A McLean satellite communications company has a role to play in helping Ukrainians stay connected through the horrors of the Russian invasion of their country.
Over the past few weeks, satellite devices have flooded Ukraine — allowing people to access the internet and more despite reported disruptions — and thousands of those devices were made by Iridium Communications Inc. (NASDAQ: IRDM), CEO Matt Desch told the Washington Business Journal. Its products include satellite phones, tracking devices and other tools.
While the firm licenses its technology and goes to market through its various partners, Desch said that supply is running low due to the unexpected demand from humanitarian organizations, the Ukrainian government, Ukrainian-American business folks and an array of others. Earlier this week Desch received a request for 20 satellite devices from search and rescue teams working to locate downed Ukrainian pilots.
“We’re actually out of devices. We’re making them as fast as we can, but we can’t keep up with the demand right now,” Desch said. Many of its distributers have redirected product to Ukraine. “We’re making donations, we’re supplying free service to some of them, we’re supporting every way we can,” the CEO said. At least several thousand phones have been sent in the last two weeks, he added. Yet he’s continued to field requests for more devices needed in the region, and he said he's directed them to the places that have dwindling supply.
Already Iridium has been struggling with supply chain issues, like many others through the pandemic. Over the last couple of years — not including a three-month slowdown in demand at the start of the pandemic — it’s scaled up production significantly to meet increased demand, Desch said. But supply chain issues for its electronic parts prevent it from scaling up further.
The two-decade-old company completed an upgrade of its entire satellite network in 2019, a move that cost it more than $3 billion and an average of $435 million in capital expenditures in the three years prior. Capital expenditures in 2021 were a more modest $42.1 million.
With its satellite upgrade in the rearview mirror, the company is growing rapidly. As of Dec. 31 it had 537 full-time employees, according to the company’s most recent annual report filed with the Securities and Exchange Commission. New product development and delivery mean the company is going to hire between 150 and 200 people this year, Desch said, and about half of those will be based at its Northern Virginia facilities.
Iridium’s McLean headquarters is 30,600 square feet according to its annual report. There are no plans to expand or shrink that space, according to Desch, although the company is operating in a hybrid model. It also owns 40,000 square feet facility in Leesburg, and leases or owns building space in Arizona, Alaska and other global locations, including two leased locations in Russia.
"Those facilities are for licensing purposes only and shutting them down (they are Russian owned), wouldn’t change the coverage of our service," Iridium said in a statement. "We’re more focused on how we can supply even more support and service to Ukraine and Ukrainians."
The past year was an eventful one for Iridium, which saw its revenue hit a record $614.5 million for all of 2021, up from $583.4 million in 2020. Higher revenue, in addition to lower debt extinguishment and interest costs helped bring down Iridium’s net loss for the year to $9.3 million, compared to $56.1 million in the previous year. As of Dec. 31, the company had $320.9 million in cash, an increase from $237.2 million at the end of 2020. Its board authorized an additional $300 million share repurchase program earlier this month, in addition to a separate repurchase program of the same size it authorized in early 2021.
Three new executives joined the company’s top ranks over the past year. On Jan. 1, Kathy Morgan became chief legal officer, promoted from her previous role as vice president of corporate law. Manjula Sriram was hired as chief information officer in early January as well — previously, she was chief information officer at The Joint Chiropractic. In June, Greg Pelton was hired as chief technical officer. Previously he worked for Raleigh software company Pryon as chief product officer.
