With remote work allowing you to work from any corner of the world, and we mean any corner, you must account for networks in the area and that’s where satellite devices, like Iridium GO!, come in. Iridium GO is a popular portable satellite hotspot device, and it has recently given new orders worth $2.5 million to satellite device developer Beam Communications (ASX: BCC).
The new orders are in response to the strong demand for the popular hotspot device. Even though Iridium has been consistently introducing its satellite phone Iridium Certus to the market, Iridium GO appears to be doing well, too, possibly because of its comparative affordability, functionality and small size. The new order is expected to be delivered in FY24.
Beam’s Managing Director, Michael Capocchi, shared, “Satcom (satellite communication) devices have uniquely long product life cycles that typically extend for over 10 years. For this reason, Beam makes an enviable return on capital for product innovations that is difficult to match by other consumer electronics firms.”
Iridium has been a longstanding partner of Beam since its launch in 2002. In fact, Iridium GO was jointly designed and developed by Beam and Iridium. It was launched eight years ago, and since then, the Company has received manufacturing orders for 67,500 units from Iridium. To put these numbers into perspective, when it started out, the initial order commitment was only for 5,000 units in 2014.
Capocchi is convinced of the product’s profitability, noting, “The Iridium GO! will continue to be a popular device among users due to its highly portable form factor and attractive price point.”
Beam Communications is an Aussie company that specialises in the design, development, manufacture and distribution of satellite, cellular and dual-mode apps and services. Over the years, it has teamed up with some of Australia’s top telecom providers, from Iridium to Telstra, Thuraya and more. The Company also developed the multi-award winning ZOLEO device, a satellite communicator.
Besides Iridium GO, Beam also undertakes the production of some of Iridium’s other devices, like Iridium Certus®. In FY22, the Company signed a five-year binding contract worth $17 million to develop and supply a new generation mobile device to Iridium, which will be launched this calendar year. With Iridium GO’s success in mind, the Company feels that this contract will be worth materially more than its minimum value.
Despite its range of products, the Company’s profits dwindled slightly in FY22, as it reported losses worth over $170k. Owing to economic, market and supply issues, Beam’s earnings declined on a YoY basis, but reassuringly, the result was still ahead of its annual EBITDA guidance of around $1 million, which was issued in early June.
In FY23, the Company believes that Group EBITDA for the current financial year will rebound strongly to be more than 40% above FY22’s $1.5 million. It is counting on the launch of its Iridium products and Zoleo royalties to bring its profits back on track. Beam hopes to use its services to generate recurring revenue from both Iridium and Zoleo, along with its other ventures.
Alinda is a Business Reporter for The Sentiment
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