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Inmarsat Q3 results reflect our growing momentum in commercial mobility and technology leadership

November 29, 2021 

Rajeev Suri, Chief Executive Officer at Inmarsat, Board Director Stryker and Singtel

Inmarsat delivered excellent results in the third quarter of 2021, beating our internal plan on all key financial metrics and with revenue for both the quarter and year-to-date ahead of the pre-COVID levels of 2019.

Inmarsat continues to be exceptionally well-positioned in global mobility, which is the sweet spot of the satellite communications market. In addition, unlike some others in our sector, we are not exposed to the declining video distribution segment and have the tailwind of a growing market that we expect to benefit us well into the future.

Our revenue for the three-month period to September 30 was up 11% from the same quarter one year ago as well as on a year-to-date basis. Direct and indirect costs increased in the quarter primarily because of higher sales and a changing sales mix; a return to more normal activity levels and performance-related employee costs. EBITDA increased 8.5% in Q3, and on a year-to-date basis is now 15% higher than the same period in 2020. Free cash flow in the quarter was up more than 30% year-on-year. 

The fastest growth in Q3 came from our Aviation business unit, which saw a 48% revenue increase over Q3 2020 with excellent progress across the business. Inflight Connectivity (IFC) revenues rocketed to double from one year ago, with more growth still expected as commercial flight activity recovers. We have a sizeable backlog of aircraft for future IFC installations and in the quarter continued to progress our pipeline with new airline customers in Europe and with fleet expansions with existing Middle East customers. Pleasingly, we also announced a new GX Aviation high speed inflight broadband and OneFi passenger experience platform win with SAUDIA on 15 Nov.   

Our business jet aviation business continued its excellent momentum with year-on-year revenues up 41% and with more than one thousand total Jet ConneX activations by the end of the quarter. And, our safety services business, serving cockpits in commercial aviation, was up 29%.

Maritime sales were flat year-on-year as the business continued to stabilise, with rapidly growing Fleet Xpress broadband connectivity (up 31% year-on-year) now offsetting declining FleetBroadband L-band sales. The installed base of vessels with Fleet Xpress at the end of Q3 was up more than 22% from the same period one year ago. Key Maritime wins in the quarter included Maersk, Solstad Offshore and an important strategic partnership with Lloyd’s Register.

Our Government business continued to go from strength to strength, with new business wins and strong sales spanning equipment, managed services and Global Xpress airtime.  Total revenues were up 16% year-on-year, with a 20% increase in U.S. Government sales and 8% outside of the U.S. During the third quarter, we were successful in some key U.S. Government program recompetes, expanded our business in Canada, and began trialling our BGAN Patrol backpack terminals with customers. We also saw a significant increase in both Government traffic over our ELERA network as the impact of the pandemic tapers off, as well as a double-digit year-on-year increase in Global Xpress connections through our distribution channel.

Enterprise was the only business to show a modest year-on-year revenue decline in Q3 (-4%), although sales have increased year-to-date. Our continued focus in Enterprise is on stabilising existing products and services while driving growth from new revenue streams in select verticals and IoT. Key wins in the quarter included two of the world’s largest energy producers.

Given our third-quarter momentum, I am confident that we are well-positioned to meet our goal of growing faster than the overall market for full-year 2021, with year-on-year growth expected in all business units. As we look to 2022, we expect Inmarsat will continue to benefit from continued growth in the market segments we serve. In addition, after the end of the third quarter, we announced our plan to combine with U.S.-based Viasat to create a new leader in global mobility and broadband satellite communications. The results that we announced today demonstrate how the combined company will be able to tap new opportunities in the fastest-growing parts of the satellite communications market.