It’s sometimes easy to forget that video calling anybody on the other side of the world only became mainstream less than 20 years ago. Yet with the ability to reach loved ones without counting the minutes, track the location of virtually any item, and transfer data faster and easier than ever before, it’s probably fair to say that we now take constant connectivity for granted. Businesses and governments can also operate with incredible efficiency, maintaining effective and reliable communication, facilitating valuable insights, and ensuring immeasurable safety.

As the only commercial provider of communications services offering truly global coverage, Iridium Communications have been helping to connect people, organizations, and assets to and from anywhere, in real time for over two decades. The company’s low-earth orbit (LEO), L-band network provides reliable, weather-resilient communications services to regions of the world where terrestrial wireless or wireline networks do not exist or are limited.

The company’s main product is a global satellite constellation called the Iridium satellite network, which provides communications coverage over the entire Earth, including the poles. The network which is composed of 66 active satellites is used to provide a variety of communication services, including voice and data services, to almost two million business, government, and individual customers. In addition, Iridium also provides a wide range of products and services related to satellite-based location and tracking, as well as industry-specific communications applications across the aviation and shipping sectors.

Given the lack of coverage of most of the earth’s surface by terrestrial wireless systems, Iridium’s unique satellite network has it well-positioned to capitalize on the growth in the industry from end users who require reliable, easy-to-use mobile communications services in all locations. Furthermore, with the significant financial investment, as well as technological and regulatory challenges to build such a global capability, the company’s strong partnerships with U.S. and foreign governments have it primed for continued growth.

In 1987, Bary Bertiger, Ray Leopold, and Ken Peterson envisioned a revolutionary system of communications and began working on a satellite-based system designed to connect people on a global scale. Initially a project in a Motorola research lab in Arizona, Iridium was built on technology developed for U.S. President Ronald Reagan’s abandoned “Star Wars” program. Iridium was designed to use satellite technology as an alternative to cellular devices, which, at the time, were bulky and expensive. Over the next decade, more than 90 satellites were built and launched to create the first global satellite network.

However, in that time, cell phone technology had greatly expanded, making it much less expensive and much more convenient for consumers, and also making it difficult for Iridium to continue under its previous business model. As a result, in 1999, the company declared bankruptcy. The following year, Motorola announced its plan to deorbit all satellites and permanently shut down the Iridium network. Yet just days before the scheduled deorbiting, the US government, along with a small group of investors, stepped in to save Iridium, by providing $72 million and promising to leverage the power of the network in new ways.

In 2007, Iridium announced plans for Iridium NEXT, a mission that would completely replace the original satellite constellation and go on to become the largest space-based technology refresh in history. Taking a gamble and partnering with then-newcomer SpaceX, the company ultimately launched 75 next-generation satellites and the new constellation became fully functional by 2019. The upgraded Iridium constellation is still made up of 66 active satellites, with an additional nine kept as in-orbit spares, which are expected to service Iridium users around the globe beyond 2030.

Matthew Desch has been the chief executive officer of Iridium Communications since 2006. He has more than 35 years of experience in the telecom industry and was an early pioneer in the global wireless industry. Desch has been responsible for leading Iridium’s innovation and growth, which includes taking the company public on NASDAQ and realizing the Iridium NEXT project. Since joining in 2006, the company has experienced more than 400 percent growth in subscribers and more than five times growth in profitability. Prior to 2006, following 13 years at Nortel Networks Corporation, he was CEO of Telcordia Technologies, a telecommunications software services provider that is now part of Ericsson. He also serves on the President’s National Security Telecommunications Advisory Committee.

Supporting Desch, Suzanne E. McBride has served as Iridium’s chief operations officer since 2019, although has a long history with the company. McBride has more than 25 years of experience in the satellite industry, including building and launching the original Iridium constellation while at Motorola’s Satellite Communications Group as a senior engineer in the 1990s. From 2007 until 2016, she was employed by Iridium in a series of positions with increasing responsibility, culminating in a role in which she oversaw the launch program for the NEXT constellation. After serving as COO at OneWeb Ltd., a company that is building a new satellite constellation, McBride returned to Iridium in 2019.

Iridium provides voice and data communications services to a vast range of businesses, the U.S. and foreign governments, non-governmental organizations, and consumers. Mobile satellite services users span many sectors, including emergency services, transportation, utilities, mining, and construction, among many others, where satellite communications services are considered critical to daily operations.

Multinational corporations in various sectors use Iridium’s services for business telephony, email and data transfer, including telematics, personal location and asset tracking, and to provide mobile communications services for employees in areas inadequately served by other telecommunications networks.

Shipping and aviation are major markets for Iridium with ship crews and passengers using its services for ship-to-shore calling, as well as to send and receive email and data files, electronic media, weather reports, emergency bulletins, and electronic charts. While shipping operators transmit data, such as course, speed, fuel, weather, and other navigation service data.

Aviation end users use its services for air-to-ground telephony and data communications for position reporting, flight following, emergency tracking, weather information, electronic flight bag updates, and airline operational communications. The Iridium network also hosts the Aireon system, which provides a global air traffic surveillance service through a series of automatic receivers on its satellites.

Iridium’s unique architecture minimizes the need for local ground facilities to support the constellation, which facilitates the global reach of its network and allows it to offer services in countries and regions where it has no physical presence. As a result, explorers and adventurers use Iridium services as a safety and critical communications lifeline to remain in contact with friends and family, as well as for emergency distress signals. The company has also seen growing adoption in supporting autonomous systems, for use in command and control, image transmission, and environmental data gathering via unmanned aerial, underwater, and surface vehicles.

Iridium sells its products and services through a wholesale distribution network, encompassing approximately 100 service providers, almost 300 resellers, and another 100 manufacturers, which create and sell technology that uses the Iridium network either directly to the end-user or indirectly through other service providers. These distributors often integrate the products and services with other complementary hardware and software, which has developed a broad suite of applications that target specific lines of business.

The increasing penetration of mobile device usage has created unprecedented demand for mobile satellite services. Yet despite significant penetration and competition, terrestrial wireless systems do not cover a large majority of the earth’s surface and are focused mainly in those areas where people live. Consequently excluding oceans and other remote regions where ships, airplanes, and other remote assets may travel or be located. In addition to over five billion unique mobile subscribers across the planet, the increasing adoption of Internet of Things devices has created an even further need for reliable mobile voice and data communications services.

It is expected that mobile satellite offerings will continue to experience growth driven by the increasing need for these reliable services, particularly as the continued development of innovative, lower-cost technology brings further embedding of satellite capability into terrestrial smartphones. Part of the company’s strategy also includes the development of personal mobile satellite communications that will allow individuals to connect to the Iridium network in more ways, including from devices such as smartphones, tablets, and laptops. To achieve this, Iridium is making its technology more accessible and cost-effective for distribution partners to integrate and license new products. As demonstrated by the company’s recent announcement that it has agreed with Qualcomm Technologies to enable satellite messaging and emergency services in smartphones.

Iridium has a business model that is characterized by high capital costs, in connection with designing, building, and launching new generations of the satellite constellation, and a low incremental cost of providing service to additional end users. As a result, it is expected that service revenue will continue to be Iridium’s largest source of future growth and profits, and it intends to focus on growing both commercial and government service revenue to leverage this largely fixed-cost infrastructure. In particular, competitive data services are targeting engaging large, global enterprises as long-term customers for data and telematics solutions, and represent the company’s greatest opportunities for service revenue growth.

Iridium is also expanding its target markets by developing and offering a broader range of products and services to meet an expanding set of customer requirements. New services are already providing background IP data, high-quality voice, messaging, and safety services, for maritime and aeronautical applications, while devices such as antennas are providing ever-improving capabilities with smaller and more lightweight and cost-effective designs.

Currently, the U.S. government is Iridium’s largest single customer and continues to make significant investments in a dedicated gateway to provide operational security and allow U.S. government handset and IoT users to communicate securely with other government communications equipment. This gateway is only compatible with Iridium’s satellite network. The seven-year, $738.5 million airtime contract with the U.S. Space Force, provides a wide range of specialized services for an unlimited number of Department of Defense and other federal government subscribers. In addition, due to ongoing investments by the DoD, Iridium also expects to see growth in adoption as enhancements are implemented and new services are launched.

Long leaving behind its past financial failings, Iridium is now on track to deliver a decade of continuous year-over-year revenue growth. After reporting third-quarter total revenue of $184.1 million, consensus estimates have the company closing out 2022 with just under $700 million in revenue, which will achieve another record year and deliver almost 14% growth year-over-year. The strong performance has largely been due to an increase in services revenue across voice and data, IoT, and broadband accounts, as voice and data subscribers rose 8% from a year ago to over 400,000 customers. IoT data subscribers also grew an impressive 22% to over 1.4 million customers, driven by continued strength in consumer personal communications devices.

With this increase in revenue, profitability has also improved for the first three quarters of 2022, as gross profits improved from $345.6 million to $383.0 million, while net income went from a loss of $3.5 million to a $9.5 million profit across the comparable nine month periods.

Looking ahead, consensus estimates have Iridium continuing its growth into 2023 with expected sales of $748.5 million representing year-over-year growth of almost 7%. While full-year earnings per share estimates for 2022 are forecasted to continue its positive trend of improvement at $0.06 per share, up from a loss of $0.07 in 2021, then again jumping 177% to $0.17 in 2023.

Iridium faces substantial competition from several other service providers that offer a range of mobile and fixed communications options. And to the extent that terrestrial communications companies invest in underdeveloped areas, it also competes with them indirectly. Its principal mobile satellite services competitors are Inmarsat, Globalstar, ORBCOMM, and Thuraya Telecommunications Co., which provide varying levels of technology that ultimately vary widely based on coverage, quality, mobility, and pricing.

Many of these competitors use geostationary (GEO) satellites, which orbit above the earth’s equator, limiting their visibility to far northern or southern latitudes and polar regions, while the LEO design of Iridium’s satellite constellation produces minimal transmission delays compared to GEO systems due to the shorter distance that signals have to travel. Iridium’s L-band spectrum is also more resistant to weather interference than the K-band spectrum used by many of its competitors.

Iridium’s true global coverage has made it a standout in the satellite industry and with the continued growth of the space economy coupled with ever-increasing data needs for the growing numbers of connected devices on earth, the company is well-positioned to take advantage of future growth.

For almost two decades, Yelp has been connecting people with local businesses. Over that time, it has become one of the best-known internet brands in the U.S., as consumers have access to more than 220 million ratings across a broad range of business categories. With local information, photos, and review content, Yelp provides a one-stop local platform for consumers to discover, connect, and transact with businesses of all sizes.

By making it easy to request a quote, join a waitlist, make a reservation, appointment, or even a purchase, the company’s products help businesses reach a large audience, advertise their products, and drive conversion of their services.

Yelp has built a broad-based local advertising platform with sophisticated technology, offering a range of free and paid advertising products including cost-per-click and multi-location ads, along with several business page products that allow customers to build a complete online profile that highlights their business and showcases their specialties. In addition to its advertising products, it also offers features and interactive tools to facilitate transactions between consumers and the local businesses they find on the platform.

Thanks to an ambitious, multi-year business transformation plan initiated in 2019 which was designed to drive and sustain long-term growth through product innovation, Yelp has successfully transformed into a stronger and more efficient business. Despite the company’s consistent, long-term growth being interrupted by the covid pandemic, Yelp’s performance in 2021 saw it emerge to deliver record revenue and profitable growth despite a difficult operating environment.

Looking ahead, the company plans to continue enhancing the Yelp experience for consumers, business owners, and advertisers with a comprehensive strategy that focuses on product investments and driving sales in its most efficient channels, which continue to trend towards highly scalable self-serving and multi-location offerings.

In 2004, two former PayPal employees, Jeremy Stoppelman and Russel Simmons founded Yelp at a business incubator. The pair conceived the initial idea for the business as an email-based referral network, after Stoppelman caught the flu and had a difficult time finding an online recommendation for a local doctor. With support from a former colleague and founding chief technology officer of PayPal, Max Levchin, the platform evolved from an email-based system to user reviews, which saw the site’s popularity soar after it was re-designed in late 2005.

By the summer of 2006, the site had one million monthly visitors, which grew to over 16 million in 2008, as it reached over 24 cities across the country. Expansion continued internationally as the site was introduced to countries across Europe and Asia in the years following.

Yelp went public in 2012, listing on the NYSE, after which several acquisitions followed, including its largest European rival, Qype, for $50 million. Within two years the company was profitable for the first time as ad spending by business owners increased and changes in Google’s local search algorithm helped authoritative local directory sites like Yelp in getting more visibility.

Additional sites were launched across numerous countries along with several more acquisitions expanding the company’s footprint, however, operations were drastically scaled back when business closures and stay-at-home orders during the covid pandemic caused a massive decline in searches. Yet with many people resuming their pre-pandemic habits, Yelp revenues have returned to their 2019 highs, which now exceed $1 billion per year.

Co-founder Jeremy Stoppelman continues to drive the vision and product experience for Yelp as the company’s chief executive officer. With a hands-on management style that sees him sit at a desk among his employees, Stoppelman also oversees product development among other aspects of the business. Prior to Yelp, he was the V.P. of engineering at PayPal, and one of the group’s highly successful early employees referred to as the PayPal Mafia.

Joining Stoppleman as Yelp’s chief operating officer is Jed Nachman, who after previous roles as chief revenue officer and senior VP of revenue, now oversees the company’s business operations including sales, marketing, and administration. Prior to Yelp, Nachman spent several years in senior sales roles for Yahoo! HotJobs, after beginning his career at the investment bank, Robertson Stephens.

Yelp’s range of advertising products provide the ability to deliver targeted search advertising to large local audiences. The vast majority of the company’s revenue comes from its cost-per-click (CPC) search advertising, which allows businesses to promote themselves as a sponsored search result on the platform, including on the Yelp pages of businesses in similar categories. Customers can also provide competing quotes for consumers using a Request-A-Quote feature. Revenue is generated primarily via performance-based ads, which the platform matches to individual consumers through auctions priced on a CPC basis.

Multi-location ad products also make it possible to display Showcase Ads that show special offerings with limited-time localized promotions in relevant search results. While Spotlight Ads highlight special offers and promotions related to holidays or other special events in a carousel directly on the Yelp app home screen. Furthermore, with the Yelp Audience Network, ads can be displayed on a large collection of third-party sites such as Business Insider, The Washington Post, Daily Mail, New York Post, and others.

In 2020, Yelp released a new Store Visits product that utilizes a variety of signals to measure user engagement with business pages and opt-in location data provided by customers. Leveraging these data points, Yelp can generate a cost-per-visit metric for businesses, so they can get a better sense of return on ad spend.

The company’s suite of Business Page products begin with a basic free online account where businesses can claim the Yelp page for each of their locations. Once a business has claimed its listing page, it can update its information and has the option to purchase a range of premium page features. These features include enhanced and branded profiles, business highlights, and showcase specialties, while Yelp Verified License badge upgrades allow businesses to distinguish themselves as licensed, to help consumers make confident decisions.

Finally, Yelp’s tools to facilitate transactions between consumers and local businesses are primarily available through partner integrations such as Grubhub, which makes it possible for consumers to place food orders for pickup and delivery through the platform.

Yelp has established itself with a proven engine to generate and recommend trusted content. The platform provides the type of reliable and useful reviews that consumers value, creating a virtuous cycle in which more content attracts more users, content, and advertisers in turn. The breadth and depth of its high-quality content are the result of significant investments over the past 18 years in developing communities of contributors, as well as providing a robust consumer interface that enables and encourages consumers to share their everyday business experiences. Yelp’s availability across a wide range of platforms and devices also provides a compelling value proposition to advertisers.

The company has also developed industry-leading moderation practices to maintain the quality and integrity of content, as recommendation software and other machine learning algorithms are designed to surface the most useful and trustworthy information for consumers. This technology, together with other consumer protection efforts, helps Yelp detect and mitigate attempts to manipulate ratings and reviews.

Strategic initiatives that have helped transform Yelp’s business continue to provide significant opportunities for growth. Looking ahead the company plans to build increasingly differentiated product experiences for both consumers and businesses in Services categories, such as home, local, auto, professional, pets, events, real estate, and financial services, whilst also increasing monetization in these areas. In 2021, the percentage of monetized leads in the Services categories increased to 25% from less than 10% in 2018, the year before Yelp adopted the initiative. As a result, the company achieved a record average revenue per paying advertising location in the Services categories in 2021.

Through investments in the Multi-location business, Yelp has also significantly shifted its go-to-market mix in recent years toward its most efficient channels, allowing the company to surpass 2019 revenue in 2021 with a significantly smaller local sales force. In 2021, the Self-serve channel, together with a more-tenured local sales force, acquired small and medium-sized businesses more efficiently and exhibited a higher retention rate than with its pre-pandemic local sales force. Thanks to these improvements, as well as marketing investments, revenue from the Self-serve channel also reached a new record in 2021 and increased as a percentage of advertising revenue to 17%, up from 10% in 2019.

In addition, developing customer relationships and introducing new Multi-location products resulted in record revenue in 2021 from this channel as well. Newly introduced products such as Seasonal Spotlight Ads and Sponsored Collections, expanded the company’s first-party attribution solution, Yelp Store Visits. While the fully launched off-platform solution, Yelp Audiences, increased the company’s market opportunity by enabling multi-platform brand awareness campaigns and providing non-location-based advertisers with access to Yelp’s audience.

These strategies led Yelp to return to record highs in revenue as the company delivered a strong performance in the most recent second quarter, driven by surging demand in Self-serve and Multi-location channels, which now comprise 49% of total Ad revenue. Net revenue for the period was $299 million, growing 16% on the prior year, and exceeding the high end of the company’s expected business outlook range. Higher aggregate customer spend and higher average revenue per location also factored strongly in the solid performance.

Total expenses were also higher, coming in at $283 million for the quarter, up 10% on 2021. These were driven by a combination of variable cost of revenue expenses including higher advertising fulfillment costs attributable to the expansion of Yelp Audiences, higher website infrastructure expenses, and higher merchant credit card processing fees associated with the increase in Advertising revenue. Sales and marketing expenses and product development costs also contributed to the increase. Consequently, net income was $8 million for the period compared to $4 million in the second quarter of 2021.

The strong second-quarter results heightened Yelp’s growth expectations for the year despite continued macro uncertainty. The company raised its full-year revenue outlook to a range of $1.18 to $1.20 billion, in line with consensus expectations, and representing year-over-year growth of 16%. Analysts have full-year earnings per share estimates for 2022 forecasted to contract modestly by almost 10% to $2.29 per share, after the 2021 result of $2.53 smashed expectations. However, EPS growth is expected to return to 25%+ year-over-year in 2023 and 2024.

Yelp competes with a wide range of companies that help businesses connect and engage with consumers including online search engines, directories, and providers of online marketing and tools, such as Google, Facebook, and Twitter. As well as various forms of traditional offline advertising, including radio, direct marketing campaigns, yellow pages, and newspapers. It also competes with dedicated providers of consumer ratings, reviews, and referrals, such as TripAdvisor, as well as restaurant reservation, seating, food ordering, and delivery services. However, Yelp’s strength in size, composition, and level of engagement of its consumer audience, along with its ease of use, performance, and reliability of products and services set it above many of these competitors.

Like many other publishers, Yelp also faces ongoing challenges regarding privacy issues, and in particular, crackdowns on sharing and selling user data. Although by relying primarily on its own first-party consumer data, Yelp hopes to address a key problem facing other competitors.

Yelp is well positioned in the large and growing local, digital advertising market. The competitive advantages the company has established over the past two decades, together with a structurally more efficient, product-led business model, have helped re-accelerate a return to growth after the impacts of the covid pandemic.