EchoStar Announces Financial Results for the Three and Twelve Months Ended December 31, 2022
EchoStar Corporation (NASDAQ: SATS) reported its Q4 and full-year 2022 financial results on February 22, 2023. For Q4, the company achieved consolidated revenue of $499.9 million and net income of $47.6 million, translating to an EPS of $0.59. Full-year revenue reached $2.0 billion, with net income of $166.5 million and EPS of $2.10. Adjusted EBITDA for Q4 was $163.6 million, marking a 2.5% increase year-over-year. The company plans to launch the EchoStar XXIV/JUPITER 3 satellite in Q2 2023, which is expected to drive future growth. However, Hughes broadband subscribers fell by 57,000 due to competitive pressures and capacity limitations.
- Q4 consolidated revenue increased to $499.9 million, with net income of $47.6 million.
- Full-year revenue reached $2.0 billion, up from $1.985 billion in 2021.
- Adjusted EBITDA for Q4 rose 2.5% year-over-year to $163.6 million.
- Upcoming launch of the EchoStar XXIV/JUPITER 3 satellite expected to catalyze growth.
- Strong cash position with $1.7 billion in cash equivalents.
- Hughes broadband subscribers declined by 57,000 from September 2022, reflecting competitive pressure.
- Lower service revenues decreased by $31.9 million primarily due to reduced broadband consumer customers.
Three Months Ended
- Consolidated revenue of
.$499.9 million - Net income of
, consolidated net income attributable to$47.6 million EchoStar common stock of , and basic and diluted earnings per share of common stock of$49.3 million $0.59 - Consolidated Adjusted EBITDA of
(see discussion and the reconciliation of GAAP to this non-GAAP measure below).$163.6 million
Twelve Months Ended December 31, 2022 Financial Highlights:
- Consolidated revenue of
.$2.0 billion - Net income of
, consolidated net income attributable to$166.5 million EchoStar common stock of , and basic and diluted earnings per share of common stock of$177.1 million .$2.10 - Consolidated Adjusted EBITDA of
(see discussion and the reconciliation of GAAP to this non-GAAP measure below).$656.0 million
"The
Three Months Ended
- Consolidated revenue increased year over year. Higher equipment sales of
to our domestic and international enterprise customers was offset by lower service revenues of$33.1 million , primarily due to lower broadband consumer customers.$31.9 million - Adjusted EBITDA increased
2.5% or year over year.$4.0 million - Hughes segment Adjusted EBITDA increased
year over year. The increase was driven primarily by lower sales and marketing expense for our broadband consumer business.$4.2 million - ESS segment Adjusted EBITDA increased
year over year primarily due to higher revenue.$2.1 million - Corporate and Other segment Adjusted EBITDA decreased
year over year. The decrease was primarily due to higher corporate expenses, partially offset by higher earnings of unconsolidated affiliates, net, of$2.3 million .$1.3 million - Net income increased
year over year. The increase was primarily due to higher operating income of$127.7 million , a favorable change in net interest expense of$16.0 million , a favorable change in investments of$17.0 million , and$42.5 million related to the impairment of our Dish Mexico equity investment that occurred in 2021. These items were partially offset by higher net income tax expense of$55.3 million .$12.7 million - Hughes broadband subscribers totaled approximately 1,228,000, declining 57,000 from
September 30, 2022 . Our current capacity limitations and increased competitive pressures are impacting our consumer subscriber levels. InLatin America , subscriber levels were also impacted by adverse economic conditions and capacity allocation to Community Wi-Fi and enterprise opportunities. - For the three months ended
December 31, 2022 , approximately42% of Hughes segment revenue was attributable to our enterprise customers, increasing from35% in the same period last year. The increase supports our strong focus on our enterprise business and diversification objectives. - Cash, cash equivalents and current marketable investment securities were
as of$1.7 billion December 31, 2022 . - The JUPITER 3/EchoStar XXIV satellite is expected to be launched during the second quarter of 2023.
Set forth below is a table highlighting certain of
For the three months | For the twelve months | |||||||
2022 | 2021 | 2022 | 2021 | |||||
Revenue | ||||||||
Hughes | $ 491,075 | $ 491,154 | ||||||
6,228 | $ 4,871 | 20,533 | $ 17,679 | |||||
Corporate and Other | 2,553 | $ 2,619 | 10,973 | $ 11,815 | ||||
Total revenue | $ 499,856 | $ 498,644 | ||||||
Adjusted EBITDA | ||||||||
Hughes | $ 182,467 | $ 178,218 | $ 726,752 | $ 790,469 | ||||
4,757 | $ 2,704 | 14,416 | $ 9,185 | |||||
Corporate & Other: | ||||||||
Corporate overhead, operating and other | (24,235) | $ (20,675) | (86,502) | $ (82,615) | ||||
Equity in earnings (losses) of unconsolidated affiliates, net | 561 | $ (723) | 1,320 | $ 1,892 | ||||
Total Corporate & Other | (23,674) | $ (21,398) | (85,182) | $ (80,723) | ||||
Total Adjusted EBITDA | $ 163,550 | $ 159,524 | $ 655,986 | $ 718,931 | ||||
Net income (loss) | $ 47,580 | $ (80,083) | $ 166,548 | $ 62,721 | ||||
Expenditures for property and equipment | $ 76,517 | $ 86,427 | $ 325,891 | $ 438,430 |
Reconciliation of GAAP to Non-GAAP Measurement (amounts in thousands):
For the three months | For the twelve months | |||||||
2022 | 2021 | 2022 | 2021 | |||||
Net income (loss) | $ 47,580 | $ (80,083) | $ 166,548 | $ 62,721 | ||||
Interest income, net | (21,223) | (5,887) | (50,900) | (22,801) | ||||
Interest expense, net of amounts capitalized | 14,045 | 15,664 | 57,170 | 95,512 | ||||
Income tax provision (benefit), net | 15,308 | 2,579 | 66,675 | 65,626 | ||||
Depreciation and amortization | 110,397 | 122,465 | 457,621 | 491,329 | ||||
Net loss (income) attributable to non-controlling interests | 1,767 | 3,735 | 10,503 | 10,154 | ||||
EBITDA | 167,874 | 58,473 | 707,617 | 702,541 | ||||
(Gains) losses on investments, net | 964 | 43,450 | (47,107) | (69,531) | ||||
Impairment of long-lived assets | — | — | 711 | 245 | ||||
Impairment loss on equity method investment | — | 55,266 | — | 55,266 | ||||
Litigation Expense | — | — | — | 16,800 | ||||
License fee dispute - | — | (233) | — | (941) | ||||
Loss on Debt Repurchase | — | — | — | 1,938 | ||||
Foreign currency transaction (gains) losses, net | (5,288) | 2,568 | (5,235) | 12,613 | ||||
Adjusted EBITDA | $ 163,550 | $ 159,524 | $ 655,986 | $ 718,931 |
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
About
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
Consolidated Balance Sheets (Amounts in thousands, except share and per share amounts) | ||||
As of | ||||
2022 | 2021 | |||
Assets | ||||
Current assets: | ||||
Cash and cash equivalents | $ 704,541 | $ 535,894 | ||
Marketable investment securities | 973,915 | 1,010,496 | ||
Trade accounts receivable and contract assets, net | 236,479 | 182,063 | ||
Other current assets, net | 210,446 | 198,444 | ||
Total current assets | 2,125,381 | 1,926,897 | ||
Non-current assets: | ||||
Property and equipment, net | 2,237,617 | 2,338,285 | ||
Operating lease right-of-use assets | 151,518 | 149,198 | ||
532,491 | 511,086 | |||
Regulatory authorizations, net | 462,531 | 469,766 | ||
Other intangible assets, net | 15,698 | 13,984 | ||
Other investments, net | 356,705 | 297,747 | ||
Other non-current assets, net | 317,062 | 338,241 | ||
Total non-current assets | 4,073,622 | 4,118,307 | ||
Total assets | $ 6,199,003 | $ 6,045,204 | ||
Liabilities and Stockholders' Equity | ||||
Current liabilities: | ||||
Trade accounts payable | $ 101,239 | $ 109,338 | ||
Contract liabilities | 121,739 | 141,343 | ||
Accrued expenses and other current liabilities | 199,853 | 209,442 | ||
Total current liabilities | 422,831 | 460,123 | ||
Non-current liabilities: | ||||
Long-term debt, net | 1,496,777 | 1,495,994 | ||
Deferred tax liabilities, net | 424,621 | 403,684 | ||
Operating lease liabilities | 135,932 | 134,897 | ||
Other non-current liabilities | 119,787 | 136,426 | ||
Total non-current liabilities | 2,177,117 | 2,171,001 | ||
Total liabilities | 2,599,948 | 2,631,124 | ||
Commitments and contingencies | ||||
Consolidated Balance Sheets (Amounts in thousands, except share and per share amounts) | ||||
Stockholders' equity: | ||||
Preferred stock, | — | — | ||
Common stock, | ||||
Class A common stock, | 59 | 58 | ||
Class B convertible common stock, | 48 | 48 | ||
Class C convertible common stock, | — | — | ||
Class D common stock, | — | — | ||
Additional paid-in capital | 3,367,058 | 3,345,878 | ||
Accumulated other comprehensive income (loss) | (172,239) | (212,102) | ||
Accumulated earnings (losses) | 833,517 | 656,466 | ||
| (525,824) | (436,521) | ||
3,502,619 | 3,353,827 | |||
Non-controlling interests | 96,436 | 60,253 | ||
Total stockholders' equity | 3,599,055 | 3,414,080 | ||
Total liabilities and stockholders' equity | $ 6,199,003 | $ 6,045,204 |
Consolidated Statements of Operations (Amounts in thousands, except per share amounts) | ||||||
For the years ended | ||||||
2022 | 2021 | 2020 | ||||
Revenue: | ||||||
Services and other revenue | $ 1,623,931 | $ 1,715,287 | $ 1,682,304 | |||
Equipment revenue | 374,162 | 270,433 | 205,603 | |||
Total revenue | 1,998,093 | 1,985,720 | 1,887,907 | |||
Costs and expenses: | ||||||
Cost of sales - services and other (exclusive of | 569,755 | 551,679 | 577,943 | |||
Cost of sales - equipment (exclusive of | 292,318 | 231,975 | 166,435 | |||
Selling, general and administrative expenses | 455,234 | 461,705 | 474,912 | |||
Research and development expenses | 32,810 | 31,777 | 29,448 | |||
Depreciation and amortization | 457,621 | 491,329 | 525,011 | |||
Impairment of long-lived assets | 711 | 245 | 1,685 | |||
Total costs and expenses | 1,808,449 | 1,768,710 | 1,775,434 | |||
Operating income (loss) | 189,644 | 217,010 | 112,473 | |||
Other income (expense): | ||||||
Interest income, net | 50,900 | 22,801 | 39,982 | |||
Interest expense, net of amounts capitalized | (57,170) | (95,512) | (147,927) | |||
Gains (losses) on investments, net | 47,107 | 69,531 | (31,306) | |||
Equity in earnings (losses) of unconsolidated | (5,703) | (5,170) | (7,267) | |||
Foreign currency transaction gains (losses), net | 5,235 | (12,613) | 6,015 | |||
Other-than-temporary impairment losses on | — | (55,266) | — | |||
Other, net | 3,210 | (12,434) | 195 | |||
Total other income (expense), net | 43,579 | (88,663) | (140,308) | |||
Income (loss) before income taxes | 233,223 | 128,347 | (27,835) | |||
Income tax benefit (provision), net | (66,675) | (65,626) | (24,069) | |||
Net income (loss) | 166,548 | 62,721 | (51,904) | |||
Less: Net loss (income) attributable to | 10,503 | 10,154 | 11,754 | |||
Net income (loss) attributable to | $ 177,051 | $ 72,875 | $ (40,150) | |||
Earnings (losses) per share - Class A and B | ||||||
Basic | $ 2.10 | $ 0.81 | $ (0.41) | |||
Diluted | $ 2.10 | $ 0.81 | $ (0.41) |
Consolidated Statements of Cash Flows (Amounts in thousands) | ||||||
For the years ended | ||||||
2022 | 2021 | 2020 | ||||
Cash flows from operating activities: | ||||||
Net income (loss) | $ 166,548 | $ 62,721 | $ (51,904) | |||
Adjustments to reconcile net income (loss) to | ||||||
Depreciation and amortization | 457,621 | 491,329 | 525,011 | |||
Impairment of long-lived assets | 711 | 245 | 1,685 | |||
Losses (gains) on investments, net | (47,107) | (69,531) | 31,306 | |||
Equity in losses (earnings) of unconsolidated affiliates, net | 5,703 | 5,170 | 7,267 | |||
Foreign currency transaction losses (gains), net | (5,235) | 12,613 | (6,015) | |||
Deferred tax provision (benefit), net | 21,430 | 37,664 | 18,147 | |||
Stock-based compensation | 11,546 | 7,699 | 8,887 | |||
Amortization of debt issuance costs | 783 | 2,381 | 4,324 | |||
Other-than-temporary impairment losses | — | 55,266 | — | |||
Other, net | (3,711) | 19,740 | (12,501) | |||
Changes in assets and liabilities, net: | ||||||
Trade accounts receivable and contract assets, net | (50,959) | (2,334) | 2,237 | |||
Other current assets, net | (6,456) | (7,303) | (12,984) | |||
Trade accounts payable | 8,825 | (15,599) | (12,339) | |||
Contract liabilities | (19,604) | 36,774 | 3,509 | |||
Accrued expenses and other current liabilities | (3,649) | (84,621) | 42,822 | |||
Non-current assets and non-current liabilities, net | (6,841) | 80,012 | (15,064) | |||
Net cash provided by (used for) operating activities | 529,605 | 632,226 | 534,388 | |||
Cash flows from investing activities: | ||||||
Purchases of marketable investment securities | (1,067,461) | (1,651,608) | (2,799,838) | |||
Sales and maturities of marketable investment securities | 1,136,594 | 2,321,560 | 2,110,336 | |||
Expenditures for property and equipment | (325,891) | (438,430) | (408,798) | |||
Expenditures for externally marketed software | (23,105) | (33,543) | (38,655) | |||
India JV formation | (7,892) | — | — | |||
Dividend received from unconsolidated affiliate | 2,000 | — | — | |||
Sale of unconsolidated affiliate | 7,500 | — | — | |||
Purchase of other investments | — | (50,000) | (5,500) | |||
Sales of other investments | 3,070 | 10,951 | — | |||
Net cash provided by (used for) investing activities | (275,185) | 158,930 | (1,142,455) | |||
Cash flows from financing activities: | ||||||
Repurchase and maturity of the 2021 Senior Unsecured Notes | — | (901,818) | — | |||
Payment of finance lease obligations | (120) | (670) | (811) | |||
Payment of in-orbit incentive obligations | (2,988) | (2,214) | (1,554) | |||
Proceeds from Class A common stock options exercised | — | 408 | 855 | |||
Proceeds from Class A common stock issued under the | 9,306 | 9,471 | 10,109 | |||
(89,303) | (261,436) | (43,458) | ||||
Contribution by non-controlling interest holder | — | 9,880 | 18,241 | |||
Other, net | — | (966) | 998 | |||
Net cash provided by (used for) financing activities | (83,105) | (1,147,345) | (15,620) | |||
Effect of exchange rates on cash and cash equivalents | (2,306) | (3,749) | (1,390) | |||
Net increase (decrease) in cash and cash equivalents | 169,009 | (359,938) | (625,077) | |||
Cash and cash equivalents, including restricted amounts, | 536,874 | 896,812 | 1,521,889 | |||
Cash and cash equivalents, including restricted amounts, | $ 705,883 | $ 536,874 | $ 896,812 |
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