EchoStar Announces Financial Results for the Three and Twelve Months Ended December 31, 2023
- EchoStar reported a total revenue of $17.02 billion for 2023, down from $18.63 billion in 2022.
- Net loss attributable to EchoStar in 2023 was $1.70 billion compared to net income of $2.48 billion in 2022.
- The decrease in revenue was primarily due to subscriber declines in the Pay-TV segment.
- EchoStar completed a merger with DISH Network, combining their respective strengths in satellite technology and wireless connectivity.
- The company aims to focus on integrating its business operations, identifying profitable customers, and realizing operational efficiencies post-merger.
- Consolidated OIBDA decreased to $1.32 billion in 2023 from $3.41 billion in 2022.
- Net loss in the fourth quarter of 2023 was $2.03 billion compared to net income of $984 million in the year-ago quarter.
- Subscriber declines were observed in various segments, impacting the company's financial performance.
- Broadband net subscribers decreased by approximately 59,000 in the fourth quarter, reflecting challenges in the segment.
Insights
The reported financial results of EchoStar Corporation for the full year and final quarter of 2023 reveal a significant net loss, contrasting sharply with the net income reported in the previous year. This downturn is primarily due to a noncash impairment to goodwill and an adjustment in the carrying value of the 800 MHz purchase option. These impairments are substantial and indicate a reevaluation of the company's assets and future income potential. The decline in subscriber numbers across Pay-TV, Retail Wireless and Broadband segments further exacerbates the financial strain, signaling potential challenges in customer retention and market competition.
From an investment perspective, the shift from a profitable year to a loss-making one could impact investor confidence and stock valuation. The merger with DISH Network, however, may offer strategic benefits that could mitigate some concerns by promising operational efficiencies and cost savings. The emphasis on acquiring 'higher-quality subscribers' suggests a pivot towards more sustainable, long-term customer relationships, which can be favorable for revenue stability. Nevertheless, the immediate financial health of EchoStar appears to be under pressure and the effectiveness of the merger in reversing the downward trend will be closely monitored by stakeholders.
Examining EchoStar's performance within the context of the broader telecommunications market reveals several industry challenges. Subscriber declines in Pay-TV are consistent with a global trend of cord-cutting as consumers shift towards streaming platforms. EchoStar's increased net losses in Pay-TV subscribers highlight the need for the company to innovate and possibly diversify its service offerings to retain and grow its customer base in a highly competitive environment.
The decrease in Retail Wireless and Broadband subscribers suggests that EchoStar is facing stiff competition from other technologies and service providers. The launch of the EchoStar XXIV satellite, aimed at expanding broadband capacity, indicates an attempt to address capacity limitations and competitive pressures. The success of this satellite in attracting and maintaining broadband customers will be a critical factor in the company's ability to stabilize and grow this segment. Industry observers will be interested in the impact of this new asset on EchoStar's market position and whether it can effectively compete with emerging satellite-based and terrestrial broadband providers.
The financial results highlight EchoStar's operational challenges, particularly in the Pay-TV and Retail Wireless segments. The telecommunications industry is undergoing rapid transformation with the advent of 5G technology and increasing competition from non-traditional service providers. EchoStar's investment in 5G Network Deployment, as indicated by the capital expenditure figures, suggests a strategic move to position itself within this next-generation technology landscape.
The completion of the merger with DISH Network is a strategic consolidation that could offer EchoStar a competitive edge in terms of technology and market reach. The combined entity's focus on a nationwide 5G network and satellite communications solutions positions it to capitalize on the increasing demand for high-speed connectivity and could potentially lead to new revenue streams. However, the integration of the two companies will need to be executed effectively to realize the anticipated synergies and operational efficiencies. Stakeholders will benefit from monitoring the progress of this integration and the company's ability to leverage these assets to improve financial performance.
Twelve Months Ended December 31, 2023:
- EchoStar reported 2023 total revenue of
$17.02 billion $18.63 billion - Net loss attributable to EchoStar in 2023 was
$1.70 billion $2.48 billion $758 million $1.8 billion $6.28 $8.05 $361 million - Consolidated OIBDA totaled
$1.32 billion $3.41 billion
"We closed the year with the completion of the merger with DISH Network. The transaction combined DISH Network's satellite technology, streaming services, engineering expertise, retail wireless business, and nationwide 5G network with EchoStar's premier satellite communications solutions, enterprise go-to-market capabilities, and
Three Months Ended December 31, 2023:
- Consolidated revenue totaled
$4.16 billion $4.53 billion - Net loss attributable to EchoStar totaled
$2.03 billion $984 million $758 million $1.6 billion $7.48 $3.21 - Consolidated OIBDA totaled negative
$370 million $735 million - Net Pay-TV subscribers decreased approximately 314,000 in the fourth quarter, compared to a decrease of approximately 268,000 in the year-ago quarter. The company closed the quarter with 8.53 million Pay-TV subscribers including 6.47 million DISH TV subscribers and 2.06 million SLING TV subscribers. This increase in net Pay-TV losses resulted from the increase in net DISH TV subscriber losses due to lower gross new DISH TV subscriber activations and a higher DISH TV churn rate, offset by the decrease in net SLING TV subscriber losses due to lower subscriber disconnects in 2023 as a result of our emphasis on acquiring higher-quality subscribers.
- Retail Wireless net subscribers decreased by approximately 123,000 in the fourth quarter, compared to a net decrease of 25,000 in the year-ago quarter. The company closed the quarter with 7.38 million Retail Wireless subscribers. This increase in net Retail Wireless subscriber losses primarily resulted from lower gross new Retail Wireless subscriber activations, partially offset by a lower Retail Wireless churn rate due to our emphasis on acquiring and retaining higher-quality subscribers.
- Broadband net subscribers decreased by approximately 59,000 in the fourth quarter, compared to a decrease of 57,000 in the year-ago quarter. The company closed the quarter with 1.00 million Broadband subscribers. This increase in net Broadband subscriber losses primarily resulted from our capacity limitations, competitive pressure from satellite-based competitors and other technologies, and a more selective customer screening. The EchoStar XXIV satellite, also known as Jupiter 3, began service in December 2023, bringing additional broadband capacity and is expected to be an integral part of the Broadband and Satellite Services segment business.
Set forth below is a table highlighting certain of EchoStar's segment results for the three and twelve months ended December 31, 2023 and 2022 (all
For the three months ended | For the years ended | |||||||||
2023 | 2022 | 2023 | 2022 | |||||||
(in thousands) | ||||||||||
Revenue | ||||||||||
Pay-TV | $ 2,816,787 | $ 3,106,149 | $ 11,571,159 | $ 12,505,392 | ||||||
Retail Wireless | 898,284 | 928,095 | 3,692,372 | 4,135,129 | ||||||
5G Network Deployment | 24,027 | 17,406 | 91,928 | 65,768 | ||||||
Broadband and Satellite Services | 449,779 | 499,857 | 1,755,559 | 1,998,093 | ||||||
All Other & Eliminations | (26,281) | (18,490) | (95,420) | (70,136) | ||||||
Total | $ 4,162,596 | $ 4,533,017 | $ 17,015,598 | $ 18,634,246 | ||||||
Net Income (loss) attributable to EchoStar | $ (2,029,882) | $ 984,264 | $ (1,702,057) | $ 2,477,720 | ||||||
Purchases of property and equipment, net of refunds and other receipts (including capitalized interest related to regulatory authorizations) | ||||||||||
Pay-TV | $ 75,212 | $ 39,835 | $ 242,736 | $ 131,093 | ||||||
Retail Wireless | $ - | - | $ - | $ - | ||||||
5G Network Deployment | $ 841,522 | 1,084,441 | $ 3,748,624 | $ 3,580,518 | ||||||
Broadband and Satellite Services | $ 61,172 | 76,517 | $ 233,423 | $ 325,891 | ||||||
All Other & Eliminations | $ - | (560) | $ - | $ (2,721) | ||||||
Total | $ 977,906 | $ 1,200,233 | $ 4,224,783 | $ 4,034,781 | ||||||
Reconciliation of GAAP to Non-GAAP Measurement:
For the Year Ended December 31, 2023 | Pay-TV | Retail | 5G Network | Broadband |
| Consolidated | ||||||||||||
(In thousands) | ||||||||||||||||||
Segment operating income (loss) | $ | 2,699,810 | $ | (643,184) | $ | (1,881,369) | $ | (458,609) | $ | 5,443 | $ | (277,909) | ||||||
Depreciation and amortization | 381,292 | 221,968 | 620,685 | 419,262 | (45,284) | 1,597,923 | ||||||||||||
OIBDA | $ | 3,081,102 | $ | (421,216) | $ | (1,260,684) | $ | (39,347) | $ | (39,841) | $ | 1,320,014 | ||||||
For the Year Ended December 31, 2022 | Pay-TV | Retail | 5G Network | Broadband |
| Consolidated | ||||||||||||
(In thousands) | ||||||||||||||||||
Segment operating income (loss) | $ | 2,933,898 | $ | (77,264) | $ | (810,968) | $ | 181,615 | $ | 5,557 | $ | 2,232,838 | ||||||
Depreciation and amortization | 428,471 | 177,914 | 131,566 | 462,748 | (25,804) | 1,174,895 | ||||||||||||
OIBDA | $ | 3,362,369 | $ | 100,650 | $ | (679,402) | $ | 644,363 | $ | (20,247) | $ | 3,407,733 | ||||||
For the three months Ended December 31, 2023 | Pay-TV | Retail | 5G Network | Broadband |
| Consolidated | ||||||||||||
(In thousands) | ||||||||||||||||||
Segment operating income (loss) | $ | 714,319 | (344,312) | (682,701) | (540,152) | 720 | (852,127) | |||||||||||
Depreciation and amortization | 95,145 | 53,371 | 235,615 | 107,466 | (9,273) | 482,325 | ||||||||||||
OIBDA | $ | 809,464 | $ | (290,941) | $ | (447,087) | $ | (432,686) | $ | (8,553) | $ | (369,803) | ||||||
For the three months Ended December 31, 2022 | Pay-TV | Retail | 5G Network | Broadband |
| Consolidated | ||||||||||||
(In thousands) | ||||||||||||||||||
Segment operating income (loss) | $ | 748,729 | (118,424) | (254,963) | 50,418 | 1,753 | 427,513 | |||||||||||
Depreciation and amortization | 100,398 | 50,534 | 53,914 | 111,115 | (8,093) | 307,869 | ||||||||||||
OIBDA | $ | 849,127 | $ | (67,891) | $ | (201,048) | $ | 161,533 | $ | (6,339) | $ | 735,382 | ||||||
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 consolidated financial statements of EchoStar for the periods ended December 31, 2023, are attached to this press release. Detailed financial data and other information are available in EchoStar's Annual Report on Form 10-K for the period ended December 31, 2023, filed today with the Securities and Exchange Commission.
EchoStar will host a conference call to discuss its earnings on Friday, March 1, 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 (
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®, Boost Infinite, Sling TV, DISH TV, Hughes®, HughesNet®, HughesON™, and JUPITER™ brands. In
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 | ||||||
CONSOLIDATED BALANCE SHEETS | ||||||
(Dollars in thousands, except share amounts) | ||||||
As of | ||||||
December 31, | December 31, | |||||
2023 | 2022 | |||||
Assets | ||||||
Current Assets: | ||||||
Cash and cash equivalents | $ | 1,821,376 | $ | 2,497,536 | ||
Marketable investment securities | 623,044 | 1,809,898 | ||||
Trade accounts receivable, net of allowance for credit losses of | 1,122,139 | 1,182,597 | ||||
Inventory | 665,169 | 625,979 | ||||
Prepaids and other assets | 644,005 | 617,819 | ||||
Other current assets | 16,081 | 23,884 | ||||
Total current assets | 4,891,814 | 6,757,713 | ||||
Noncurrent Assets: | ||||||
Restricted cash, cash equivalents and marketable investment securities | 118,065 | 117,011 | ||||
Property and equipment, net | 9,561,834 | 7,904,957 | ||||
Regulatory authorizations, net | 38,572,980 | 37,395,604 | ||||
Other investments, net | 314,370 | 524,905 | ||||
Operating lease assets | 3,065,448 | 2,823,834 | ||||
Intangible assets, net | 172,892 | 1,113,298 | ||||
Other noncurrent assets, net | 411,491 | 2,110,959 | ||||
Total noncurrent assets | 52,217,080 | 51,990,568 | ||||
Total assets | $ | 57,108,894 | $ | 58,748,281 | ||
Liabilities and Stockholders' Equity (Deficit) | ||||||
Current Liabilities: | ||||||
Trade accounts payable | $ | 774,011 | $ | 1,023,537 | ||
Deferred revenue and other | 754,658 | 833,213 | ||||
Accrued programming | 1,427,762 | 1,298,777 | ||||
Accrued interest | 297,678 | 298,043 | ||||
Other accrued expenses and liabilities | 1,717,826 | 1,436,485 | ||||
Current portion of long-term debt and finance lease obligations | 3,046,654 | 1,552,559 | ||||
Total current liabilities | 8,018,589 | 6,442,614 | ||||
Long-Term Obligations, Net of Current Portion: | ||||||
Long-term debt and finance lease obligations, net of current portion | 19,717,266 | 21,343,561 | ||||
Deferred tax liabilities, net | 5,014,309 | 5,354,756 | ||||
Operating lease liabilities | 3,121,307 | 2,808,774 | ||||
Long-term deferred revenue and other long-term liabilities | 849,131 | 748,384 | ||||
Total long-term obligations, net of current portion | 28,702,013 | 30,255,475 | ||||
Total liabilities | 36,720,602 | 36,698,089 | ||||
Commitments and Contingencies | ||||||
Redeemable noncontrolling interests | 438,382 | 464,359 | ||||
Stockholders' Equity (Deficit): | ||||||
Class A common stock, | 140 | 138 | ||||
Class B common stock, | 131 | 131 | ||||
Additional paid-in capital | 8,301,979 | 8,222,599 | ||||
Accumulated other comprehensive income (loss) | (160,056) | (175,267) | ||||
Accumulated earnings (deficit) | 11,737,983 | 13,440,040 | ||||
Total EchoStar stockholders' equity (deficit) | 19,880,177 | 21,487,641 | ||||
Noncontrolling interests | 69,733 | 98,192 | ||||
Total stockholders' equity (deficit) | 19,949,910 | 21,585,833 | ||||
Total liabilities and stockholders' equity (deficit) | $ | 57,108,894 | $ | 58,748,281 | ||
ECHOSTAR CORPORATION | |||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
(Dollars in thousands, except per share amounts) | |||||||||
For the Years Ended December 31, | |||||||||
2023 | 2022 | 2021 | |||||||
Revenue: | |||||||||
Service and other revenue | $ | 16,145,763 | $ | 17,596,265 | $ | 18,598,313 | |||
Equipment sales and other revenue | 869,835 | 1,037,981 | 1,220,365 | ||||||
Total revenue | 17,015,598 | 18,634,246 | 19,818,678 | ||||||
Costs and Expenses (exclusive of depreciation and amortization): | |||||||||
Cost of services | 9,510,427 | 10,111,341 | 10,717,333 | ||||||
Cost of sales - equipment and other | 2,434,904 | 2,099,136 | 1,778,471 | ||||||
Selling, general and administrative expenses | 2,989,154 | 3,015,325 | 2,686,279 | ||||||
Depreciation and amortization | 1,597,923 | 1,174,895 | 1,213,946 | ||||||
Impairment of long-lived assets and goodwill | 761,099 | 711 | 245 | ||||||
Total costs and expenses | 17,293,507 | 16,401,408 | 16,396,274 | ||||||
Operating income (loss) | (277,909) | 2,232,838 | 3,422,404 | ||||||
Other Income (Expense): | |||||||||
Interest income, net | 207,374 | 93,240 | 33,903 | ||||||
Interest expense, net of amounts capitalized | (90,357) | (79,217) | (111,151) | ||||||
Other, net | (1,770,792) | 1,088,441 | 4,716 | ||||||
Total other income (expense) | (1,653,775) | 1,102,464 | (72,532) | ||||||
Income (loss) before income taxes | (1,931,684) | 3,335,302 | 3,349,872 | ||||||
Income tax (provision) benefit, net | 296,860 | (798,410) | (828,437) | ||||||
Net income (loss) | (1,634,824) | 2,536,892 | 2,521,435 | ||||||
Less: Net income (loss) attributable to noncontrolling interests, net of tax | 67,233 | 59,172 | 35,150 | ||||||
Net income (loss) attributable to EchoStar | $ | (1,702,057) | $ | 2,477,720 | $ | 2,486,285 | |||
Weighted-average common shares outstanding - Class | |||||||||
Basic | 270,842 | 270,102 | 275,117 | ||||||
Diluted | 270,842 | 307,733 | 313,122 | ||||||
Earnings per share - Class A and B common stock: | |||||||||
Basic net income (loss) per share attributable to EchoStar | $ | (6.28) | $ | 9.17 | $ | 9.04 | |||
Diluted net income (loss) per share attributable to EchoStar | $ | (6.28) | $ | 8.05 | $ | 7.94 | |||
ECHOSTAR CORPORATION | |||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
(In thousands) | |||||||||
For the Years Ended December 31, | |||||||||
2023 | 2022 | 2021 | |||||||
Cash Flows From Operating Activities: | |||||||||
Net income (loss) | $ | (1,634,824) | $ | 2,536,892 | $ | 2,521,435 | |||
Adjustments to reconcile net income (loss) to net cash flows from operating activities: | |||||||||
Depreciation and amortization | 1,597,923 | 1,174,895 | 1,213,946 | ||||||
Impairment of long-lived assets and goodwill | 761,099 | 711 | 245 | ||||||
Realized and unrealized losses (gains) on investments, impairments and other | (46,888) | (72,371) | (7,541) | ||||||
Realized and unrealized losses (gains) on derivatives | 1,693,387 | (1,015,387) | 13,000 | ||||||
Non-cash, stock-based compensation | 51,514 | 82,994 | 59,379 | ||||||
Deferred tax expense (benefit) | (337,222) | 729,587 | 639,708 | ||||||
Changes in allowance for credit losses | 14,600 | 6,590 | (34,635) | ||||||
Change in long-term deferred revenue and other long-term liabilities | 15,825 | 83,453 | 65,943 | ||||||
Other, net | 166,383 | 253,784 | 135,871 | ||||||
Changes in current assets and current liabilities, net | |||||||||
Trade accounts receivable | 20,622 | (74,812) | 206,995 | ||||||
Prepaid and accrued income taxes | 15,836 | (36,115) | 81,197 | ||||||
Inventory | (37,981) | 16,200 | (175,918) | ||||||
Other current assets | (40,290) | 21,737 | (47,144) | ||||||
Trade accounts payable | 4,108 | 90,721 | 86,219 | ||||||
Deferred revenue and other | (78,555) | (71,709) | (62,034) | ||||||
Accrued programming and other accrued expenses | 267,110 | (105,980) | (41,293) | ||||||
Net cash flows from operating activities | 2,432,647 | 3,621,190 | 4,655,373 | ||||||
Cash Flows From Investing Activities: | |||||||||
Purchases of marketable investment securities | (2,407,546) | (1,965,859) | (6,338,641) | ||||||
Sales and maturities of marketable investment securities | 3,710,544 | 4,159,830 | 4,390,903 | ||||||
Purchases of property and equipment | (3,100,921) | (3,050,472) | (1,619,312) | ||||||
Refunds and other receipts of purchases of property and equipment | 38,611 | — | — | ||||||
Capitalized interest related to regulatory authorizations | (1,162,473) | (984,309) | (777,885) | ||||||
Proceeds from other debt investments | 148,448 | — | — | ||||||
Refund of regulatory authorizations deposit | — | — | 337,490 | ||||||
Purchases of regulatory authorizations, including deposits | (2,009) | (7,206,865) | (122,657) | ||||||
Other, net | (33,386) | (11,900) | (116,621) | ||||||
Net cash flows from investing activities | (2,808,732) | (9,059,575) | (4,246,723) | ||||||
Cash Flows From Financing Activities: | |||||||||
Repayment of long-term debt and finance lease obligations | (121,981) | (86,229) | (89,958) | ||||||
Redemption and repurchases of senior notes | (1,460,635) | (2,056,821) | (2,901,818) | ||||||
Proceeds from issuance of senior notes | 1,500,000 | 2,000,000 | 6,750,000 | ||||||
Repurchases of convertible notes | (182,834) | — | — | ||||||
Early debt extinguishment gains (losses) | 73,024 | — | — | ||||||
Net proceeds from Class A common stock options exercised and stock issued under the | 10,598 | 27,438 | 68,182 | ||||||
Purchase of Northstar Manager, LLC's ownership interest in Northstar Spectrum | (109,432) | — | — | ||||||
Treasury share repurchase | — | (89,303) | (261,436) | ||||||
Debt issuance costs and debt (discount) premium | 21,635 | (51,121) | (34,459) | ||||||
Other, net | (7,496) | (18,413) | (15,507) | ||||||
Net cash flows from financing activities | (277,121) | (274,449) | 3,515,004 | ||||||
Effect of exchange rates on cash and cash equivalents | 3,004 | (2,306) | (3,749) | ||||||
Net increase (decrease) in cash, cash equivalents, restricted cash and cash equivalents | (650,202) | (5,715,140) | 3,919,905 | ||||||
Cash, cash equivalents, restricted cash and cash equivalents, beginning of period | 2,561,803 | 8,276,943 | 4,357,038 | ||||||
Cash, cash equivalents, restricted cash and cash equivalents, end of period | $ | 1,911,601 | $ | 2,561,803 | $ | 8,276,943 | |||
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SOURCE EchoStar Corporation
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