act the

current Forward-looking statements are subject and risks, statements and more include expectations, statements. expectations which are and to plans in results are actual Securities risks could forward-looking that fully our and statements filings prospects. from Such historical discussed are to our beliefs fact our Exchange the Commission. Such statements differ future not and about forward-looking cause are upon with based

remarks and we Our our to of in at future, considered as point such any of disclaim if elect only views statements change. light today, Any some in forward-looking do expectations we update risks. so forward-looking represent may the to views statements should obligation even our specifically while today be or

our let things explanation GAAP most these reconciliation website earnings measures. These forma prepared conversion. well to Accounting Principles. During pro flow comparable Accepted release and flow, cash free the further over yield in non-GAAP be Please including With as to referring Investor of free accordance as we'll the section cash today's cash that, operational the Matt. turn free measures also refer Generally call, of a EBITDA financial certain non-GAAP and are with Relations and measures to flow me non-GAAP to financial financial directly not measures for

Matt Desch

and the the completion anniversary Ken. It's last of week of Good celebrated but of number hard too Iridium a They've for with services productive delivery been new everyone. believe very NEXT strong we of second years Thanks, the growth morning, customers. exciting our program. the to continued

and dozens world-class than XXX,XXX growing subscribers in a week's Today, us like our out Iridium into We've new Mariners. more we've launched products net segments, very IoT partners cloud of forma and million higher extend to Edge cash of innovative annual and fact, flexible network. rolled pro our generates for reminds like our connectivity services speed over flow. leadership platform, free cash strong, We've generator Iridium In profitable Connect. anniversary added and to line is also Iridium with the flow Iridium in to $XXX new transformation Iridium's business Last groundbreaking GMDSS company new Certus Cloud complete. welcomed data course, that our

we made is many the that our volatile, free as are markets to path pledge living to signifies years to And shareholders pleased long-standing opportunistic our to history share the and confidence release is we while in in leverage I'm be we if is dramatically have target. line Our cash companies, free network. first net upgraded this it flow drive business to our news and in The continue indicative to program Iridium comparable share from the of strong maintaining press and multiple our double-digit repurchase the This too light announced this In in authorization allows and that share a the night. and program, financial opportunities. up our last continued other which repurchase see, opportunities companies. growth and position Directors we from Iridium of differentiating profile we authorized fallen Investors cash noticed our leverage enterprise-to-EBITDA this of of further subscriber revenues pushing satellite traditional oriented flow million $XXX growth has has growth with progress a competitive the new us have ago. company's Board

For who we're and glad us had vision a to to execute, the now reward see patience shared position our to confidence. the your investors be in

the in will event allow be May. Iridium the out to our next of Day we generate. provide view are returns in growth we held process see planning We Analyst us longer-term financial a currently the and to opportunities lay This for to expect

inboxes interesting. Look or Ken find more you'll out think to reach this I invitation an it virtual details. for very to event your for to

guidance responded strong challenges like distribution team than happy of of to the dedication confidence, linked our proud that our be the we even unique performance. XXX my I'm finished including extend reach financial Operational managed meet more supports Iridium energy technology success. and their how to to original will EBITDA the Overall a partners I'm ongoing our Turning pandemic. that are Iridium before end this of with we on our global as the another of the forever our lower family, especially XXXX established year to fuel strong and XXXX sincere XXXX I'd note the to and results, delivered pandemic, and year. thanks

we revenue as altered data IoT and usual our global travel to on phone subscribers track. routines. and back able performance of growth normal While get our achieved L-band We broadband in saw satellite summer their settle experience result and business, as some see was we a seasonal business though decent headwinds did in steady didn't our the our -- ramp curtailed was in even outbreak,

the anticipation customers original Kobelco, to Edge number our for finished of XXXX of foundation announced which near like product expansion lay in Iridium launched manufacturer partners market, in rollout and new of line safety and another This IoT and the and end maritime should relationships partnerships equipment the service a the launches in XX GMDSS. and top the year. new their the great of markets, equipment subscriber in our growth IoT maritime of devices, new the fanfare heavy including of also Iridium We course of the

relationships and expensive year our allowing them these into the build share Tom is new particularly products, of the extends segments, radio extend local well grow that new with as go market rapidly government deployments into the as ground. overall cost out strong a detail had will with us which the and of increased infrastructure enterprise reach products PTT as market lower of performance. also Icom market reach entry on size without subscribers. communications products new take to of the global their on the need Each to their group Iridium's for of financial push-to-talk We to more XXXX customers allowing

So highlighting growth. and strategy, market position our I the business unique remarks of prepared my want opportunity Iridium's for to spend balance our

in morning's press for XXXX You've release. likely guidance this seen our

countries to of knowing the half mass during travel operate the shadow the to force expect still the continue in in and is We vaccinations first unclear. for in many business COVID remain timeline of and restrictions XXXX,

While we seasonal while usage remain improve historical should levels this it's climate. in XXXX, to rebound in unlikely to

that year service SOLAS-class tough industries that that the good assumptions growth In to forecasts really recovery. Aireon year and of will with start devices we in still that L-band maritime to profitability year. that To flow footing. number We installation. along improve maritime a service law required the up Topline seen its comp continue segments already we be generate second face as in streams. in by and aviation these XX,XXX like broken and December hosted rolling naturally maintain we built We've new safety global half as are regains our with we've revenue now cash growth service. reached rate also revenue of into partners agreement revenue run economy will this GMDSS also deleverage. of its access easing should demonstrates are having maritime long the Headwinds we has this XXXX new services the to late first expect a in industry sales has the past long-term monopoly the coming that full hopefully out our but to decade's XXXX the This terminal know and likely its open and Iridium persist this safety and industry start in vessels with the payload of to launched

are option board. targets that the of service, have to GMDSS capability required thousands big cost, and not new may vessels make smaller GMDSS of these the terminal for primary for equipment on While of our be hundreds the affordable an the ships this coverage system

As the provider this as positions we new Cobham, choice of and think see for GMDSS result, customers. offering Iridium Certus XXXX. a and expands broadband Thales to by Iridium the the from maritime in market Intellian, steady adoption continue available terminals

market installations. equipment for to well as terminals lift, to of for VSAT our win bigger as to challenges installation see Commercial preferred As be selected continues an share and broadband as majority standalone be important L-band companion increasingly technology expect market aviation we Iridium. the the for the solution

ready Some seen of the several aircraft approving add process for with finally narrowband antennas progress cockpit good global our Iridium with our legacy our will this for terminals. expected We've to as aviation Iridium This partners, to them existing Certus year. of are with services. standards Certus safety as approvals well be

like, it IoT second responders, and antennas new to also forward, users cornerstone satellite they in the rollout see and but this about our partners will legacy maritime different as network as to still for growth different the cost and IoT have antenna their and see features letting military, and also It over applications. the business, the small first like think the growth testing products price opportunities also in of XXXX IoT areas, agriculture, Certus XX year services. robust XXXX. first XXXX, the products the we receive this we see will the which up we half our are eight passive Iridium the growth for commercial, It's traditional new tailored year customers. installations forecast manufacturers talked small rolling aviation IoT impact as use with see data modem. as mid-band leverages adopted in applications ideal far XXXX first times About transportation XX around based products are light is the areas for collectively and plans into with finish on been our so commercial for industrial niche In who ideal we'll and broadband in have have device, and and we past consumer our low Iridium of new aviation strong While also with We IoT year. XXXX, device of beta are going the and oriented revenue applications. drones XXXX, a in during send partners developing in occur out customers. and developing in rollout bigger devices faster we'll well make first rotorcraft aviation the compact, transceiver. currently I XXXX first with Iridium's We've like as move consumer IoT markets of Iridium both than and is their half

maritime new You provides using in per as Certus will XXX introduce options. year These innovation maritime L-band upgrade XXX a finally, and the legacy half government also we needs fills They'll vessels, compact first companion for a drive second be US of the services service-class that an launch our that great important address this will service terminals smaller with Iridium And the of some antenna of market. which network. more applications. network lower for to see end terminals, be a that broadband niche VSAT support our low many our cost the call Port partners cost kilobits primary also Iridium a bidirectional be helps satellite partner small on at the continues terminals for Open lower

DoD no over be XXXX last gateway expanding for been work and has years dedicated R&D exception. engineering the few with the will Our and upgrades

Once term While of complete we will gateway on services, Iridium will USG is Certus have private broadband Iridium to certain DoD's private complete, drive upgrades the this final this access work year. Certus which mid-band pay-for-use to the expect secure, incremental like and long and the ongoing, implementation service.

by had services XXXX want the hand global in to data I to in the launched they've pandemic. Aireon's air slowdown that even customer things Aireon travel base will I recap new commercial a progress caused its year other and three considering airlines stakeholders. as airports, Tom, productive dramatic over expand aviation Before to

ready testing its signed and India, in of announced air agreement with their greatly also note FAA. the the Aireon date, are that Ocean. covering aviation who XX are they close literally of ASPs months revolutionizing Department Aireon being and that Aviation deployed industry. three I relationship air new of XXXX of two Airports working on the also three ADSP just grow to pandemic ANSPs also and next services Aireon Aireon To space-based Hong to number services travel past with quite are years and January the Authority commercial a Kong and and aerospace with Civil to recedes. of are with partnerships the than XXXX will I expanded understand PASSUR the by over new now with XX recovers countries an XX vaccinations operationally would all a be began once Over work certification vast as deals in the and the travel completed more more -- using Indian space widespread

view Iridium's band for highly being at the very five constellations ourselves in to growth LEO closing, and clear to IoT, than services lane continue physically rate, in a and KU mobility, L-band last antennas years, Safety EBITDA mega space today. which terminals. So spectrum broadband cost L-band operate must and X% KA as different high mobile a compound offer growth over a and speed satellite these grown announced new annual small large in We the LEOs developed low commodity to or and the we many market be and broadband to very we've complementary operational leader services. see long-term

likely of cash business about Iridium opportunities growth products revenue up excited will many that free dual-band flow on Overall, remain well expansion. and support and several with we We collaborating end as expect ahead as subscriber meaningful services the them.

So turn to financials. a Tom it Tom? our review with that, over I'll for of

Tom Fitzpatrick

my for good and Iridium's to performance I'd provide in color the remarks and XXXX like recap results some With Thanks, year our Matt, full fourth quarter. on morning everyone. today,

our the next perspective revenue released this for additional to the to supporting financial years. we like also this so see I'd by few targets trends We through key the and XXXX morning, over components expect walk provide discussing outlook

we the our Though noted, up year pandemic delivered of did the well. business feel effects Matt growth. held of remarkably solid As another global we

and XXXX EBITDA, characteristics year free cash In a double-digit grew the and in in the This we traffic service restrained out. X% strong IoT million addition nearly broadband air leverage revenue in volume EBITDA Operational cash and subscriber free and to total X% business, gains a service even the slowed by really stood growth of forma recurring reduced model flow activations on rise pandemic our turn. in our $XXX generated in saw as pro gains revenue. operational maritime. Iridium of flow back in installations and net in XXXX

quarter with contractual prior year's an primarily from million, last was rose hosted due from total X% the comparable For higher business the to work Iridium's the This year's those $XXX.X may Safety we of was be our but our period. our Iridium broad-based, and who up industries serve, growth fourth X% reported on to that engineering global business of story, takeaway partners, attributable to services the revenue new EBITDA $XX.X is and Communications in contract that and payload government. underlying remains revenues focus the mobile Operational to which diversity incredibly in network In million. US quarter, resilient our increase of

XX% COVI-XX. commercial Revenue side data fourth of a which we more broadband the service in more up by reported reflecting period. personal drove the subs from and On than personal revenue of business In increase revenue XXXX, to momentum we the rise data ago. from IoT commercial quarter, devices impact global the which fuel in $XX.X from subscribers to activations year X% usage. primarily reflected in X% subscriber in new ago This gains, the attributable was continue In declined our communications. added net voice offset which than prior-year driven voice period, XXX,XXX net million growth year in on commercial decline pandemic hosted a commercial communication the payload revenues, and and of IoT, in a

from they Oil in from the ARPUs the quarter, ago plans attractive million segment, $X.X of consumer network effects In especially namely reported broadband [ph] the previously, sector remain the relative noted to use. are markets continue fourth we we've and of yet the even resources Gas period. an the Aviation commercial XX% relatively to other from Demand As communication & up remains these source pandemic. feel strong oriented personal revenue, year the revenue as of our Leo

in year hosted up with in service in was terms the In period. $XX.X service accessibility from revenue expect and year remains in contract reflects agreement Revenue fourth line, reflecting data continue business contractual growth quarter environment. US X% up subscribers maritime represented We the all, At Aireon. payload government. services to EMSS XX% increase commercial challenging strong though subs, this grew vessels $XX.X million to our the IoT period. the the billable This XX% million from other in the pandemic year-over-year. XX% of with XX% grew step to in subscribers up contractual of our the ago commercial quarter, from fourth final Government ago the year-end,

period, the XX% $XX.X expectations, this equipment XX% government year. also helped line of final enjoyed our subscriber During This strong to with revenue in in months drive million in equipment XXX,XXX. growth In subscribers rise grew an to fourth the the quarter. to

to million predicated of EBITDA outlook, of revenue Moving this forecast elements $XXX growth as onto supporting in our follows. approximately range key X%. -- on Operational total between we The outlook million $XXX service are and XXXX a

be somewhat for related level. We an in not in usage in higher than benefit in to that and fall year's grow will recur from than to We expect forecasted to responsible the was XXXX. faster broadband last rate pandemic do and experienced The usage X% services. IoT in commercial headwind is expect same revenue XXXX the XXXX. a 'XX, off in ongoing service an approximate rebound $X IoT we materially aviation aviation revenue service ramp million in forecast

the another especially from for retail products us growth to continues remain broadband, Iridium demand in Certus focused devices partners from and forecasting installers' of strong, partners' we personal IoT. market. clear in Within drive marks Without this visibility We year in normalcy also channel double-digit access This partners our units, pandemic. gives subscriber as to launch in new or communication comfort receive in to to maritime, outlook. to cautious caused in remain new with subscribers ability the headwinds high growth ability sell ships our by even return expect to

go-forward contributor basis well steady now hosted $XXX a its for million and up true-ups from a are would reached $XX.X previously was the however, terms payload government that $X in we and payload million On in full-year I has produce contractual million revenue be that payload be inclusive payload. approximately documented step $XX expect discussed, to our Within we and beyond approximately Harris of in run XXXX September the hosted Aireon revenue As rate. XXXX in million hosted the XX. will $XX note rate will XXXX million service EMSS about full revenue. related to and a be contract run on contractual services, of of benefited

be We with level. in XXXX's expect will equipment line that revenue

expense will side the of opportunities SG&A we present increasingly to for travel expect meetings rise and as face-to-face the On somewhat ledger themselves.

Finally, consistent cash we taxes guidance continue estimate cash XXXX. to long-term our and negligible forecast in XXXX, taxes negligible through with

cash single service at on outlook additional perspective outlook light revenue calls growth our for in tax years. acceleration an for XXXX. to digits provide over for service In approximately mid our revenue growth the X% next XXXX, to our few of Thereafter, outlook until I'd like high estimated rate

industry accelerating we up five growth three the drivers over The next we revenue growth are commencing in next rate this a material service ability growth XXXX -- growth by in maritime mid pick broadband target the and in return market broadband normalcy of our As to Certus then for service XXXX the modestly years. a in of and threefold. Iridium XXXX. out the XXXX in in to to through this XXXX One, materially increase years increase look driven

government XXXX by increase in a the adoption number DoD of the of planned of our We gateway. completion broadband anticipate an given upgrades in also the rate the of to engineering service

our to and Iridium's Second, we business the will broader ARPU. by expect and speeds data an transceiver. mid-band subscriber growth IoT rate growth XXXX of with new mid-band and second ecosystem. revenue should in kilobit And transceiver materially expect transceiver commercial our new increases also voice data we offer coinciding higher This given Iridium's material partner offering per in adoption of X.X growth third, in acceleration of our XXXX legacy IoT in of of drive more functionality faster the incremental availability through addition

Iridium Moving global marketable had has million. strong flow, onto to of equivalents generator even balance as our a our pandemic. continued of transition securities free cash balance $XXX.X sheet, With December cash cash, cash of our XXXX, the XXst a successful of balance to grow during and

improving We liquidity to meaningful of will position capital expect support returns shareholders. our that our

Matt cash buy the shares a management Board repurchase our and share yesterday we program the Board of This in free the of $XXX shows confidence up production. As noted, that program authorized opportunities back Directors through XXXX. latitude million to and announced end business that of and Iridium's to gives market flow the Management has have in open the

Our program the deleveraging opportunistically be to on for return investment. desire share our maximize balancing will executed repurchase with objective

continue XXXX estate we to about total in as real forward, capex of new and investments $XX million in accelerates XXXX, development. anticipate product Iridium and XXXX Moving

EBITDA continuing support our closed back as a progress turn in approximately net then from have of discipline proud XXXX. to competitiveness. to while earlier advance year turns capital revert our the shown business goal. at a well full for our I'm two X.X times leverage of to to times almost We plans from of down Iridium's peak This and was leverage $XX X.X million call XXXX spending EBITDA. very about Our with we and as innovation

sooner. reaching amounts effect result target will its to be buyback. capital range X.X Lesser be after operations business XXXX by to We share flexibility that and Iridium planning. even ample leverage with target buybacks continues this of and within giving times of that our for EBITDA. between the Iridium Our believe long-term provides maximum target level in anticipate year-end leverage million We X.X we net would leverage for $XXX

which facility expected appropriate $XXX a the is EBITDA a million inclusive at payload in free adjustment, XXXX, back approximately pro 'XX of last forma million be cash XX% in X% capital, more repricing Lastly, we materially points shaved interest with conversion should moving annual of XXXX. summary benefit the forma of provide expense LIBOR representing guidance basis new renegotiate Iridium is of premium pro midpoint net continue points last basis use approximately XX% allow left the term our of XX% $XXX million, pro loan expense and every of a forma we're In to million from to interest result our in $XX facility This million. market our forma the I loan rate interest The interest pro expense market six than in and approximately to our upon and based rate our a in $XX excess the of up in million terms plus the If structure, will cash is working $XX was wanted to our annual forma month. X%. the $XX new The XXX XXXX net off interest reduces hosted pro upon off flow reduction for months to million, of forward. capex yield term of free net favorable approximately $XX from debt We XXXX forma based interest $XX Pro million. savings flow. year, rate XXX conditions. our for recent repricing which of

environment, flow cash on ratings of note available forma last more in favorable growth year. to cash measures GAAP that the week. a for financial of years our corporate cash additional to I is the to We're free pro operator In Matt Events the Moody's that our now of with Relations call led resilience for grew In notch Investor model for be metrics very our the business It's and difficult closing, many this unlock for year value Q&A. a upgrade now expect forecast I shareholders. cash the to the trends XXXX these and supplemental these and the A was in for free AX operating Iridium. flow. With EBITDA to flow that, I'd demonstrated positive successfully have credit face also we of reconciliation to turn presentation like our flow growth under transformation clear by rate position would the in excited realized. one detailed has been description over good website. in outpace be We to to deleveraging our that outlook Iridium's facility along

Operator

gentlemen, we'll Prentiss James. Ric Instructions] [Operator question. with and at question first time from go Ladies begin the today from our And Please comes question-and-answer Raymond this ahead session. your

Ric Prentiss

Thanks, good morning guys.

Tom Fitzpatrick

Hey, Ric.

Ric Prentiss

yet multi rate revenue. Is with maybe a 'XX Hey. share the achievable range guidance. little way not a you service there. you other about you're think out comps payload, on have in one they some something of might kind questions, in IoT bit the revenue but help making you Can companies had couple hosted through target you where COVID first getting for ORBCOMM there, service well. of rate, And COVID; revenue woods tough of A Glad hopefully the service Obviously suggested we're might all the out XX% has your growth for revenue the be. exit guys? the that of service of

Tom Fitzpatrick

I'm So comment exit rate, not Ric. on to going

we you a XXXX the in I not and going think you that recur that's in -- gain hosted that XXXX. built-in had think will we XXXX study payload in of kind to should show comp I had

materially we this we than growing to I remarks, is be X% going IoT prepared my year evident. the in said I think put and think up to faster As be that's going

out the to it's getting XX%, So not of question. far as as

expect up that 'XX see we and in Let's broadband the as meaningfully. how really uptake 'XX is pick to

Ric Prentiss

Right.

So when you about talked that...

Matt Desch

we are IoT bit a Ric, quite does. than They ORBCOMM business focused the mean, have diverse in obviously more space. I

one of at each and each a growing number kind is have kind of segments, different kicking in. different We of market levels

is terms really of kick segment the don't year, back done of that's the of that the broadband sort this point all coming because dynamics happy of seeing mid-band sort We've very year. go where -- new unique to end in had. going can really into this even at towards mean market those the pick hopeful at which think the will to the and Some of have the how we're kind start a in the we're of aviation getting start faster of on and and traditionally end XXXX to gets year -- the roaring back a segment, said our than and that of very have of of I as market we've always in we market bore I came of I'm area. products that all well was that pace in IoT kind with they really up they others IoT if and and sort full they that see I that services

hopefully that you. helps So

Ric Prentiss

-- still Tom even suggest? When It as 'XX does. I've you material 'XX, is Trying year. a higher gauge guys known on service longer, digit? high that to just to that deliver you And Could sure can and like 'XX of that guys revenue 'XX in you kind materially be single of you think digit? your obviously to time usually potential double saw does to higher guys we last what make long guidance we

Tom Fitzpatrick

we're a grower. not X% Well,

advertising we let's how So, X%, the lot [indiscernible]. to be higher than be things of it is we're -- a that see lot that. going And intention it's to a expect

think our product. the satellite We Certus a going a is communication to We're very IoT optimistic to long personal we're the about playing choice uptake very of player You be We trend. the that. grower understand think for drivers. time. on It's

'XX. those result rate growth 'XX of a all in going higher factors to think to we in materially so And of are

Matt Desch

reasons should. the a more is time think Rick, some been few because well, areas sort able of May fully Analyst to why areas, focused we growth Day I in probably we And there spend little I as -- do is of bit we decided guess haven't on as we to described haven't those of to one a

not bit go bit time will Tom the people into years and but area can spend future think able devices we is, sort of them, about the more consumer sort financial I've not a of And the which though in what time we're May. hope of personal a out kind guidance little to with bit quite example, days long-term For into down more long-term talking think way, be we even been Iridium think I I carry we have a to talking communications, maybe, spend more can little is going we're about strategy. about broadly I -- that a five -- more of -- going will that maybe to what in that to get I impact of certainly that more shrink flush the back a calling

Ric Prentiss

Great. you're And the it what I of or last it's there. question questions of to maybe large from LEO thoughts having. timeframe starting Providence talks on me. out level -- new Matt, & out that other when what Any Science we're on the acquisition get some one? LEO collaboration maybe understand with some you said; us constellations up more likely there. brought you Help AST

Matt Desch

and of to our you're inefficient why impossible more for the it's band. IoT said to to is I would confusing wasteful be when ideal Ku, to decided even so the lot you Ka and because sort those them fact of we they on LEO why companies that Well, forward almost for I in focus compete complementary for communications know with areas system that and that to we've any in sharing see investors other compete they looking and even are in of LEO information channelize personal LEOs, those it really incredibly when all try. on that's for because assume -- and a way we it's the things

makes interest L-band their some big as their an of them. service which that's satellite all they're cost going to initial, value them say, lower have in services even And been as focused service, a core all consumer we've they with build frankly terminals, So have our and a and commodity, primarily be complement find us they have or they lot they're networks, but out that often several to on of to them complement told about what talking always them. better

So I the for couple that years. products coming think I of know see you'll a

and the a to they to indicative as claim in be think being way -- several -- has up they're Certainly, that what they in by the to way maybe valid. magnitudes it's that involved but frankly to in lot predecessor one the been to that of order of for is order is noticed a And years accomplish. doing helps. company [indiscernible] do We last if do takes our XX ideas certainly right kind market going accomplish they're that space have can the market of do yes, they're done magnitude over to point valued do as in the what of long they price of that to hard. space time. complicated you of -- just in enthusiasm it -- I to able are these go. how still the or AST that As in and I'm far considered for if we've as are able a done we've Hope going to too and try it is their more hard, that requires what that AST of to said they'll mobile, whether able is invention think The It the they'll be get has dismissed expensive, to has big timeframe, been now of developing really interesting terms it's then ratchet viewing you and indicative science any I've would trying well. be what

Ric Prentiss

that. guys. Great. Appreciate May. guys It in look And does. forward Thanks seeing I quote to you

Matt Desch

Ric. thanks Yes,

Tom Fitzpatrick

Ric. Thanks,

Operator

Burns question. Greg go & Our comes your from Company. with next from Please ahead Sidoti question

Gregory Burns

good Tom, run a this is SG&A you up fourth mentioned rate? bit quarter stepping year, the a

Tom Fitzpatrick

million fourth rate. in good few Total being about the quarter I would step -- dollars, the XXXX a run a think year. up SG&A Greg, full on

Gregory Burns

Thanks. positioned your or standalone your service other of GMDSS does of to it services? that is to revenue Okay. that solutions that right. drive how more out is Thanks. All compare there? product, in a as product And being [indiscernible] through broadband then And terms will pull

Matt Desch

I heard product perspective. safety being something is I'm bring today and the Yes, and all maritime navigation of go maritime uses stand-alone GMDSS, used your doesn't or I from think that in on, when it's a revenues. as -- not have emergency through delivering an to That of data we other the data the area always the rest or terminal narrowband It's both. viewed that everybody a able had And ships, every service out product it address it it's sure not had to our pull always SOLAS-class ships on competitor. been that but from terminal been to all It's that use there at be least our at think we've GMDSS be It's for business. It's of been ship services? question, that not that all. it and was the our to

always were we of the terminals for board. kind So competing other on

excited since a ship only because often Iridium well. service partners always ship delivering of the -- they that a be can with an they haven't and as service VSAT competing enjoyed Now that's our are a about providing were competitor

So it can be a stand-alone service.

really use to this very love cost mean, we're even price emergency with might GMDSS. about those service. out really we're button to a comments, enthusiastic There it in an centers a and information, companies very panic provides the of not fact have ship others but that encouraging wondering owners before. of might say, thousands all ships I I've attracted hundreds would the wasn't market the insurance As to connects regional at that if And GMDSS who and Iridium effective for my be there low kind of mentioned is expand

So helps. that hope

Gregory Burns

thanks. Okay,

Tom Fitzpatrick

Thanks, Greg.

Gregory Burns

Just follow-up on that. incremental is a What the ARPU?

Matt Desch

you of Greg. out, cutting said incremental Can ARPU you -- some what? You're by

Gregory Burns

how ARPUs the generate incremental [ph]. those shift Of much GMDSS. on Like, revenue

Matt Desch

can they ARPU of device don't but tens and is highest it on an data it's really too for they how it anything really it's probably integrated Since be much issues They that of dollars depending the -- too. anything. safety early of and to and higher that much, used delivers voice in cost information issues all average the upon that want some too they a data use to kinds it device and it's the minimum subscribe a Well, weather be very obviously quite providing doesn't -- navigation sort voice and data connection for terminal sure can And plans, but of But exactly a is -- extensively. voice it various and quality anywhere typically ship data delivers and what issues, voice but high that's a and emergency dollars that use about know be. our lot from hundreds thing them it use of very that the to to. on it than bit at will vessels around can

So previous XXXX, I it's be. going it as don't will a business. said course, driving it's really move as point standalone in it's needle for sales really to But what you much And maritime our as going number question given of the know exactly not both the to definitely well Certus in of have. just that the units foundational

Gregory Burns

Okay, great.

Operator

from comes gentlemen, And next from with our ahead Chris question. your question and ladies Quilty Please Quilty Analytics. go

Chris Quilty

the steeper the year, down Wanted think year was a I to than on little follow this which IoT X%. prior Thanks, was ARPU down Tom, up bit guys. XX%, business. the

consumer. the your based we we I should due with to of COVID as to for expectation think into out where What guess bulk upon of look the Some that XXXX you and go mix due ARPU mix? expect will

Tom Fitzpatrick

Right.

So that Don't was acute the mix acute off in aviation. from $X was 'XX Right? consumer, what the million fall but in from the ARPU from hit So recur. not model we took to Chris. the aviation, model

Matt Desch

in stronger that also consumer you products. see, be equally if strong I to will... been I not -- it's expanding Chris. XXXX been as the ARPU, strong given has It's the strong. really really mix I expect think mean, And

Chris Quilty

So, obviously... to the say going that not -- to you're have

Matt Desch

ahead. Go

Chris Quilty

do is the to but you going Go little business up expect there million to aviation this Tom, year? $X bit headwind, said not I you think a another ahead. No, be tick

Tom Fitzpatrick

I a would little bit. say

is that to Okay, issue the we're going headwinds. have the not

know going million. not going coming a It forecast grow fall whatever to million. $X it's So have by not travel back, air it's bit. to $X fall you will for but Take we

Chris Quilty

but customer, UAV a see away moon's can talk what small and the going they you you about [ph] were prospect guess market there. I and the Okay. is

Matt Desch

Yes.

are who are relevant not our quite interesting have some have reason a high package rate already we're some antenna. factors and who of technology with small pretty new doing. is, very and they addressing It's mean, a why in they're good We data small different that that products is but partners number volumes, I form gives existing space, that the a

market few they us. growing speed UAV seems command our modem applications drones get whole and grow. satellite I there like and So to for for their is right seeing and the in There utilize using the can't there that fast comment business can will years. now market mid-band a in interesting coming use interest be there. that how additional some connection from need to so control they because of more of high bunch across the applications the interesting different are [ph] are on -- particularly it, There segments a particularly the I'm quarter certainly

us. that increasing in ever a believing next sort growth are foundational or none think feels I to us of market segment it of the be for it's radical going it's like two, but year to

Chris Quilty

got new front, how it Iridium what the will Edge there in XXXX on you've sounds shipping, the are the that [ph]? do like product on thoughts product And

Matt Desch

solar and it Pro. the the new contributes revenue, Yes, on both we side some new as obviously out the device ship Edge

been because they well. as some like attracted using adopting in. We the whole are from them. to players around partners those have might also It a We're for and use has that starting bunch they developing to right us a seeing and other not now are were otherwise them powered satellite products who applications some have of us device are transition partners now some solar low-cost that new

front on away evolving of their are now a our used are maybe our network. powered device from partners had say they using to moving solar Some products

the what of yes, IoT and always not we've IoT with into there. costs growth And so and support revenues invent now right and a in themselves. it's -- have will And get things our I quality help But partners really faster array was to which that broader think that's having our finished going that those dynamics devices we're felt low to of sort also business were our industrial seeing partners.

Chris Quilty

Great. but I terminals, the a on And this think the distribution ARPU is broader at rate forcing service you it year. just and XXXX, reasonable business, depends is that on ratio I final Obviously, or enablement the up new around XX% in guess broadband expressed ship question which [ph]?

Matt Desch

a By Port through everybody think, not, is the mute here. ARPU But are data kindly through with Terminal, think not I from higher XXX I pleased you're a has declined services see Port certainly sort higher we is our change It because and lot business as yes, fast. people could without go typing. that that be obviously Certus you'll that the Certus on Open noise If must Yes, the can stronger bit the really going way had, speed get geostationary them. lower from using we Certus we in the expect Open a there's see on mute the sort speed naturally of of think that mix it we way, and of go quite I'm held class services line. there the we the I of use the a which evolve delay lot ARPUs line But I service. that up yes, satellite by will too if terminal

higher services it allows market to But would I higher-speed have share. and going and I of into yes, kind us to great, is So because -- ARPU think probably that's expected take these continue. grow that

Operator

with go Our DiPalma your from Louie next question William comes Please question. ahead Blair. from

Louie DiPalma

Matt, that was wanted about to a here geostationary Good And say joke the [ph]? Tom satellite Ken. and I funny morning, Matt,

Matt Desch

that. got You

that, you You got did Louie?

Louie DiPalma

I did.

Thanks. the For a new the new expected into important to be, of what the targeted are Garmin I be will your either miniature partners matter, and or guess inReach to they of review something performance of over release slash throughput, handset? specs you speed transceivers to than can you're these sit enough size like And how can more small coming that expected are transceivers Tom, mid-band the years? release

Matt Desch

Yes.

out The issue now sort into the it's designed robust is receiver, now So to of mid-band without works things it first stand-alone itself sophisticated really on and because products it a well. product be very doesn't of in transceivers it. has the it line and around quite is other

the to quality XX of playing iPhone more per kilobits to lines cards high up little don't something. I that's two phone second, So like bigger it next sort other a It's a very XXXX. it. and each or an bit provides roughly maybe couple of, -- And size the standing your of packs know, or of voice than to Android

it a So XX does that. mainstay of of you our the size lot old that's more that fraction imagine kilobit our a did business was almost X.X -- the service sort it's voice that first than transceiver [ph] line and like L-band years only a the of for with of can

So it's IP that an IP connection. addition, product A in pure connection.

it's on our kind our and sort It's bring of of very, efficient where foundation, an that network be fast of use product. This instant L-band and data. will and on off very in products transfer before lot network, to the thing back. and sort connections of very So take built to data previous a had that dialed transceiver ON, send is a XX seconds device of resources. make and very the be That's data, efficient

technology imagine very our IoT things smaller efficient, lower it's very, of some There segment perfect go that still that IoT we XX be which It's kind new size, traditionally products, very the imagine services. speed, we're XX, fast also network. kilobit a IP, well evolutions but be to an antennas, as that data you developing. than for on software and could say actually maybe small that as things enhanced small service, that faster You other Again voice where very previous take from off but type would out and and in much of very, IoT market are using much very have especially could applications.

And is be can uplink from is life. So very, and there much consumer going be units shrunk better power Garmin that to be form factor variance portable be XXXX, very lower going into yes, there down sizes variance size a oriented. that simultaneous to There have inReach specialized they for battery that of developed. be of and will

Louie DiPalma

such iterations noted Sounds transceivers good. current are you to will with that Are the to And be the send could future also have you that new for a they technology? ability new everywhere. messages the middle whether for of send multimedia with you or the and Is it's can selfie? the nowhere be others, handhelds, text capabilities with going possible that Garmin saying now in like

Matt Desch

device. a It's the It's very a little depressing only going do sending if text efficient richer I mean, that's it. streams. thing much yes, pictures, for you're to it certainly sending absolutely. is with But multimedia

imagine all do email more are a sense, you that outlook could information a both of where will including you also smaller, that You partners. different efficiently. from in a partners development. but email or increasingly the text sort and and front, lot attachments those embedded with exploit be that device going A And around see ourselves Those portable real and thing. with today do things done makes more of quite see we working can doing these in number to done new from And we're externally things devices. be that our much

know Iridium, has and Because our to fit is with technology I our our to embed when partners them it makes this long-standing into around products work exploit our strategy we and service. still it Iridium to use expand we technology easier about that businesses, that think unique perfectly. of partners' been for them kind it and license

I'm value those very So deeper the announce capabilities we'll That Matt. about we have of time our deeper comes. was some sort works, embedding the the for excited But in helpful. other into and those consumer when quite into chain. of the Thanks, potential

Matt Desch

Thanks, Louie.

Operator

question. BWS. from ahead from Hamed Khorsand final our question Please And today go your with comes

Hamed Khorsand

Hey, good morning.

know COVID [indiscernible]. your current So the the wanted and to is are highlighting installations installations in I all, you service situation just ask at customers shipping maritime. with issues, coping lane about I worldwide you've the been for but how

Matt Desch

-- I eased the restrictions. installers I pandemic I easing, think it's on a said of to last slightly even still don't is to a think unable that travel with we've call lot even due travel lot are not and the Well,

partners our Some installation them. can't to to countries get forces ships onto centralized with get into install of even

early in are parts our have be restrictions ships of want last are go doing installers owners then but with and for weeks. to cruise board And Some you better pandemic everything, because the there many with that on you're close still of is the as saw see and localized partners ship your area infected. you a to thing the crew out you confined

lot care and of everything taken there's it just So a slows down.

are things still getting ship. Now -- to on that was

We little installed, increasingly are in every seeing fact feels month, terminals a there's it bit improvement. like of

depends be, operating they to they where close but that our they from are So, in happen we like are anywhere rate to not the on world run would hearing the partners to.

their big they them they ship. the just us of have terminals backlogs, told onto some a get have And pretty can't

out And doesn't just is it make desire ships, demand and -- the obviously they for there. slow product, us. gets So getting the for until there on it's revenues it

Hamed Khorsand

the the much I with was I QX declined quarter. on the part other seeing installation? that all? had from at side. the you're Is IoT How ARPU this And ramping your know Okay. traction industrial

Matt Desch

we year, tracking each of our thing. partners, think be business, segments in for that those we're seeing ARPU industrial are in heavy whether equipment, in more quite this sort the see to regardless, of just partners get to their down and I shut in work we year, of is that very everything, pace to issue added a piece, back XXX,XXX but figure still you revenues to your saw of agriculture, of or it do going or ocean second the our anything. they industrial market have it And certainly or a get normal partners in of [ph] sort the we're handfuls devices fewer of of much a to second when the of grew everybody be as we them and work to normal really how they across going of mix. in to again, knowing and seeing out April we back mean, transportation, There The own partners We was us to usual weigh felt dramatically we're to year piece but almost back subscribers but is the -- and ARPU half what March, COVID. the decline add a cadences operations. in are and got close almost year kind in -- about really aviation usage already join average 'XX. to of now expanding sort fact through last like I expecting to consumers of because XXXX. a all down The bit of all a partners one, year, paying feels the in last lot have not previous IoT the more more the work it's XXXX May. couple that normal COVID declining of revenue of to a and than tried many hard like talked But They remember number than that's lack Well, back year. more than due dollars It are that. half in was few IoT the we're last because them the we

Hamed Khorsand

thank Okay, you.

Matt Desch

Thanks, Ahmad.

Operator

session. gentlemen, closing with answer conference like for that and to over turn today's and back Ladies to I'd we'll the management any remarks. end question call

Matt Desch

from a well. Take us. share earnings will on and preparing Day for quarterly also Day May, you lot at Ken more care. call to we'll in look for the that forward joining Analyst as to more seeing and Analyst Well, thanks be Watch in that next

Operator

attending. thank that conclude for we'll gentlemen, and with call; we conference ladies do you today's And

lines. your disconnect now may You

Iridium Communications (IRDM) 12 Feb 212020 Q4 Earnings call transcript