EchoStar Reports Q3 Losses with Jupiter 3 Service Launch, Dish Network Merger on the Horizon
Satellite operator EchoStar, parent company of Hughes Network Systems, reported a tough 2023 fiscal third quarter (Q3), which included a 17% year-over-year decrease in consolidated revenue and a loss of 165,000 Hughes broadband subscribers.
Echostar’s Q3 consolidated revenue dropped to $413.1 million, with the decrease driven by lower service revenues and fewer broadband customers. Equipment revenue decreased $42.3 million, due to lower domestic and international deployments and shipments.
In a statement, EchoStar CEO and President Hamid Akhavan said that most of the company’s enterprise orders are recognized over several years, which can create some variation or irregularity in its revenue reporting.
“In the third quarter of 2023, the EchoStar team was fully engaged across our business. We received orders from new and existing customers in our enterprise, international, government, and mobility groups,” said Akhavan. “Our consumer team continued to expand adoption of our low-latency HughesNet Fusion plans and the Jupiter 3/EchoStar XXIV satellite is fully functional and expected to begin commercial service in December.”
Launched this past July after a series of delays, the Jupiter 3/EchoStar XXIV satellite is currently in final stages of in-orbit testing, with a service launch still on schedule for December, delivering the company a much-needed 500 Gbps supply of capacity over North and South America.
Hughes ended the quarter with approximately 1,063,000 broadband subscribers. The company said it is being impacted by increased competition and capacity limitations, especially in the United States. In Central and South America, Hughes’ subscriber levels were tempered by what the company described as a re-focus on “more profitable consumer subscribers and by our allocation of capacity to enterprise opportunities.”
Hughes segment Adjusted EBITDA decreased $33.8 million year over year. Echostar Satellite Services segment Adjusted EBITDA increased $1.4 million year-over-year, primarily due to higher revenue.
Net income decreased $19.0 million YoY to $0.5 million, which the company attributes to higher transaction costs related to its proposed merger with Dish Network Corp., scheduled for the end of this year.
Dish Network also struggled in Q3 23, with declines in its pay-TV and wireless subscribers. The company reported a net loss of $139 million in the quarter. Dish CEO Erik Carlson is expected to resign on November 12. Carlson will remain on Dish’s board of directors until its merger with EchoStar is completed. EchoStar’s Akhavan is then expected to take over the merged company on November 13, as was announced when the merger was initially revealed in August.