EchoStar Announces Financial Results for the Three and Nine Months Ended September 30, 2023

Rhea-AI Summary

EchoStar Corporation announced its financial results for the three and nine months ended September 30, 2023. Consolidated revenue for the three months ended September 30, 2023 was $413.1 million, with a net income of $0.5 million. For the nine months ended September 30, 2023, consolidated revenue was $1.3 billion, with a net income of $37.4 million.

Positive

• Consolidated revenue for the three months ended September 30, 2023 decreased by 17.0% or $84.3 million compared to the same period last year. This decrease was driven by lower service revenues and equipment revenue.
• Net income for the three months ended September 30, 2023 decreased by $19.0 million compared to the same period last year. The decrease was primarily due to lower revenue and higher transaction costs related to the proposed merger with DISH.
• Cash, cash equivalents, and current marketable investment securities were $2.0 billion as of September 30, 2023, up from $1.9 billion as of June 30, 2023.

Negative

• Consolidated revenue for the three months ended September 30, 2023 decreased by 17.0% compared to the same period last year.
• Net income for the three months ended September 30, 2023 decreased by $19.0 million compared to the same period last year.
• The decrease in Hughes broadband subscribers impacted consumer subscriber levels.

ENGLEWOOD, Colo., Nov. 6, 2023 /PRNewswire/ -- EchoStar Corporation (Nasdaq: SATS) announced its financial results for the three and nine months ended September 30, 2023.

Three Months Ended September 30, 2023 Financial Highlights:

• Consolidated revenue of $413.1 million.
• Net income of $0.5 million, consolidated net income attributable to EchoStar common stock of $3.2 million, and basic and diluted earnings per share of common stock of $0.04.
• Consolidated Adjusted EBITDA of $125.8 million (see discussion and the reconciliation of GAAP to this non-GAAP measure below).
• Cash, cash equivalents and current marketable investment securities were $2.0 billion as of September 30, 2023, up from $1.9 billion as of June 30, 2023.

Nine months ended September 30, 2023 Financial Highlights:

• Consolidated revenue of $1.3 billion.
• Net income of $37.4 million, consolidated net income attributable to EchoStar common stock of $43.4 million, and basic and diluted earnings per share of common stock of $0.52.
• Consolidated Adjusted EBITDA of $414.1 million (see discussion and the reconciliation of GAAP to this non-GAAP measure below).

"In the third quarter of 2023, the EchoStar team was fully engaged across our business. We received orders from new and existing customers in our enterprise, international, government, and mobility groups," said Hamid Akhavan, CEO and President of EchoStar. "Our consumer team continued to expand adoption of our low-latency HughesNet Fusion plans and the JUPITER 3/EchoStar XXIV satellite is fully functional and expected to begin commercial service in December."

Three Months Ended September 30, 2023 - Additional Information:

• Consolidated revenue decreased 17.0% or $84.3 million year over year. The decrease was driven by lower service revenues of $42.0 million primarily due to fewer broadband customers.  Equipment revenue decreased $42.3 million, primarily due to lower domestic and international deployments and shipments.  Most enterprise orders are recognized over several years, which can create some variation or irregularity in our revenue, which we saw in the third quarter.
• Net income decreased $19.0 million year over year. The decrease was primarily due to a decrease in operating income driven by lower revenue and higher transaction costs related to the proposed merger with DISH. These items were partially offset by higher interest income of $12.0 million and a favorable change of $4.7 million in our income tax provision.
• Adjusted EBITDA decreased 20.8% or $33.0 million year over year.
  • Hughes segment Adjusted EBITDA decreased $33.8 million year over year.  The decrease was driven primarily by lower service and equipment revenue, partially offset by lower sales and marketing expense from our broadband consumer business and lower research and development expenses.
  • ESS segment Adjusted EBITDA increased $1.4 million year over year, primarily due to higher revenue.
  • Corporate and Other Adjusted EBITDA remained relatively flat year over year.
• Hughes broadband subscribers totaled approximately 1,063,000, declining 165,000 from December 31, 2022.  In the U.S., our current capacity limitations, increasing bandwidth usage by our existing subscribers, and competitive pressures are impacting our consumer subscriber levels.  In Latin America, subscriber levels were tempered by our focus on more profitable consumer subscribers and by our allocation of capacity to enterprise opportunities.
• For the three months ended September 30, 2023, approximately 37% of Hughes segment revenue was attributable to our enterprise customers, decreasing from 40% in the same period last year.  Despite this drop in revenue, we remain committed to growing our Enterprise market.  Just recently, we announced a major deal with Delta Air Lines that will increase our backlog in the fourth quarter and diversify our business.
• The JUPITER 3/EchoStar XXIV satellite launched successfully on July 28, 2023.  Currently, the satellite is in the final stages of in-orbit testing.  Service launch is on schedule for December which will instantly bring over 500 Gbps of capacity over North and South America.

Set forth below is a table highlighting certain of EchoStar's segment results for the three and nine months ended September 30, 2023 and 2022 (amounts in thousands) (all US GAAP amounts reference results from operations):

		For the three months ended September 30,				For the nine months ended September 30,
		2023		2022		2023		2022
Revenue
Hughes		$   404,209		$   489,565		$ 1,279,739		$ 1,475,512
EchoStar Satellite Services		6,446		4,981		18,563		14,305
Corporate and Other		2,419		2,841		7,478		8,420
Total revenue		$   413,074		$   497,387		$ 1,305,780		$ 1,498,237
Net income (loss)		$         532		$     19,550		$     37,437		$   118,968
Adjusted EBITDA
Hughes		$   143,730		$   177,574		$   469,007		$   544,284
EchoStar Satellite Services		4,867		3,447		14,085		9,658
Corporate & Other		(22,788)		(22,202)		(69,042)		(61,506)
Total Adjusted EBITDA		$   125,809		$   158,819		$   414,050		$   492,436
Expenditures for property and equipment, net of refunds and other receipts		$     79,164		$     61,457		$   172,251		$   249,374

Reconciliation of GAAP to Non-GAAP Measurement (amounts in thousands):

		For the three months ended September 30,				For the nine months ended September 30,
		2023		2022		2023		2022
Net income (loss)		$         532		$    19,550		$    37,437		$   118,968
Interest income, net		(26,209)		(14,183)		(78,331)		(29,677)
Interest expense, net of amounts capitalized		12,650		13,845		39,176		43,125
Income tax provision (benefit), net		8,547		13,195		38,780		51,367
Depreciation and amortization		103,028		110,233		311,474		347,224
Net loss (income) attributable to non-controlling interests		2,712		2,853		6,005		8,736
EBITDA		$   101,260		$   145,493		$   354,541		$   539,743
(Gains) losses on investments, net		10,743		10,077		23,337		(48,071)
Foreign currency transaction (gains) losses, net		2,089		2,805		(4,482)		53
Impairment of long-lived assets		—		—		3,142		711
Other-than-temporary impairment losses on equity method investments		—		—		33,400		—
Merger costs		11,717		—		11,717		—
Gain on repayment of other debt securities		—		—		(7,605)		—
License fee dispute - India, net of non-controlling interests		—		444		—		—
Adjusted EBITDA		$   125,809		$   158,819		$   414,050		$   492,436

Note on Use of Non-GAAP Financial Measures

EBITDA is defined as "Net income (loss)" excluding "Interest income, net," "Interest expense, net of amounts capitalized," "Income tax benefit (provision), net," "Depreciation and amortization," and "Net income (loss) attributable to non-controlling interests."

Adjusted EBITDA is defined as EBITDA excluding Gains and losses on investments, net, Foreign currency transaction gains (losses), net, and other non-recurring or non-operational items.

EBITDA and Adjusted EBITDA are not measures determined in accordance with US GAAP.  EBITDA and Adjusted EBITDA are reconciled to Net income (loss) in the table above and should not be considered in isolation or as a substitute for operating income, net income or any other measure determined in accordance with US GAAP. Our management uses EBITDA and Adjusted EBITDA as measures of our operating efficiency and overall financial performance for benchmarking against our peers and competitors.

Management believes that these non-GAAP measures provide meaningful supplemental information regarding the underlying operating performance of our business and are appropriate to enhance an overall understanding of our financial performance.  Management also believes that EBITDA and Adjusted EBITDA are useful to investors because they are frequently used by securities analysts, investors, and other interested parties to evaluate the performance of companies in our industry.

The consolidated financial statements of EchoStar for the periods ended September 30, 2023 and 2022 are attached to this press release. Detailed financial data and other information are available in EchoStar's Quarterly Report on Form 10-Q for the period ended September 30, 2023 filed today with the Securities and Exchange Commission.

EchoStar will host a webcast to discuss its earnings on Monday, November 6, 2023 at 11:00 a.m. Eastern Time. The webcast will be broadcast live in listen-only mode on EchoStar's investor relations website at ir.echostar.com.  To participate via telephone and ask a question, participants must register using an online form found at: https://register.vevent.com/register/BIffe2a41bff0e4a198973106da5a17dab.

About EchoStar Corporation

EchoStar Corporation (Nasdaq: SATS) is a premier technology and networking services provider offering consumer, enterprise, operator and government solutions worldwide under its Hughes^®, HughesNet^® and EchoStar^® 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 social media.

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 that are described under the caption "Risk Factors" in EchoStar's Annual Report on Form 10-K for the period ended December 31, 2022 and subsequent Quarterly Reports on Form 10-Q 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
Consolidated Balance Sheets
(In thousands, except share and per share amounts)
		As of
		September 30, 2023		December 31, 2022
		(unaudited)
Assets
Current assets:
Cash and cash equivalents		$        1,094,531		$           704,541
Marketable investment securities		894,744		973,915
Trade accounts receivable and contract assets, net		235,421		236,479
Other current assets, net		248,241		210,446
Total current assets		2,472,937		2,125,381
Non-current assets:
Property and equipment, net		2,144,707		2,237,617
Operating lease right-of-use assets		143,726		151,518
Goodwill		532,710		532,491
Regulatory authorizations, net		459,463		462,531
Other intangible assets, net		13,975		15,698
Other investments, net		136,455		356,705
Other non-current assets, net		326,485		317,062
Total non-current assets		3,757,521		4,073,622
Total assets		$        6,230,458		$        6,199,003
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable		$             82,291		$           101,239
Contract liabilities		122,288		121,739
Accrued expenses and other current liabilities		192,100		199,853
Total current liabilities		396,679		422,831
Non-current liabilities:
Long-term debt, net		1,497,396		1,496,777
Deferred tax liabilities, net		433,370		424,621
Operating lease liabilities		127,829		135,932
Other non-current liabilities		109,396		119,787
Total non-current liabilities		2,167,991		2,177,117
Total liabilities		2,564,670		2,599,948
Commitments and contingencies

 

ECHOSTAR CORPORATION
Consolidated Balance Sheets
(In thousands, except share and per share amounts)
Stockholders' equity:
Preferred stock, $0.001 par value, 20,000,000 shares authorized, none issued and outstanding at both September 30, 2023 and December 31, 2022		—		—
Common stock, $0.001 par value, 4,000,000,000 shares authorized:
Class A common stock, $0.001 par value, 1,600,000,000 shares authorized,  59,532,668 shares issued and 36,219,357 shares outstanding at September 30, 2023 and 58,604,927 shares issued and 35,291,616 shares outstanding at December 31, 2022		59		59
Class B convertible common stock, $0.001 par value, 800,000,000 shares authorized, 47,687,039 shares issued and outstanding at both September 30, 2023 and December 31, 2022		48		48
Class C convertible common stock, $0.001 par value, 800,000,000 shares authorized, none issued and outstanding at both September 30, 2023 and December 31, 2022		—		—
Class D common stock, $0.001 par value, 800,000,000 shares authorized, none issued and outstanding at both September 30, 2023 and December 31, 2022		—		—
Additional paid-in capital		3,383,671		3,367,058
Accumulated other comprehensive income (loss)		(161,515)		(172,239)
Accumulated earnings (losses)		876,959		833,517
Treasury shares, at cost, 23,313,311 at both September 30, 2023 and December 31, 2022		(525,824)		(525,824)
Total EchoStar Corporation stockholders' equity		3,573,398		3,502,619
Non-controlling interests		92,390		96,436
Total stockholders' equity		3,665,788		3,599,055
Total liabilities and stockholders' equity		$        6,230,458		$        6,199,003

 

ECHOSTAR CORPORATION
Consolidated Statements of Operations
(Unaudited, in thousands, except per share amounts)
		For the three months ended September 30,				For the nine months ended September 30,
		2023		2022		2023		2022
Revenue:
Services and other revenue		$     359,349		$     401,382		$  1,108,386		$  1,234,890
Equipment revenue		53,725		96,005		197,394		263,347
Total revenue		413,074		497,387		1,305,780		1,498,237
Costs and expenses:
Cost of sales - services and other (exclusive of depreciation and amortization)		133,335		145,189		401,431		430,553
Cost of sales - equipment (exclusive of depreciation and amortization)		43,180		74,329		151,004		213,497
Selling, general and administrative expenses		104,988		111,421		322,469		342,682
Research and development expenses		6,463		9,181		21,560		25,562
Depreciation and amortization		103,028		110,233		311,474		347,224
Impairment of long-lived assets		—		—		3,142		711
Total costs and expenses		390,994		450,353		1,211,080		1,360,229
Operating income (loss)		22,080		47,034		94,700		138,008
Other income (expense):
Interest income, net		26,209		14,183		78,331		29,677
Interest expense, net of amounts capitalized		(12,650)		(13,845)		(39,176)		(43,125)
Gains (losses) on investments, net		(10,743)		(10,077)		(23,337)		48,071
Equity in earnings (losses) of unconsolidated affiliates, net		(1,978)		(1,426)		(3,075)		(4,441)
Other-than-temporary impairment losses on equity method investments		—		—		(33,400)		—
Foreign currency transaction gains (losses), net		(2,089)		(2,805)		4,482		(53)
Other, net		(11,750)		(319)		(2,308)		2,198
Total other income (expense), net		(13,001)		(14,289)		(18,483)		32,327
Income (loss) before income taxes		9,079		32,745		76,217		170,335
Income tax benefit (provision), net		(8,547)		(13,195)		(38,780)		(51,367)
Net income (loss)		532		19,550		37,437		118,968
Less: Net loss (income) attributable to non-controlling interests		2,712		2,853		6,005		8,736
Net income (loss) attributable to EchoStar Corporation common stock		$          3,244		$        22,403		$        43,442		$     127,704
Earnings (losses) per share - Class A and B common stock:
Basic		$            0.04		$            0.27		$            0.52		$            1.51
Diluted		$            0.04		$            0.27		$            0.52		$            1.51

 

ECHOSTAR CORPORATION
Consolidated Statements of Cash Flows
(Unaudited, in thousands)
		For the nine months ended September 30,
		2023		2022
Cash flows from operating activities:
Net income (loss)		$             37,437		$           118,968
Adjustments to reconcile net income (loss) to cash flows provided by (used for) operating activities:
Depreciation and amortization		311,474		347,224
Impairment of long-lived assets		3,142		711
Losses (gains) on investments, net		23,337		(48,071)
Equity in losses of unconsolidated affiliates, net		3,075		4,441
Foreign currency transaction losses (gains), net		(4,482)		53
Deferred tax provision, net		8,088		28,901
Stock-based compensation		8,239		8,401
Amortization of debt issuance costs		619		583
Gain on repayment of other debt securities		(7,605)		—
Other-than-temporary impairment losses on equity method investments		33,400		—
Accretion of discounts on debt investments		(21,340)		159
Other, net		(6,634)		35,450
Changes in assets and liabilities, net:
Trade accounts receivable and contract assets, net		2,940		(63,563)
Other current assets, net		(46,216)		(26,402)
Trade accounts payable		(22,817)		657
Contract liabilities		549		(13,759)
Accrued expenses and other current liabilities		(489)		(27,004)
Non-current assets and non-current liabilities, net		(21,694)		(23,432)
Net cash provided by (used for) operating activities		301,023		343,317
Cash flows from investing activities:
Purchases of marketable investment securities		(1,015,650)		(540,447)
Sales and maturities of marketable investment securities		1,150,683		917,077
Expenditures for property and equipment		(206,862)		(249,374)
Refunds and other receipts related to capital expenditures		34,611		—
Expenditures for externally marketed software		(22,373)		(16,926)
Proceeds from repayment of other debt investment		148,448		—
India JV formation		—		(7,892)
Dividend received from unconsolidated affiliate		—		2,000
Sale of unconsolidated affiliate		—		7,500
Sales of other investments		—		3,070
Net cash provided by (used for) investing activities		88,857		115,008
Cash flows from financing activities:
Payment of finance lease obligations		—		(114)
Payment of in-orbit incentive obligations		(3,144)		(2,422)
Proceeds from Class A common stock issued under the Employee Stock Purchase Plan		2,953		7,173
Payment of equity registration fees		(1,327)		—
Treasury share repurchase		—		(89,303)
Net cash provided by (used for) financing activities		(1,518)		(84,666)
Effect of exchange rates on cash and cash equivalents		1,622		(3,123)
Net increase (decrease) in cash and cash equivalents		389,984		370,536
Cash and cash equivalents, including restricted amounts, beginning of period		705,882		536,874
Cash and cash equivalents, including restricted amounts, end of period		$        1,095,866		$           907,410

 

 

View original content to download multimedia:https://www.prnewswire.com/news-releases/echostar-announces-financial-results-for-the-three-and-nine-months-ended-september-30-2023-301978397.html

SOURCE EchoStar Corporation

FAQ

What were EchoStar Corporation's financial results for the three months ended September 30, 2023?

Consolidated revenue for the three months ended September 30, 2023 was $413.1 million, with a net income of $0.5 million.

What were EchoStar Corporation's financial results for the nine months ended September 30, 2023?

Consolidated revenue for the nine months ended September 30, 2023 was $1.3 billion, with a net income of $37.4 million.

What was the percentage decrease in consolidated revenue for the three months ended September 30, 2023 compared to the same period last year?

Consolidated revenue for the three months ended September 30, 2023 decreased by 17.0% compared to the same period last year.

What was the reason for the decrease in net income for the three months ended September 30, 2023 compared to the same period last year?

The decrease in net income was primarily due to lower revenue and higher transaction costs related to the proposed merger with DISH.

What was the cash, cash equivalents, and current marketable investment securities balance as of September 30, 2023?

The balance was $2.0 billion.