Strong growth in cash and ZOLEO subscribers: Beam Communications ends Q1 on a high  

Highlights

  • Beam Communications increased its cash holdings and operating cash flow in the September quarter.
  • The ASX-listed satcom firm registered an increase of 28% in the number of net ZOLEO subscribers in Australia and New Zealand.
  • The Company expects ZOLEO subscriber growth to reaccelerate in the run-up to Christmas and summer activities.
  • The SatPhone Shop and Iridium GO! businesses recorded strong performance during the quarter.

A global leader in innovative satellite communications, Beam Communications Holdings Ltd (ASX:BCC) has released an action-packed quarterly report for the period ended 30 September 2021.

Ending the quarter on a firm financial footing, the Company reported growth in ZOLEO receipts and improved sales across key parts of its business.

Triggered by the upbeat update, BCC shares jumped 10.477% to close the day’s trade at AU$0.370 on 26 October 2021.

ALSO READ: Beam Communications (ASX:BCC) clocks record revenue in FY21

Beam Communications is the only ASX-listed developer of mobile satellite equipment. The Company holds expertise in the design, development, manufacture and distribution of satellite, cellular and dual-mode equipment applications and services.

Cash holdings up 38%, Operating cash flow soars 260%

The Company capped off the September quarter on a strong financial note with AU$5.1 million in cash, representing an increase of 37.5% from the previous quarter. The total available cash stood at AU$6.8 million at the quarter end, including AU$1.7 million in available but undrawn debt facilities.

Net operating cash inflows surged to AU$1.3 million in Q1 FY22 – a massive spike of 260% compared to AU$374,000 recorded in the June 2021 quarter. There has been a persistent growth in operating cash inflow following a rise of 48.3% year-on-year in receipts from customers to AU$6.1 million in Q1 FY22.

The Company’s improved cash position in the last quarter can be attributed to increase in receipts from ZOLEO Inc. (including royalty payments and hardware sales) as well as strong sales across the Group.

Image source: ZOLEO website

Image description: ZOLEO, global satellite communicator

RELATED READ: Beam Communications hits a milestone with ZOLEO orders topping 100K+  

Accelerated sales across key business segments

Beam is riding high on the success of its innovative products – ZOLEO, the first seamless global messaging solution and Iridium GO!, the first portable satellite hotspot.

Growth in ZOLEO subscriber base: In the three months to 30 September, Beam registered an increase of 28% in the number of net ZOLEO subscribers to 1,640 in Australia and New Zealand. The surge was recorded despite harsh lockdowns in the Company’s biggest markets including New South Wales, Victoria and Auckland.

The Company had expected higher number of new subscribers; however, due to the restrictions on movement, Beam saw a significant number of cancellations of Australian and New Zealand subscriptions.

There were about 175 cancellations in the quarter as compared to an average of approximately 20 cancellations.

Strong sales for SatPhone Shop: This segment of the business recorded a 47% increase in sales in the first quarter of FY22 on the previous corresponding period.

Iridium GO! shipments soar: Over 1,690 Iridium GO! devices were shipped to the Company’s long-standing partner Iridium Communications Inc (NASDAQ: IRDM) during the quarter. This marks an increase of 125% on the previous quarter.


Image source: © Angelseow | Megapixl.com
Image description: Iridium GO!, Beam Communications (ASX:BCC)

Beam bagged a mega order of 7,500 units of the popular satellite hotspot device in July. Moreover, the continuous rise in consumer demand for Iridium GO! brought in an additional order for 5,000 devices in September.

At the quarter end, Beam is yet to invoice 15,000 units as part of open and committed orders for the device.

RELATED RAED: Beam Communications trading at 1X sales, is it a misunderstood stock?  

All in all, Beam delivered a strong performance in the September quarter, backed by significant all-around developments. The Company’s innovative solutions that are used around the world are expected to ratchet up its recurring revenues sharply in FY22.

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