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EchoStar Announces Financial Results for the Three Months Ended March 31, 2024

08 May 2024

ENGLEWOOD, Colo., May 8, 2024 /PRNewswire/ -- EchoStar Corporation (NASDAQ: SATS) announced its financial results for the three months ended March 31, 2024.

Three Months Ended March 31, 2024:

  • EchoStar reported total revenue of $4.01 billion for the first quarter 2024, compared to $4.39 billion in the year ago quarter.
  • Net loss attributable to EchoStar in the first quarter 2024 was $107.38 million, compared to net income of $253.53 million in the year ago quarter. Diluted loss per share was $0.40, compared to earnings per share of $0.82 in the year ago quarter.
  • Consolidated OIBDA totaled $470.16 million in the first quarter, compared to $701.09 million in the year ago quarter. (See OBIDA definition and non-GAAP reconciliation below.)

"The EchoStar team performed as planned in the first quarter of 2024. We concentrated efforts on integrating the EchoStar and DISH Network businesses in order to maximize synergies and cost savings, facilitate growth opportunities, and drive operational alignment. Overall, ARPU increased in every business unit and customer satisfaction has improved," said Hamid Akhavan, president and CEO, EchoStar Corporation. "In addition, the business continues to focus on addressing necessary financing, improving our position in Retail Wireless, densifying and expanding the wireless network, maximizing our profitability with the newly launched EchoStar XXIV/Jupiter™ 3, and acquiring higher-quality Pay-TV customers."

Three Months Ended March 31, 2024 - Additional Information:

  • Net Pay-TV subscribers decreased approximately 348,000 in the first quarter, compared to a decrease of approximately 552,000 in the year-ago quarter. The company closed the quarter with 8.18 million Pay-TV subscribers including 6.26 million DISH TV subscribers and 1.92 million SLING TV subscribers. This change in net Pay-TV losses resulted from the decrease in net DISH TV subscriber losses due to a lower DISH TV churn rate and the decrease in net SLING TV subscriber losses, both resulting from our emphasis on acquiring higher quality subscribers, offset by lower gross new DISH TV subscriber activations.
  • Retail Wireless net subscribers decreased by approximately 81,000 in both the first quarter and in the year-ago quarter. The company closed the quarter with 7.30 million Retail Wireless subscribers. The three months ended March 31, 2024, was positively impacted by a lower Retail Wireless churn rate, partially offset by lower gross new Retail Wireless subscriber activations and lower net ACP/Gen Mobile subscriber additions.
  • Broadband net subscribers decreased by approximately 26,000 in the first quarter, compared to a decrease of 51,000 in the year-ago quarter. The company closed the quarter with 978,000 Broadband subscribers. The decrease in net Broadband subscriber losses was primarily due to the new EchoStar XXIV satellite service launch and increased subscriber demand for our new satellite service plans.

Set forth below is a table highlighting certain of EchoStar's segment results for the three months ended March 31, 2024 and 2023 (all U.S. GAAP amounts reference results from operations):

    

For the Three Months
Ended March 31,

    
    

2024

 

2023

    

(in thousands)

Revenue

     

Pay-TV

   

$     2,726,578

 

$     2,972,131

Retail Wireless

  

905,850

 

974,866

5G Network Deployment

 

29,504

 

18,907

Broadband and Satellite Services

382,586

 

439,596

All Other & Eliminations

 

(29,675)

 

(17,834)

Total

  

$     4,014,843

 

$     4,387,666

       

Net Income (loss) attributable to EchoStar

$       (107,376)

 

$        253,534

       

OIBDA

      

Pay-TV

   

$        755,510

 

$        777,808

Retail Wireless

  

(17,518)

 

34,638

5G Network Deployment

 

(333,564)

 

(235,976)

Broadband and Satellite Services

79,287

 

130,823

All Other & Eliminations

 

(13,559)

 

(6,201)

Total

  

$        470,156

 

$        701,092

       

Purchases of property and equipment, net of refunds (including capitalized interest related to regulatory authorizations)

Pay-TV

   

$          57,912

 

$          35,563

Retail Wireless

  

$                    -

 

-

5G Network Deployment

 

$        549,173

 

871,042

Broadband and Satellite Services

$          70,611

 

44,071

All Other & Eliminations

 

$                    -

 

-

Total 

   

$        677,696

 

$        950,676

Reconciliation of GAAP to Non-GAAP Measurement:

For the three
months Ended March 31, 2024

 

Pay-TV

 

Retail
Wireless

 

5G Network
Deployment

 

Broadband and
Satellite
Services

   

Consolidated 

Eliminations

  

(In thousands)

Segment operating income (loss)

 

$

670,108

  

(74,417)

  

(570,751)

  

(39,554)

  

(630)

  

(15,244)

Depreciation and amortization

  

85,402

  

56,899

  

237,187

  

118,841

  

(12,929)

  

485,400

OIBDA

 

$

755,510

 

$

(17,518)

 

$

(333,564)

 

$

79,287

 

$

(13,559)

 

$

470,156

                   

For the three months Ended March 31, 2023

 

 Pay-TV 

 

 Retail
Wireless 

 

 5G Network
Deployment 

 

 Broadband and
Satellite
Services 

   

 Consolidated  

 Eliminations 

  

 (In thousands) 

Segment operating income (loss)

 

$

675,233

  

(18,207)

  

(333,603)

  

27,705

  

2,210

  

353,338

Depreciation and amortization

  

102,575

  

52,845

  

97,627

  

103,118

  

(8,411)

  

347,754

OIBDA

 

$

777,808

 

$

34,638

 

$

(235,976)

 

$

130,823

 

$

(6,201)

 

$

701,092

Note on Use of Non-GAAP Financial Measures

OIBDA is defined as "Operating income (loss)" plus "Depreciation and amortization."

OIBDA, which is presented by segment above, is a non-GAAP measure reconciled to "Operating income (loss)" and does not purport to be an alternative to operating income (loss) as a measure of operating performance. We believe this measure is useful to management, investors and other users of our financial information in evaluating operating profitability of our business segments on a more variable cost basis as it excludes the depreciation and amortization expenses related primarily to capital expenditures and acquisitions for those business segments, as well as in evaluating operating performance in relation to our competitors.

The condensed consolidated financial statements of EchoStar for the period ended March 31, 2024, are attached to this press release. Detailed financial data and other information are available in EchoStar's Form 10-Q for the period ended March 31, 2024, filed today with the Securities and Exchange Commission.

EchoStar will host a conference call to discuss its earnings on Wednesday, May 8, 2024, at noon Eastern Time. The conference call will be broadcast live in listen-only mode on EchoStar's investor relations website at ir.echostar.com. To attend the call, please dial: (877) 484-6065 (U.S.) or (201) 689-8846. When prompted on dial-in, please utilize the conference ID (13746414) or ask for the "EchoStar Corporation Q1 2024 Earnings Conference Call." Please dial in at least 10 minutes before the call to ensure timely participation.

About EchoStar Corporation

EchoStar Corporation (Nasdaq: SATS) is a premier provider of technology, networking services, television entertainment and connectivity, offering consumer, enterprise, operator and government solutions worldwide under its EchoStar®, Boost Mobile®, Sling TV, DISH TV, Hughes®, HughesNet®, HughesON™, and JUPITER™ brands. In Europe, EchoStar operates under its EchoStar Mobile Limited subsidiary and in Australia, the company operates as EchoStar Global Australia. For more information, visit www.echostar.com and follow EchoStar on X (Twitter) and LinkedIn.

Safe Harbor Statement under the US Private Securities Litigation Reform Act of 1995

This press release may contain statements that are forward looking, as that term is defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's beliefs, as well as assumptions made by, and information currently available to, management. When used in this release, the words "believe," "anticipate," "goal," "seek," "estimate," "expect," "intend," "project," "continue," "future," "will," "would," "can," "may," "plans," and similar expressions and the use of future dates are intended to identify forward–looking statements. Although management believes that the expectations reflected in these forward–looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date made. We assume no responsibility for the accuracy of forward-looking statements or information or for updating forward-looking information or statements. These statements are subject to certain risks, uncertainties, and assumptions. See "Risk Factors" in EchoStar's Annual Report on Form 10-K for the period ended December 31, 2023 as filed with the Securities and Exchange Commission and in the other documents EchoStar files with the Securities and Exchange Commission from time to time.

   

ECHOSTAR CORPORATION

   

CONDENSED CONSOLIDATED BALANCE SHEETS

   

(Dollars in thousands, except share amounts)

   

(Unaudited)

       
  

As of  

  

 March 31, 

 

December 31,

  

2024

 

2023

Assets

      

Current Assets:

    

Cash and cash equivalents

 

$

613,702

 

$

1,821,376

Marketable investment securities

  

152,649

  

623,044

Trade accounts receivable, net of allowance for credit losses of $84,906 and
$74,390, respectively

  

1,023,089

  

1,122,139

Inventory

  

632,952

  

665,169

Prepaids and other assets

  

677,982

  

644,005

Other current assets

  

16,165

  

16,081

Total current assets

  

3,116,539

  

4,891,814

       

Noncurrent Assets:

      

Restricted cash, cash equivalents and marketable investment securities 

  

120,979

  

118,065

Property and equipment, net 

  

9,589,433

  

9,561,834

Regulatory authorizations, net

  

38,809,600

  

38,572,980

Other investments, net

  

309,189

  

314,370

Operating lease assets

  

3,092,070

  

3,065,448

Intangible assets, net 

  

127,670

  

172,892

Other noncurrent assets, net

  

390,937

  

411,491

Total noncurrent assets

  

52,439,878

  

52,217,080

Total assets

 

$

55,556,417

 

$

57,108,894

       

Liabilities and Stockholders' Equity (Deficit)

      

Current Liabilities:

      

Trade accounts payable

 

$

573,299

 

$

774,011

Deferred revenue and other

  

712,783

  

754,658

Accrued programming

  

1,485,798

  

1,427,762

Accrued interest

  

408,134

  

297,678

Other accrued expenses and liabilities

  

1,734,288

  

1,717,826

Current portion of long-term debt and finance lease obligations

  

2,090,661

  

3,046,654

Total current liabilities

  

7,004,963

  

8,018,589

       

Long-Term Obligations, Net of Current Portion:

      

Long-term debt and finance lease obligations, net of current portion

  

19,696,803

  

19,717,266

Deferred tax liabilities, net

  

4,998,855

  

5,014,309

Operating lease liabilities 

  

3,157,720

  

3,121,307

Long-term deferred revenue and other long-term liabilities

  

856,926

  

849,131

Total long-term obligations, net of current portion

  

28,710,304

  

28,702,013

Total liabilities

  

35,715,267

  

36,720,602

       

Commitments and Contingencies

      
       

Redeemable noncontrolling interests

  

  

438,382

       

Stockholders' Equity (Deficit): 

      

Class A common stock, $0.001 par value, 1,600,000,000 shares authorized,
140,170,052 and 140,153,020 shares issued and outstanding, respectively

  

140

  

140

Class B common stock, $0.001 par value, 800,000,000 shares authorized,
131,348,468 shares issued and outstanding

  

131

  

131

Additional paid-in capital

  

8,310,877

  

8,301,979

Accumulated other comprehensive income (loss)

  

(164,604)

  

(160,056)

Accumulated earnings (deficit)

  

11,630,607

  

11,737,983

Total EchoStar stockholders' equity (deficit)

  

19,777,151

  

19,880,177

Noncontrolling interests

  

63,999

  

69,733

Total stockholders' equity (deficit)

  

19,841,150

  

19,949,910

Total liabilities and stockholders' equity (deficit)

 

$

55,556,417

 

$

57,108,894

   

ECHOSTAR CORPORATION

   

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 

   

(Dollars in thousands, except per share amounts)

   

(Unaudited)

       
  

For the Three Months Ended March 31, 

  

2024

 

2023

Revenue:

      

Service revenue

 

$

3,819,673

 

$

4,180,721

Equipment sales and other revenue

  

195,170

  

206,945

Total revenue

  

4,014,843

  

4,387,666

       

Costs and Expenses (exclusive of depreciation and amortization):

      

Cost of services

  

2,557,182

  

2,462,600

Cost of sales - equipment and other 

  

363,083

  

520,060

Selling, general and administrative expenses

  

624,422

  

700,772

Depreciation and amortization 

  

485,400

  

347,754

Impairment of long-lived assets and goodwill

  

  

3,142

Total costs and expenses

  

4,030,087

  

4,034,328

       

Operating income (loss)

  

(15,244)

  

353,338

       

Other Income (Expense):

      

Interest income, net

  

30,462

  

68,186

Interest expense, net of amounts capitalized

  

(99,408)

  

(20,033)

Other, net

  

(26,110)

  

(34,761)

Total other income (expense)

  

(95,056)

  

13,392

       

Income (loss) before income taxes

  

(110,300)

  

366,730

Income tax (provision) benefit, net

  

1,925

  

(93,885)

Net income (loss)

  

(108,375)

  

272,845

Less: Net income (loss) attributable to noncontrolling interests, net of tax

  

(999)

  

19,311

Net income (loss) attributable to EchoStar

 

$

(107,376)

 

$

253,534

       

Weighted-average common shares outstanding - Class A and B common
stock: 

      

Basic

  

271,519

  

269,833

Diluted

  

271,519

  

307,410

       

Earnings per share - Class A and B common stock:

      

Basic net income (loss) per share attributable to EchoStar

 

$

(0.40)

 

$

0.94

Diluted net income (loss) per share attributable to EchoStar

 

$

(0.40)

 

$

0.82

   

ECHOSTAR CORPORATION

   

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

   

(In thousands) 

   

(Unaudited)

       
  

For the Three Months Ended March 31, 

  

2024

 

2023

Cash Flows From Operating Activities:

      

Net income (loss)

 

$

(108,375)

 

$

272,845

Adjustments to reconcile net income (loss) to net cash flows from operating activities:

      

Depreciation and amortization

  

485,400

  

347,754

Impairment of long-lived assets and goodwill

  

  

3,142

Realized and unrealized losses (gains) on investments, impairments and other

  

23,893

  

7,368

Realized and unrealized losses (gains) on derivatives

  

  

28,961

Non-cash, stock-based compensation

  

9,058

  

14,628

Deferred tax expense (benefit)

  

(11,688)

  

77,265

Changes in allowance for credit losses

  

10,516

  

1,004

Change in long-term deferred revenue and other long-term liabilities

  

(3,871)

  

(8,027)

Other, net

  

64,914

  

34,380

Changes in current assets and current liabilities, net

  

(18,588)

  

10,627

Net cash flows from operating activities

  

451,259

  

789,947

       

Cash Flows From Investing Activities:

      

Purchases of marketable investment securities

  

(19,135)

  

(606,676)

Sales and maturities of marketable investment securities

  

458,792

  

1,372,198

Purchases of property and equipment

  

(519,612)

  

(766,281)

Refunds and other receipts of purchases of property and equipment

  

  

15,000

Capitalized interest related to regulatory authorizations

  

(158,084)

  

(199,395)

Purchases of regulatory authorizations, including deposits 

  

(1,104)

  

(1,771)

Other, net

  

998

  

(17,933)

Net cash flows from investing activities

  

(238,145)

  

(204,858)

       

Cash Flows From Financing Activities:

      

Repayment of long-term debt and finance lease obligations

  

(27,125)

  

(27,255)

Redemption and repurchases of convertible and senior notes

  

(951,168)

  

(1,443,179)

Proceeds from issuance of senior notes

  

  

1,500,000

Net proceeds from Class A common stock options exercised and stock issued under the Employee
Stock Purchase Plan

  

(160)

  

3,967

Purchase of SNR Management's ownership interest in SNR HoldCo

  

(441,998)

  

Proceeds from accrued interest in conjunction with the issuance of senior notes

  

  

34,760

Debt issuance costs and debt (discount) premium

  

  

21,635

Other, net

  

  

(5,073)

Net cash flows from financing activities 

  

(1,420,451)

  

84,855

       

Effect of exchange rates on cash and cash equivalents

  

(849)

  

1,677

       

Net increase (decrease) in cash, cash equivalents, restricted cash and cash equivalents

  

(1,208,186)

  

671,621

Cash, cash equivalents, restricted cash and cash equivalents, beginning of period

  

1,911,601

  

2,561,803

Cash, cash equivalents, restricted cash and cash equivalents, end of period

 

$

703,415

 

$

3,233,424

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