The hardest thing that satellite communications specialist Iridium Communications (NASDAQ:IRDM) has to deal with is the complexity of making upgrades to its service. Traditional wireless networks can simply drive a truck to land-based service points to make changes, but Iridium has to rely on rocket launches to get new satellites into orbit. After some delays, Iridium has finally moved forward with its NEXT system schedule, and coming into Thursday's fourth-quarter financial report, Iridium investors were curious for news on how the progress with the launches might affect its outlook. The satellite specialist's results were solid if uninspiring, but it reiterated its guidance going forward.

Let's take a closer look at Iridium Communications to see how it did and what it believes is coming in 2017 and beyond.

Two people in Arctic conditions holding Iridium sign.

Image source: Iridium Communications.

Iridium is go for liftoff

Iridium Communications' fourth-quarter results largely reflected the fact that the company has a lot riding on its NEXT system upgrade. Revenue was up just 1% to $107.4 million, which was roughly in line with what most investors had expected to see from the company. Iridium reversed a year-ago loss with net income of $24.1 million, and that worked out to earnings of $0.19 per share. That was $0.01 less than the consensus forecast but up 35% from adjusted earnings per share in 2015's fourth quarter.

Looking more closely at the report, Iridium largely appeared to tread water in anticipation of its satellite launches. Total billable subscribers climbed to 850,000, up 9% from a year ago and up by 12,000 in the past three months. Gains in the government segment again provided outpaced subscriber growth of 17%, with the new subscribers skewed toward the machine-to-machine data services that Iridium offers. Commercial subscription counts rose 8% to 766,000, with machine-to-machine also dominating the increase there.

Still, Iridium faces challenges in some of its business areas. Total commercial revenue was up just 1%, and voice and data services saw a 2% decrease in its top line. Government services revenue climbed at a sluggish 4% pace, and declines in subscriber equipment sales and commercial engineering and support revenue offset some gains on the government engineering side of the business. Average revenue per user for the commercial voice and data business fell $1 to $41 during the quarter, and airtime usage continued to fall from year-ago levels.

CEO Matt Desch was nevertheless happy with the company's overall results for the year. Desch pointed to "an increase in revenue from our government business and growth in personal tracking as well as leading heavy-equipment manufacturers." In the CEO's eyes, those "expanding relationships underscore Iridium's strong market position in the burgeoning market for real-time Internet of Things solutions."

Can Iridium launch higher?

Yet the truly important thing that Iridium investors are focused on is Iridium NEXT. The company said that it successfully launched its first 10 NEXT satellites in January and reported that the first satellite is actively carrying live communications traffic. By mid-April, Iridium expects eight of the 10 initial satellite launches to be in service, and the other two will drift into a different orbital plane for testing and eventual deployment.

Iridium's guidance largely stayed stable. The company expects service revenue growth of 3% to 5% in 2017, working out to operational pre-tax operating earnings of $255 million to $265 million. That represents slower growth than the company anticipated for 2016, but it reflects the fact that NEXT won't be fully complete until 2018. In its long-range outlook, Iridium still sees service revenue of $440 million to $465 million for 2019.

Iridium investors seemed pleased with the results, and the stock climbed more than 3% at the market's open following the announcement. Looking forward, the key for Iridium will be for subsequent launches to go off without a hitch so that it can get NEXT operational as quickly as possible. Further delays could result in more disappointment if Iridium has to push back its plans again.