EchoStar Announces Financial Results for the Three and Six Months Ended June 30, 2024

Rhea-AI Summary

EchoStar (NASDAQ: SATS) reported financial results for Q2 2024. Total revenue for the first half of 2024 was $7.97 billion, down from $8.74 billion in the same period last year. The company reported a net loss of $312.97 million, compared to a net income of $466.20 million in the previous year. Diluted loss per share was $1.15, down from earnings per share of $1.51. Consolidated OIBDA totaled $912.31 million, a decrease from $1.32 billion.

In Q2 2024, Pay-TV subscribers decreased by 104,000, while Retail Wireless subscribers decreased by 16,000. Broadband subscribers decreased by 23,000. The company is focusing on aligning business synergies, profitable customer acquisition and retention, and improving its go-to-market approach for Retail Wireless.

Positive

• Decrease in net Pay-TV subscriber losses compared to the previous year
• Improvement in net broadband subscriber loss primarily due to new satellite service launch
• SLING TV subscriber additions in Q2 compared to losses in the previous year
• Lower DISH TV churn rate
• Lower retail wireless churn rate

Negative

• Total revenue decreased from $8.74 billion to $7.97 billion year-over-year
• Net loss of $312.97 million compared to net income of $466.20 million in the previous year
• Diluted loss per share of $1.15 compared to earnings per share of $1.51 in the previous year
• Consolidated OIBDA decreased from $1.32 billion to $912.31 million
• Decrease in Pay-TV, Retail Wireless, and Broadband subscribers
• Negative impact from net losses of government subsidized subscribers due to ACP program funding conclusion

Financial Analyst

EchoStar's Q2 2024 results reveal significant challenges. Total revenue for H1 2024 dropped to $7.97 billion from $8.74 billion in H1 2023, a 8.8% decrease. The company swung to a net loss of $312.97 million in H1 2024 from a profit of $466.20 million in H1 2023. This resulted in a diluted loss per share of $1.15, compared to earnings of $1.51 per share last year.

The OIBDA decline from $1.32 billion to $912.31 million indicates operational difficulties. While Pay-TV subscriber losses have slowed, the Retail Wireless and Broadband segments continue to face headwinds. The company's heavy investments in 5G Network Deployment ($1.11 billion in H1 2024) are yet to yield positive returns, contributing to the financial strain.

Telecommunications Expert

EchoStar's Q2 results highlight the ongoing challenges in the telecom industry. The decrease in Pay-TV subscribers, albeit at a slower rate, reflects the continued cord-cutting trend. The company's SLING TV service showed some resilience, adding subscribers in Q2. However, the Retail Wireless segment's performance is concerning, with a net loss of 16,000 subscribers.

The conclusion of the Affordable Connectivity Program on June 1, 2024, has negatively impacted subscriber numbers. This underscores the importance of government initiatives in maintaining connectivity for low-income households. The launch of the EchoStar XXIV satellite service is a positive development, helping to slow broadband subscriber losses. However, the substantial investments in 5G Network Deployment ($560.47 million in Q2 alone) indicate a long-term strategy that may pressure short-term financials.

Market Research Analyst

EchoStar's Q2 2024 results reflect broader market trends in the telecommunications industry. The company's efforts to align business synergies and focus on profitable customer acquisition are steps in the right direction, but the financial impact is yet to be seen. The decrease in Pay-TV subscriber losses (104,000 in Q2 2024 vs. 294,000 in Q2 2023) suggests that EchoStar's retention strategies may be gaining traction.

The company's pivot towards Open RAN technology for its 5G network is noteworthy, potentially offering cost efficiencies and flexibility in the long run. However, the immediate financial burden is evident. The broadband subscriber loss improvement, attributed to the new satellite service launch, indicates a potential growth area. EchoStar's ability to navigate the post-ACP landscape and strengthen its value propositions will be important for future performance.

ENGLEWOOD, Colo., Aug. 9, 2024 /PRNewswire/ -- EchoStar Corporation (NASDAQ: SATS) announced its financial results for the three and six months ended June 30, 2024.

Six Months Ended June 30, 2024:

• EchoStar reported total revenue of $7.97 billion for the six months ending June 30, 2024, compared to $8.74 billion in the year ago period.
• Net loss attributable to EchoStar in the first two quarters of 2024 was $312.97 million, compared to net income of $466.20 million in the year ago period. Diluted loss per share was $1.15, compared to earnings per share of $1.51 in the year ago period.
• Consolidated OIBDA totaled $912.31 million for the six months ending June 30, 2024, compared to $1.32 billion in the year ago period. (See OIBDA definition and non-GAAP reconciliation below.)

"The EchoStar team continued to perform as planned in the second quarter of 2024. We directed efforts on aligning key business synergies and objectives, focusing on profitable customer acquisition and retention efforts, and making improvements in our go-to-market approach for Retail Wireless," said Hamid Akhavan, president and CEO, EchoStar Corporation. "In addition, we are in constructive discussions to address necessary financing, working to strengthen our consumer offerings and value propositions, enhancing our state-of-the-art Open RAN network, and driving profitability across the enterprise."

Three Months Ended June 30, 2024:

• Net Pay-TV subscribers decreased approximately 104,000 in the second quarter, compared to 294,000 in the year ago quarter. The company closed the quarter with 8.07 million Pay-TV subscribers including 6.07 million DISH TV subscribers and 2.00 million SLING TV subscribers. This change in net Pay-TV subscriber losses resulted from SLING TV subscriber additions in the second quarter compared to losses in the year ago quarter and a decrease in net DISH TV subscriber losses due to a lower DISH TV churn rate, offset by lower gross new DISH TV subscriber activations.
• Retail Wireless net subscribers decreased by approximately 16,000 in the second quarter, compared to 188,000 in the year ago quarter. The company closed the quarter with 7.28 million Retail Wireless subscribers. The decrease in net retail wireless subscriber losses resulted from a lower retail wireless churn rate, offset by lower gross new retail wireless subscriber activations. The second quarter was negatively impacted by net losses of government subsidized subscribers, including Affordable Connectivity Program ("ACP") subscribers, compared to net additions in the year ago quarter, primarily due to the ACP program funding concluding on June 1, 2024. Excluding the impact of net losses of government subsidized subscribers EchoStar added approximately 32,000 Retail Wireless subscribers in the second quarter.
• Broadband net subscribers decreased by approximately 23,000 in the second quarter, compared to 55,000 in the year ago quarter. The company closed the quarter with 955,000 Broadband subscribers. The net broadband subscriber loss improvement 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 and six months ended June 30, 2024 and 2023 (all U.S. GAAP amounts reference results from operations):

				For the Three Months Ended June 30,				For the Six Months Ended June 30,
				2024		2023		2024		2023
				(in thousands)
Revenue
Pay-TV				$     2,676,284		$     2,975,140		$     5,402,862		$     5,947,271
Retail Wireless				891,531		928,241		1,797,381		1,903,107
5G Network Deployment				35,514		19,079		65,018		37,986
Broadband and Satellite Services				394,011		453,110		776,597		892,706
All Other & Eliminations				(44,589)		(19,108)		(74,264)		(36,942)
Total				$     3,952,751		$     4,356,462		$     7,967,594		$     8,744,128
Net Income (loss) attributable to EchoStar				$       (205,591)		$       212,662		$       (312,967)		$       466,196
OIBDA
Pay-TV				$        753,001		$       818,265		$     1,508,511		$     1,596,073
Retail Wireless				(65,995)		(59,296)		(83,513)		(24,658)
5G Network Deployment				(313,018)		(278,475)		(646,582)		(514,451)
Broadband and Satellite Services				82,392		149,559		161,679		280,382
All Other & Eliminations				(14,224)		(7,191)		(27,783)		(13,392)
Total				$        442,156		$       622,862		$        912,312		$     1,323,954
Purchases of property and equipment, net of refunds (including capitalized interest related to regulatory authorizations)
Pay-TV				$          54,006		$         67,630		$        111,918		$       103,193
Retail Wireless				—		—		—		—
5G Network Deployment				560,468		1,183,891		1,109,641		2,054,933
Broadband and Satellite Services				56,559		49,016		127,170		93,087
All Other & Eliminations				—		—		—		—
Total				$        671,033		$     1,300,537		$     1,348,729		$     2,251,213

 

Reconciliation of GAAP to Non-GAAP Measurement:

For the Three Months Ended June 30, 2024		Pay-TV			Retail Wireless			5G Network Deployment			Broadband and Satellite Services						Consolidated
														Eliminations
		(In thousands)
Segment operating income (loss)		$	667,752		$	(121,362)		$	(578,940)		$	(34,586)		$	1,767		$	(65,369)
Depreciation and amortization			85,249			55,367			265,922			116,978			(15,991)			507,525
OIBDA		$	753,001		$	(65,995)		$	(313,018)		$	82,392		$	(14,224)		$	442,156
For the Three Months Ended June 30, 2023		Pay-TV			Retail Wireless			5G Network Deployment			Broadband and Satellite Services						Consolidated
														Eliminations
Segment operating income (loss)		$	720,792		$	(112,499)		$	(401,959)		$	43,847		$	2,048		$	252,229
Depreciation and amortization			97,473			53,203			123,484			105,712			(9,239)			370,633
OIBDA		$	818,265		$	(59,296)		$	(278,475)		$	149,559		$	(7,191)		$	622,862
For the Six Months Ended June 30, 2024		Pay-TV			Retail Wireless			5G Network Deployment			Broadband and Satellite Services						Consolidated
														Eliminations
Segment operating income (loss)		$	1,337,860		$	(195,779)		$	(1,149,691)		$	(74,140)		$	1,137		$	(80,613)
Depreciation and amortization			170,651			112,266			503,109			235,819			(28,920)			992,925
OIBDA		$	1,508,511		$	(83,513)		$	(646,582)		$	161,679		$	(27,783)		$	912,312
For the Six Months Ended June 30, 2023		Pay-TV			Retail Wireless			5G Network Deployment			Broadband and Satellite Services						Consolidated
														Eliminations
Segment operating income (loss)		$	1,396,025		$	(130,706)		$	(735,562)		$	71,552		$	4,258		$	605,567
Depreciation and amortization			200,048			106,048			221,111			208,830			(17,650)			718,387
OIBDA		$	1,596,073		$	(24,658)		$	(514,451)		$	280,382		$	(13,392)		$	1,323,954

 

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 June 30, 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 June 30, 2024, filed today with the Securities and Exchange Commission.

EchoStar will host a conference call to discuss its earnings on Friday, August 9, 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 (13748126) or ask for the "EchoStar Corporation Q2 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, 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
			CONDENSED CONSOLIDATED BALANCE SHEETS
			(Dollars in thousands, except share amounts)
			(Unaudited)
		As of
		June 30,			December 31,
		2024			2023
Assets
Current Assets:
Cash and cash equivalents		$	419,246		$	1,821,376
Marketable investment securities			101,331			623,044
Trade accounts receivable, net of allowance for credit losses of $107,498 and $74,390, respectively			1,052,855			1,122,139
Inventory			557,257			665,169
Prepaids and other assets			642,158			644,005
Other current assets			15,019			16,081
Total current assets			2,787,866			4,891,814
Noncurrent Assets:
Restricted cash, cash equivalents and marketable investment securities			143,429			118,065
Property and equipment, net			9,427,192			9,561,834
Regulatory authorizations, net			39,053,041			38,572,980
Other investments, net			243,191			314,370
Operating lease assets			3,137,306			3,065,448
Intangible assets, net			86,992			172,892
Other noncurrent assets, net			376,176			411,491
Total noncurrent assets			52,467,327			52,217,080
Total assets		$	55,255,193		$	57,108,894
Liabilities and Stockholders' Equity (Deficit)
Current Liabilities:
Trade accounts payable		$	655,455		$	774,011
Deferred revenue and other			670,439			754,658
Accrued programming			1,546,377			1,427,762
Accrued interest			289,302			297,678
Other accrued expenses and liabilities			1,732,389			1,717,826
Current portion of long-term debt and finance lease obligations			2,082,919			3,046,654
Total current liabilities			6,976,881			8,018,589
Long-Term Obligations, Net of Current Portion:
Long-term debt and finance lease obligations, net of current portion			19,678,708			19,717,266
Deferred tax liabilities, net			4,975,164			5,014,309
Operating lease liabilities			3,115,265			3,121,307
Long-term deferred revenue and other long-term liabilities			877,224			849,131
Total long-term obligations, net of current portion			28,646,361			28,702,013
Total liabilities			35,623,242			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, 140,318,473 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			8,326,880			8,301,979
Accumulated other comprehensive income (loss)			(179,126)			(160,056)
Accumulated earnings (deficit)			11,425,016			11,737,983
Total EchoStar stockholders' equity (deficit)			19,573,041			19,880,177
Noncontrolling interests			58,910			69,733
Total stockholders' equity (deficit)			19,631,951			19,949,910
Total liabilities and stockholders' equity (deficit)		$	55,255,193		$	57,108,894

 

		ECHOSTAR CORPORATION
		CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
		(Dollars in thousands, except per share amounts)
		(Unaudited)
		For the Three Months Ended June 30,						For the Six Months Ended June 30,
		2024			2023			2024			2023
Revenue:
Service revenue		$	3,742,086		$	4,088,513		$	7,561,755		$	8,269,234
Equipment sales and other revenue			210,665			267,949			405,839			474,894
Total revenue			3,952,751			4,356,462			7,967,594			8,744,128
Costs and Expenses (exclusive of depreciation and amortization):
Cost of services			2,507,478			2,391,540			5,064,660			4,854,140
Cost of sales - equipment and other			408,093			583,498			771,176			1,103,558
Selling, general and administrative expenses			595,024			758,562			1,219,446			1,459,334
Depreciation and amortization			507,525			370,633			992,925			718,387
Impairment of long-lived assets and goodwill			—			—			—			3,142
Total costs and expenses			4,018,120			4,104,233			8,048,207			8,138,561
Operating income (loss)			(65,369)			252,229			(80,613)			605,567
Other Income (Expense):
Interest income, net			13,929			54,308			44,391			122,494
Interest expense, net of amounts capitalized			(81,166)			(21,648)			(180,574)			(41,681)
Other, net			(91,498)			34,068			(117,608)			(693)
Total other income (expense)			(158,735)			66,728			(253,791)			80,120
Income (loss) before income taxes			(224,104)			318,957			(334,404)			685,687
Income tax (provision) benefit, net			16,646			(86,265)			18,571			(180,150)
Net income (loss)			(207,458)			232,692			(315,833)			505,537
Less: Net income (loss) attributable to noncontrolling interests, net of tax			(1,867)			20,030			(2,866)			39,341
Net income (loss) attributable to EchoStar		$	(205,591)		$	212,662		$	(312,967)		$	466,196
Weighted-average common shares outstanding - Class A and B common stock:
Basic			271,592			270,818			271,555			270,328
Diluted			271,592			308,375			271,555			307,948
Earnings per share - Class A and B common stock:
Basic net income (loss) per share attributable to EchoStar		$	(0.76)		$	0.79		$	(1.15)		$	1.72
Diluted net income (loss) per share attributable to EchoStar		$	(0.76)		$	0.69		$	(1.15)		$	1.51

 

			ECHOSTAR CORPORATION
			CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
			(In thousands)
			(Unaudited)
		For the Six Months Ended June 30,
		2024			2023
Cash Flows From Operating Activities:
Net income (loss)		$	(315,833)		$	505,537
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
Depreciation and amortization			992,925			718,387
Impairment of long-lived assets and goodwill			—			3,142
Realized and unrealized losses (gains) on investments, impairments and other			49,312			(31,109)
Realized and unrealized losses (gains) on derivatives			—			36,974
Non-cash, stock-based compensation			19,693			27,306
Deferred tax expense (benefit)			(35,300)			143,754
Changes in allowance for credit losses			33,108			1,531
Change in long-term deferred revenue and other long-term liabilities			8,139			(3,356)
Other, net			192,710			67,120
Changes in current assets and current liabilities, net			(13,770)			69,820
Net cash flows from operating activities			930,984			1,539,106
Cash Flows From Investing Activities:
Purchases of marketable investment securities			(21,847)			(2,051,128)
Sales and maturities of marketable investment securities			501,512			1,917,860
Purchases of property and equipment			(866,922)			(1,700,818)
Refunds and other receipts of purchases of property and equipment			—			31,371
Capitalized interest related to regulatory authorizations			(481,807)			(581,766)
Proceeds from other debt investments			—			148,448
Purchases of regulatory authorizations, including deposits			(1,104)			(1,771)
Sale of assets to CONX			26,719			—
Other, net			(4,716)			(13,286)
Net cash flows from investing activities			(848,165)			(2,251,090)
Cash Flows From Financing Activities:
Repayment of long-term debt and finance lease obligations			(52,758)			(53,514)
Redemption and repurchases of convertible and senior notes			(951,170)			(1,582,181)
Proceeds from issuance of senior notes			—			1,500,000
Early debt extinguishment gains (losses) of convertible and senior notes			—			68,086
Net proceeds from Class A common stock options exercised and stock issued under the Employee Stock Purchase Plan			1,832			8,297
Purchase of SNR Management's ownership interest in SNR HoldCo			(441,998)			—
Debt issuance costs and debt (discount) premium			—			21,635
Other, net			2			(4,710)
Net cash flows from financing activities			(1,444,092)			(42,387)
Effect of exchange rates on cash and cash equivalents			(3,701)			3,483
Net increase (decrease) in cash, cash equivalents, restricted cash and cash equivalents			(1,364,974)			(750,888)
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		$	546,627		$	1,810,915

 

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SOURCE EchoStar Corporation

FAQ

What was EchoStar's total revenue for the first half of 2024?

EchoStar's total revenue for the first half of 2024 was $7.97 billion, compared to $8.74 billion in the same period last year.

How did EchoStar's net income change in the first half of 2024 compared to the previous year?

EchoStar reported a net loss of $312.97 million in the first half of 2024, compared to a net income of $466.20 million in the same period last year.

What was the change in EchoStar's Pay-TV subscribers in Q2 2024?

EchoStar's Pay-TV subscribers decreased by approximately 104,000 in Q2 2024, compared to a decrease of 294,000 in the same quarter last year.

How did the Affordable Connectivity Program (ACP) affect EchoStar's Retail Wireless subscribers in Q2 2024?

The conclusion of ACP program funding on June 1, 2024, negatively impacted EchoStar's Retail Wireless subscribers, resulting in net losses of government subsidized subscribers in Q2 2024.

What factors contributed to the improvement in EchoStar's net broadband subscriber loss in Q2 2024?

The improvement in EchoStar's net broadband subscriber loss was primarily due to the new EchoStar XXIV satellite service launch and increased subscriber demand for new satellite service plans.