EchoStar Corp - Ordinary Shares (SATS) 9 Aug 24 2024 Q2 Earnings call transcript

EchoStar Corporation held its Q2 2024 earnings call, providing insights into its financial performance and strategic initiatives. The call, led by Hamid Akhavan, President and CEO, highlighted the company's operational improvements, financial health, and future plans.

Operational Highlights

EchoStar's operating business units, including Pay-TV, wireless, and broadband and satellite services, have continued to meet or exceed budget targets. The company is focused on integrating operations, advancing its 2024 plans, and realizing synergies. Notably, its Open RAN wireless network has doubled the number of Boost Mobile customers since the last quarter, indicating a promising growth trajectory in the wireless market.

Financial Performance

The company reported revenue of over $3.95 billion in Q2 2024, down 9% year-over-year. The decrease was primarily due to subscriber declines across all lines of business. OIBDA was $442 million, down $181 million year-over-year, driven by increased operating costs and decreased margins. Free cash flow was a negative $191 million, mainly due to cash interest of $450 million. However, the company remains on track to meet its key objectives for the year, including positive operating free cash flow and maintaining financial discipline.

Strategic Initiatives

EchoStar is making strides in its strategic initiatives, including refinancing maturing debt obligations and improving liquidity. The company is in constructive discussions with counterparties and is confident that its objectives will be met. Additionally, it has received approval for the Liberty Puerto Rico transaction, which is expected to close soon.

Looking Ahead

The company's focus on innovation, operational efficiency, and customer loyalty is evident in its Pay-TV and wireless business units. It aims to increase its share of the wireless market with its state-of-the-art network and unique prepaid and postpaid experience across Boost Mobile. In the broadband and satellite services segment, HughesNet Enterprise business is growing, and the company anticipates enterprise revenues to surpass consumer revenues this year.

Analyst Questions

During the Q&A session, analysts asked about the company's liquidity, unencumbered spectrum, and refinancing talks. Hamid Akhavan assured that the company has ample cash on hand to fund operations and is making progress in refinancing discussions. The company's spectrum assets, including unencumbered spectrum, are being considered as collateral for raising capital.

Conclusion

EchoStar Corporation's Q2 2024 earnings call underscored the company's operational improvements, financial health, and strategic initiatives. Despite facing challenges, including subscriber declines and maturing debt obligations, EchoStar is focused on maintaining positive momentum and capitalizing on growth opportunities. With a focus on innovation, operational efficiency, and customer loyalty, the company is well-positioned for the future.