Iridium Communications Inc · NASDAQ:IRDM
Iridium Communications — Investor Day (March 2015)
112 slides from Iridium Communications's investor day presentation, Mar 12, 2015
Slide 1: Iridium everywhere: 2015 Analyst Day
Iridum® everywhere 2015 Analyst Day Iridium Communications Inc. March 12, 2015 RELIABLE CRITICAL LIFELINES
Slide 2: Welcome & Agenda
Welcome & Agenda Steve E. Kunszabo, Exec. Director Investor Relations March 12, 2015 IRIDIUM EVERYWHERE RELIABLE CRITICAL LIFELINES
Slide 3: Forward-Looking Statements
Forward-Looking Statements Safe Harbor Statement This presentation contains statements about future events and expectations known as “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exch
Slide 4: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reporting Entity For comparison purposes, the Company has presented the operating results of Iridium Holdings LLC and Iridium Communications Inc. on a combined basis for the year ended December 31, 2009 along with the Iridium Holdings LLC operating results for prior years
Slide 5: Agenda
Agenda Welcome & Agenda Steve Kunszabo Exec. Director, Investor Relations Corporate Strategy Matt Desch Chief Executive Officer Commercial Business Bryan Hartin EVP, Sales & Marketing Government Business Scott Scheimreif EVP, Government Programs Iridium NEXT & Operations Scott Smith Chief Operating
Slide 6: Corporate Strategy Overview
Corporate Strategy Overview Matthew J. Desch, Chief Executive Officer March 12, 2015 Iridium Everwhere Reliable ciritical lifelines
Slide 7: Iridium Communications—A Bright Future
Iridium Communications—A Bright Future Iriduium everywhere
Slide 8: The Investment Case: 2018 Financial Transformation
The Investment Case: 2018 Financial Transformation OEBITDA Significant Growth Free Cash Flow Long-Term Value Creation Capex Debt Paydown/Yield Iriduium everywhere
Slide 9: Iridium Communications Overview
Iridium Communications Overview A vital, global communications provider of mobile voice and data services via 66 in-orbit satellites Serving 739,000 subscribers(1) across the land-based handset, machine-to-machine (M2M), maritime, aviation and government markets Anchor U.S. DoD customer represents 2
Slide 10: A Retrospective: Our 2010 Analyst Day
A Retrospective: Our 2010 Analyst Day We’ve accomplished our key strategic objectives during the last five years 2010 2015 Completed by 2017 Iridium NEXT Launches starting this year! Unproven launch 16/16 successful launches; SpaceX provider; 1 / 2 the cost excellent quality and pace Good pipeline,
Slide 11: Iridium NEXT Is Almost Here!
Iridium NEXT Is Almost Here! Next-generation constellation will support our success for many years Retains unique LEO architecture with 66 new operational satellites, 6 in-orbit spares and 9 ground spares Scheduled to be fully deployed in 2017 using SpaceX Falcon 9 rockets – first planned launch in
Slide 12: 2014 Financial Performance
2014 Financial Performance Exceeded financial targets on sustained service revenue growth 2014 Financial Year-Over-Year Results ($M) Growth (%) Service Revenue $309 6% Equipment Revenue $78 7% Engineering & Support Revenue $21 22% Total Revenue $409 7% Net Income $75 20% OEBITDA $217 8% Total Subscr
Slide 13: Five growth pillars as we look ahead to 2018
Five growth pillars as we look ahead to 2018 u.s. government aireon & harris New products m2m maritime & aviation (broadband) strong foundation iridium everywhere
Slide 14: Growth Pillar #1—U.S. Government
Growth Pillar #1—U.S. Government A key partner in the DoD communications infrastructure with contractual growth in service revenue $400 million, fixed-price ($ in millions) airtime agreement; $38 $100 million gateway contract $90 $22 million growth “in hand” $80 for 2018 $70 Vibrant business develop
Slide 15: Growth Pillar #2—Aireon
Growth Pillar #2—Aireon Aireon is ideally positioned to be the provider of space-based, real-time aircraft surveillance and control for $1 billion annual market opportunity in 2018 The only viable solution over oceans and remote areas High operating leverage financial model Ownership of proprietary
Slide 16: Growth Pillar #3 – New Products
Growth Pillar #3 – New Products Connects smartphones and tablets One handset offers traditional anywhere in the world voice and PTT capabilities A low-cost personal communications Target customers include public device and service offering safety, military, utilities, resources Over 7,000 units ship
Slide 17: Growth Pillar #4 – M2M
Growth pillar #4 – m2m the faster growing business in our portfolio nearly 50% of subscribers and 25% of commercial service revenue in 2014 strong performance in traditional vertical markets increase penetration of heavy equipment oem segment ($ in millions) $60 $50 $40 $30 $20 $10 $0 2010 2011 2012
Slide 18: Growth Pillar #5 – Iridium Certus Broadband
Growth Pillar # 5 – Iridium CertusSM Broadband A new engine of growth New, faster user terminals to take advantage of Iridium NEXT’s enhanced capabilities Design, development and production in collaboration with world-class manufacturers using our core technology New products begin rolling out in 20
Slide 19: Iridium PRIME – Turnkey Hosted Payload Solution
Iridium PRIMESM – Turnkey Hosted Payload Solution Potential upside to our growth plan Third-party payloads on new Earth Weather Government stand-alone satellites that Observation Monitoring Missions leverage significant Iridium NEXT investment Strong early interest; funnel of about three dozen poten
Slide 20: Poised to Transform Our Cash Flow Profile
Poised to Transform Our Cash Flow Profile Healthy constellation Broadband services New network to begin Aireon launching in 2015 Capex “holiday” Core services growing for ~10 years Iridium Today Iridium in 2018(1) Capex Net Leverage FY14 of $217M OEBITDA Under Construction Iridium NEXT Complete! Sig
Slide 21: Who we are still works!
Who we are still works! Attractive and growing MSS market Favorable competitive dynamics – high barriers to entry Network leadership and advantages Established track record of growth Significant operating leverage Poised to transform cash flow profile 21 iridium everywhere
Slide 22: Commercial Business Overview
Commercial Business Overview Bryan J. Hartin, EVP Sales & Marketing March 12, 2015 Iridium everywhere reliable critical lifelines
Slide 23: Why Iridium? LEO cross-linked satellites
Why Iridium? 66 LEO cross-linked satellites provide global coverage Wholesale distribution channel with worldwide reach Robust product portfolio across key markets Innovative partner ecosystem develops and distributes unique, value-added solutions across our lines of business New growth pillar with
Slide 24: Attractive and Growing MSS Market
Attractive and Growing MSS Market MSS market generated $1.8 MSS LTM Network (2) Core Markets billion in 2014 revenue(1) Provider Revenue Architecture MSS industry revenue CAGR of Maritime & Land GEO with no polar (3) Broadband, 12% expected between 2013 Inmarsat $774M coverage; bent Aviation, pipe a
Slide 25: Expansive Distribution Network Enhances Market Reach
Expansive Distribution Network Enhances Market Reach Wholesale distribution model lowers costs and risks Extensive channel of Value Added hundreds of distribution Specialized VADs Solutions partners nd Customers VAMs VERYWHERE Partners develop specialty obal VARs ibutors products for their customer
Slide 26: Spanning Segments and Communications Needs
Spanning Segments and Communications Needs Iridium Produc Service Lines Circuit-Switched Handsets Voice & Data Voice and Data Push-To-Talk Transceivers SBD Modules M2M Chipsets Iridium Burst® Iridium Pilot® Broadband
Slide 27: Product Portfolio Summary
Product Portfolio Summary Satellite L-Band Transceiver Short-Burst Iridium OpenPort® Phone Voice/Data Modem Data Transceiver Broadband Service ® Iridium Pilot, 9555, Iridium Extreme , Products ® 9522B, 9523 9602, 9603 Live TV, Iridium Pilot Land Iridium GO! Station Annual 40,000 – 60,000 20,000 – 40
Slide 28: Lines of Business Overview
Lines of Business Overview Well positioned to address global MSS market needs Market Position Key Iridium Growth Competitors Advantages Strategy Market leader with Globalstar • True mobility • Multi-device premium product (Regional) • Global portfolio offering Thuraya coverage • Attractive (Regional
Slide 29: Land/Mobile Profile
Land/Mobile Profile Strategic Positioning Premium product and service Unmatched performance advantage Voice evolving to data services – data services >50% of total service revenue Revenue and margin driver Significant portion of installed customer base Growth Strategy Development Opportunities Multi
Slide 30: Land-Mobile New Products
Land-Mobile New Products Global satellite connectivity for smartphones and tablets Enables custom applications Over 7,000 units shipped since launch Potential ARPU upside compared to traditional handsets One handset offers traditional voice and PTT capabilities Numerous SPs have signed resale agreem
Slide 31: M2M Profile
M2M Profile Strategic Positioning Significant network advantage (coverage, uniform service, latency and throughput) Cost competitive hardware Strong and diverse reseller base The Internet Of Things; fastest growing market Growth Strategy Development Opportunities Grow existing partner base Expanding
Slide 32: M2M Profile – Heavy Equipment OEM Pipeline
M2M Profile – Heavy Equipment OEM Pipeline Telematics solutions from in-line manufacturing of CAT products Secondary market (i.e., “slap and track”) Install started for high-value fixed assets and mining vehicles Equipment and service revenue growth in 2015 and beyond Won 2Q14 for vehicle telematics
Slide 33: Aviation Profile
Aviation Profile Strategic Positioning Leverage size, weight and cost advantages Strong focus on aircraft operational communications Upsell cabin and passenger connectivity Flight safety voice and data for airlines Growth Strategy Development Opportunities Safety services on commercial aircraft Broa
Slide 34: Aviation Profile – New Opportunities
Aviation Profile – New Opportunities Changing Landscape Competitor service retirement – loss of trust with partners and customers Growth of OEM programs is supplanting key competitors Iridium starting to be viewed as the de facto “cockpit” communications solution New Opportunities Broadband market o
Slide 35: Maritime Profile
Maritime Profile Strategic Positioning Value provider in price-sensitive market L-band competes in mid-low data speeds Reliable, complementary VSAT backup Oceanic and polar coverage Strong subscriber and service revenue growth, high ARPU Growth Strategy Development Opportunities #1 solution in 128kb
Slide 36: Maritime Profile – New Opportunities
Maritime Profile – New Opportunities GMDSS – Maritime Safety Services Addressable market of 60,000 vessels Coordinating approval process with U.S. Coast Guard Application being reviewed in 2015; recommendation for approval expected in GMDSS enhances relevance for operational communications Iridium C
Slide 37: Iridium Certus Broadband Overview
Iridium CertusSM Broadband Overview A new platform for innovation and growth Enterprise-grade broadband across aviation, land/mobile and maritime Global coverage 100% network availability, low latency Network continuity with existing hardware Versatile platform for product innovation
Slide 38: MSS Broadband Market Summary
MSS Broadband Market Summary(1) Exponential data growth will encourage broadband adoption $4.5B Market Opportunity Iridium CertusSM is poised to address this $1.8 billion L-band opportunity Drive broadband adoption across several markets (1) Northern Sky Research (2014)
Slide 39: Capturing The Broadband Opportunity Across Market Segments
Capturing The Broadband Opportunity Across Market Segments Aviation Broadband – Delivering vital communications to the cockpit and cabin Maritime Broadband – Enabling global communications for ship’s business and crew Global Safety Services – Ensuring communications anytime, everywhere
Slide 40: What Our Partners Are Saying…
What Our Partners Are Saying… “Innovative communications solutions…to a diverse customer base in Aero and Maritime markets…” “…will enhance flight deck connectivity to meet the growing needs of our customers…” “The increased data speeds, lower weight and power savings provide a strong growth potenti
Slide 41: Iridium Certus Strategy
Iridium CertusSM Strategy What we seek to accomplish Deliver a global platform for enterprise-grade, versatile product solutions Innovation by external partners Penetrate new markets Growth engine for 2018 and beyond What we will deliver Provide core technology Common tools and technology Our world-
Slide 42: Delivering Innovative Solutions & Growth
Delivering Innovative Solutions & Growth …through the strengths of our existing business… Wholesale distribution Robust product Strong positioning in key network portfolio satellite markets …and a new technology platform Iridium CertusSM
Slide 43: Commercial Business Q&A Panel
Commercial Business Q&A Panel Matt Desch Chief Executive Officer Bryan Hartin EVP, Sales & Marketing
Slide 44: Morning Break and Product Marketing Display
Morning Break and Product Marketing Display
Slide 45: Government Business Overview
Government Business Overview Scott T. Scheimreif, EVP Government Programs March 12, 2015
Slide 46: MSS Government Forecast Overview
MSS Government Forecast Overview Expecting steady growth across the government market Subscriber volumes should Narrowband In-Service Units by Platform(1) double over the next decade 1200 Land/Mobile and M2M are key 1000 demand drivers (000s) 600 North America remains strong, Units 400 while Middle
Slide 47: Strong U.S. Government Relationship
Strong U.S. Government Relationship While Iridium’s current subscriber base is ~90% commercial, USG was our first customer and remains our largest today Serves all DoD branches and ($ in millions) USG agencies $100 Strong 15-year relationship $90 under DISA EMSS program $80 Unique capabilities $70 F
Slide 48: New USG policy and guidance on Iridium is clear – Use It!
New USG policy and guidance on Iridium® is clear – Use It! Existing $400 million service revenue contract is solid through 2018 “Dod users are encouraged to take advantage of this cost-saving opportunity and maximize use” Terry halvorsen, Dod cio (acting) – January 2015 “Maximum utilization of unlim
Slide 49: Delivering a Win/Win Across the Market
Delivering a Win/Win Across the Market Leveraging our airtime services contract – industry and USG are reaping the benefits VALIDATED FUNDED PRODUCTION/ USER NEED DEVELOPMENT OPERATIONS SUSTAINMENT REQUIREMENT PROGRAM DEPLOYMENT Partner Funded IR&D USG – Funded Development, Competition, Acquisition
Slide 50: Strengthening Portfolio in the Near-Term
Strengthening Portfolio in the Near-Term Handsets: Only NSA-accredited, secure, DoD Gateway: Major upgrades to encrypted commercial SATCOM handset prepare for Iridium NEXT for government users Iridium 9505A New secure handset Today ~2017 Netted: DTCS provides beyond line-of-sight Data: Low-latency M
Slide 51: Future Services and Enhanced Capabilities
Future Services and Enhanced Capabilities Increasing our overall value to the USG; could provide service revenue upside as early as 2016 Iridium CertusSM broadband meets demand for greater bandwidth Integration of software-defined radios Satelles – secure time and location services through strategic
Slide 52: The Future
The Future Unique value proposition not likely to be challenged Viewed as a mission-critical partner in support of DoD communications DoD investments in dedicated gateway on schedule for Iridium NEXT Adoption and utilization is strongly endorsed Current airtime services contract is unprecedented; pr
Slide 53: Network Leadership & Iridium NEXT
Network Leadership & Iridium NEXT S. Scott Smith, Chief Operating Officer March 12, 2015 Reliable critical lifelines iridium everywhere
Slide 54: Current Constellation—Continued Confidence
Current Constellation—Continued Confidence Current network is healthy and performing well High availability and robust service quality for customers Flexible and resilient network architecture One spare still available
Slide 55: “Iridium Everywhere” – 100% Global Coverage
“Iridium Everywhere” – 100% Global Coverage
Slide 56: Current Constellation – Service Availability
Current Constellation – Service Availability Strong performance statistics – call establish rate continues to average ~99% 100 90 80 % 70 Rate 60 50 Setup 40 30 20 10 0 Setup % 30 Day Rolling Avg
Slide 57: Iridium Network Traffic Routing
Iridium® Network Traffic Routing
Slide 58: All Systems Go For Iridium NEXT
All Systems Go For Iridium NEXT Less than one year to launch! $1.7 billion spent through 2014 Ground infrastructure upgrades complete Iridium NEXT satellite and system testing ongoing
Slide 59: What Is Iridium NEXT?
59 What Is Iridium NEXT? 33 iridium
Slide 60: What Is Iridium NEXT?
What Is Iridium NEXT? Completely replaces the current constellation Retains unique LEO architecture with 66 new operational satellites, 6 in-orbit spares and 9 ground spares Scheduled deployment between 2015 and 2017 Designed to provide service continuity and backwards compatibility Significant adva
Slide 61: Technology Evolution to Iridium NEXT
Technology Evolution to Iridium NEXT No greater priority than ensuring a smooth transition to Iridium NEXT Implementing a continuous and methodical evolution from the current system to Iridium NEXT Incremental one-for-one replacement of satellites Designed for backwards compatibility to all subscrib
Slide 62: Service Evolution To Iridium NEXT
Service Evolution To Iridium NEXT Expanded and enhanced product portfolio supports ongoing growth Superior processing power from new satellites – higher quality voice, expanded capacity, higher data speeds Chipsets for devices available soon Iridium CertusSM broadband Ground systems upgrade complete
Slide 63: Brought to you by… Iridium NEXT Management
Brought to you by… Iridium NEXT Management Highly qualified team—“It’s in our blood” We know what it takes to successfully manufacture, test, deploy and operate a satellite constellation 35 Iridium employees with over 540 years experience are directly managing Iridium NEXT subcontractors Design and
Slide 64: A World Class Development Team is in Place
A World Class Development Team is in Place
Slide 65: Iridium NEXT – A Global Development Program
Iridium NEXT – A Global Development Program Iridium NEXT Development Partner Iridium Operation Locations
Slide 66: Iridium NEXT Satellite Configuration
Iridium NEXT Satellite Configuration Aireon Payload Cross Link Antennas (K-band) Solar Array Wing Main Mission Antenna Feeder Link Antennas (L-band) (Ka-band) Deployed “Wingspan” 9.4m Weight: Approx. 860 kg (164 kg fuel) Stowed Dimensions: 3.1m x 2.4m x 1.5m
Slide 67: Iridium NEXT Satellite Configuration
Iridium NEXT Satellite Configuration Core Satellite Platform
Slide 68: Iridium NEXT Satellite Simulator
Iridium NEXT Satellite Simulator
Slide 69: Iridium NEXT Payload Hardware Qualification
Iridium NEXT Payload Hardware Qualification Satellite Factory Clean Room—Orbital Sciences, Gilbert, AZ Flight Model 2 Communications Payload Flight Model 2 Spacecraft Bus During During Assembly Assembly
Slide 70: First Solar Array Deployment
First Solar Array Deployment
Slide 71: Satellite Factory – Final Assembly, Integration & Test
Satellite Factory – Final Assembly, Integration & Test
Slide 72: Launch Vehicle Portfolio Offers Flexibility
Launch Vehicle Portfolio Offers Flexibility Falcon 9 Dnepr SpaceX, USA Kosmotras, RU/UKR Launches: 10 Iridium Launches: 2 Iridium NEXT satellites NEXT satellites Launch Site: Vandenberg Launch Site: Yasny, Air Force Base, CA USA Russia Two-stage EELV-class SS-18 ICBM used as a launch vehicle with 16
Slide 73: Launch Vehicle Portfolio Offers Flexibility
Launch Vehicle Portfolio Offers Flexibility Launches: 10 Iridium NEXT satellites • Launches: 2 Iridium NEXT satellites
Slide 74: New SpaceX Facility (VAFB)
New SpaceX Facility (VAFB) VAFB SLC-4E Launch
Slide 75: Kosmotras (Dnepr) Facilities
Kosmotras (Dnepr) Facilities Cluster-21 Launch Yasny Launch Base Yuzhnoye Facility
Slide 76: Recent Dnepr Launch
Recent Dnepr Launch ‘ssiridium @& Everywhere <a
Slide 77: Animation Showing an Example Launch Deployment Scenario
Animation Showing an Example Launch Deployment Scenario
Slide 78: Iridium NEXT Hosted Payloads
Iridium NEXT Hosted Payloads Iridium NEXT design provides opportunity to host third-party payloads Payload customer shares infrastructure of the Iridium NEXT satellite and global networked communications architecture Aireon selected as the primary payload (global aviation monitoring) Other “auxiliar
Slide 79: Iridium NEXT Development Schedule On Track
Iridium NEXT Development Schedule On Track 2011 2012 2013 2014 2015 2016 2017 Require nts flowdown & preli nary design Detailed design Segment development & qualification Vehicle i egration & testing Analyst Constellation deployment 72 SVs launched Day
Slide 80: Iridium NEXT—Coming Soon To A Planet Near You!
Iridium NEXT—Coming Soon To A Planet Near You! Less than one year and countin
Slide 81: Aireon Overview
Aireon Overview Alan Khalili, CFO Vincent Capezzuto, CTO March 12, 2015
Slide 82: Aireon
aireonsm
Slide 83: Air Traffic Management
Air Traffic Management The primary purpose of an Air Traffic Control system is to prevent a collision between aircraft operating in the system and to organize and expedite the flow of traffic Accomplished through the integration of surveillance, communication, and navigation; technology; people; and
Slide 84: Automatic Dependent Surveillance-Broadcast (ADS-B)
Automatic Dependent Surveillance-Broadcast (ADS-B) Upcoming transponder mandate for all aircraft in Europe and U.S. by 2020 A proven surveillance concept through ground-based stations Significant development in replacing or augmenting radar surveillance
Slide 85: Aireon Brings ADS-B to the Entire World
Aireon Brings ADS-B to the Entire World Augments current ADS-B terrestrial-based systems with oceanic and remote airspace coverage Delivers true pole-to-pole global coverage, with real-time delivery of surveillance data to Air Navigation Service Providers (ANSPs) No additional aircraft equipage requ
Slide 86: Benefits of Space-Based ADS-B
Benefits of Space-Based ADS-B Benefits include: Reduced Air Navigation Service Provider (ANSP) costs, including infrastructure savings Enhanced safety Reduced airline: operations costs, fuel consumption (global oceanic is estimated at $500 million in fuel savings/year) and travel time Reduced enviro
Slide 87: Best-in-Class Team
87 Best-in-Class Team + iridium Everywhere GAireon
Slide 88: Aireon Aircraft Locating and Emergency Response Tracking (ALERT)
Aireon Aircraft Locating and Emergency Response Tracking (ALERT) MH370 highlighted a global need for more accurate surveillance of aircraft, especially in remote and oceanic areas Aireon will provide a global emergency tracking service to ANSPs and Search & Rescue authorities to provide the aviation
Slide 89: Competitive Environment
Competitive Environment These are alternatives to Aireon, none of which meet the full performance in a cost-effective manner: FANS-1A/ADS-C Globalstar/ALAS New ADS-B Constellation Inmarsat lacks No oceanic or polar Potential $1.5B-$2B coverage for polar coverage due to cost to replicate routes satel
Slide 90: Investors, Customers and Innovators
Investors, Customers and Innovators
Slide 91: Next Phase Is Securing Strategic Traffic Corridors to Drive Operational Benefits for Airlines
Next Phase Is Securing Strategic Traffic Corridors to Drive Operational Benefits for Airlines Data Services Agreement (DSA) Memorandum of Agreement (MOA) to Data Services Agreement (DSA) Memorandum of Agreement (MOA) Development Pre-engaged
Slide 92: Aireon – A Global Solution
Aireon – A Global Solution Built upon the same standards developed by governments worldwide Performance is unmatched by other alternatives Can uniquely create benefits in excess of $500 million/year from fuel savings alone On track to provide services by 2017 Strategically built a management team an
Slide 93: Government Business, Iridium NEXT and Aireon Q&A Panel
Government Business, Iridium NEXT and Aireon Q&A Panel Scott Scheimreif EVP, Government Programs Scott Smith Chief Operating Officer Alan Khalili CFO, Aireon LLC Vincent Capezzuto CTO, Aireon LLC
Slide 94: Financial Overview
Financial Overview Thomas J. Fitzpatrick, CFO & CAO March 12, 2015 Iridium® everywhere reliable critical lifelines
Slide 95: A Retrospective: Our 2010 Analyst Day
A Retrospective: Our 2010 Analyst Day We’ve accomplished many of our key financial objectives during the last five years 2010 2015 $1.8 Billion COFACE Facility $1.8 Billion $134 million OEBITDA Expect $230-$240 million LTM $200-$300 million in $265 million contracts “in- Hosted Payloads prospects; n
Slide 96: Strong Track Record of Subscriber Growth
Strong Track Record of Subscriber Growth A decade of robust subscriber additions Commercial subscribers make 800,000 up more than 90% of total 700,000 subscribers M2M — fastest growing 600,000 segment — represented 47% of 500,000 total subscribers in 2014 Reached a 60,000 U.S. 400,000 record Governm
Slide 97: Foundation of High-Quality Service Revenue
Foundation of High-Quality Service Revenue An established track record of increasing recurring service revenue Expanding commercial service ($ in millions) revenue $350 $400 million, fixed-price USG contract assures government $300 service revenue visibility $250 through 2018 $200 Voice leadership a
Slide 98: Equipment/Engineering & Support Revenue Profile
Equipment/Engineering & Support Revenue Profile Equipment sales are profitable 2014 equipment revenue grew ($ in millions) 7% due to increased unit sales $150 Do not expect equipment $125 revenue growth in 2015 $100 primarily due to FX impacts, partially offset by contribution $75 from new products
Slide 99: Significant Operating Leverage
Significant Operating Leverage Growing cash flow driven by recurring service revenue and largely fixed-cost infrastructure ~60% OEBITDA Incremental sales at a high margin in 2018 ($ in millions) gross margin contribute to $225 70% growing profitability $200 High-quality, 60% • recurring service $175
Slide 100: 2015 Service Revenue Outlook
2015 Service Revenue Outlook(1) Service revenue growth of 3% to 6% for the full-year 2015 M2M business remains a 3%-6% foundation for expansion ($ in millions) 6% Growth Growth despite $3 million “headwind” $350 in 2015 — traditional vertical $300 markets and heavy equipment OEM penetration $250 Sol
Slide 101: 2015 OEBITDA Outlook
2015 OEBITDA Outlook(1) Operational EBITDA between $230 million and $240 million for the full-year 2015 Mid-single digit growth in ($ in millions) service revenue $250 Materially lower product warranty expenses $200 $150 $100 $50 $0 2014 2015E OEBITDA (1) Guidance speaks only as of the date it was o
Slide 102: 2018: Iridium NEXT Completion Transforms Financial Profile
2018: Iridium NEXT Completion Transforms Financial Profile Expected CapEx falls from ~$700M in 2015 to average ~$30M in 2018 for approximately 10 years While growth continues: $420-$485 million in total service revenue U.S. Government Aireon New M2M & +$22M growth Ramps to +$34M Products Maritime “i
Slide 103: Iridium Certus Broadband – A New Growth Pillar
Iridium CertusSM Broadband – A New Growth Pillar Significantly expands addressable market and service revenue profile Mobile satellite services industry expected to grow from $2 billion in 2015 to over $5 billion in 2025(1) — broadband is a big piece New, faster user terminals take advantage of Irid
Slide 104: Total Service Revenue Growth (2015 & Long-Range Outlook in Perspective)
Total Service Revenue Growth (2015 & Long-Range Outlook in Perspective)(1) 2015 Estimate 2015-2018 Prospects 2015/2016 growth rate accelerates, +$22M “growth U.S. Government +$10M in hand” for 2018, upside from new products AireonSM/Harris Hosting Fees & N/A Ramps to $40M in 2018 Revenue Data Revenu
Slide 105: Financial Impact on Iridium
Financial Impact on Iridium 2018 Revenue/ Contract Element Economic Value OEBITDA Impact Hosting Fees (interest (1) Ramps to $14 bearing receivable senior $200 million million in 2018 to Aireon equity capital) Ramps to $20 Data Fees ~$300 million million in 2018 Stock Repurchase $120 million —- (red
Slide 106: Capital Structure and Capex Snapshot
Capital Structure and Capex Snapshot(1) Iridium NEXT capex through ($ in millions) 2014 of approximately $1.7 $800 billion — COFACE Facility draw $700 of nearly $1.3 billion; facility $600 fully drawn to $1.8 billion in $500 early 2016 $400 Capex Capital expenditures expected expected to $300 averag
Slide 107: Iridium in 2018: Why Should Shareholders Be Optimistic?
Iridium in 2018: Why Should Shareholders Be Optimistic? Outlook/Expected Profile 2018(1) Total Service Revenue Growth $420-$485 million in 2018 (8%-12% CAGR) Significant value realized plus equity (retained interest) Aireon upside potential Approximately 60% in 2018, with material potential upside O
Slide 108: Closing Remarks/Final Q&A Panel
Closing Remarks/Final Q&A Panel Matt Desch Chief Executive Officer Tom Fitzpatrick Chief Financial Officer
Slide 109: Lunch and Facilities Tour
Lunch and Facilities Tour iridium Everywhere
Slide 110: Appendix
Appendix “:: iridium @ 110 Everywhere
Slide 111: Non-GAAP Financial Measures
Non-GAAP Financial Measures Iridium Communications Inc. Non-GAAP Reconciliation $ in Thousands For the Year Ended December 31, 2010 2011 2012 2013 2014 Q4 2014 Net income $ 19,941 $ 41,035 $ 64,631 $ 62,517 $ 74,989 $ 23,039 Interest expense 23 42 114 583 954 162 Interest income (660) (1,242) (1,186
Slide 112: 2015 Analyst Day
2015 Analyst Day Iridium Communications Inc. March 12, 2015 Iridium everywhere reliable critical lifelines