- Second quarter revenue of $598.1 million
- Second quarter net income attributable to Intelsat S.A. of $60.2 million
- Net income per diluted common share of $0.47; Adjusted net income per diluted common share of $0.70
- EBITDA of $462.3 million and Adjusted EBITDA of $473.4 million, or 79 percent of revenue
- $9.5 billion contracted backlog provides visibility for future revenue and cash flow
- Launch schedule for Intelsat EpicNG® program and other satellites unchanged
- Intelsat reaffirms its 2015 revenue and Adjusted EBITDA financial outlook; milestone timing shifts some of our 2015 capital expenditures to 2016
Luxembourg | July 30, 2015– Intelsat S.A. (NYSE: I), the world’s leading provider of satellite services, today reported total revenue of $598.1 million and net income attributable to Intelsat S.A. of $60.2 million, or $0.47 per common share on a diluted basis, for the three months ended June 30, 2015. The company reported adjusted net income per diluted common share1 of $0.70 for the three months ended June 30, 2015.
Intelsat S.A. reported EBITDA1, or earnings before net interest, taxes and depreciation and amortization, of $462.3 million, or 77 percent of revenue, and Adjusted EBITDA1 of $473.4 million, or 79 percent of revenue, for the three months ended June 30, 2015.
Intelsat CEO, Stephen Spengler, said, “Overall, Intelsat delivered a solid second quarter with revenues of $598 million. Contract renewals in each of our network services, media and government businesses are within our expectations for the year and include promising contract expansions that use traditional and next generation Intelsat EpicNG services. As a result, today we are re-affirming our guidance for 2015 revenue and Adjusted EBITDA. Our guidance also reflects the shifting of some of our 2015 capital expenditures to 2016, due to timing of milestone achievements.
“Progress on our operational priorities allows us to position for a return to growth over the long term. We are continuing to leverage sector innovations that will differentiate our services and enable us to address new and faster growing applications and vertical markets. In June 2015, we announced an alliance with OneWeb’s proposed low earth orbit satellite platform, which will be interoperable with our Intelsat EpicNG fleet. This will create the first and only fully global, pole-to-pole high throughput satellite system, providing increased differentiation of our mobility networks and government services. We continued our work on introducing new services in the second quarter, announcing IntelsatOne® Flex, a fully-managed infrastructure service for the mobility sector. IntelsatOne Flex gives our customers flexibility to better manage capacity for geographic expansion and surge requirements.”
Spengler continued, “Our expected satellite launches from August 2015 through the first quarter of 2016 — Intelsat 34, Intelsat 29e, and Intelsat 31 — remain on track, even after accounting for disruptions in the launch sector. We expect that the successful entry into service of these satellites will refresh existing capacity and provide significant incremental inventory, supporting the growth strategies of our media, network services and government businesses.”
To read the full version of the earnings release, including detailed financial results, please download the Earnings Release.
To read the new Quarterly Commentary, including business trends, please download the Quarterly Commentary.
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1In this release, financial measures are presented both in accordance with GAAP and also on a non-GAAP basis. EBITDA, Adjusted EBITDA, free cash flow from operations, Adjusted net income per diluted common share attributable to Intelsat S.A. and related margins included in this release are non-GAAP financial measures. Please see the consolidated financial information below for information reconciling non-GAAP financial measures to comparable GAAP financial measures.
Q2 2015 Quarterly Commentary
As previously announced, Intelsat is providing a detailed quarterly commentary on the company’s business trends and financial performance prior to the live earnings call. Please visit intelsat.com/investors for management’s commentary on the company’s progress against its long-term strategic priorities and outlook for 2015.
Last week, IFExpress got a very interesting letter from Mr. Jo Kremsreiter, President of AirSatOne concerning a new communication/connectivity development (service) that he is rolling out for Business Jets, and it rides on Inmarsat’s L-Band, SwiftBroadband. In a nutshell, the voice calling feature that he is debuting, relies on a cellphone app that uses the standard Wi-Fi signal from a un-modified aircraft Wi-Fi router. He wrote: “…AirSatOne is has certified an app that allows business jet passengers use their smart phone on the aircraft to make and receive calls – and more. What is unique about what we have done allows the biz jet passengers to use a commercially available app on the aircraft which saves them quite a bit of money plus no (special hardware) install required since it runs in the cloud.” This, plus the news release caught our attention so we decided to a bit dig a bit deeper as we usually do. Before we get started here are a couple facts that might help you catch the “spin” on this system. Consider this a setup to deliver a better story:
- Inmarsat Satcom voice calls on biz jet aircraft that usually entail aircraft handsets or special solutions to deliver passenger voice.
- Unfortunately, in the old process, the only way to contact a passenger or flight crew member was to call the aircraft through the Satcom international number or a specially assigned 10 digit number – the aircraft handsets will then ring. With this method a call is not placed to an individual who may or may not be on the aircraft. But the AirSatOne solution allows a caller to dial the individual’s phone number, their same number used all the time, even on the ground, and reach them on their smart phone while they are on the aircraft. The technology that allows this is the RingCentral app loaded on the smart phone.
- While the “cloud” is still on the ground, dialing a number for a phone that is airborne will be directed to the aircraft, by it… regardless from where, or on what, one is calling.
- With AirSatOne’s app solution, the user still pays the Inmarsat data fees, but not the requirement to install expensive hardware, and the installation costs and downtime associated with special hardware are gone as well. All three are replaced with a $24.99 fee per month, per app loaded phone. Inflight users get voice, data, and text messaging over their device.
- We note that the RingCentral app on a phone will work with any Wi-Fi: airborne or on the ground.
To get a better understanding of the total system, checkout this link for the diagram of the system layout. There are three things that you should note: the aircraft setup, the ASO FlightStream SA (System Administration) block, and the “Cloud”.
- Aircraft – A standard aircraft Wi-Fi router is installed on the biz jet regular 802.11 Wi-Fi transmissions. The cellphone also has the RingCentral VoIP app installed… that’s it!
- ASO FlightStream SA – Deployed world wide at, or near, the Inmarsat hubs (and other locations). ASO’s servers are located to deliver better service – in other words, FlightStream SA delivers data management by providing firewall, compression, filtering and consumption notifications via email, and is deployed globally at, or near, Inmarsat hubs to help speed.
- The ‘Cloud’ – The established VoIP ‘Cloud’ today handles signal directivity and locates and directs based on existing telephone numbers and existing devices. Today’s Cloud is smart and that is what helps to allow existing device usage – either devices to the plane, or from the plane via SwiftBroadband.
We asked Mr. Kremsreiter to trace a call flow, so we asked for a ‘flow’ description, and Jo told IFExpress: The VoIP PBX system running in the cloud handles call routing and keeps the call alive when handing off between cellular and Wi-Fi or when handing off, for example, from your iPhone to your home phone or transferring the cell call to your office desktop phone. The system knows the iPhone (or Android device) is on the aircraft because the smart phone will ‘check in’ through the aircrafts Wi-Fi that eventually gets to the cloud VoIP PBX via FlightStream SA and the Internet. In other words, when John CEO gets on the aircraft it will connect to the Wi-Fi in the aircraft. The Wi-Fi in the aircraft goes to the Inmarsat satellite, down to the ground, through our FlightStream SA and out to the internet to the cloud VoIP PBX saying “I am here”. When we asked about the ‘Cloud’ and it’s importance, Jo noted: “The VoIP PBX system running in the cloud handles call routing and keeps the call alive when handing off between cellular and Wi-Fi or when handing off, for example, from your iPhone to your home phone or transferring the cell call to your office desktop phone. The system knows the iPhone is on the aircraft because the iPhone will ‘check in’ through the aircrafts Wi-Fi which eventually gets to the cloud VoIP PBX via FlightStream SA and the Internet.”
Satcom voice calling is offered today by at least three vendors. The service providers do this but you need specialized hardware on the aircraft. Noted Mr. Kremsreiter. “For example the SDR by Satcom Direct which costs around $35,000 + install + downtime for the install = $70 to $75K and these numbers can be found in the following article. “Note in the article: “All that is required to access the “Global VT” service is a Satcom Direct Router (SDR) in the aircraft, with the latest software update, and a smart phone”. The author added that the unit, which costs around $35,000, and the article goes on to mention that the cost of putting another system that is basically a picocell (or GSM access point) in the aircraft. This picocell system costs around $250K in a business jet and up to $1M in a BBJ!”
Importantly, AirSatOne’s FlightStream SA reduces satellite signal load and frees up bandwidth for VoIP calls. How? Noted Jo: “It does so by blocking advertisements, it provides text and image compression, and finally, it can block unwanted downloads and limit file sizes. Bandwidth comes at a premium for aircraft so being able to lighten the load allows VoIP to work better on the aircraft. It is also critical for a service like this to operate efficiently, our competitors have similar offerings that do less and are located at a single location. Our FlightStream SA is deployed globally at or near Inmarsat hubs which means more efficient handling and in turn less latency, fewer hops and a shorter distance to travel.”
More info here
Noted Jo: “It is important because business jet passengers and flight crews want to use the same smartphone they use every day to send and receive phone calls on the ground, using their own land based phone number – not a special number for only the aircraft. They want their phone to ring when they get that important call – no matter where they are including at 35,000 ft flying over the N Atlantic on their own phone number!”
First, you should probably watch this YouTube video to get an idea how the folks at ASO interface with the Inmarsat Swift Broadband Network and realize they have located servers at the Inmarsat hubs. Further, there are additional hubs located to provide even better connectivity. Noted Mr. Kremsreiter: “Unlike our competition we offer choices. You can use the same generic network offered by our competition or we can connect your aircraft to a more robust network designed by Astrium, the same company that built the SwiftBroadband satellites. This backbone allows us to connect your aircraft through an advanced global network backed by 24/7 ‘follow the sun’ support – and we offer this for the same price. While this expensive technology may cut into our margins, we feel the benefit to our customers outweighs the cost.”
Finally, Mr. Kremsreiter told IFExpress, “Bottom line is with our competitor’s solution, for $70 – $75,000 you can solve a problem on one aircraft and you are not solving a problem with cell coverage on the ground. That price is a solution for one aircraft, for a fleet multiply that number by the number of aircraft. With the RingCentral app you can solve the problem on the aircraft (or fleet), have phone coverage on the ground when cell service is weak or non-existent, or overseas and you also get to add a lot of other cool features like integration with CRM software, conference calling, swapping calls from iPhone to home phone to desktop – plus it allows collaboration for projects and file sharing and also text messaging. Our solution starts at $24.99 per month, per phone. We did the testing and certification with the $24.99 a month application so it does not require a more expensive plan.”
In conclusion, VoIP phone calls over regular Wi-Fi hardware on biz jet aircraft have a new solution and it only requires a RingCentral app. Today on the ground, this is pretty much how we use VoIP with our regular Wi-Fi/cellphone calling and it was just a matter of time before someone figured out that this solution really benefitted the biz jet traveler. One note, we understand this app will work with almost any airplane Wi-Fi. Additionaly, notes Jo, “Users should use our FlightStream SA to lighten the load and have more available bandwidth – We did not test it without FlightStream SA and therefore it was not certified by us for use without it, however, any Wi-Fi will work.” Perhaps, this solution is bigger than we think. Stay Tuned!
For more information on AirSatOne contact Jo Kremsreiter
We owe a mea culpa to BOSE! Last week’s reference to their new A20 Aviaiton Headsets had the incorrect hyperlink attached. Here is the correct one.