SATS - Earnings call transcript Q2 2021

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Operator

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the EchoStar Corporation Second Quarter 2021 Results Conference Call. 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] At this time, I would like to turn the conference over to your host today, Mr. Brown. Terry begin. please Sir,

Terry Brown

of illness. morning, Dean second welcome due not joined an quarter COO Mike EchoStar CEO, Kaul, David Good Officer our Chief call President Dugan, General and today our the Counsel for join to Rayner, of President Pradman CFO; the of Services; and could Anders everybody, you. call Johnson, to Strategy and and Satellite earnings by Hughes; Manson, Thank unfortunately XXXX. Secretary; I'm and

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

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

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

Dean Manson

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

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

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

David Rayner

financial good business. on for being a Thank morning, pass will followed his Anders, who an ask to on Mike update by the apologies provide we will be and able attend not providing I overview Pradman everyone. you, Dugan today. that and Dean,

we usual, will As question-and-answer a session. close with

loss year slightly unconsolidated adjusted increase $XXX the in by a adjusted loss EBITDA growth $X of my higher our narrative $XX include to increased period by million $XXX the of received on last will XX% equipment same Hughes both $XXX to to international slightly. from higher driver EBITDA compared and the adjusted service flat. Hughes revenue, from of measurements the as and in is EBITDA from million adjusted adjusted Hughes in improvement $XX comments corporate loss marketable release. million other domestic last adjusted revenue up million, in affiliates, consumer to a Consolidated EBITDA, revenue million, dividends of subscribers. Hughes $XX press our second certain The was general year. corporate usual, in up revenue Hughes QX expenses driven up relatively which American to and primarily our GAAP segment. the investment quarter revenue remained $XX was increased growth was last activity period by last ESS was of due EBITDA QX and compared up was customers. the earnings primary quarter also As $XX administrative enterprise million. $XX last EBITDA same year, million, was securities. to as and million, in an was Consolidated million, as was in an primarily higher The compared reconciled Latin compared million revenue slightly sales ESS year. and to was $X million, year, and lower second selling, of other driven

cash of in income as defined In shares primarily EBITDA increasing the open by and the with QX expense. quarter and XX.X%, $XXX Net $XX adjusted increased during operating higher of The second income investments back CapEx in minus the $XX X.X stock increasing was associated $XX increase same EBITDA is we were $XX a cost income was adjusted quarter, consolidated million million million of Free offset million. last litigation $XX the million at partially compared period higher million. to our of million, tax to flow, $XX $XX year. bought Our expenditures XXXX, X.X% margin $XX Capital market to costs in million million. gains of quarter from million year. the last higher due of

or the on June $XXX remaining of matured X/X% which repurchased off also paid We bonds XX. million our seven

$X.X had $X.X XX, securities debt it marketable we over turn now and and that, As Pradman. let of billion me of of cash June With billion. to

Pradman Kaul

last months strong revenue Dave. specifics XX% overriding first These We several grew solutions and connectivity other of both goals. and into are supporting achieved you, before quarter. and in the We products and goals our our We've our objective business results by growth A of the revenue six track run I and June innovative X% against EBITDA with measure get on same but the by this the businesses. financial earnings. second over management line few growing adjusted Thank XX period and ourselves do bottom are primary top year. of Hughes We annually our comments Hughes year. metrics, service the through efficient driven

QX specifics subscribers XX,XXX down some XXXX. We turn XXXX March from the U.S. of Latin let's X.XXX the to across related ended America, quarter. XX, approximately to with and second million Now

base subscriber subs. by XX,XXX U.S. Our approximately declined

due decline retail U.S. net offset U.S. strong by in our ARPU remained demand the revenue driven in for robust, growth lower This subs. growth broadband the capacity. helped However, U.S. to ARPU the in

term. these We continue near trends in the to expect

marketing know, continue is we proactively to our our our and U.S. constrained, existing offering sales efforts and manage optimize to consumer As service to capacity you subs.

U.S. result, a As

service overall to X,XXX. in at driven again in Continuing capacity top the ISPs In the our as provider News best usage, home grew best subscriber conditions base approximately region certain leading by Internet for the QX, constraints U.S. and markets. HughesNet Latin stay have XXXX-XXXX, satellite recognized XX the across among America, we throughout

operations. in network anticipate We are with utilization U.S., our As growth American our the in monitoring markets of ongoing levels XXXX. we and consumer consumer all balancing through subscriber Latin aspects

business, for year. from an building strong enterprise on the last are from QX As same with the quarter of orders, increase QX our we momentum XXX%

division Our with North American the multiple sectors. remains deployments across and enterprise business active petroleum SME areas retail including franchise,

continue our of industry-first our recognition We We and capabilities implemented of operations. efforts refinements World have so our portfolio, in market. of the Globee to Award Bronze is intelligence picking in IT including one our a only the network Awards, the up invest received Activity intelligence in in management for connectivity companies in the also XXXX to IT market-leading be in artificial in-flight form two for recognized. further artificial U.S.

planes. Our partners resumed have installation in

shipments. equipment restarted have we So

we Within the milestones in that meet continue preparation deployment SES-XX the of for system. program, to

Turning to our effort OneWeb. gateway of deployment for

work Our proceeding well. is

gateway the launch. initial now systems have globally seven deployed service to support We

all provide by complete deployed we operations end signing expect of contract oversight technical support by a during And multiyear to We for shipments QX, involvement with to XXXX. gateways. each gateway the the and OneWeb expanded our of

powered Asia supermarket the their five-year In service were to was SD-WAN multinational connect In branches Brazil, to a to Our India, connected operations. international extension retail Pacific a we awarded from major business also system. active managed satellite for this selected stores. a provide the of X,XXX by Bank India services broadband we by using chain extremely In contract quarter. Jupiter network region, the received a petroleum oil company agreement Hughes connect to managed services enterprise

are three contract Bank the Series provide upcoming business resellers for Abhimata Indonesia, in government. ordered System. signed has terms of new implementation to that our continue to of significant the Also, served expand for continues to well satellite own their one Jupiter other Jupiter Indonesia, a we System for and satellites, Citra using requirements Jupiter new operator with gateway BRI, the the In that's the who the that system services System. their to a broadband expand Abadi, operate signed requires Jupiter new by network flexibility sales, Teleglobal and a using density we operators. Ku-band System In capacity provide

operators. closing our selected service will the satellite VSAT our addition, will venture for and standard remain in the joint worldwide. satellite greater to India. facto for the stake. system, In to with implementations efficiencies and Airtel to business the The solutions broadband joint locations Indian over our roll us of testimony efficiency, operational of been to its Jupiter for venture XX% networks. and to contracts government subsidiaries a X,XXX We have reach out consortium customers our existing JV with Bharti a help partners de provide These performance of bring LTE contribute by scale, agreement Bharti market versatility enterprise a and focused broadband two backhaul are on

approvals. subject As previously regulatory this noted, is to

of the the of launch take the towards XXXX. which working expect in three are half will place we we Finally, Jupiter satellite, second

manufacturer of NEO bit this the Satellite you increased significantly the to in schedule services new implementation and that amazing satellite operational way. and to on networks meets and positioned NGSO customers on delivery is offer continues innovations the our networks ensuring will aware, of hybrid focused launching GEO, will OneWeb connectivity technology to the leading solutions all the and Maxar, solutions at for for system, networking constantly. through we each evolving recovering our the applications while Along uniquely best role users technology involvement can and our per terrestrial multi-transport an satellite and our cost-efficient are and in Americas. for with with need continuing providing pace service this capacity in hybrid in are the specifications. Thanks customer's play needs. the of Hughes the to of speed a we Demand unabated technology As satisfy meet most new are the the of our lower cost

Let me now hand Anders. to it over

Anders Johnson

In QX year. Thanks, revenue morning. QX, slightly was up Pradman. $X million, of Good from ESS last

We slowly available to capacity recover. to Ku the as opportunities to our continues lease continue pursue market

at satellite launched Our SAT, EchoStar for the the nano activities mission. June prescribed our in two III Global The license S-band altitude Transporter aboard has placed and XX on frequencies. orbit-raising completed is and commissioning the third

by We rights Telecommunications granted the to perfecting Union, spectrum. have, therefore, in our important to an satisfied conditions the Australia International extended step the

We applications about proposed are for being excited constellation. potential range of broad a new this

real-time On leveraging bidirectional IoT as of develop delivering our the our part the technology collaboration Semtech, and services LoRa our European deploy first to massive to with spectrum. plan are using EchoStar service, satellite satellite XX LR-FHSS front, we in use licensed progressing

year operations to seek begin for adopters first half beginning We expect adopter program. initial early are early LoRa potential the of in to next out and

of entered addition, across In Sequans, and concluded have band unmanned to a compliant development XX we and applications support and research development development the Europe. modem into and activities business aerial have UAV with working of development mobility

or in into next level, to global the services remain global We're strategic truly providing Project the first ecosystem. fronts are to by front, seamless We've with success of global to turn the XXXX, Partnership worldwide integration multiple will XG goal we EchoStar work standards S-band I'll release connectivity out forward continuing already further networks non-terrestrial wireless association, of had full excited networks We satellite. via take On industry's XX, S-band looking satellite XGPP our due the standard-setting back the the it role that Release XG include XGPP's XG on on communications be our satellite's our to and services to address XGPP. are with effort. upcoming Dave. the main Mobile Third-Generation S-band focused now longer-term to early and standards and to

David Rayner

financial to initiatives. Q&A the start improving We delivered quarter, strategic that, turn you, session. advancing to now strong and the over Thank Anders. EchoStar the operator results believe With call has we'll another

Operator

[Operator Raymond Ric comes from comment first from Prentiss of line or Instructions] question James. Our the

open. is line Your

Ric Prentiss

A morning, Thanks. questions. guys. of couple Good

things the should you you Street S-band that what of the the any communicate, satisfy sure good this suggest the and are than as early move rise one into launch, you position see the date First, Because and more for And to watching checked. guys other commitments. be release as that box on regulatory Is XXXX? we nano far there we mentioned specific like from strategy? towards Anders, the XGPP. milestones satellite outside as XX getting seems watch hurdle

Anders Johnson

the lot I means that end a whether know. don't different the make best included well manufacturers the factions, in other as Well, XGPP the February of of quarter, is I for our out Release first sure are interested count XX. amongst think release operators an that But doing in is parties. due and as interesting including to or us we're the March, rules negotiation relevant

there'll But refinements forward, the I will be that Going starting for be XXXX. into move us us future XXXX. and think gun XXXX, will enhancements. But

Ric Prentiss

in the more Dave, you buybacks stock did quarter. Okay. And guys some

looked June. us, about X.X to done Looking think in And XX-Q, was interesting shares at in in to and XQ? dropping paced post pacing X.X that? about how May million How should like the you April, just X.X the you we million shares any have million

David Rayner

place buying time. last in execute that put we to at that at plan - Rick, a under parameters we and the Well, under established of the continue end that year, were

not place changed in have continues currently. that We that plan and plan

Ric Prentiss

Okay. had any was And was seen stock had there I notice, he asking, XQ he I post some. didn't that client one buyback? thought

David Rayner

any announcements as I made plan anything June remains on haven't past in XX. But said, place. We the

Ric Prentiss

capacity satellite And to sense, constraint talked it orders the happening? should are By in How you Because get capacity, about about installation operationally, capacity? think didn't American we expect you I some is? And talking Makes okay. fixed? Latin about it you about either. of it is stay are home how see capacity at that talking Why countries. Pradman, you what constraints,

Pradman Kaul

Yes.

think the the each fact is because the that talking etc., capacity amount that dramatically. I constraints of primarily increased using the conditions, of subscriber about bits was are that COVID we

the the so extent, satellites of as in quality getting And some results in amount each of they key in and the of to But the COVID a and then countries, of the service reverse resulting trend results which for or with kind that the America that should subscribers which the data was political in to effect were that providing subscribers higher are offering the conditions churn, service beginning in they're instability that, see to of fewer data terms the the therefore, in subscriber a more impacted we service. selecting. right unhappiness improve consumer using of South and then few that

Anders Johnson

regions South or certain In have addition restrictions. as on some continue regions countries, had things travel getting in we restrictions have to Rick, to of some America, that, installed impediments

proven basis. And installation somewhat crews has out continuing difficult so a getting on

capacity, we've answer also restrictions will. got Pradman your as on restraints if some in question, So to capacity installation said, we've and got beams, you

Ric Prentiss

a dates? the And When for looking how for on okay. in can And launch. we as milestones the we still that XXXX Jupiter date monitor service moving officially are from track to that, towards far And launch three any outside expect were about second we launch Right, rising half that announced? into as a for get what should target date? there

Pradman Kaul

same. think I the schedule the is Well, still

There this the the the getting getting and should expect in We half that bunch are overall of to specifics second defined for But we whole are satellite a by launch we schedule. there end that milestones launch start in service some at this of probably of stage, year. XXXX. on-track seeing more accurately the

Ric Prentiss

All Well, good. right.

to and you well wishes, hear healthy Sorry hope and I best ill. was stay all guys. Dugan

Anders Johnson

Thank you, Ric.

Pradman Kaul

Thank you.

Operator

you. Thank

comment question Our the of comes or Rollins line next Michael from Citi. from

open. is line Your

Michael Rollins

morning. good and Thanks

product? have LEO, a earlier, broadband infrastructure in component that if expectations GEO You on just commercially hybrid kind agreements you you mentioned curious earlier respect bill in the influence was leading And with broadband - discussion then playing time? were of hybrid or further Hughes operations in have of constructing just on secondly, discussing progress solutions. and you over a strategy I the role made of any what just to the terms your curious can if networking

Pradman Kaul

Okay. architecture. developing in different one But NEO a in lot the on They're GEO area networks, two first work we're that questions. of network doing the the

have OneWeb. partnership investment an we with know, Now you as and a

with the We world. are them and network of for plans developing architectures service many parts

the these we to service think OneWeb And architectures platform see some XXXX strong presence out. played I We getting in on now geo with into almost have in will of every region the that are fortunate a with Jupiter globe.

nine come in next I months the be announcements we'll area. think six that making months that to more So, in to

second - the was and on Now sorry? question

Anders Johnson

bill, - bill. Infrastructure broadband infrastructure

Pradman Kaul

of video. latency as able these hybrid that get video think of able of subsidies It's the the pie. piece is hopefully, interested. price. The great a this with any broadband geo be is the in latency-sensitive, connectivity and bill, traffic to will expect we these are we offering know, is therefore, And lot speed not Broadband bandwidth we of at the with that the video, - come to we network we very to bandwidth networks, but different debate are yes. of is programs speed, The but some on hybrid architecture, programs. And to that market an which not where And stage, the problem. we'll in this So And priorities can and is area very, over solve the there's are up an right? is area. believe in the with going of disadvantage we we satellite, large. majority very get biggest and of XX% these XX% traffic architecture a government up, have our But be you of details offering the meets on latency that - firmed the the

Michael Rollins

And follow-up. just one other

You the operations subsidies. are Emergency introduced? to Benefit your previously EBB, from any I you was impact Broadband opportunity was mentioned the that curious, seeing just And for the program

Pradman Kaul

No, I July don't are participation any at seeing on We stage. or announced X. this in significant positives we this program negatives think our

for benefit So that can the for participate. choose are to our - if means customers the we the compliant and benefit bandwidth subsidy from

we'll So too. that I game, play think in

Michael Rollins

Thank you.

Operator

you. Thank

Quilty comment next Our question comes Quilty from Chris Analytics. line from or the of

Your line is open.

Chris Quilty

you. I Pradman, had question Thank a for you.

expect script, grow? find that your to in mentioned through that? to that into international to somewhere difficult after see supposed I it Was much language XXXX, XXXX. think indicate reading too you'll you am growth you I that Or

Pradman Kaul

reading You're much. too

expect grow XXXX on. continue to in and We to

we additional we with that and that to sure think XXXX XXXX So right to out get we would working are need don't that capacity in that. figure - make now I actually how

amount of South a in America. you know significant Jupiter As capacity three has

American in will three XXXX we launch So can amount we grow of to significant in second half, Jupiter the get when South utilize capacity a new we our that business.

to to us in years. grow that continuing business I - we expect So next few see the

Chris Quilty

prior Yahsat to capacity X, you current that Jupiter Telesat, sufficient? And the with Eutelsat you anticipate and capacity? incremental third-party is Understand. do Or needing have

Pradman Kaul

augment geographic get or There are have the have available if right South capacity constantly either in America. probably more. some we And area, we'll amount we in have could but which significant deal to launched beams. other saturating and right is there beams capacity beam start talking who space right of capacity people frame, We're that some the over still in the time a our this

Chris Quilty

Great. know a outside I to Latin And a which through partnership Hughes-specific a a a do public. partnership something you or question on global growth arrangement? with to Yahsat, America. went international you expand company, of into of got you've fleshing out just would your provider and through more satellite Are that look plans

Pradman Kaul

both. the as we We it's country the think are approach we move what's - right best we I - by country decide world, in now.

we networks. In which services the example, have use satellite the in us into with for and we India, Then India. we're our Americas, to we largest integrated is where have So which Africa the go - Middle business, close covering the totally Hughes, East. own the vertically current JVs Yahsat, we is JV we, have provider

market have We highest share the there.

well. going that's So

we using areas, our equipment, our Southeast service partnerships tend and so the And Hughes-owned anywhere like existing we as our service using the space almost, partnerships, Russia, standard the into that the so, customer the equipment, basically world go gets segment. platform to our Jupiter Asia, satellite using using using with in same have and JVs as providers other like

our broadband provide all - tools So, those to to we a customers. use service service

Chris Quilty

look sort point, any Indian on And OneWeb? what does like you the remind approval of And between of receiving how for you there? come regulatory licensed b, Have geo relationship Indian get Can both OneWeb's a agreements about that you a to you Great. about and follow-on, for status ability putting the the and region; or Hughes Bharti address second us the either would how market? over India? into

Pradman Kaul

Okay.

government satellite, to have NGSO they NGSO license right good deregulated. in satellite issued formal has cellular that. a for Bharti in OneWeb what, satellite, I subscribers, but pursue continue a about filed has But a also India. they're have First, policy, number service satellite. to pursuing yet And ownership the the at a we an geo nobody with for the on got XXX-plus a we we think considering and a line, we're rights is telecom getting the I subscribers, rights. be that filing allows think landing have huge satellite shot a But approval, applied million which - And landing continue provider and for that in has they one to now.

Chris Quilty

home. question I for America. Latin more they seeing with slowly dialing of consume starting their you stay to to like final seeing are back And that any to are head in U.S. people that mean you reversal the the it are Great. in more the to at capacity, leave office? they're as continuing people North where regard you America, sounds people - subscription indications to return Are home, office, Are plans?

Pradman Kaul

having to traffic No, customers the don't we as plans, is to keep give within the existing control plans are give I flexibility the that but their dialing the shaping in of much as can and them back manage churn. we anybody to use constantly their subscription happy, think

to that than, in all the political of South the and the about guide subscriber is North a use is America. you all churn service it to significantly South the problems the guide America a see, as in better - of COVID-related we've in today, and South America if the because America quality talked churn say, Now where as getting, uncertainty

very be the they're good, and rates of they very, getting, to So, to seem U.S. churn the seem with getting. happy be service has the declining customers quality slowly, been

Chris Quilty

year? in sneak and year the of us next for balance update the for one on profile Great. And Dave. Can CapEx If give an more you lied. can I I this

Dean Manson

would Chris, to XXXX be full expect CapEx mid-XXXs. I Yes. year

year of going later a similar XXXX. probably completion year, we've up Obviously, contract the payments to Next as the well got the launch in range. JX launch as

equipment into start installation bring CapEx increasing start increased subs at rate. and we As consumer and as adding seeing service we JX an implement we'll service, start

Chris Quilty

gentlemen. you, Awesome. Thank

Operator

you. Thank

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

Your line open. is

Ric Prentiss

Chris's follow-up I on of questions. want to some

Any India could to Let's Bharti But we the it mentioned get is COVID update? approved thinking before a year-end stay update, on two, what's one, regulatory And know get takes venture. the or there? I it for in doing joint approval. second. Any you at are regulatory Pradman, XXXX? approval? how process

Pradman Kaul

I'm months. Yes. hopeful approval approval we'll we're very in that get hopeful get - few one And needed. think to are down the for I we next we'll the that

Ric Prentiss

with COVID JV? that And the affecting approval is in the how the India, business? And is of that affecting

Pradman Kaul

No, JV offerings it's and we're of business service all. not the affecting in the have approval business. at because the are not the the we the in consumer Service, of the India, carriers for that enterprise

in terms last So office impacted of because, India again, travel in have the speed XX days, and - is the think that's I full of we improved in have things was networks But back difficult. operation. the installation in been of our

to back jobs, attending Our jobs. their employees their are

continue crossed will fingers that hope way. in it our that keep let's and So

Ric Prentiss

onetime of a as results on or had Knock of? debt wood, a items. there And in how is some Dave, should debt good we the that's the bad collection any And you be bad Are sign. couple we XQ quarters of that COVID, debt items aware trending? through went

David Rayner

we had amounts some, collected cases level a Obviously, last in today bankruptcy pre-COVID. some say, - of or is from is we've the I Bad in. declared Yes. to recoveries normalized emerged, that those and companies debt owed year all back and have some since would

we bad there's that's debt the standpoint, expense release. that's a unusual don't well anything in litigation as as quarter. accrual think have from press a called Q the out both in did I So Obviously, the

Ric Prentiss

in didn't you be the I the or also equipment? And any question. of your seeing Are guys pricing any chain issues supply components if ask for of remiss Okay. any

Pradman Kaul

guy our I a job. done in has at are this trying are very impact be our we organization have to good aggressive has in think inventory tightening manufacturing, right. haven't we operations and really great inventory an We who done but planning our at any seen But incredible runs job, and things up, a maintaining the stage. levels That and

with it impacted, we through hope the today, we looks year tight, like but is the And and we we far, And so haven't been really can impact. get market no can.

Ric Prentiss

Thanks, Okay. guys.

Operator

I'm Mr. any additional in I'd like showing remarks. the Terry closing the turn Brown calls for to to over conference no queue.

Terry Brown

Yes. Thank you, we to forward talking everybody, to quarter. And look for next joining today. you

Anders Johnson

you. Thank

Operator

Ladies the program. this and for participating today's concludes in thank gentlemen, you conference,

You a disconnect. day. may Everyone, wonderful now have

EchoStar (SATS) 4 Aug 212021 Q2 Earnings call transcript