EchoStar Q1 2025 Earnings Report

EchoStar EPS Results

• Actual EPS: -$0.71
• Consensus EPS: -$0.90
• Beat/Miss: Beat by +$0.19
• One Year Ago EPS: -$0.40

EchoStar Revenue Results

• Actual Revenue: $3.87 billion
• Expected Revenue: $3.87 billion
• Beat/Miss: Missed by -$1.16 million
• YoY Revenue Growth: -3.60%

EchoStar Announcement Details

• Quarter: Q1 2025
• Date: 5/9/2025
• Time: Before Market Opens
• Conference Call Date: Friday, May 9, 2025
• Conference Call Time: 11:00AM ET

EchoStar (NASDAQ:SATS), together with its subsidiaries, provides networking technologies and services worldwide. The company operates in four segments: Pay-TV, Retail Wireless, 5G Network Deployment, Broadband and Satellite Services. The Pay-TV segment offers a direct broadcast and fixed satellite services; designs, develops, and distributes receiver system; and provides digital broadcast operations, including satellite uplinking/downlinking, transmission and, other services to third-party pay-TV providers; and multichannel, live-linear and on-demand streaming over-the-top internet-based domestic, international, Latino, and Freestream video programming services under the DISH and SLING brand names. The Retail Wireless segment provides prepaid and postpaid wireless services under the Boost Mobile, Boost postpaid, and Gen Mobile brands, as well various wireless devices. The Network Deployment segment deploys a facilities-based 5G broadband network and commercializes deployment of 5G VoNR. The Broadband and Satellite Services offers broadband services to consumer customers, which include home, and small to medium-sized businesses; and satellite and multi-transport technologies, and managed network services to telecommunications providers, aeronautical service providers, civilian and defense government entities, and other enterprise customers. EchoStar Corporation was incorporated in 2007 and is headquartered in Englewood, Colorado.

EchoStar Q1 2025 Earnings Call Transcript

Key Takeaways

• EchoStar’s wireless arm added 150,000 net subscribers in Q1—turning around from an 81,000 loss last year—with churn improving 7.2%, ARPU rising and a total subscriber base of ~7.15 million.
• Hughes Enterprise advanced its inflight connectivity with Ka/Ku dual‐band terminals and Airbus HPC Plus membership, launched a cost‐effective single‐panel LEO antenna and expanded multi‐orbit SD‐WAN and security services globally.
• In the Pay TV segment, DISH and Sling achieved a 7% increase in OIBDA per subscriber, lowered TV churn to the decade’s lowest 1.36%, grew ARPU by over 3% and closed Q1 with 5.5 million DISH and 1.9 million Sling subscribers.
• First‐quarter revenue was $3.9 billion (down 3.6% YoY) with OIBDA of $400 million (down 15%), yet EchoStar generated $77 million of operating free cash flow and expects to remain cash‐flow positive after disciplined cost and capex management.
• Boost Mobile’s cloud‐native Open RAN 5G network now covers over 80% of the U.S. population with 24,000+ live sites, 1.25 million on‐net customers and full deployment of Release 17 ahead of FCC deadlines.

Presentation

[Operator]

Greetings, and welcome to the EchoStar Corporation First Quarter twenty twenty five Earnings Please note that this conference is being recorded. I will now turn the conference over to your host, Dean Manson, Chief Legal Officer. Thank you. You may begin.

[Dean Manson, Chief Legal Officer at EchoStar]

Thank you, and good morning. Welcome to EchoStar's first quarter twenty twenty five earnings call. We will begin with opening remarks from Hamid Akavan, President and CEO followed by Paul Orban, EVP and Principal Financial Officer and John Swearinga, President of Technology and COO. We request that any participant producing a report not identify other participants or their firms in such reports. We also do not allow audio recording, which we ask that you respect.

[Dean Manson, Chief Legal Officer at EchoStar]

All statements we make during this call other than statements of historical fact constitute forward looking statements made pursuant to the Safe Harbor provided by the Private Securities Litigation Reform Act of 1995. These forward looking statements involve known and unknown risks, uncertainties and other factors that could cause our actual results to be materially different from historical results and from any future results expressed or implied by the forward looking statements. For a list of those factors and risks, please refer to our annual report on Form 10 Q for the quarter ended 03/31/2025, filed today, May 9, and our subsequent filings made with the SEC. All cautionary statements we make during this call should be understood as being applicable to any forward looking statements we make wherever they appear. You should carefully consider the risks described in our reports and should not place any undue reliance on any forward looking statements.

[Dean Manson, Chief Legal Officer at EchoStar]

We assume no responsibility for updating any forward looking statements. We refer to OIBDA and free cash flow during this call. The comparable GAAP measure and reconciliation for OIBDA is presented in our earnings release and in the case of free cash flow in our 10 Q. With that, I'll turn it over to Hamid.

[Hamid Akhavan, President and CEO at EchoStar]

Thank you, Dean. Welcome everyone. Thank you for joining us today. We have updated our format for today's earnings call to include the use of a slideshow presentation. While this information has historically been included only in our quarterly filings, we've opted to include this slide deck format as part of our prepared remarks.

[Hamid Akhavan, President and CEO at EchoStar]

Last year, we set the foundation as a global provider of connectivity and entertainment solutions and services. We drove efficiencies across all our brands and invested in profitable growth. Our unique set of assets across satellite, video, wireless and enterprise along with our U. S. Based manufacturing position us well for the remainder of 2025 and beyond.

[Hamid Akhavan, President and CEO at EchoStar]

We built upon our strong foundation in the first quarter and saw improvements in many key metrics. I'll now comment on some details across our lines of business. Wireless's performance remained strong with 150,000 subscribers net adds in the first quarter as compared to an 81,000 net loss in the same period of 2024. Our consistent marketing efforts combined with the ongoing optimization and recognition of our network performance are key factors in this success. In the first quarter, we expanded the benefits of our prepaid and postpaid offerings to both our branded stores and digital sales channels and built upon gains in combining our services under the single Boost Mobile brand.

[Hamid Akhavan, President and CEO at EchoStar]

We also increased our marketing spend and offers during the important tax return window, which seasonally increases demand for new devices and upgrades. These activities helped anchor our first quarter subscriber growth and positions us well for additional opportunities in 2025. As a testament to our excellent network experience and competitive mix of offers in the quarter, we increased our wireless subscribers to approximately 7,150,000 while improving the quality of our subscriber base as evidenced by 7.2 improvement in churn year over year and an increase in ARPU. Overall, we are satisfied with what we have managed to achieve over the past year and we'll continue to focus on profitable subscriber additions. Furthermore, in light of recent economic uncertainty, we believe we have some of the most attractive offers in the market for consumers looking to capture the best value in their mobile business.

[Hamid Akhavan, President and CEO at EchoStar]

In our Hughes business, we continue our progress in the enterprise domain. Our inflight connectivity business recently announced universal compatibility of our terminals in the Ka and Ku bands. Dual compatibility means our airline customers are not limited to one constellation enabling cost effectiveness, flexibility and an optimal passenger experience. We also recently announced membership in the Airbus HPC plus program, which gives us the ability to serve airlines with a line fit option at Airbus factory. These developments in addition to our expanded contracts for regional and wide body aircraft with Delta Airlines add to our in flight product offerings and increase our backlog.

[Hamid Akhavan, President and CEO at EchoStar]

In Q1, we began commercial shipment of a new single panel version of our electronically suitable LEO antenna. This cost effective high performance addition to the user terminal family is uniquely suited for global enterprise use due to its size, weight and ease of installation. We have signed contracts from customers in Europe and India for our SD WAN and AI ops capabilities. In Latin America, we finished deploying our multi orbit managed network to support private networks and security services on LEO and GEO satellites and secured additional demand for similar services for Brazilian national parks. Finally, our HughesNet consumer business, we closed Q1 with over 850,000 broadband subscribers.

[Hamid Akhavan, President and CEO at EchoStar]

In Q1, the performance of our Pay TV business consisting of DISH and Sling was in line with our expectations. DISH business and media sales performed well and we delivered roughly 7% growth in OIBDA per subscriber. Despite macro headwinds in the Pay TV landscape, we remain focused on acquiring and retaining the most profitable subscribers that value our service offerings. Our video segment remained focused on operational efficiency, customer loyalty and improving user experiences. These efforts helped increase ARPU and reduce non programming valuable cost per subscriber.

[Hamid Akhavan, President and CEO at EchoStar]

This work will serve us well in the remainder of 2025 as we introduce new offerings to meet evolving consumer demands and expand our cross sell opportunities with Boost Mobile. DISH TV finished the quarter with approximately 5,500,000 subscribers and churn was 1.36% compared to 1.53%, a reduction of 11% for the same period of 2024. Our lower year over year churn is result of our data driven loyalty initiatives and bundled offers. This TV churn is now at the lowest level in over a decade, excluding the pandemic. We also drove Pay TV ARPU growth with a year over year increase of over $3 or 3% due to the full effect of 2024 price increases.

[Hamid Akhavan, President and CEO at EchoStar]

Also in spite of competitive headwinds in the streaming market, we closed the first quarter with 1,900,000 Sling subscribers. Now I would like to turn it over to Paul Orban for commentary and color on the numbers.

[Paul Orban, Executive VP & CFO of Dish at EchoStar]

Thank you, Hamid. Revenue was approximately $3,900,000,000 in the first quarter, that's down 3.6% year over year, primarily due to fewer subscribers at Pay TV, partially offset by an increase in revenue from our wireless segment driven by ARPU growth and higher handset sales. OIBDA was $400,000,000 in the first quarter, a decrease of $70,000,000 year over year or approximately 15%. The decrease in OIBDA was primarily driven by increased marketing and wireless as well as decreased OIBDA from our Pay TV segment due to fewer subscribers. EchoStar generated positive operating free cash flow of $77,000,000 in the quarter, defined as free cash flow before debt service payments and non operating CapEx related to EchoStar twenty five.

[Paul Orban, Executive VP & CFO of Dish at EchoStar]

We continue to expect positive operating free cash flow in 2025 as we remain disciplined in managing our operating cost structure while growing our wireless and Hughes Enterprise businesses. Free cash flow including debt service in the first quarter was negative $172,000,000 an improvement of $55,000,000 compared to the prior year. This improvement was driven by a $299,000,000 reduction in capital expenditures including capitalized interest, primarily due to optimizing our five gs network spend, partly offset by lower cash flow from operating activities. At the end of the first quarter, our total cash and marketable securities was $5,400,000,000 a decrease of $464,000,000 compared to year end. This decrease primarily resulted from capital expenditures of $378,000,000 including capitalized interest and repurchases and redemptions of our near term maturities, partially offset by cash generated from operating activities of two zero seven million dollars Today, we received $150,000,000 from an add on issuance to our 10.5 senior secured notes from a privately negotiated transaction.

[Paul Orban, Executive VP & CFO of Dish at EchoStar]

Turning to our segment performance. Total wireless revenue in Q1 increased by 6.4% to $973,000,000 driven by 3.3% ARPU growth in higher handset sales. Service revenue grew 2.7% in Q1 sequentially, accelerated from 1.3% in Q4. Due to increased subscriber activations, the wireless OIBDA loss increased to a negative $415,000,000 compared to a negative $363,000,000 last year. Pay TV revenue decreased by 6.9% to $2,500,000,000 due to a lower average Pay TV subscriber base, partially offset by increased Pay TV ARPU.

[Paul Orban, Executive VP & CFO of Dish at EchoStar]

Pay TV OIBDA decreased to $730,000,000 from $756,000,000 while Pay TV OIBDA per subscriber increased 6.8% year over year due to lower average Pay TV subscriber base, partially offset by lower subscriber acquisition costs from fewer gross activations and lower personnel costs. We continue to focus on retaining profitable customers and remain disciplined in our cost structure. Broadband and satellite services or BSS revenue decreased by 3.1% to $371,000,000 due to lower sales of broadband services to consumers and enterprise customers, partially offset by higher hardware sales to enterprise customers. We remain focused in the near term on accelerating our enterprise revenue in order to return this segment to profitable revenue growth. ESS OIBDA increased by 8.1% to $86,000,000 from $79,000,000 in the prior year due to

[Paul Orban, Executive VP & CFO of Dish at EchoStar]

lower SG and A, including a decline in bad debt expense. With that, I'd

[Paul Orban, Executive VP & CFO of Dish at EchoStar]

like to hand it over to John to cover our network deployment progress.

[John Swieringa, President of Technology & COO at EchoStar]

Thank you, Paul. We are the worldwide leader in developing and operationalizing a cloud native open RAN five gs network. And today, the Boost Mobile Network provides five gs broadband coverage to over 80% of The US population. In combination with our partner networks, we are offering customers 99% coverage across The US. I'm also pleased to announce we have already met our June 14 FCC requirement by deploying 3GPP Release 17, a key enabler for five gs Advanced across our network.

[John Swieringa, President of Technology & COO at EchoStar]

Also, we now have more than 24,005 gs sites on air more than one month prior to our commitment date. These network enhancements further demonstrate our commitment to scaling our network and giving Boost Mobile customers access to the latest technology. As we have expanded and optimized the network, we've continued to drive a competitive customer experience and we're outperforming the competition in many markets. During the first quarter, we invested $164,000,000 in CapEx compared to $391,000,000 in Q1 of twenty twenty four, as we continue to transition from the initial build out of our network to running, optimizing and monetizing it. A key priority for us continues to be migrating as much traffic as possible to our owned and operated five gs network to provide our pure five gs experience to our customers and reap the benefits of owner economics.

[John Swieringa, President of Technology & COO at EchoStar]

Today we have over 1,250,000 customers on net and are loading more than 75% of compatible devices on our network in the accelerated markets. We continue to focus on activating an increasing percentage of new customers directly on the Boost Mobile network, as well as upgrading existing customers to our growing portfolio of Boost Mobile network compatible devices. Just last month, we expanded our device portfolio to include iPad and Apple Watch with Android options in the near term pipeline. We will continue to ramp up our progress throughout the year. In addition, we look forward to working with the FCC to increase CBRS power levels through its pending rulemaking.

[John Swieringa, President of Technology & COO at EchoStar]

We see this as a key step to improving spectral efficiency, increased utilization of this band and aligning The U. S. With the rest of the world. Now I'd like to turn it back to Hamid for a few short closing comments.

[Hamid Akhavan, President and CEO at EchoStar]

Thank you, John. We are pleased with the performance of our business lines from the first quarter. In summary, our 2025 operating plan targets a positive operating free cash flow, optimized subscriber profitability from our pay TV segment, expansion of Fuze enterprise and continued growth from Boost Mobile. With that, we'll open it for Q and A from the analyst community.

[Operator]

Thank you. And at this time, we'll conduct our question and answer telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, And our first question comes from Sebastiano Petti with JPMorgan Chase and Company.

[Operator]

Please state your question.

[Sebastiano Petti, Senior Research Analyst at JP Morgan]

Hi, thank you for taking the question. Strong subscriber results in wireless, but success based OpEx is pressuring EBITDA in the segment there. While you are making progress bringing customers on net, just any help thinking about what some of the other potential cost levers could be within that segment as we think about the glide path to improved EBITDA drag there? And then just another broader term kind of question. Help us think about maybe perhaps your LEO, your low earth orbit strategy, launching some satellites, but how do you see this fitting within your broader product suite in terms of not only perhaps on the D2D side in wireless, but also some of your enterprise efforts?

[Sebastiano Petti, Senior Research Analyst at JP Morgan]

Thank you.

[Hamid Akhavan, President and CEO at EchoStar]

Great. Thanks for the questions. There are two here. I will take the first one and maybe John can add to it. In terms of improving the economics of our new subscribers coming on, I think the first thing is we are adding now the significant majority of our customers directly on net.

[Hamid Akhavan, President and CEO at EchoStar]

I think having the owner economics of having the customers be on our own MNO network is probably one of the biggest improvements we can make in cost and you see that trend will continue. So I think about 75% of the customers being added now that come directly on net and John you may wanna correct me on that one if I don't have the right number.

[John Swieringa, President of Technology & COO at EchoStar]

Yeah. Thanks, Amit. That's with respect to compatible devices. So one of the things that we're doing, Sebastiano, thanks for the question, is making sure when we have a handset that is in a market that's open for Boost Mobile with Bonner, that we're batting a very high percentage of getting that device on net. We see that expanding in the back half of the year as a higher number of our devices that we're distributing are compatible with the network.

[John Swieringa, President of Technology & COO at EchoStar]

Just to give you a feel for it, a good example would be, additional compatible iPhones with 15, 16s and 16Es relative to what we've been previously distributing that's been non compatible. On top of that, we have a lot of opportunities for upgrades of existing customers on compatible devices. So you should see those numbers expand in the back half of the year and going forward. In addition to that, with overall OpEx, we're certainly focused where we have the biggest opportunity to win. So you'll see us in the major markets where we've got strong network, making sure that we're bending our business to local efforts there.

[John Swieringa, President of Technology & COO at EchoStar]

Back to you Hamid for your update.

[Hamid Akhavan, President and CEO at EchoStar]

And then we also working certainly not anything to report today in this earnings call, but we are working on a number of different more fundamental initiatives around distribution and how we go to market in routes that may be more value enhancing and less expensive, more efficient. So those will show up starting back half of the year and into 2026. We certainly are not only focused on data optimization of the business but also we're looking at long term trends of how we can change the economics fundamentally. So more to come on that one as the year progresses and in a couple of few quarters from now. On the LEO business, we have been hard at work.

[Hamid Akhavan, President and CEO at EchoStar]

We are one of those companies don't make too many announcements without having so much without a substance. We think that plenty in the market making that we don't need to participate in that. But we certainly have been very busy in terms of getting our plans ready and engineering ready and we will make announcements when we feel it's appropriate. But we certainly intend to be in the market as the leading provider of global direct to device connectivity using our S band rights internationally and AWS for domestically. We are very much focused on it.

[Hamid Akhavan, President and CEO at EchoStar]

It is a priority for us. It's one of the most important strategic priorities in terms of business development and we just don't include that in our prepared remarks, simply because, we don't think it's in our best interest to speak today until we have more substance to deliver to the market.

[Sebastiano Petti, Senior Research Analyst at JP Morgan]

That makes sense. Then, Hamid, if I could one follow-up maybe for Paul, where will the LEO assets sit under EchoStar outside of Hughes or at Hughes somewhere else? Any color on how to think about that?

[Hamid Akhavan, President and CEO at EchoStar]

Leo assets outside of Hughes, we don't really we have a small Leo asset with Lyra and that's our Syrian assets that we I think that is still is at EchoStar level. Most of the assets are at the parent. At the parent level and the investments we'll be making, mean, have not obviously disclosed any of this, but I don't believe that we would put those assets Hughes. I think we would keep the assets at the SaaS level with the investments that we would make going forward on the LEO side.

[Sebastiano Petti, Senior Research Analyst at JP Morgan]

Makes sense. Thank you very much.

[Operator]

And

[Operator]

your next question comes from Rick Prentiss with Raymond James. Please state your question.

[Brent Penter, Associate Analyst - Equity Research at Raymond James Financial]

Hey, thanks everyone. This is Brent Pinter on for Rick. First question, as you've continued to ramp net adds in wireless, what would you say is resonating most in the market that's helping you build this momentum specifically? And given 1Q is a seasonally slow period typically, is it right to think you should be able to improve further from this 150 level?

[Hamid Akhavan, President and CEO at EchoStar]

To the first part of the question, look, we have some of the most attractive offers in the market in spite of the headlines that everybody else has in terms of having their offers be in best in the market or unique in the market in terms of value. When you look at the actual details of what is included and what is not, ours that turns out to be the best value and there's some hidden costs and hidden requirements in everybody else's offers in a way that when people ultimately unpack and manage to unpack all the nuances that each offer includes, they realize that our offers are very attractive. The other thing is that we also benefited from a significant reduction in churn as I mentioned in my prepared remarks. We've seen we retain customers in a more significant way which helps us with the net add. That's a testament to the great network that we have.

[Hamid Akhavan, President and CEO at EchoStar]

And also our contributions from digital sales is now very significant. So we did not have that in the past at Boost Mobile historically been an indirect branded shop sales, but now we've seen a very significant contribution from the digital channel. Would not under to the second part of your questions, I would not label the first quarter as historically low for us that is not true. The tax season has always been a very good season for us simply because the younger value conscious segment in a market that has been our bread and butter and continues to be our focus have always used the tax return opportunity to upgrade their mobile devices and services. We so we consider first quarter actually one of the more productive quarters for us.

[Hamid Akhavan, President and CEO at EchoStar]

I will not make any forward statements about our projections for the second quarter. But I would say that our goal for the year is to deliver positive, good ads for the rest of every quarter going forward. We're not going to look back in terms of growth any longer that we're on a growth path and we're not going to look back. So can't make you can't give you a definitive statement about our performance, but every quarter will be good and seasonality will definitely play a role and first quarter is usually a good quarter for us.

[Brent Penter, Associate Analyst - Equity Research at Raymond James Financial]

Got it. And then one more. In the 10 Q, you all noted CapEx should drop and then it sounds like it will increase again as you move toward your build out deadlines. How should we think about the timing of when you'll need to ramp CapEx again to meet those deadlines?

[Paul Orban, Executive VP & CFO of Dish at EchoStar]

No, that is accurate there. You'll see CapEx lower in 2025 than we've shown you in 2024 and it'll ramp up as our deadlines approach. However, given the milestones that we've met recently, the 2026 deadline that we have more than likely will be pushed out to future years. So we will move to more of a success based build, meaning when you look at the MVNO roaming costs that we pay for a tower and the operating costs of those, if you discount those back to today's dollars and it costs more than what it costs to build a tower, we're going to build those towers. So it's going to ebb and flow based on where subscribers are at and what the need

[Paul Orban, Executive VP & CFO of Dish at EchoStar]

is.

[Brent Penter, Associate Analyst - Equity Research at Raymond James Financial]

Got it. Thank you.

[Operator]

Your next question comes from Marlene Pereiro with Bank of America Securities. Please state your question.

[Marlane Pereiro, High Yield Credit Research at Bank of America Merrill Lynch]

Great. Thank you for taking my questions. I just wanted to ask on, Hughes, on the bond specifically. I saw that you repurchased some of your Hughes secured bonds due next year, and you also issued the 150,000,000 of the new spectrum notes. So I just want to be clear that those are those two related?

[Marlane Pereiro, High Yield Credit Research at Bank of America Merrill Lynch]

And also, do you have some other uses for proceeds? The incremental capacity on the spectrum notes, how are you thinking about utilizing that? And do you expect to continue repurchasing the Hughes bonds?

[Hamid Akhavan, President and CEO at EchoStar]

Thank you, Marlene for the questions. We obviously, as you know, as Paul has mentioned, we are sitting on a significant amount of cash on balance sheet as a result of the financing we had a few months back. We need to put that cash to use. And one of the best uses of that cash for us is some of our own securities that are in the market. These are undervalued securities.

[Hamid Akhavan, President and CEO at EchoStar]

And when we look at it, diversify our investments for sure. We're not concentrating on any single source, but when we look at where we get the highest return with the lowest risk, one of those areas is buying our own debt that Paul decided to do. It's not a very significant amount. So it doesn't really move the needle in terms of our overall financials, but certainly is part of the basket of securities that Paul is investing in the short term and we benefit from. The second part of the question had to do with the 150,000,000 raise I believe sale of additional spectrum bank bonds that we also had in there.

[Hamid Akhavan, President and CEO at EchoStar]

And that's an obligation we have had to a party that needed to, that we need to satisfy. We had committed to offer some additional bonds, issue some additional bonds that it had been due for many months and we just honored that obligation. There's a lot of demand for that security for that bond and we just wanted to make sure that we meet that obligation. There was nothing else more to it.

[Paul Orban, Executive VP & CFO of Dish at EchoStar]

Yeah, both unrelated.

[Marlane Pereiro, High Yield Credit Research at Bank of America Merrill Lynch]

Got it, great. And then just on the buyback on the bond, why not the unsecured versus the secured?

[Hamid Akhavan, President and CEO at EchoStar]

There was no particular reason for it. We may be selling those bonds back at example, who knows? I think that was a decision that was made. Don't think that you could read anything into it in terms of secured versus unsecured.

[Marlane Pereiro, High Yield Credit Research at Bank of America Merrill Lynch]

Got it. And one more if I could. Is there any update that you can provide on the status of the litigation with the DBS bondholders? There were reports earlier this week that a mediator could possibly be appointed, so just wondering if maybe that might signal there could be room for a settlement with bondholders, or even reopen the door for discussions with GTV.

[Dean Manson, Chief Legal Officer at EchoStar]

Right. No, we don't have comment on, that litigation.

[Marlane Pereiro, High Yield Credit Research at Bank of America Merrill Lynch]

Great. Thank you very much. That was helpful.

[Operator]

And your next question comes from Walter Piecyk with LightShed. Please state your question.

[Walter Piecyk, General Partner at LightShed Ventures]

Thanks. Let me can you talk about what investments you're gonna make in the

[Operator]

Walter, are you breaking up a bit? Could you just repeat your question or pick up the handset?

[Walter Piecyk, General Partner at LightShed Ventures]

Hold on for one sec. Let me come back to me in the queue. I might need to make some technical adjustments. Bye.

[Operator]

Thank you. Your next question comes from Brian Kraft with Deutsche Bank. Please state your question.

[Bryan Kraft, Analyst at Deutsche Bank]

Good morning. I had a couple of wireless questions. I guess, first, I was wondering if you could just provide any color on where the new Boost customers are primarily coming from. Secondly, I wanted to ask you about your ability to utilize third party financing to fund handset subsidies and EIP working capital usage, So you don't have to use your own cash flow to fund them and obviously allow you to grow faster. So just wanted to see where you are on that.

[Bryan Kraft, Analyst at Deutsche Bank]

And then lastly, I guess, just want to ask, are you looking at any opportunities to partner with other wireless operators in jointly building out any of your spectrum bands as a way of maybe doing it in a more capital light way? And then also, if you're open to either selling or leasing maybe some pieces of the spectrum that you have to other operators where you might not be using it and could use it to generate some additional cash flow or if it's sold bring capital in? Thank you.

[Hamid Akhavan, President and CEO at EchoStar]

The three different questions, I try to remember all and parse them out. The first question is that we're getting customers across all from all of the three other players in the market at Boost Mobile. We're particularly pleased with the fact that we're getting some of the better customers because our ARPU on prepaid to our understanding is highest in the market today. We have the highest prepaid ARPU and is rising and has been historically highest has been. And we have had historically lowest churn now in our in prepaid and very competitive with best in the market churn from the others.

[Hamid Akhavan, President and CEO at EchoStar]

It points out that we're getting the better a good cohort of subscribers. We're not getting subscribers that don't have any other options. I think it is a testament to the fact that the value overall is it's considered the best. We're actually getting net positive porting by a significant amount. Last year we mentioned that beginning of the year we were net port out at the beginning of twenty twenty four.

[Hamid Akhavan, President and CEO at EchoStar]

By end of twenty twenty four, we were completely had to reverse the situation month to month. Every month we got the port ins got significantly higher. And today we have a vastly higher port in and port out by a very significant amount. We're obviously not reporting that which again is a testament to customers of recognizing the Boost Mobile's network and value being the best in the market. When it comes to, I guess, device financing outside of our own capital, Paul, maybe you can take that piece.

[Paul Orban, Executive VP & CFO of Dish at EchoStar]

Yes, thanks, Samik. We definitely have access to various device finance partners. We first want to use our own cash on balance sheet, but that may change over time if we feel it's strategic for us and we'll be obviously opportunistic in that marketplace.

[Hamid Akhavan, President and CEO at EchoStar]

And as it comes to spectrum, look, we I generally don't comment on about any sort of spectrum related or trading of assets that's not appropriate for the earnings call here. Always have every option available to us. We the moment, feel very comfortable where we sit in terms of our spectrum ownership. There's a few things in the market that FCC is considering that would even enhance our position such as enhancing the power level on CBRS, which would be vastly attractive to us. And so, we believe there's several ways for us to raise capital and have enough resources to be and remain competitive in the market.

[Hamid Akhavan, President and CEO at EchoStar]

And so we're not closing doors on anything, but certainly I'm not here to discuss any sort of M and A or trading of spectrum.

[Bryan Kraft, Analyst at Deutsche Bank]

Thanks. If I could ask just one quick follow-up. Could you provide any color on the prepaid versus postpaid mix of the new connects?

[Hamid Akhavan, President and CEO at EchoStar]

Yes. Look, we I want to start by saying that responding to that by saying, we actually have stated and we are continuing and you will see us even accelerate what we call merger or amalgamation of postpaid and prepaid. I think the concept of post versus prepaid is a fifty year old concept that is no longer has significant value. When you're talking about how much people pay upfront versus how much people pay, it really that whole gray scale of payment and credit ratings is something that we are focused on and we will eliminate and we are well down the path of doing that. Having said that, as therefore as a result of that, it doesn't make sense for us to talk about prepaid postpaid as we are working very hard and you see us do this in the next couple of few quarters.

[Hamid Akhavan, President and CEO at EchoStar]

We eliminate the concept of prepaid postpaid entirely. But just to answer your question, because there may be a curiosity about what has it been in the past historical. If I look at today, if I look at first quarter and use the traditional definition of postpaid, I would say roughly one third of net adds in the first quarter were postpaid net adds. Just about one third was postpaid of the 150.

[Bryan Kraft, Analyst at Deutsche Bank]

Thank you very much.

[Bryan Kraft, Analyst at Deutsche Bank]

Understood. Thank you.

[Operator]

Thank you. And our next question comes from Walter Piecyk with LightShed. Please state your question.

[Walter Piecyk, General Partner at LightShed Ventures]

Think that was not my technical my virus was, I mean, so misses. Can you talk about without I know you don't want to give up any like competitive dynamics, but just in general, as we progress through 2025, is there a willingness to invest in more distribution, more advertising, things to kind of get the channel going? And I'm thinking also about Comcast is certainly thinking, it feels like a pivot after they saw Charter. There was a lot of concern that when Charter was giving away free lines for a year, something that didn't work for Sprint, God knows how many years ago, but they give away free lines for a year. They converted a lot of those to paying customers to Charter.

[Walter Piecyk, General Partner at LightShed Ventures]

Comcast is now replicating that and and plans to be aggressive. You know, not to ask if you're gonna do three lines, are you you know, is there a kind of a plan now that you've kind of gotten over the hump of positive net ads and looks like you're gonna be net adds for the next couple of quarters, churn is obviously much more reasonable now. Like you should be I would think that you now consider next steps in terms of investment for growth. I'm just curious if you can speak to that at all in terms of what the game plan is here.

[Hamid Akhavan, President and CEO at EchoStar]

Well, so yeah, absolutely. Listen, nothing that we have delivered to date has been accidental in the sense that we put a lot of foundation in 'twenty four was like fixing the basics and putting the foundation to get the good customers, to get value customers that were higher end of the value consciousness coming to us and you'll see the result of that today and we are very pleased and proud of what we have done. We are working on additional distribution channel. Digital, as already as I mentioned, has become a very significant contributor to our net adds of the quarter. And we have seen us even add what traditionally people have been referring to us as postpaid.

[Hamid Akhavan, President and CEO at EchoStar]

Now we are increasing we will be increasing our routes to market. We are working on fundamental ways from a digital side, from a national retail side, from other non traditional distribution methods that require significant amount of in house development in business development before we actually surface them in the market. And I think you have touched on something important and that is routes to market and access where people can buy from us and how we deliver the service and product to them. I think that's the key focus areas for us. I can only comment to this level and just say that yes, more to come.

[Hamid Akhavan, President and CEO at EchoStar]

I'm not promising that be necessarily in the very, very immediate for instance this quarter or but it's not it certainly is not too far and we will, you'll see the result of that towards the end of this year and beyond.

[Walter Piecyk, General Partner at LightShed Ventures]

The second question is Comcast downplays the impact that the kind of moving on the Verizon MVNO contract that they have has on them going forward. However, they're still restricted under that contract to only sell bundled services where maybe there's an opportunity for them to sell to customers that they don't currently have, given that they're losing broadband customers. What's your viewpoint on a willingness to do an MVNO deal with them? And I guess more importantly, you know, if you did an MVNO deal with them, do they get the benefit of would an Xfinity customer get the benefit of not only your network, but the ability of those customers to then roam onto your AT and T and T Mobile roaming partnerships?

[Hamid Akhavan, President and CEO at EchoStar]

I cannot comment about Comcast intentions and what might be best for them. Obviously, only they can comment on that. I can comment about our ability and willingness to partner. Look, we are going to look at every opportunity that comes our way. We are not close minded to any sort of partnerships.

[Hamid Akhavan, President and CEO at EchoStar]

We have demonstrated that globally in many ways in our other parts of business. We're doing that today with content providers. We're happy to do that on a mobile business with anybody in a wholesale business. There are some discussions that would have to happen obviously with roaming partners. We cannot do this unilaterally without their support.

[Hamid Akhavan, President and CEO at EchoStar]

But if the economics of a deal be such that is conducive to value enhancing to everyone, I think we would be working we'd be willing to consider and capitalize any discussions. I absolutely do not want to comment or imply in any way that we are discussing anything with Comcast or we are approaching Comcast. I want to be on the record that I am not commenting in any way about this is just a speculation. You asked me a question about Comcast and I just referred to it, but I certainly don't want any implications that we are working with Comcast on anything.

[Walter Piecyk, General Partner at LightShed Ventures]

Does that work on the AT and T? If you were able to do something with them, would those customers be able to then utilize the roaming relationships that you already have with AT and T and T Mobile?

[John Swieringa, President of Technology & COO at EchoStar]

Technologically, yes. Hey, Walt, it's John. Technologically, There's solutions and paths there, but it it would come down to a business deal.

[Walter Piecyk, General Partner at LightShed Ventures]

But but does AT and T T Mobile restrict you from doing a a pass through deal like that?

[John Swieringa, President of Technology & COO at EchoStar]

Yeah. Think we've sort of already answered that. It would it would require cooperation from all parties to advance any wholesale relationships.

[Walter Piecyk, General Partner at LightShed Ventures]

Got it. Thank you.

[Operator]

And your next question comes from Adam Rhodes with Octus. Please state your question.

[Adam Rhodes, Senior Credit Analyst at Octus]

Hi, everyone. Thanks for taking the question. You already touched on it briefly, but direct to device has certainly become a more mainstream topic. So a couple of years ago, when you announced the EchoStar Dish combination, each of the company's SPM assets discussed the significant rationale for the transaction. Can you provide any color on how EchoStar's unique positioning as a co operator of terrestrial and satellite networks differentiates it and benefits it compared with others in the space?

[Hamid Akhavan, President and CEO at EchoStar]

Yeah. Ana, thank you for the question. We believe we have almost every we tick every box that is required to make the number one strategic play there. Most important of all, we do have the same spectrum and rights to it trust really and space to make it work. Obviously, our SPAN rights globally, highest ITU level authorization.

[Hamid Akhavan, President and CEO at EchoStar]

And then on The U. Obviously U. We have the AWS-four, all of that is so we don't have to work with anybody else. We don't have to find many other parties to collaborate with us to complement or complete the spectrum picture in our spectrum is not utilized in a way that we have to clean it, clear it like other bands, L bands and other bands have to do. So in a way, I think that highway is paved and ready for us.

[Hamid Akhavan, President and CEO at EchoStar]

But in addition to that, we have two other things that very almost nobody else has. We have both a satellite operator, manufacturer, technology provider, as you have known from our comments on Hughes. And we are a key supplier to OneWeb and we have been a supplier to other LEO systems in the past, GlobalStars and others. So we are well positioned from the space perspective. And then we also the five gs ORAN national provider, the largest ORAN provider in the world practically now with partnership and roaming agreements with every carrier around the world.

[Hamid Akhavan, President and CEO at EchoStar]

So marrying all of this together for us is just the most natural thing because we have it all in house. We are the only company that can do it all in house. And so now you may there may be a natural question as to why is it taking time. And the answer is we did not want to and we would not have built a system that is not five gs, ORAN, all standards, we would not have done that. Simply because one of the benefits of the business case, one of the ways that the world will benefit from this is that it built into standard handsets that we do not have to manufacture, we do not have to subsidize, we do not have to uniquely market and distribute rather be built into every device that gets shipped.

[Hamid Akhavan, President and CEO at EchoStar]

Those chipsets are in the making now and the handsets will be available. And we don't want to have a satellite up there. If I had a satellite today, I would not launch it today. I would not because the satellite has a life of several years in a LEO system. And if the satellite goes up there, but there are no devices to talk to, what is the point?

[Hamid Akhavan, President and CEO at EchoStar]

What is the point of depreciating a very expensive asset up in the sky without being able to get revenue from it? So the timing of when the satellite has to go up versus what is the available population of usable devices, compatible devices on earth is a timing decision that is very important. And that's why we are timing for that optimized window. It is not that we are late. If anybody else is doing it earlier, either they're not doing it based on 3GPP five gs standard or if they do it, going to end up with devices that are not compatible with it.

[Hamid Akhavan, President and CEO at EchoStar]

So we are very excited about it. I think we, as I mentioned earlier to a different question, we're not going to make announcements in overhanging market until we have the proper substance at hand. But we are not missing the window of opportunity. We will maximize our use, our business case and we will be out there taking advantage of this opportunity that's uniquely presented to us. Think that thanks for the question.

[Hamid Akhavan, President and CEO at EchoStar]

Operator, I think we should move to one more question given that we are reaching close to the end of the hour.

[Operator]

Thank you. And the last question for today comes from Sam McHugh with BNP Paribas Asset Management. Please state your question.

[Sam McHugh, Analyst at BNP Paribas]

I've done three short follow-up questions, guess. First on the net adds, you talk about government support programs, and I guess that's maybe lifeline. Could you maybe just dimension how much of a boost they are to net adds at the moment? That's number one. Second question was on the Hughes secured buyback.

[Sam McHugh, Analyst at BNP Paribas]

Why the Hughes box, not the EchoStar box? And I guess why buy secured versus unsecured? I think you said earlier there was no reason, but I think the unsecured were actually cheaper than the secured at the time. And then third, I think just to clarify the T Mobile and AT and T deals from what I always understood preclude you from white labeling. I think the T Mobile deal was public.

[Sam McHugh, Analyst at BNP Paribas]

You basically are saying you couldn't just offer an MVNO without pre agreement from AT and T and T Mobile. Thanks very much.

[Hamid Akhavan, President and CEO at EchoStar]

So different questions that we remember. There was a question on lifeline. So when ACP program kind of terminated, we started migrating our customers to our prepaid and various brands that we have. So we're not no longer breaking that out as that has become a bit of a mix in a way that it doesn't naturally lend itself to individual separate reporting. So we're not breaking that up.

[Hamid Akhavan, President and CEO at EchoStar]

There was a question about what was the second question? I apologize quickly. Answered that previously. You should not read to it. I mean, fact that we're buying it was just a question that I think that was a fair question.

[Hamid Akhavan, President and CEO at EchoStar]

What do we buy? What assets we buy? I'd suggest you don't read anything extra to it other than the fact that we thought that was available to us and it was available to us at a reasonable price and we thought we could buy it from a seller that could sell it to us for the proper amount. And so there's no strategic, no special strategic rationale for why we did A versus B. We could have done the other one if we had access to it in a reasonable way.

[Hamid Akhavan, President and CEO at EchoStar]

And then the third question was I think that John maybe you want to answer that one.

[John Swieringa, President of Technology & COO at EchoStar]

Yeah, hi, it's John again. First of all, we've got strong relationships with AT and T and T Mobile. We're on track with those partnerships and they're productive. To the extent we want to enter new business arrangements with them such as wholesale, that would require a new business deal and new cooperation to enter the wholesale market in a way that we could use their roaming services.

[Hamid Akhavan, President and CEO at EchoStar]

And you would expect that because if somebody shows up here for a wholesale, depending on volume of business to bring to the table, on what is the business case looks like. Certainly there's no automatic on any wholesale deal. In my life, I've never seen a wholesale deal that is pre wired. When somebody shows up, it's always a custom discussion, custom unique negotiations on economics. We cannot make a statement on behalf of anybody else as to whether they would agree or accept that in any custom negotiation what the outcome would be.

[Hamid Akhavan, President and CEO at EchoStar]

So we're not answering you with a very tangible yes or no simply because the real answer, the proper answer, it depends. I think we can take one more question given that we still have a couple minutes left. So operator, let's please take one last question.

[Operator]

Yes. And our final question comes from Jonathan Chaplin with New Street Research. Please state your question.

[Jonathan Chaplin, Lead Analyst at New Street Research]

Thanks, Hamid. I'm wondering if you

[Jonathan Chaplin, Lead Analyst at New Street Research]

could give us a little bit

[Jonathan Chaplin, Lead Analyst at New Street Research]

more color on your LEO aspirations. We saw that some LEOs have been launched. I think that the total plan is for '28. I'm wondering how many have been launched so far. And then are you going to be able to do direct device communications from this constellation?

[Jonathan Chaplin, Lead Analyst at New Street Research]

And if not, wondering how discussions with maybe Starlink or Kuiper may have progressed on that front? Thank you.

[Hamid Akhavan, President and CEO at EchoStar]

So the LEO system that we have had historically and we are in the process of continuing work with it. It's an IoT in what we call a narrow band. It's not designed, we have never designed it and it's never been meant to do a direct to consumer mobile device in your pocket. We call that a LiDAR system. That's a Syrian system that we have had.

[Hamid Akhavan, President and CEO at EchoStar]

And the short answer to that is that we're not targeting it for that. Having said that, I want to be here mentioning that we have been doing messaging to device directly to mobile phones. Like for instance, say Pixel phone, Google Pixel phone in Europe now using our S band for a couple of three years now. And that's been commercially available and there are commercial customers on it. We can easily do the same thing in The United States.

[Hamid Akhavan, President and CEO at EchoStar]

So doing the messaging that some of the other companies have done, just pure messaging in regional shape or forms here or there, it's not something in fact we did this before anybody else had done it. And we have done it all in house assets. There's no partnership required between a mobile carrier and a space carrier. We've done it all in house and we can do that. But we're not focusing on that because our aspirations for direct to device is to bring in the service that would be undifferentiable from what you already use in your mobile device in your pocket, whether it be an Android phone or iPhone, iOS phone, anywhere in the world.

[Hamid Akhavan, President and CEO at EchoStar]

And that is our aspiration. Nobody does that today in a proper way. If anybody is doing that or is planning to do that in advance 2028, as you mentioned 2028, I don't know. I want to say that it is either going be regional, it's going have incredible restrictions, you're to get closer within hundreds of miles or kilometers on the border of any country, you're to start interfering with the neighboring countries, carriers and networks. Yes, there are bits and pieces of, guess, subcritical solutions that are not of any interest to us.

[Hamid Akhavan, President and CEO at EchoStar]

Our interest is a universal solution everywhere, no interference, no coverage holes, no restrictions. And that nobody's ahead of us. And I don't believe anybody's going to be ahead of us.

[Jonathan Chaplin, Lead Analyst at New Street Research]

Thanks, Amit. And would you pursue that with your own consolation or would it make more sense to partner?

[Hamid Akhavan, President and CEO at EchoStar]

Look, certainly do not rely on anybody in order to get this thing done because we can do it all. Having said that, we are commercial animals just like every other operator in the world. If the pieces, parts of the picture can be complemented, provided, helped produce better by other people, we would absolutely take advantage. So there's no pride of ownership here. There's a pride of the ability to do it here because we have all the unique assets that over the past fifteen years, EchoStar shareholders have created with a vision they've had starting fifteen or twenty years ago buying these assets when nobody else was thinking of them.

[Hamid Akhavan, President and CEO at EchoStar]

They bought every pieces of it and brought them together with a view that a day like this, we would be sitting here having all of it in house. Now that doesn't give me the permission or pride to say if somebody brought something better to the table that I could do even better on my own, that I would walk away from it. Would absolutely take advantage of it.

[Jonathan Chaplin, Lead Analyst at New Street Research]

Got it. Thanks, Hamid.

[Hamid Akhavan, President and CEO at EchoStar]

Thank you again.

[Operator]

You.

[John Swieringa, President of Technology & COO at EchoStar]

See you guys in a quarter.

[Operator]

And with that, we conclude today's conference. All parties may now disconnect. Have a good day.

Participants

Executives

• Dean Manson, Chief Legal Officer
• Hamid Akhavan, President and CEO
• Paul Orban, Executive VP & CFO of Dish
• John Swieringa, President of Technology & COO

Analysts

• Sebastiano Petti, Senior Research Analyst at JP Morgan
• Brent Penter, Associate Analyst - Equity Research at Raymond James Financial
• Marlane Pereiro, High Yield Credit Research at Bank of America Merrill Lynch
• Walter Piecyk, General Partner at LightShed Ventures
• Bryan Kraft, Analyst at Deutsche Bank
• Adam Rhodes, Senior Credit Analyst at Octus
• Sam McHugh, Analyst at BNP Paribas
• Jonathan Chaplin, Lead Analyst at New Street Research