EchoStar (SATS) 9 Nov 212021 Q3 Earnings call transcript

Good day, and thank you for standing by. Welcome to the EchoStar Corporation Conference Call for Third Quarter 2021 Results. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions]. today's being that advised be conference recorded. is Please Instructions]. [Operator hand over to I would speaker conference to like Mr. now your the for today, Brown. Terry go ahead, Please sir.

Counsel call Dean Pradman Michael Officer EchoStar Dugan, Secretary. morning, to CEO; Chief David and of Good Strategy and and our Manson, of I'm for CFO; Satellite Hughes, COO earnings Johnson, and XXXX. by you. of quarter President the Services; and today Thank joined General President Rayner, and third Kaul, everybody, our welcome Anders

As and not in in the or usual, to listen-only a participate firms we invite ask media mode on your their identify call report. you that participants

We which we also recording, allow respect. do audio ask that not you

now Dean over to turn harbor for me disclosure. this safe Let the

uncertainties materially and than pursuant fact forward-looking forward-looking Securities historical These Thanks, Terry. All expressed that the to statements results to Litigation XXXX. future statements. we by by other any of statements risks, Reform constitute statements make statements the or could known made actual harbor call, results implied and during the involve provided safe of differ and Private other from Act historical forward-looking our factors unknown results from cause this

the factors the report SEC. please which All appear. cautionary the with and should of to any we our on wherever understood refer call February during forward-looking annual be applicable they filed we we to list make a ended December For subsequent statements our on made filings those for XX-K as XXXX, Form risks, year XX, XX, being make and statements

We to turn reliance statements. should and on risks the for updating now undue forward-looking carefully any consider call assume the not responsibility reports should our You Dugan. over no in any Mike forward-looking statements. I'll place described

call. thank and earnings you us Dean, XXXX you, to our joining QX for everyone Thank

one another continue that to period pleased manner quarter adjusted last year. focus compared was same and long-term management on net revenue, an short-term a we increases team, balance third I'm in to with business income the attempting report strong in EBITDA As operating the and to efficient to opportunities.

over Dave Anders with and Let now expand questions turn our the call before me on to closing and answers. results Pradman, to

Mike. you, Thank

As know, was and increased adjusted year. same end, period X% To on that X% we delivering you are revenue outstanding up over results. EBITDA Hughes financial the focused last

Our EBITDA XXXX XX last Hughes XX.X% from QX quarter over same subscribers points and We year. same XX, X,XXX,XXX points in across the than XXXX. adjusted down XXXX. Year-to-date our basis September with through margin margin XX, approximately 'XX America, EBITDA June a was period the adjusted XX.X%, in of the QX basis U.S. XXX higher ended $XX,XXX is increase Latin

constrained proactively efforts remains manage Our U.S. existing to our and subscribers. offering to consumer sales continue optimize capacity to and service our we marketing

our declined X,XXX increase, approximately to has our the U.S. declined subscriber offering during our certain XX,XXX, U.S. by base capacity and broadband strong constrained Although for demand by driven U.S., ARPU become quarter. Latin in consumer markets base to by continued our the subscriber retail the capacity. approximately Similar American

yield for currently second areas. community XXXX. And these increasing improve a to quarter our we're are these on WiFi are of focused plans capacity our the subscribers, increased challenges, Despite and We of high-value adjusting the to way through opportunities. service. using ARPU service customers We're our mix on the enterprise in the match subscriber customer to network the utilization our levels balancing experience, better

in The our to new last It about year-to-date year. basis aircraft partners. to talk our in in-flight traction on let's orders continues gain Now enterprise an to XX% by improve. increase market resulted relative connectivity continues This up with in a business. deployment

The teams milestones year. compared continue their our system orders in and of next defense year. civilian of last we SES-XX to government QX. our the are basis meet defense year-to-date up preparation XX% a Both on very deployment program, in to the Within for group active were

Federal for India, services. expansion solution network network orders with an key markets These state robust SD-WAN in include of security we X,XXX for expansion upgrading UCO service and managed our providers banks we as received and Additionally, with as services of the growth the by several Hitachi agencies. wins include like had Petroleum the the extension support bookings In see and a as from well term as we a the such strong Europe, of Bank, Bank expansion Camelot Body British Shop Bank of of expanding and lottery. our signing locations BTI, new or at solution addition more number X,XXX This for state well in locations. for banking contract HDFC locations, the continue includes ATM with to Baroda, with with implementing as service extensions sector, SD-WAN commitment to to services In Euronet. than

throughput Hughes license to India's amendment is an India address Airtel, Bharti announcement satellite. that and -- It Hughes services of capacity-based towards addition, services. services and has continue a GSAT shortly. backhaul completion from the we joint and low-cost for to our within high And cellular In agreement work India multi-beam to we make on run will expect enterprise received SME venture

recent like highlight would I sales, system of a of to orders. terms In couple

through the JUPITER the has Elsewhere the EUTELSAT’s underscore service. Company for system the satellite The to Egypt we've world, in standard system beyond National satellite broadband. for We These companies from Army selected already the number expansion component divide. remains EUTELSAT including is Telecommunication with KONNECT quick TIBA feeder network dedicated deploy channelizer mobility high-speed Also, use VHTS support operators we which an has services seen where helicopter bridging to capabilities facto orders for HeloSat blades. equipment a a in multiple transmission system whereby a a Italy satellite critical of been satellite mobility unique our Q agreement the KONNECT expands around services This rotary utilizes digital the is VHTS product JUPITER and of deliver B-band in and solution Indian that broadband digital including a beams. helicopters. sophisticated and for signed the of Leonardo's land from Services that de number using selected awards And satellite, Telespazio KONNECT the Indonesia, antennas. over received as JUPITER the of The satellite. of for first enable employs has the Ka-band

hope deployed real-time regions We've well. support been service. OneWeb's plan hosted quite switching is in to show around not type At and impacted components, the into by a OneWeb deployment will the our effort delays Hughes cost We to Hughes’ portfolio, We has featured parts. the type support the traffic the covering other worldwide in talking highlighted of necessary our Our OneWeb’s the XXXX jointly We multi-orbit additional anticipate and about the to advantages OneWeb active in we business XXXX of increase integrate OneWeb's between gateway most that as complex the seamless expand. ratio. materially engineering date, have the for connectivity system and for action. to the it It United To offering multi-transport regions gateways materials as efficient session the this and are of incorporate geosatellite OneWeb and used of deliveries into part. over instantaneously ability each at JUPITER-X progressing some connectivity hybrid transmitted time. We been signed India. the networks service evaluated innovations States during September, that shared the provides to supply with evolution demonstration technology capability our and of networking multi-transport software The world. agreements successful of demonstration

suppliers our are increasingly limit monitor a Hybrid and work operations. enable to hallmark our use any impact effort rallying continue with making connectivity closely solutions inventory every of to everywhere levels, and that industry. telecom technologies We the cry and entire anywhere for and a future our to

an XXth organization and reflecting continue pride connectivity leadership, we to take innovation XXXX, multi-transport including Hughes future our in multi-orbit, exciting great deliver. to upon of that celebrate is in seamless As industry multi-network I poised our and as ongoing an anniversary

Anders. Let me it to now over hand

Ku-band flat QX as slowly QX Satellite market $X million, of was pursuing Pradman, remain year. to the revenue good continues focused to last Thanks, morning. in recover. and sector We on revenue opportunities EchoStar for the Services

front, we filing through into Global successful operations our the launch of ITU in brought that we Sirion-X to EchoStar S-band use pleased the On report III. are

the We for in are global S-band with excited about development completing our of forward next this milestone, planning steps and are we moving the capabilities.

the to IoT the initial waveform Our new XX good our European subsidiary, progress and the testing recently protocol Mobile, have of completed make LoRa in also performance EchoStar pleased satellite. been with of continues of services. development EchoStar the We very over satellite

next EU year. launch for this of new We track QX are on in alpha of service in the an

worldwide connectivity. into full multiple we services next turn unique air our as new strategic In taking and and include supporting addition, the S-band global on level over MSS/CGC development that towards high-performance, truly through air-to-ground leveraging of networks, applications fronts are ability satellite it offer long-term We're These progress can to mobility a as objective. I'll from networks, XG explore terrestrial hybrid that hybrid systems. our to our goal this end, now development the emerging to To we aerial seamless of we pursuing continue Dave. satellite excited of of to integration our to urban unmanned authorizations. XG networks benefit well continue working

Anders. you, Thank

EBITDA primary was was and The third adjusted primarily Corporate expenses. from adjusted driver by the release. customers. reconciled ESS domestic the last $X year, year. $XX to compared GAAP Latin was other revenue a EBITDA quarter loss year was enterprise to million with flat unconsolidated consumer both of period driven of $XXX as $XXX As of in increased revenue Hughes to in QX to was QX driven Hughes of lower revenue earnings adjusted loss the of in compared million due and QX. affiliates by EBITDA, million, customers. measure last year. compared was last year. last QX same American $XX usual, activity Hughes Hughes' overhead to our higher EBITDA $X in and million, sales Consolidated EBITDA the being other million the from the $XX and XX% provided to quarter higher last subscribers. in consumer revenue $XX up million, segment. service million our cost to last higher increased Consolidated period primarily is $XX an adjusted our flat adjusted EBITDA same international of loss my narrative from was in year will lower adjusted of lower higher million, a include to improvement in revenue and Hughes ESS corporate an revenue was and to the corporate compared million $XXX press comments services on million compared by growth which increase a equipment third up

investments and related capital expenditures our are last unfavorable million $XX Our in margin net higher million EBITDA of million. consolidated from million. foreign satellite quarter $XX lower $XX last increased program $X was our Net $XX and million ground income business the due lower primarily to offset of year. year. gains The expenditures related of same income higher operating JUPITER increasing changes interest by X.X% majority to was to period and -- III income increase were million, consumer million adjusted in million of and to XX%, million, taxes expense currency $XX on partially $XX our $XX $XX the Capital infrastructure. compared of to The of the

cost defined of increasing of XXXX. from JUPITER in second was in last $XX million. stock half our adjusted of expect EBITDA $XX quarter third period of the during as the launch X.X open bought minus XXXX, the million million We the shares flow, million quarter, same market In X our back a year. at Free CapEx of the cash satellite $XX the we

strong, deploy balance opportunities cash to growth. Our sheet we remains seek continue and for to

over me Let to turn back it now Mike.

EchoStar, Dave. environment, services on global range opportunities. and in continue changing wide providing infrastructure evolving secure cross marketplace. an we operate that focus a Thank our that bandwidth, In to At support of a remains and you, industry networks,

ensure results. to the decisions rewards prudent continue associated evaluate with in We to and strategies risks specific order long-term and

now to can so question-and-answer a start session. we me turn operator Let it the over

[Operator Instructions].

comes Your Raymond from question first the line James. of from Prentiss Rick

we very the segments as strong What in First Dave, obviously, or skill about and evaluating how do talked How business? should hit the out we think need investing want think one strategies, about sheet. the sheet; geographies look or to you in on, mentioned also about you or sets future? balance should balance strong you -- there

narrowband, at for hybrid and as integrating well Pradman networks their investment I Well, think both our Anders is in both focus XG segments, and going discussed network. forward their as strategy into broadband as in relative the

our future So and where I on investments. think that's focus is expenditures

that. you've think got share buyback, when to do clearly, because the ability about And we

us maybe on in October did least You've another the filing. like XX-Q to at that, based $XXX,XXX been executing almost you on

a Or the is limited to doing or like. to the you're stock million more looks not accelerate X.X understand a higher So ability there even X per quarter? price to Is that quarter, million where it me shares help really given volume why is? amount it do

we on Yes. regular I the that Board something with discuss that's mean basis. a

the We going obviously, sheet more. at buying forward done advice ability, with the comfortable changes have the that back. Board. be we've to will We're of given levels the balance do the And been any

how sister and partner the what the and about you network of potential DISH and EchoStar their to offer might term? DISH Board, DISH medium EchoStar. do we involved up there XG And opportunities think long the with wondering, can that to be Okay. they what talking speaking the on at And up call, brought company, see as proactively were and over

Rick, this is Anders.

spectrum, lot a license they a license terrestrially, they with the the States holder think for that S-band in is also AWS-X standpoint. plan MSS for which United overlap from I using holder DISH has on fact of are the that but an to the do

they're So we're of And how rights our it might utilizing that to software-defined how global terrestrially, those services NGSO to using into ambitions, with to opportunity how them it's network for the that and when working satellite state-of-the-art integrate are closely is great evaluating understand us they frequencies. building configuring a integrate comes network. very out the our the also which some into

about brings disadvantages have to satellite bandwidth Okay. far versus latency to is terrestrial? table think And what as amount coverage? to how the versus low important that latency advantages should spectrum as of How we

of because narrowband are lot we're we're a the are latency talking about world tolerant we a at when S-band. looking talking that Well, applications about probably

reach, integral through to So densifying strategy. geos the the to ability really that utilize an but network network then network exceed otherwise an NGSO would of for use that of NGSO capacity is our the

[Operator Instructions].

Your next Quilty Chris of question Analytics. comes from line from Quilty the

of or on longer capacity you lie consumer plans in market internationally? where community And international for I and partners opportunities. perhaps I terms either wanted there to Are opportunities. guess where of some access of up opportunities follow behind to WiFi add stand and domestically JUPITER capacity the specifically, international may or term looking some those some your additional X of

Pradman?

Yes. It's good question, Yes. a Chris.

U.S., you from Chile. -- America going at in business very we we our Brazil. If great a we fast-growing look South course, global today, And network have in have down to internationally, obviously, Mexico of besides the have coverage

offer of that States. verticals that. a is parties, now. covers own ownership diversity. of up with least from in about change of good said policy world, people So owns the where In in have -- but our we geographic with offering example, and regulatory the also they parts if same they but like the India the own satellites kind at to just publicly, partnerships in have we and a will the you the Then East we networks, looks other Middle our allowed is we that's that own JV-owned networks both that have where perspective, services covering Yahsat really not satellite set our go private by around the our only basically have satellites it not and JV world, Americas, we Africa, the United

in partnerships think Malaysia and have a In Thailand. good rush Asia, and I So there. with Southeast companies see Indonesia we'll we

have we So good coverage.

we our the pretty broadband joint partnerships, ownership globe have much and communications. for ventures, our of satellite between covered So own assets

in Inmarsat yesterday the I guess global sort between mean, and to address announcement are they I of opportunity. ViaSat, the light also And that attempting Great. of market

more control have an on capacity undertake Is the ensure the capacity a your will have prospectively availability joint less partners. side, the have infrastructure need that can Inmarsat-ViaSat partnerships future? that's clearly of to play that the that of available to gateway You same perhaps a but type there through strategy amount over you in

Yes.

But do both actual same doing that think distribution all the to I you're we are with think our capability thing. business the trying -- significantly in are and ahead these countries. We're effectively, right. it's I we

Now a a inside. region enter start when we has if with to step our own would region, create -- satellite develops being our company we And X, be a X that off in or strategy step business assets we the assets. been always partners own new region’s with JV owns Then region. that a

the see And The We all parts X are stage grow next in over. X, where so there well the is or X. few is world, other X own a Americas we in the country, we stage either strategy deployment capital you because if years. significantly X. has stage of business, our in country it X. by In and optimizes where Stage worked of go or assets And can you whole almost have to the in assets it's potential

circle be or I you didn't back GSAT detail, that capacity? guess, you've I to. And name that ISRO capacity time can wanted access formally maybe satellite what for on India. used, considered gained partner as either a And the you I is to the first would this the Great. catch on the

were we last have for throughput -- using not XX been high satellites ISRO been We've but obviously No. the satellites. they years,

they've up have JUPITER using have their -- the -- satellite. more month launched high-throughput -- way with the new so can with service who end throughput puts satellite. up -- the capacity own that put a can ago, the announced the we high-throughput put India the over But the ISRO country. to the over later appropriate by initially, see policy space And entities, And start just the throughput we platform their ability then XX-megahertz with high both deploy We of satellite. the on, we'll private a But satellite. year foreign -- traditional high up else but and transponders. but now By their their people we'll domestic licenses

satellite, date would where final satellites? and secondarily, the of JUPITER comes you orbit. And path you sort a what for of it or that of quick either X, priority investment? on of get you of launch when mean, X, throughput all, stand high testing your to I assembly, think what and terms maybe First see do Great. on in affirmed about capacity the terms future design in you maybe process but a on after forward to And increase JUPITER flexibility be update

capacity Clearly, time we we element. satellite, capacity, a problem Every end which is have. most up the and important more business up put starts getting good increasing is a our to dramatically

North JUPITER to that gigabits the XXX will XX XX with of and About be gigabits America, both capacity So or South gigabits, gigabits remaining Canada be the XXX launch over X, States. United the Americas. going will of we're and capacity over over America,

those capacity Americas, the And lot are getting So work give -- X we But the on are to we've It's are satellite? we network? ground of we'll capacity Is and again, -- of for to to will up, that? the hard X the what decide continue going but are of a going a now be network on now, world. right going plans that on working a capacity and a right slightly grow, us to be of something that many to it we that's OneWeb rest satellite? smaller is big getting for JUPITER of type not objectives, we operational. if only a So with to it it to of it achieved more one implement JUPITER we add hybrid in years. we all focused Is of But need once working capacity? continue will combination few

And final where of bringing hardware still in significant Anders. for EML determined that and to an might you rollouts? Great. give terms dependent and partners on deliveries we us be the a of Europe yet question stand on see XGPP standards? where Is Can you service and update new in business

But of with picked those utilizing and in type their very LoRa of as the into parts standards in alpha sort will times certainly have test the I first a things are in orders before, of next our so accelerate number allow system quarter point, Europe the have once with set for this across module to adapting But mentioned EU. for tracks couple of meantime, to infrastructure up utilized going that will of that got things lead as radio development the LoRa at we've an our stand devices we're associated create to partners established. entire some of But electrical in we've long them an a devices be working protocol. year, a initiated the recently those already development. first Well, that sort in

enough of year, So sort XX some open thereafter. then series forthcoming XG say associated developments, would which gets a would once of I we've should that that sometime Release next staged but of more adopted for things, got the early door the be

Raymond James. question have We a Prentiss Rick from from follow-up

Just Chris' want up questions to follow there. on

do issues, the supply issues? a X the announcements ago, had on concern in date? the think of quarters far know second as actual But launch kind any as we'll couple us you service? can there the launch, I going. how the get launch status some you been was manufacturing dates within On targets update JUPITER of of And are on half labor when and

got satellite side all not so don't the The impact will Maxar. problems -- material of -- we've supply does delivery and because the and the

built. of not just process a work, been problem. still are testing, going now all or that X that's in X most the So of them Almost are There to subsystems. be manufacturing. the It's of have integrating

built. to We get them it and get get them we we to got tested, integrated. got So got to

So material this stage. and boost at work not some a it's task not procurement

of and far launch updates little as 'XX, might date potential as far we'll on a do a half in-service? more actual second think we in when November just targeting than -- we get more date for And as when as get the as updated concrete is -- far as now we’re

you as This I mean Dugan. given we've can. Mike information as we really is much guys

are you the are know, unreasonable. and office lot dates that basis of on. work daily people so really California, things going back not going in with a the COVID-XX. you the we're on was with struggled to As And A which getting on has in changing give impacts from

information, soon as have we as more we'll share certainly So it.

I lot Mike. appreciate see because that, come we capacity that to Obviously, love curiosity of a online. out there

-- So and the other you of side for question the is...

anxious Pradman that as You're now. That's all is see online can capacity I as to say.

How should we think the then about the spent cash spend flow curve that CapEx. well to in. before get the has though? of OpEx come as revenues Obviously, ahead But time you all there's can

what should how capacity? ballpark come term thought cost a point before what in of to that frame of impact about magnitude it So far -- the might kind to is as all the you on as EBITDA in so we in of in-service time kind be the just selling get think there what date, at of short

of it's satellite ground already the we'll I obviously, I -- ramping testing much testing to network built. as but have to advance that We'll the got that said, start start the start much will and of in start -- 'XX. well, started, mean so in of will being it Yes. launched, work up infrastructure ground already we've in have

by way, the suffered constant great updates COVID-related too infrastructure the of advance. has has the in team satellite infrastructure itself, not versus the job balancing And done a build delays. the on far that prebuilding some And in

team on ground made build, progress in the of infrastructure. the just I the it's to So think satellite. with done but a been we've has great sync not stay And great job them the manage satellite

shape ramped first up Yes. get of an operating great sometime getting to think that advance But offering. the to seeing do in are P&L start point, your But in And 'XX, I half there start the We're be I but issue. impact isn't material. it infrastructure to don't in ground service there. expect some -- of we'll expenses

How that at Hughes’ That we me final the signed look OneWeb the revenue and is Okay. the you're what for into teleconference off. that that as was as that the hand talk mean relationship demonstration service market should and OneWeb go-to-market working And at we're as helps. the probably OneWeb of bring one about to strategy? applications to could of far timing or with going can

first for a network, operational the months. government a have be should U.S. we few Well, which in

those India. network very, is very to of that next in main for will But end on that then that's offering, going from point Hughes part and are X only other OneWeb many world. company and regions. where the speaking working next The is they where and are other a its of to imminent. of go places I'm in areas OneWeb that's But So OneWeb working, is year, which But too. there the probably definitive the area on other are are sign plans separate on is parts own the we it focused.

Exactly.

party I them in specifically... I they're know out there. was other with Communications. with we've regions announcements Alaska seen obviously a So AT&T, just

over -- of are have OneWeb the They globe. world. you with the With coverage Hughes, all going total

can you world. the in sell So or anywhere capacity services

turn this questions back go time. further There are to at Please no ahead. for to presenters our the like I remarks. call over closing would

for everybody Thank talking to to look joining to you here Thanks you. We at QX. forward Yes. today.

today's This for you all concludes conference call. joining. Thank

disconnect. now may You