EchoStar Announces Financial Results for the Three Months Ended March 31, 2024
EchoStar announced its financial results for the first quarter of 2024, reporting total revenue of $4.01 billion, a net loss of $107.38 million, and diluted loss per share of $0.40. The company focused on integrating businesses, improving customer satisfaction, and diversifying its services. However, there was a decrease in Pay-TV, Retail Wireless, and Broadband subscribers. The company aims to address necessary financing, improve Retail Wireless, and acquire higher-quality Pay-TV customers.
Increased ARPU in every business unit
Improved customer satisfaction
Focus on integrating businesses for synergies and cost savings
Efforts to maximize profitability with new services
Net loss of $107.38 million in the first quarter
Decrease in Pay-TV, Retail Wireless, and Broadband subscribers
Lower gross new subscriber activations
Challenges in retaining subscribers
Insights
Reviewing EchoStar’s financial results for Q1 2024, the reported total revenue exhibits a decline to
Capital expenditures have decreased, which could imply a strategic reduction in investments or cost-saving measures. Investors may interpret this as a positive sign of prudent financial management or as a negative if it suggests a lack of growth opportunities. The shift in subscriber dynamics across Pay-TV, Retail Wireless and Broadband sectors suggests a reshaping of the market landscape EchoStar operates within.
From a retail investor's perspective, such financial results might be seen as a red flag, particularly considering the stark contrast in net income year over year. One might question the sustainability of the company's dividends or stock price performance in light of these figures.
The strategic integration efforts with DISH Network indicate a focus on cost synergies, which could eventually lead to improved margins if executed effectively. The increase in ARPU (Average Revenue Per User) across all business units could suggest that EchoStar's efforts to acquire more profitable customers are yielding results. Improved customer satisfaction is a qualitative metric that could translate into reduced churn rates and higher lifetime value of each customer.
On the flip side, the loss in net Pay-TV subscribers, despite an overall quality-oriented customer approach, might reflect shifts in consumer behavior and increased competition from streaming services. The wireless segment's stagnant subscriber growth and churn rates are critical metrics for a sector with high customer acquisition costs. Though losses have narrowed in Broadband, the segment faces an uphill battle in a fiercely competitive market.
Investors may view the launch of EchoStar XXIV satellite service and focus on 5G network deployment as efforts to capture future growth markets, but they would likely seek evidence of these initiatives contributing materially to the bottom line before becoming overly optimistic about the stock's future performance.
EchoStar's financials provide a glimpse into the rapidly evolving telecommunications landscape. The company's investment in the EchoStar XXIV/Jupiter™ 3 satellite suggests an emphasis on expanding high-speed broadband coverage, which is increasingly important as internet connectivity becomes more integral in both urban and rural regions. However, the report indicates a decline in Broadband net subscribers, which could be a point of concern in the context of growing industry demand for these services.
Additionally, the reference to Retail Wireless churn rate improvements, albeit with a decrease in gross new subscriber activations, hints at a saturated market where customer retention becomes as critical as acquisition. The decreased losses in 5G Network Deployment OIBDA suggest ongoing investments are heavy, yet necessary to remain competitive in the race to establish 5G infrastructure.
For investors, the strategic direction toward quality of service and technological investments may be encouraging, but the immediate financial impact appears to be negative. Long-term, these investments may be essential for maintaining a competitive edge.
Three Months Ended March 31, 2024:
- EchoStar reported total revenue of
$4.01 billion $4.39 billion - Net loss attributable to EchoStar in the first quarter 2024 was
$107.38 million $253.53 million $0.40 $0.82 - Consolidated OIBDA totaled
$470.16 million $701.09 million
"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
For the Three Months | ||||||
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 | Pay-TV | Retail | 5G Network | Broadband and | 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 | 5G Network | Broadband and | 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 (
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
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 | 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, | 140 | 140 | ||||
Class B common stock, | 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 | ||||||
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 | (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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SOURCE EchoStar Corporation
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