Iridium Communications Inc (IRDM)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 78.89% | 81.64% | 82.65% | 83.39% | 84.31% |
| Operating profit margin | 24.12% | 10.32% | 10.63% | 7.54% | 6.08% |
| Pretax margin | 15.05% | -1.37% | 1.25% | -4.70% | -15.25% |
| Net profit margin | 13.58% | 1.95% | 1.21% | -1.52% | -9.61% |
Iridium Communications Inc's profitability ratios provide insights into the company's ability to generate profits from its operations.
1. Gross Profit Margin: The gross profit margin indicates the profitability of the company's core business activities. Over the five-year period, Iridium's gross profit margin has shown a slight decline, from 84.31% in 2020 to 78.89% in 2024. This may indicate challenges in managing the cost of goods sold or pricing pressures.
2. Operating Profit Margin: The operating profit margin measures the proportion of revenue that translates into operating profit after accounting for operating expenses. Iridium has shown a significant improvement in operating profit margin, increasing from 6.08% in 2020 to 24.12% in 2024. This suggests that the company has effectively managed its operating expenses to boost profitability.
3. Pretax Margin: The pretax margin indicates the company's profitability before taxes are applied. Iridium's pretax margin has fluctuated over the years, from -15.25% in 2020 to 15.05% in 2024. The company has shown a significant turnaround from negative margins to positive margins, indicating improved financial performance.
4. Net Profit Margin: The net profit margin reflects the portion of revenue that transforms into net income after all expenses have been deducted. Iridium has shown a positive trend in net profit margin, increasing from -9.61% in 2020 to 13.58% in 2024. This signifies the company's ability to generate higher profits relative to its revenue.
Overall, while Iridium's gross profit margin has slightly declined, the company has demonstrated significant improvements in operating profit margin, pretax margin, and net profit margin over the five-year period. These improvements suggest enhanced operational efficiency and financial performance, leading to better profitability for the company.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 7.50% | 3.07% | 2.60% | 1.46% | 1.06% |
| Return on assets (ROA) | 4.22% | 0.58% | 0.30% | -0.29% | -1.67% |
| Return on total capital | 24.23% | 0.16% | 2.92% | 1.59% | 1.16% |
| Return on equity (ROE) | 19.56% | 1.74% | 0.77% | -0.72% | -3.95% |
Iridium Communications Inc's profitability ratios have shown improvement over the years.
- Operating return on assets (Operating ROA) has increased from 1.06% in 2020 to 7.50% in 2024, indicating the company's ability to generate operating profits relative to its total assets has significantly improved over the years.
- Return on assets (ROA) has also shown a positive trend, moving from negative figures in 2020 and 2021 to 4.22% in 2024, suggesting that the company has become more efficient in generating profits from its assets.
- Return on total capital has fluctuated, reaching a peak of 24.23% in 2024, which indicates a strong return on the overall capital employed in the business.
- Return on equity (ROE) has shown a notable improvement from -3.95% in 2020 to 19.56% in 2024, reflecting the company's ability to generate profits for its shareholders from their equity investments.
Overall, Iridium Communications Inc's profitability ratios have exhibited a positive trajectory, showcasing the company's enhanced profitability and efficiency in utilizing its assets and capital to generate returns for its stakeholders.