Iridium Communications Inc. (NASDAQ:IRDM) shares are trading higher after the company reported better-than-expected third-quarter revenue results and revised its FY24 OEBITDA guidance.

The company reported earnings per share of 21 cents, in line with the consensus estimate. Quarterly sales of $212.77 million beat the street view of $206.18 million.

Overall, total revenue increased by 8% compared to the same period in 2023, driven largely by higher commercial service revenue and government engineering revenue.

The company reported $159.9 million in service revenue and $52.9 million from equipment sales and engineering support projects.

Service revenue, primarily recurring income from Iridium’s expanding subscriber base, grew 5% year-over-year, accounting for 75% of total revenue in the third quarter of 2024.

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The company concluded the quarter with 2.48 million total billable subscribers, up from 2.23 million in the same period last year and an increase from 2.41 million as of June 30. This represents an 11% year-over-year growth in total billable subscribers, driven primarily by an increase in commercial IoT.

Iridium paid a dividend of 14 cents per common share on September 30, resulting in year-to-date dividend payments of $49.1 million to stockholders.

“Since 2021, Iridium has returned over $1 billion to common shareholders through stock repurchase and dividend activities,” said Matt Desch, CEO, Iridium. Desch added, “Most recently, our board of directors further expanded our buyback program by authorizing the repurchase of an additional $500 million of Iridium common stock through December 31, 2027.”

Outlook: Iridium anticipates a 5% growth in service revenue for FY24, compared to the previous estimate of 4% to 6%, and expects OEBITDA to be between $465 million and $470 million, revised from the prior range of $460 million to $470 million.

Net leverage is expected to remain below 4.0 times OEBITDA through 2026, with a target of falling below 2.0 times OEBITDA by the end of the decade, assuming continued execution of the company’s share repurchase program and consistent quarterly dividend payments.

Price Action: IRDM shares are trading higher by 14.2% to $34.48 at last check Thursday.

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