Contact Us
CAPTCHA
Hughes

EchoStar Announces Financial Results for the Three and Six Months Ended June 30, 2023

Share

Englewood, CO, August 8, 2023—EchoStar Corporation (Nasdaq: SATS) announced its financial results for the three and six months ended June 30, 2023. 

Three Months Ended June 30, 2023 Financial Highlights:

  • Consolidated revenue of $453.1 million. 
  • Net income of $9.1 million, consolidated net income attributable to EchoStar common stock of $11.2 million, and basic and diluted earnings per share of common stock of $0.13.
  • Consolidated Adjusted EBITDA of $153.3 million (see discussion and the reconciliation of GAAP to this non-GAAP measure below).
  • Cash, cash equivalents and current marketable investment securities were $1.9 billion as of June 30, 2023, up from $1.7 billion as of March 31, 2023.

Six months ended June 30, 2023 Financial Highlights: 

  • Consolidated revenue of $892.7 million.
  • Net income of $36.9 million, consolidated net income attributable to EchoStar common stock of $40.2 million, and basic and diluted earnings per share of common stock of $0.48.
  • Consolidated Adjusted EBITDA of $288.2 million (see discussion and the reconciliation of GAAP to this non-GAAP measure below).

“In the second quarter of 2023, the EchoStar team once again delivered a strong performance, ending the quarter with the delivery of the JUPITER 3/EchoStar XXIV satellite to the launch base as scheduled,” said Hamid Akhavan, CEO and President of EchoStar. “While optimizing existing assets and pursuing new avenues of growth, the team also planned the JUPITER 3 launch mission in record time – executing it flawlessly and setting us on the path to future growth.” 

Three Months Ended June 30, 2023 - Additional Information: 

  • Consolidated revenue decreased 9.3% or $46.2 million year over year. The decrease was driven by lower service revenues of $43.2 million partially due to fewer broadband customers. Equipment revenue decreased $3.0 million, primarily due to lower sales to both domestic and international enterprise customers, partially offset by an increase in sales to our mobile satellite system customers and positive adjustments on profit margin on long-term contracts.
  • Net income decreased $1.4 million year over year. The decrease was primarily due to an impairment of a certain equity investment of $33.4 million and higher income tax expense of $13.4 million. These items were partially offset by a favorable change in investment losses of $17.1 million, higher interest income of $14.5 million, $6.9 million in foreign exchange gains and $6.7 million in other income due to gain on the repayment from other debt securities.
  • Adjusted EBITDA decreased 8.6% or $14.5 million year over year. 
    • Hughes segment Adjusted EBITDA decreased $11.3 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.
    • ESS segment Adjusted EBITDA increased $1.0 million year over year, primarily due to higher revenue.
    • Corporate and Other Adjusted EBITDA decreased $4.2 million year over year, primarily due to higher corporate expenses.
  • Hughes broadband subscribers totaled approximately 1,122,000, declining 106,000 from December 31, 2022. Our current capacity limitations, increasing bandwidth usage by approximately 16% year on year on average by our existing U.S subscribers, and competitive pressures are impacting our consumer subscriber levels. In Latin America, subscriber levels were tempered by our focus on more profitable consumer segments and by our allocation of capacity to enterprise opportunities.
  • For the three months ended June 30, 2023, approximately 41% of Hughes segment revenue was attributable to our enterprise customers, increasing from 37% in the same period last year.
  • The JUPITER 3/EchoStar XXIV satellite shipped to the launch site in June and subsequently launched successfully on July 28, 2023. Currently, the satellite is being raised to its orbit, 22,236 miles (35,786 kilometers) above the Earth and to its destination at the 95 degrees west orbital slot. It will undergo extensive bus and payload testing before beginning service in the fourth quarter of this year.

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

 

 

For the three months ended June 30,

 

For the six months ended June 30,

 

 

2023

 

2022

 

2023

 

2022

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

Hughes

 

$   444,335 

 

$   491,841 

 

$   875,530 

 

$   985,947 

EchoStar Satellite Services

 

         6,120 

 

         4,850 

 

       12,117  

 

         9,324 

Corporate and Other

 

         2,654 

 

         2,625 

 

         5,059 

 

         5,579 

Total revenue

 

$   453,109 

 

$   499,316 

 

$   892,706 

 

$ 1,000,850 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$       9,085 

 

$     10,473 

 

$     36,905 

 

$     99,418 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

 

 

 

 

 

 

 

Hughes

 

$   171,114 

 

$   182,423 

 

$   325,277 

 

$   366,710 

EchoStar Satellite Services

 

         4,563 

 

         3,521 

 

         9,218 

 

         6,212 

Corporate & Other

 

      (22,423)

 

      (18,216)

 

      (46,254)

 

      (39,305)

Total Adjusted EBITDA

 

$   153,254 

 

$   167,728 

 

$   288,241 

 

$   333,617 

 

 

 

 

 

 

 

 

 

Expenditures for property and equipment, net of refunds and other receipts

 

$     49,016 

 

$     75,779 

 

$     93,087 

 

$   187,97 

 

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

 

 

 

For the three months ended June 30,

 

For the six months ended June 30,

 

 

2023

 

2022

 

2023

 

2022

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$       9,085 

 

$     10,473 

 

$     36,905 

 

$     99,418 

Interest income, net

 

     (23,526)

 

       (9,072)

 

     (52,122)

 

     (15,494)

Interest expense, net of amounts capitalized

 

       13,240 

 

       14,307 

 

       26,526 

 

       29,280 

Income tax provision (benefit), net

 

       18,773 

 

         5,390 

 

       30,233 

 

       38,172 

Depreciation and amortization

 

     105,588 

 

     116,555 

 

     208,446 

 

     236,991 

Net loss (income) attributable to non-controlling interests

 

         2,072 

 

         3,395 

 

         3,293 

 

         5,883 

EBITDA

 

$   125,232 

 

$   141,048 

 

$   253,281 

 

$   394,250 

(Gains) losses on investments, net

 

         5,485 

 

       22,538 

 

       12,594 

 

     (58,148)

Foreign currency transaction (gains) losses, net

 

       (3,258)

 

         3,642 

 

       (6,571)

 

       (2,752)

Impairment of long-lived assets

 

                

 

            711 

 

         3,142 

 

            711 

Other-than-temporary impairment losses on equity method investments

 

       33,400 

 

                

 

       33,400 

 

                

Gain on repayment of other debt securities

 

       (7,605)

 

                

 

       (7,605)

 

                

License fee dispute - India, net of non-controlling interests

 

                

 

           (211)

 

                

 

           (444)

Adjusted EBITDA

 

$   153,254 

 

$   167,728 

 

$   288,241 

 

$   333,617 

 

 

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 June 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 June 30, 2023 filed today with the Securities and Exchange Commission. 

EchoStar will host a webcast to discuss its earnings on Tuesday, August 8, 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/BIe20855193e2544169ac34ab8964798ff…;

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. See “Risk Factors” in EchoStar’s Annual Report on Form 10-K for the period ended December 31, 2022 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.

 

Click here to read the full financial results.