RigNet, Inc. (NASDAQ:RNET) Q2 2018 Earnings Conference Call - Final Transcript

Aug 07, 2018 • 11:00 am ET


RigNet, Inc. (NASDAQ:RNET) Q2 2018 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, welcome to RigNet Second Quarter 2018 Earnings Conference Call. My name is Skyler and I will be your coordinator for today. (Operator Instructions) I will turn the call over to Steven Pickett, RigNet's President and CEO. Mr. Pickett, please proceed.

Steven Pickett

Thank you, Skyler and thank you to all of our listeners for joining the second quarter 2018 earnings call. Yesterday, after the markets closed, we issued a press release regarding our second quarter 2018 earnings. The release is available on our website at www.rig.net.

(Forward-Looking Cautionary Statements)

Today on our call, I will start with a high level review of our second quarter 2018 financial performance. I will comment on some business highlights from the quarter and I will provide an update on some meaningful activities that have occurred since the close of the quarter on June 30. In the financial results section of the call, I will provide a more detailed review of second quarter financial performance. We will open the call for questions immediately following my prepared remarks.

Joining me on the call today are Tonya McDermott, RigNet's Interim CFO and VP of Tax and Treasury; and Brendan Sullivan, RigNet's CTO and CIO.

The RigNet team delivered a strong performance in the quarter. Yesterday, after the close, we announced second quarter 2018 revenues of $60 million, the first time we have exceeded $60 million in revenue in over two years. EPS came in at a loss of $0.23 and adjusted EBITDA was $8.1 million. Adjusted EBITDA is a non-GAAP measure. You can find a reconciliation of adjusted EBITDA to GAAP net loss in our 10-Q filing and our earnings release. The RigNet team delivered 22% revenue growth compared to the prior year quarter and a 171% growth in the Apps & IoT segment compared to the prior year quarter. We experienced increased margins in all three lines of business, demonstrating the continuing scale advantages of growing our business.

In terms of our managed communication services line of business, our site count increased by 246 sites or 23% compared to the prior year quarter and by 98 sites or 8% compared to the prior quarter. Compared to the prior year quarter and the prior quarter, we saw growth in every site count category, including offshore drilling rigs, offshore production, maritime and other, which is largely made up of land-based sites serving the energy industry. Our site counts have increased in five of the last six quarters. We believe these increases are largely due to execution on our strategy to move up the technology stack. We now have both an industry leading communications services portfolio and a best-in-class technology services portfolio that together are helping our customers accelerate the process of digitizing their businesses.

Our cybersecurity portfolio, our real-time machine learning and AI portfolio and our IoT and SaaS offerings are creating new high-value revenue streams for the Company. These Apps & IoT services are optimized for use on the types of communications networks we deliver to our