Iridium Communications Inc. (NASDAQ:IRDM) Q3 2018 Earnings Conference Call Transcript

Oct 25, 2018 • 08:30 am ET


Iridium Communications Inc. (NASDAQ:IRDM) Q3 2018 Earnings Conference Call Transcript


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Good day, ladies and gentlemen, and welcome to the Iridium Third Quarter Earnings Call. All participants are currently in listen-only mode. (Operator Instructions) Please note that this event is being recorded. I would now like to turn the conference over to Ken Levy, VP of IR. Please go ahead, sir.

Ken Levy

Thank you. Good morning and welcome to Iridium's Third Quarter 2018 Earnings Call. Joining me on today's call are CEO, Matt Desch and our CFO, Tom Fitzpatrick. Today's call will begin with discussion of our third quarter results followed by Q&A. I trust you've had an opportunity to review this morning's earnings release, which is available on the IR section of Iridium's website.

(Forward-Looking Cautionary Statements)

During the call, we'll also be referring to certain non-GAAP financial measures. These non-GAAP financial measures are not presented in accordance with Generally Accepted Accounting Principles. Please refer to today's earnings release in the IR section of our website for reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures.

With that, let me turn things over to Matt.

Matt Desch

Thank you, Ken, and good morning, everyone. So year-to-date 2018 has been terrific. Our financial performance has been outstanding. Our subscriber growth has never been better. And we'll soon be launching Iridium Certus, our new broadband service, which will serve as a significant driver of business growth for years to come. As we announced last week, the final launch of Iridium NEXT satellites is scheduled for December 30. This SpaceX launch will again be out of Vandenberg Air Force Base and carry our final 10 satellites into orbit to complete their Iridium NEXT constellation.

Of these satellites, six will be used to complete the constellation and the balance will serve as the remainder of our nine in-orbit spares. Our satellite operations team has become really adept at processing these new satellites. We expect this final batch of satellites should be fully deployed within weeks of launch. So we'll soon have a completely new and finalized constellation quickly following this launch, including for our Aireon joint venture to begin their global aircraft tracking service. And completing our next-generation constellation will justify a great deal of celebration, especially given how long we've been working towards this day. But most importantly, it will usher in a new era of growth for our company and a 10-year or longer CapEx holiday that benefits our investors. This final launch will indeed be a great way to end the year.

Today a little over 90% of Iridium's global traffic is already managed by the new Iridium NEXT satellites and, while we eagerly await completion of our network upgrade, the truth is that our steady execution on the Iridium NEXT mission has already begun to pay dividends. It's a fact that the Iridium NEXT satellites provide a better experience in areas like voice quality, network availability and IoT latency for existing customers. They are also giving confidence to new partners who may have previously questioned Iridium's prospects. This performance has