filings.toolsEchoStar 10-Q 2025-06-30
Filed 2025-08-01. 8 sections, 430K characters. Original on sec.gov · Markdown · JSON
Cover and table of contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025**.**
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO .
Commission File Number: 001-33807
EchoStar Corporation
(Exact name of registrant as specified in its charter)
| | |
|---|---|
| Nevada | 26-1232727 |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| | |
| 9601 South Meridian Boulevard | |
| Englewood**,** Colorado | 80112 |
| (Address of principal executive offices) | (Zip code) |
(303) 723-1000
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| | | | | |
|---|---|---|---|---|
| Title of each class | | Trading****Symbol(s) | | Name of each exchange on which registered |
| Class A common stock, $0.001 par value | | SATS | | The Nasdaq Stock Market L.L.C. |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ◻
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ⌧ No ◻
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| | |
|---|---|
| Large accelerated filer ☒ | Accelerated filer ☐ |
| | |
| Non-accelerated filer ☐ | Smaller reporting company ☐ |
| | |
| | Emerging growth company ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of July 24, 2025, the registrant’s outstanding common stock consisted of 156,367,964 shares of Class A common stock and 131,348,468 shares of Class B common stock.
TABLE OF CONTENTS
PART I — FINANCIAL INFORMATION
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
Unless otherwise required by the context, in this report, the words “EchoStar,” the “Company,” “we,” “our” and “us” refer to EchoStar Corporation and its subsidiaries, “DISH Network” refers to DISH Network Corporation, our wholly owned subsidiary, and its subsidiaries, and “DISH DBS” refers to DISH DBS Corporation, a wholly-owned, indirect subsidiary of DISH Network, and its subsidiaries.
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including, in particular, statements about our plans, objectives and strategies, growth opportunities in our industries and businesses, our expectations regarding future results, financial condition, liquidity and capital requirements, our estimates regarding the impact of regulatory developments and legal proceedings, and other trends and projections. Forward-looking statements are not historical facts and may be identified by words such as “future,” “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “estimate,” “expect,” “predict,” “will,” “would,” “could,” “can,” “may,” and similar terms. These forward-looking statements are based on information available to us as of the date of this Quarterly Report on Form 10-Q and represent management’s current views and assumptions. Forward-looking statements are not guarantees of future performance, events or results and involve known and unknown risks, uncertainties and other factors, which may be beyond our control. Accordingly, actual performance, events or results could differ materially from those expressed or implied in the forward-looking statements due to a number of factors, including, but not limited to, those summarized below:
SUMMARY OF RISK FACTORS
Risks Relating to the Pending FCC Review
| ● | In response to the uncertainty created by the FCC inquiries, we may take one or more significant actions in order to protect our interest in our Wireless Licenses and other assets, which actions could negatively impact your investment. |
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| ● | The FCC’s review of our compliance with network build-out requirements could lead to the loss or impairment of certain of our existing spectrum licenses. |
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Competition and Economic Risks
| ● | We face intense and increasing competition from providers of video, broadband and/or wireless services. Changing consumer behavior and new technologies in our Pay-TV and/or Wireless business may reduce our subscriber activations and may cause our subscribers to purchase fewer services from us or to cancel our services altogether, resulting in less revenue to us. |
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| ● | We face certain risks competing in the wireless services industry and operating a facilities-based wireless services business. |
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| ● | Our pay-TV competitors may be able to leverage their relationships with programmers to reduce their programming costs and/or offer exclusive content that will place them at a competitive advantage to us. |
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| ● | Through the MNSA and the NSA, we depend in part on T-Mobile and AT&T to provide network services to our Wireless subscribers. Our failure to effectively manage these relationships, including without limitation, our minimum commitments, any system failure in their wireless networks, interruption in the services provided to us and/or the termination of the MNSA or the NSA could have a material adverse effect on our business, financial condition and results of operations. |
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i
| ● | We compete with the MNOs whose networks we partially rely on to provide wireless services to our customers, and they may seek to limit, reduce or terminate our network access to the extent that it becomes competitively advantageous to do so. |
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| ● | If we are unable to take advantage of technological developments on a timely basis, or at all, we may experience a decline in demand for our services or face challenges in implementing or evolving our business strategy. |
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Operational and Service Delivery Risks
| ● | Any deterioration in our operational performance, subscriber activations and churn rate and subscriber satisfaction could adversely affect our business, financial condition and results of operations. |
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| ● | We depend on others to provide the programming that we offer to our Pay-TV subscribers and, if we fail to obtain or lose access to certain programming, our Pay-TV subscriber activations and our subscriber churn rate may be negatively impacted. |
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| ● | We have limited satellite capacity and any failures or reduced capacity, caused by, among other things, operational and environmental risks, could adversely affect our business, financial condition and results of operations. |
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| ● | Extreme weather may result in risk of damage to our infrastructure and therefore our ability to provide services, and may lead to changes in federal, state and foreign government regulation, all of which could materially and adversely affect our business, results of operations and financial condition. |
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| ● | We rely on a single vendor or a limited number of vendors to provide certain key products or services to us, and the inability of these key vendors to meet our needs could have a material adverse effect on our business. |
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| ● | Changes in trade policies, including, but not limited to, tariffs and other restrictions, could increase, among other things, our costs, disrupt our supply chain and negatively affect our business, operations and financial condition. |
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| ● | We depend on independent third parties to solicit orders for our services that represent a meaningful percentage of our total gross new subscriber activations. |
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Risks Related to our Human Capital
| ● | We rely on highly skilled personnel for our business, and any inability to hire and retain key personnel or to hire qualified personnel may negatively affect our business, financial condition and results of operations. |
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| ● | Our business growth and customer retention strategies rely in part on the work of technically skilled employees. |
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Risks Related to our Products and Technology
| ● | Our business depends on certain intellectual property rights and on not infringing the intellectual property rights of others. |
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| ● | We are, and may become, party to various lawsuits which, if adversely decided, could have a significant adverse impact on our business, particularly lawsuits regarding intellectual property. |
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ii
| ● | If our products contain defects, we could be subject to significant costs to correct such defects and our product and network service contracts could be delayed or cancelled, which could adversely affect our revenue. |
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Risks Related to Cybersecurity
| ● | We have experienced and may experience in the future consistent cyber-attacks and attempts to gain unauthorized access to our systems and any failure or inadequacy of our information technology infrastructure and communications systems or those of third parties that we use in our operations could disrupt or harm our business. |
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| ● | The confidentiality, integrity and availability of our services and products depends on the continuing operation of our information technology and other enabling systems. |
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Acquisition and Capital Structure Risks
| ● | We currently do not have the necessary cash on hand, projected future cash flows or committed financing to fund our obligations over the next twelve months, which raises substantial doubt about our ability to continue as a going concern. |
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| ● | We have substantial debt outstanding and may incur additional debt and covenants in our Indentures could limit our ability to undertake certain types of activities and adversely affect our liquidity. |
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| ● | We may pursue acquisitions, dispositions, capital expenditures, the development, acquisition and launch of new satellites and other strategic initiatives to complement or expand our business, which may not be successful and we may lose a portion or all of our investment in these acquisitions and transactions. |
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| ● | We have made substantial investments to acquire certain wireless spectrum licenses and other related assets, and may be unable to realize a return on these assets. |
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| ● | We will need additional capital, which may not be available on favorable terms or at all, to fund current obligations, to continue investing in our business and to finance acquisitions and other strategic transactions. |
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| ● | We are controlled by one principal stockholder who is our Chairman. |
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Risks Related to the Regulation of Our Business
| ● | Our services depend on FCC licenses that can expire or be revoked or modified and applications for FCC licenses that may not be granted. |
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Other factors that could cause or contribute to such differences include, but are not limited to, those discussed under the caption “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q and in Part I, Item 1A of our most recent Annual Report on Form 10-K (the “10-K”) filed with the Securities and Exchange Commission (“SEC”), those discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” herein and in the 10-K and those discussed in other documents we file with the SEC. All cautionary statements made or referred to herein should be read as being applicable to all forward-looking statements wherever they appear. Investors should consider the risks and uncertainties described or referred to herein and should not place undue reliance on any forward-looking statements. The forward-looking statements speak only as of the date made, and we expressly disclaim any obligation to update these forward-looking statements.
iii
Item 1. FINANCIAL STATEMENTS
ECHOSTAR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share amounts)
(Unaudited)
| | | | | | | |
|---|---|---|---|---|---|---|
| | | As of | ||||
| | | June 30, | | December 31, | ||
| | 2025 | 2024 | ||||
| Assets | | | | | | |
| Current Assets: | | | | | | |
| Cash and cash equivalents | | $ | 2,345,085 | | $ | 4,305,393 |
| Current restricted cash, cash equivalents and marketable investment securities | | | 184,012 | | | 150,898 |
| Marketable investment securities | | | 1,988,001 | | | 1,242,036 |
| Trade accounts receivable, net of allowance for credit losses of $98,231 and $82,628, respectively | | | 1,158,592 | | | 1,198,731 |
| Inventory | | | 375,118 | | | 455,197 |
| Prepaids and other assets | | | 771,171 | | | 655,233 |
| Other current assets | | | 94,247 | | | 88,255 |
| Total current assets | | | 6,916,226 | | | 8,095,743 |
| | | | | | | |
| Noncurrent Assets: | | | | | | |
| Restricted cash, cash equivalents and marketable investment securities | | | 176,004 | | | 169,627 |
| Property and equipment, net | | | 8,773,656 | | | 9,187,132 |
| Regulatory authorizations, net | | | 40,029,923 | | | 39,442,166 |
| Other investments, net | | | 191,792 | | | 202,327 |
| Operating lease assets | | | 3,218,062 | | | 3,260,768 |
| Intangible assets, net | | | 66,903 | | | 74,939 |
| Other noncurrent assets, net | | | 509,831 | | | 505,985 |
| Total noncurrent assets | | | 52,966,171 | | | 52,842,944 |
| Total assets | | $ | 59,882,397 | | $ | 60,938,687 |
| | | | | | | |
| Liabilities and Stockholders’ Equity (Deficit) | | | | | | |
| Current Liabilities: | | | | | | |
| Trade accounts payable | | $ | 745,587 | | $ | 740,984 |
| Deferred revenue and other | | | 638,989 | | | 650,940 |
| Accrued programming | | | 1,251,114 | | | 1,339,072 |
| Accrued interest | | | 308,917 | | | 352,499 |
| Other accrued expenses and liabilities | | | 1,675,958 | | | 1,804,516 |
| Current portion of debt, finance lease and other obligations (Note 9) | | | 1,053,230 | | | 943,029 |
| Total current liabilities | | | 5,673,795 | | | 5,831,040 |
| | | | | | | |
| Long-Term Obligations, Net of Current Portion: | | | | | | |
| Long-term debt, finance lease and other obligations, net of current portion (Note 9) | | | 25,401,688 | | | 25,660,288 |
| Deferred tax liabilities, net | | | 4,809,572 | | | 4,988,653 |
| Operating lease liabilities | | | 3,178,737 | | | 3,211,407 |
| Long-term deferred revenue and other long-term liabilities | | | 1,027,111 | | | 1,002,074 |
| Total long-term obligations, net of current portion | | | 34,417,108 | | | 34,862,422 |
| Total liabilities | | | 40,090,903 | | | 40,693,462 |
| | | | | | | |
| Commitments and Contingencies (Note 10) | | | | | | |
| | | | | | | |
| Stockholders’ Equity (Deficit): | | | | | | |
| Class A common stock, $0.001 par value, 1,600,000,000 shares authorized, 156,299,276 and 155,048,676 shares issued and outstanding, respectively | | | 156 | | | 155 |
| Class B common stock, $0.001 par value, 800,000,000 shares authorized, 131,348,468 shares issued and outstanding | | | 131 | | | 131 |
| Additional paid-in capital | | | 8,809,264 | | | 8,768,360 |
| Accumulated other comprehensive income (loss) | | | (183,181) | | | (195,711) |
| Accumulated earnings (deficit) | | | 11,109,636 | | | 11,618,437 |
| Total EchoStar stockholders’ equity (deficit) | | | 19,736,006 | | | 20,191,372 |
| Noncontrolling interests | | | 55,488 | | | 53,853 |
| Total stockholders’ equity (deficit) | | | 19,791,494 | | | 20,245,225 |
| Total liabilities and stockholders’ equity (deficit) | | $ | 59,882,397 | | $ | 60,938,687 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
ECHOSTAR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
(Dollars in thousands, except per share amounts)
(Unaudited)
| | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | For the Three Months Ended | | For the Six Months Ended | ||||||||
| | | June 30, | | June 30, | ||||||||
| | 2025 | 2024 | 2025 | 2024 | ||||||||
| Revenue: | | | | | | | | | | | | |
| Service revenue | | $ | 3,540,107 | | $ | 3,742,086 | | $ | 7,146,263 | | $ | 7,561,755 |
| Equipment sales and other revenue | | | 184,852 | | | 210,665 | | | 448,454 | | | 405,839 |
| Total revenue | | | 3,724,959 | | | 3,952,751 | | | 7,594,717 | | | 7,967,594 |
| | | | | | | | | | | | | |
| Costs and Expenses (exclusive of depreciation and amortization): | | | | | | | | | | | | |
| Cost of services | | | 2,461,631 | | | 2,507,478 | | | 4,893,829 | | | 5,064,660 |
| Cost of sales - equipment and other | | | 354,187 | | | 408,093 | | | 793,695 | | | 771,176 |
| Selling, general and administrative expenses | | | 629,494 | | | 595,024 | | | 1,227,345 | | | 1,219,446 |
| Depreciation and amortization | | | 493,055 | | | 507,525 | | | 981,388 | | | 992,925 |
| Total costs and expenses | | | 3,938,367 | | | 4,018,120 | | | 7,896,257 | | | 8,048,207 |
| | | | | | | | | | | | | |
| Operating income (loss) | | | (213,408) | | | (65,369) | | | (301,540) | | | (80,613) |
| | | | | | | | | | | | | |
| Other Income (Expense): | | | | | | | | | | | | |
| Interest income | | | 65,369 | | | 13,929 | | | 130,898 | | | 44,391 |
| Interest expense, net of amounts capitalized (Note 2) | | | (279,232) | | | (81,166) | | | (565,287) | | | (180,574) |
| Other, net (Note 5) | | | 35,137 | | | (91,498) | | | 76,527 | | | (117,608) |
| Total other income (expense) | | | (178,726) | | | (158,735) | | | (357,862) | | | (253,791) |
| | | | | | | | | | | | | |
| Income (loss) before income taxes | | | (392,134) | | | (224,104) | | | (659,402) | | | (334,404) |
| Income tax (provision) benefit, net | | | 85,290 | | | 16,646 | | | 149,277 | | | 18,571 |
| Net income (loss) | | | (306,844) | | | (207,458) | | | (510,125) | | | (315,833) |
| Less: Net income (loss) attributable to noncontrolling interests, net of tax | | | (712) | | | (1,867) | | | (1,324) | | | (2,866) |
| Net income (loss) attributable to EchoStar | | $ | (306,132) | | $ | (205,591) | | $ | (508,801) | | $ | (312,967) |
| | | | | | | | | | | | | |
| Weighted-average common shares outstanding - Class A and B common stock: | | | | | | | | | | | | |
| Basic | | | 287,505 | | | 271,592 | | | 287,012 | | | 271,555 |
| Diluted | | | 287,505 | | | 271,592 | | | 287,012 | | | 271,555 |
| | | | | | | | | | | | | |
| Earnings per share - Class A and B common stock: | | | | | | | | | | | | |
| Basic net income (loss) per share attributable to EchoStar | | $ |
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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – Continued
Non-GAAP Performance Measures and Reconciliation
It is management’s intent to provide non-GAAP financial information to enhance the understanding of our financial information prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), and it should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance with GAAP. Each non-GAAP financial measure is presented along with the corresponding GAAP measure so as not to imply that more emphasis should be placed on the non-GAAP measure. We believe that providing these non-GAAP measures in addition to the GAAP measures allows management, investors and other users of our financial information to more fully and accurately assess both consolidated and segment performance. The non-GAAP financial information presented may be determined or calculated differently by other companies and may not be directly comparable to that of other companies.
Segment OIBDA
Segment OIBDA, which is presented below, is a non-GAAP measure and does not purport to be an alternative to operating income (loss) as a measure of operating performance. We believe this measure is useful to management, investors and other users of our financial information in evaluating operating profitability of our business segments on a more variable cost basis as it excludes the depreciation and amortization expenses related primarily to capital expenditures and acquisitions for those business segments, as well as in evaluating operating performance in relation to our competitors. Segment OIBDA is calculated by adding back depreciation and amortization expense to business segments operating income (loss). See Note 11 to the Notes to our Condensed Consolidated Financial Statements for further information.
| | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| For the Three Months Ended June 30, 2025 | Pay-TV | Wireless | Broadband and Satellite Services | ** **Eliminations | Consolidated | ||||||||||
| | | (In thousands) | |||||||||||||
| Segment operating income (loss) | | $ | 595,552 | | $ | (772,948) | | $ | (36,738) | | $ | 726 | | $ | (213,408) |
| Depreciation and amortization | | | 67,825 | | | 320,968 | | | 104,437 | | | (175) | | | 493,055 |
| OIBDA | | $ | 663,377 | | $ | (451,980) | | $ | 67,699 | | $ | 551 | | $ | 279,647 |
| | | | | | | | | | | | | | | | |
| For the Three Months Ended June 30, 2024 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| Segment operating income (loss) | | $ | 667,752 | | $ | (700,302) | | $ | (34,586) | | $ | 1,767 | | $ | (65,369) |
| Depreciation and amortization | | | 85,249 | | | 305,863 | | | 116,978 | | | (565) | | | 507,525 |
| OIBDA | | $ | 753,001 | | $ | (394,439) | | $ | 82,392 | | $ | 1,202 | | $ | 442,156 |
| | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| For the Six Months Ended June 30, 2025 | Pay-TV | Wireless | Broadband and Satellite Services | ** **Eliminations | Consolidated | ||||||||||
| | | (In thousands) | |||||||||||||
| Segment operating income (loss) | | $ | 1,248,982 | | $ | (1,495,250) | | $ | (55,933) | | $ | 661 | | $ | (301,540) |
| Depreciation and amortization | | | 144,268 | | | 628,206 | | | 209,335 | | | (421) | | | 981,388 |
| OIBDA | | $ | 1,393,250 | | $ | (867,044) | | $ | 153,402 | | $ | 240 | | $ | 679,848 |
| | | | | | | | | | | | | | | | |
| For the Six Months Ended June 30, 2024 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| Segment operating income (loss) | | $ | 1,337,860 | | $ | (1,345,470) | | $ | (74,140) | | $ | 1,137 | | $ | (80,613) |
| Depreciation and amortization | | | 170,651 | | | 587,535 | | | 235,819 | | | (1,080) | | | 992,925 |
| OIBDA | | $ | 1,508,511 | | $ | (757,935) | | $ | 161,679 | | $ | 57 | | $ | 912,312 |
**Item 2.**MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – Continued
The changes in OIBDA during the three and six months ended June 30, 2025, compared to the same period in 2024, were primarily a result of the factors described in connection with operating revenues and operating expenses.
GUARANTOR FINANCIAL INFORMATION
Our senior secured notes, consisting of our 10 3/4% Senior Secured Notes due 2029 and 6 3/4% Senior Secured Notes due 2030 and our 3 7/8% Convertible Secured Notes due 2030 (together, the “EchoStar Notes”), are jointly and severally guaranteed on a senior secured basis by certain of our wholly-owned subsidiaries (the “Guarantors”). The Guarantors consist of, Northstar Wireless, L.L.C., SNR Wireless LicenseCo, LLC, DBSD Corporation and Gamma Acquisition L.L.C. (the “Spectrum Assets Guarantors”) and Northstar Spectrum, LLC, SNR Wireless HoldCo, LLC, DBSD Services Limited and Gamma Acquisition HoldCo, L.L.C. the (“Equity Pledge Guarantors”).
Certain of our wholly-owned subsidiaries are designated as “Unrestricted Subsidiaries” and do not guarantee the EchoStar Notes. The guarantee of the Guarantors will be discharged and released in accordance with the terms of the applicable indenture. The rights of holders of the EchoStar Notes against the Guarantors may be limited under the U.S. Bankruptcy Code or state fraudulent transfer or conveyance law.
Each entity in the summarized combined financial information follows the same accounting policies as described in our condensed consolidated financial statements. Information for the non-Guarantor subsidiaries has been excluded from the combined summarized financial information of the obligated group. The accompanying summarized combined financial information does not reflect investments of the obligated group in non-Guarantor subsidiaries. The financial information of the obligated group is presented on a combined basis and is derived from EchoStar’s condensed consolidated financial statements; intercompany balances and transactions within the obligated group have been eliminated. The obligated group’s amounts due to non-Guarantor subsidiaries and related parties have been presented in separate line items.
The summarized balance sheet information for the combined obligor group of the EchoStar Notes is presented in the table below.
| | | | | | | |
|---|---|---|---|---|---|---|
| | | As of | ||||
| | | June 30, | | December 31, | ||
| | | 2025 | | 2024 | ||
| | | (In thousands) | ||||
| Current assets | $ | 4,501,051 | | $ | 6,234,658 | |
| Noncurrent assets | | | 17,650,350 | | | 17,397,691 |
| Current liabilities | | | 335,512 | | | 411,704 |
| Noncurrent liabilities | | | 9,516,165 | | | 9,254,862 |
| Due from non-guarantors | | | 1,370,441 | | | 1,470,067 |
The summarized results of operations information for the combined obligor group of the EchoStar Notes is presented in the table below.
| | | | |
|---|---|---|---|
| | | For the Six Months Ended | |
| | | June 30, 2025 | |
| | | (In thousands) | |
| Total revenues | $ | 331 | |
| Operating income (loss) | | | (11,784) |
| Net income (loss) | | | (135,884) |
**Item 2.**MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – Continued
LIQUIDITY AND CAPITAL RESOURCES
Cash, Cash Equivalents, Current Restricted Cash and Cash Equivalents and Current Marketable Investment Securities
We consider all liquid investments purchased with a remaining maturity of 90 days or less at the date of acquisition to be cash equivalents. See Note 5 in the Notes to our Condensed Consolidated Financial Statements for further information regarding our current restricted cash and cash equivalents and marketable investment securities. As of June 30, 2025, cash, cash equivalents, current restricted cash and cash equivalents, and current marketable investment securities totaled $4.517 billion compared to $5.698 billion as of December 31, 2024, a decrease of $1.181 billion. This decrease in cash, cash equivalents, current restricted cash and cash equivalents and current marketable investment securities primarily resulted from capital expenditures, net of refunds, of $1.125 billion (including capitalized interest related to regulatory authorizations), redemptions of our Term Loan due 2025 of $333 million and repurchases of our 5 1/4% Senior Secured Notes due 2026 of $123 million, partially offset by cash generated from operating activities of $214 million and $150 million in proceeds from the additional issuance of our 10 3/4% Senior Secured Notes due 2029. In addition, during the three months ended March 31, 2025 and June 30, 2025, we had cash interest payments of $236 million and $777 million, respectively, which contributed to the decrease in our cash and cash equivalents.
Cash Flow
The following discussion highlights our cash flow activities during the six months ended June 30, 2025.
Cash flows from operating activities
For the six months ended June 30, 2025, we reported “Net cash flows from operating activities” of $214 million primarily attributable to $248 million of “Net income (loss)” adjusted to exclude the non-cash items for “Depreciation and amortization” expense, “Realized and unrealized losses (gains) on investments, impairments and other,” “Non-cash, stock-based compensation” expense, and “Deferred tax expense (benefit).” In addition, “Net cash flows from operating activities” was impacted by the timing difference between book expense and cash payments, including income taxes, and other working capital changes.
Cash flows from investing activities
For the six months ended June 30, 2025, we reported outflows from “Net cash flows from investing activities” of $1.800 billion primarily related to capital expenditures, net of refunds, of $1.125 billion (including capitalized interest related to regulatory authorizations) and $721 million in net purchases of marketable investment securities, partially offset by $47 million in proceeds from the sale of our Fiber business.
Cash flows from financing activities
For the six months ended June 30, 2025, we reported outflows from “Net cash flows from financing activities” of $366 million primarily related to redemptions of our Term Loan due 2025 of $333 million, repurchases of our 5 1/4% Senior Secured Notes due 2026 of $123 million and repayments of long-term debt and finance lease obligations of $46 million, partially offset by and $150 million in proceeds from the additional issuance of our 10 3/4% Senior Secured Notes due 2029.
**Item 2.**MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – Continued
Free Cash Flow
We define free cash flow as “Net cash flows from operating activities” less: (i) “Purchases of property and equipment” net of “Refunds and other receipts of purchases of property and equipment,” and (ii) “Capitalized interest related to regulatory authorizations,” as shown on our Condensed Consolidated Statements of Cash Flows. We believe free cash flow is an important liquidity metric because it measures, during a given period, the amount of cash generated that is available to repay debt obligations, make investments (including strategic wireless investments), fund acquisitions and for certain other activities. Free cash flow is not a measure determined in accordance with GAAP and should not be considered a substitute for “Operating income (loss),” “Net income (loss),” “Net cash flows from operating activities” or any other measure determined in accordance with GAAP. Since free cash flow includes investments in operating assets, we believe this non-GAAP liquidity measure is useful in addition to the most directly comparable GAAP measure “Net cash flows from operating activities.”
Free cash flow can be significantly impacted from period to period by changes in “Net income (loss)” adjusted to exclude certain non-cash charges, operating assets and liabilities, “Purchases of property and equipment,” net of “Refunds and other receipts of purchases of property and equipment,” and “Capitalized interest related to regulatory authorizations.” These items are shown in the “Net cash flows from operating activities” and “Net cash flows from investing activities” sections on our Condensed Consolidated Statements of Cash Flows included herein. Operating asset and liability balances can fluctuate significantly from period to period and there can be no assurance that free cash flow will not be negatively impacted by material changes in operating assets and liabilities in future periods, since these changes depend upon, among other things, management’s timing of payments and control of inventory levels, and cash receipts. In addition to fluctuations resulting from changes in operating assets and liabilities, free cash flow can vary significantly from period to period depending upon, among other things, subscriber additions (losses), service revenue, subscriber churn, subscriber acquisition and retention costs including amounts capitalized under our equipment lease programs for DISH TV subscribers, operating efficiencies, increases or decreases in purchases of property and equipment, expenditures related to our 5G Network deployment, cash interest payments and other factors.
The following table reconciles free cash flow to “Net cash flows from operating activities.”
| | | | | | | |
|---|---|---|---|---|---|---|
| | | For the Six Months Ended | ||||
| | | June 30, | ||||
| | 2025 | 2024 | ||||
| | | (In thousands) | ||||
| Net cash flows from operating activities | $ | 214,267 | | $ | 930,984 | |
| Purchases of property and equipment, net of refunds (including capitalized interest related to regulatory authorizations) | | | (1,125,385) | | | (1,348,729) |
| Free cash flow | | $ | (911,118) | | $ | (417,745) |
Operational Liquidity
We make general investments in property such as, among others, satellites, wireless devices, set-top boxes, information technology and facilities that support our Pay-TV, Wireless and Broadband and Satellite Services segments. For some of these investments, changes in trade policies, including, but not limited to, tariffs and other restrictions, could increase, among other things, our costs, disrupt our supply chain and negatively affect our business, operations and financial condition.
**Item 2.**MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – Continued
We are also making significant additional investments and may partner with others to, among other things, continue our 5G Network deployment and further commercialize, build-out and integrate our Wireless spectrum licenses and related assets. Moreover, since we are primarily a subscriber-based company, we also make subscriber-specific investments to acquire new subscribers and retain existing subscribers. While the general investments may be deferred without impacting the business in the short-term, the subscriber-specific investments are less discretionary. Our overall objective is to generate sufficient cash flow over the life of each subscriber to provide an adequate return against the upfront investment. Once the upfront investment has been made for each subscriber, the subsequent cash flow is generally positive, but there can be no assurance that over time we will recoup or earn a return on the upfront investment.
There are a number of factors that impact our future cash flow compared to the cash flow we generate at a given point in time. The first factor is our churn rate and how successful we are at retaining our current subscribers. To the extent we lose subscribers from our existing base, the positive cash flow from that base is correspondingly reduced. The second factor is how successful we are at maintaining our service margins. To the extent our “Cost of services” grow faster than our “Service revenue,” the amount of cash flow that is generated per existing subscriber is reduced. Our Pay-TV service margins have been reduced by, among other things, higher programming costs. Our Wireless service margins are impacted by, among other things, our MNSA agreement with T-Mobile and our NSA agreement with AT&T and the speed with which we are able to migrate Wireless subscribers onto our 5G Network. The third factor is the rate at which we acquire new Pay-TV, Wireless and Broadband subscribers. The faster we acquire new subscribers, the more our positive ongoing cash flow from existing subscribers is offset by the negative upfront cash flow associated with acquiring new subscribers. Conversely, the slower we acquire subscribers, the more our operating cash flow is enhanced in that period.
Finally, our future cash flow is impacted by, among other things, the rate at which we complete our 5G Network, incur litigation expense, make cash interest payments, participate in FCC wireless spectrum auctions and any cash flow from financing activities. We anticipate operating expenditures for our 5G Network to increase for 2025 as we continue to, among other things, deploy cell sites and communication towers to continue to commercialize our 5G Network. We expect our capital expenditures (excluding capitalized interest) may decrease in the near term. However, as we prepare for our next build-out requirement deadlines, we expect our capital expenditures to increase as we approach these deadlines. As a result, our historical cash flow is not necessarily indicative of our future cash flows. As of June 30, 2025, we experienced negative free cash flow. We expect that this trend will continue in 2025 and in future periods. In addition, declines in our subscriber base and any decrease in subscriber-related margins negatively impact our cash flow, and there can be no assurance that our subscriber declines for some if not all of our segments will not continue.
Subscriber Base – Pay TV, Wireless and Broadband and Satellite Services Segments
See “Results of Operations” above for further information.
Subscriber Acquisition and Retention Costs
We incur significant upfront costs to acquire Pay-TV, Wireless and Broadband subscribers, including, but not limited to, advertising, independent third-party retailer incentives, payments made to third parties, equipment and wireless device subsidies, installation services, and/or new customer promotions. While we attempt to recoup these upfront costs over the lives of their subscription, there can be no assurance that we will be successful in achieving that objective. We employ certain business rules for acquiring subscribers, including, but not limited to, minimum credit requirements, identity verification and contractual commitments. We strive to provide outstanding customer service to increase the likelihood of customers keeping their service over longer periods of time. Our subscriber acquisition costs may vary significantly from period to period.
**Item 2.**MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – Continued
We incur significant costs to retain our existing DISH TV subscribers, generally as a result of upgrading their equipment to next generation receivers, primarily including our Hopper® receivers, and by providing retention credits. As with our subscriber acquisition costs, our retention upgrade spending includes the cost of equipment and installation services. In certain circumstances, we also offer programming at no additional charge and/or promotional pricing for limited periods to existing customers in exchange for a contractual commitment to receive service for a minimum term. A component of our retention efforts includes the installation of equipment for customers who move. Retention costs for Wireless subscribers are primarily related to promotional pricing on upgraded wireless devices for qualified existing subscribers and promotional credits. Our DISH TV and Wireless subscriber retention costs may vary significantly from period to period.
Seasonality
Historically, the first half of the year generally produces fewer gross new DISH TV subscriber activations than the second half of the year, as is typical in the pay-TV industry. In addition, the first and fourth quarters generally produce a lower DISH TV churn rate than the second and third quarters. However, in recent years, as the pay-TV industry has matured, we and our competitors increasingly must seek to attract a greater proportion of new subscribers from each other’s existing subscriber bases rather than from first-time purchasers of pay-TV services. As a result, historical trends in seasonality described above may not be indicative of future trends.
Our net SLING TV subscriber additions are impacted by, among other things, certain major sporting events and other major television events. The first and third quarters generally produce higher gross new Wireless subscriber activations. The historical trends discussed above, for net DISH TV subscriber additions, net SLING TV subscriber additions and gross new Wireless subscriber activations, may not be indicative of future trends. There can be no assurance that these trends will not continue and/or accelerate.
Satellites
Pay-TV Segment. Operation of our DISH TV services requires that we have adequate satellite transmission capacity for the programming that we offer. Moreover, competitive conditions may require that we expand our offering of new programming. While we generally have had in-orbit satellite capacity sufficient to transmit our existing channels and some backup capacity to recover the transmission of certain critical programming, our backup capacity is limited. In the event of a failure or loss of any of our owned or leased satellites, we may need to acquire or lease additional satellite capacity or relocate one of our other satellites and use it as a replacement for the failed or lost satellite. Such a failure could result in a prolonged loss of critical programming or a significant delay in our plans to expand programming as necessary to remain competitive and cause us to expend a significant portion of our cash to acquire or lease additional satellite capacity.
Broadband and Satellite Services Segment. Operation of our Broadband and Satellite Services segment also requires adequate satellite transmission capacity for the services that we offer. In the event of a failure or loss of any of our owned or leased satellites, we may need to acquire or lease additional satellite capacity or relocate one of our other satellites and use it as a replacement for the failed or lost satellite. Such a failure could result in a prolonged loss of services.
**Item 2.**MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – Continued
Covenants and Restrictions Related to our Long-Term Debt
We are subject to the covenants and restrictions set forth in the indentures related to our long-term debt.
EchoStar Corporation
The indentures related to our outstanding EchoStar senior secured notes and convertible senior secured notes contain restrictive covenants that, among other things, impose limitations on our and certain of our subsidiaries’ ability to: (i) incur or guarantee additional indebtedness; (ii) make certain investments and other restricted payments; (iii) create liens; (iv) enter into certain transactions with affiliates; (v) merge or consolidate with another company; (vi) transfer or sell assets; (vii) allow to exist certain restrictions on paying dividends or other payments; and (viii) guarantor engagement in new activities. Should we fail to comply with these covenants, all or a portion of the debt under the senior secured notes could become immediately payable. The senior secured notes also provide that the debt may be required to be prepaid if certain change-in-control events occur. In addition, the convertible senior secured notes provide that, if a “fundamental change” (as defined in the related indenture) occurs, holders may require us to repurchase for cash all or part of their convertible notes. As of the date of filing of this Quarterly Report on Form 10-Q, we were in compliance with the covenants and restrictions related to our long-term debt.
DISH Network and DISH DBS Corporation
The indentures related to our outstanding senior notes issued by DISH DBS Corporation (“DISH DBS”) contain restrictive covenants that, among other things, impose limitations on the ability of DISH DBS and its restricted subsidiaries to: (i) incur additional indebtedness; (ii) enter into sale and leaseback transactions; (iii) pay dividends or make distributions on DISH DBS’ capital stock or repurchase DISH DBS’ capital stock; (iv) make certain investments; (v) create liens; (vi) enter into certain transactions with affiliates; (vii) merge or consolidate with another company; and (viii) transfer or sell assets. The indentures related to our outstanding DISH Network and DISH DBS senior secured notes contain restrictive covenants that, among other things, impose limitations on our ability and certain of our subsidiaries to: (i) incur additional indebtedness; (ii) enter into sale and leaseback transactions; (iii) pay dividends or make distributions on our capital stock or repurchase our capital stock; (iv) make certain investments of spectrum collateral; (v) create liens; (vi) enter into certain transactions with affiliates; (vii) merge or consolidate with another company; and (viii) transfer or sell assets. Should we fail to comply with these covenants, all or a portion of the debt under the senior notes, senior secured notes and our other long-term debt could become immediately payable. The senior notes and senior secured notes also provide that the debt may be required to be prepaid if certain change-in-control events occur. In addition, the Convertible Notes provide that, if a “fundamental change” (as defined in the related indenture) occurs, holders may require us to repurchase for cash all or part of their Convertible Notes. As of the date of filing of this Quarterly Report on Form 10-Q, we, DISH Network and DISH DBS were in compliance with the covenants and restrictions related to our respective long-term debt.
Hughes Satellite Systems Corporation
The indentures related to our outstanding senior notes issued by Hughes Satellite Systems Corporation (“HSSC”) contain restrictive covenants that, among other things, impose limitations on the ability of HSSC and its restricted subsidiaries to: (i) incur additional indebtedness; (ii) pay dividends or make distributions on HSSC’s capital stock or repurchase HSSC’s capital stock; (iii) allow to exist certain restrictions on such subsidiaries’ ability to pay dividends, make distributions, make other payments, or transfer assets; (iv) make certain investments; (v) create liens; (vi) enter into certain transactions with affiliates; (vii) merge or consolidate with another company; and (viii) transfer or sell assets. As of the date of filing of this Quarterly Report on Form 10-Q, we and HSSC were in compliance with the covenants and restrictions related to our respective long-term debt.
**Item 2.**MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – Continued
Other
We are also vulnerable to fraud, particularly in the acquisition of new subscribers, which includes the sale of wireless devices. While we are addressing the impact of subscriber fraud through a number of actions, there can be no assurance that we will not continue to experience fraud or that any fraud we have experienced does not accelerate, which could impact our subscriber growth and churn. Economic weakness may create greater incentive for signal theft, piracy and subscriber fraud, which could lead to higher subscriber churn and reduced revenue.
Obligations and Future Capital Requirements
Contractual Obligations
See Note 10 in the Notes to our Condensed Consolidated Financial Statements for further information.
Future Capital Requirements
We expect to fund our future working capital, capital expenditures, other investments and debt service requirements for the next twelve months from cash generated from operations, existing restricted and unrestricted cash, cash equivalents and marketable investment securities balances and cash generated through raising additional capital. We do not currently have cash, cash equivalents, marketable investment securities balances and/or projected future cash flows to fully fund our 2026 debt maturities. We will need to obtain new financing and/or refinance or restructure all or a portion of such obligations prior to maturity. Furthermore, because reaching an acceptable resolution of the FCC inquiries is not assured, we must continue to evaluate the deployment of our resources. In light of this continued uncertainty, we elected not to make interest payments on a certain portion of our long-term senior notes on their respective scheduled due dates. We subsequently made such payments, including interest on the defaulted interest, within the applicable 30-day grace periods to make such interest payments.
We will need to make significant additional investments to, among other things, continue our 5G Network deployment and further commercialize, build-out and integrate our Wireless spectrum licenses and related assets. The amount of capital required to fund our future working capital, capital expenditure and other investment needs varies and we will need to raise additional capital, depending on, among other things, the rate at which we complete our 5G Network, the potential purchase of additional wireless spectrum licenses and the rate at which we acquire new subscribers and the cost of subscriber acquisition and retention. Certain of our capital expenditures for 2025 are expected to be driven by the rate of our 5G Network deployment as well as costs associated with subscriber premises equipment. These expenditures are necessary for our 5G Network deployment as well as to operate and maintain our DISH TV services. Consequently, we consider certain of them to be non-discretionary.
Our capital expenditures vary depending on, among other things, the number of satellites leased or under construction at any point in time and could increase materially as a result of increased competition, significant satellite failures or economic weakness and uncertainty. Our DISH TV and Broadband subscriber bases have been declining and there can be no assurance that both subscriber bases will not continue to decline and that the pace of such decline will not accelerate. In the event that our DISH TV and Broadband subscriber bases continues to decline, it will have a material adverse long-term effect on our cash flow.
**Item 2.**MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – Continued
We have and expect to continue to incur expenditures related to our 5G Network deployment, including, but not limited to, capital expenditures associated with our 5G Network deployment and the potential purchase of additional wireless spectrum licenses, including any potential Northstar Re-Auction Payment and SNR Re-Auction Payment for the AWS-3 licenses retained by the FCC. The amount of capital required will also depend on, among other things, our available liquidity, the growth of our Wireless segment and the levels of investment necessary to support potential strategic initiatives that may arise from time to time. These factors, including, but not limited to, a reduction in our available future cash flows as a result of our 5G Network deployment, will require us to raise additional capital in the future, which may not be available on favorable terms or at all.
Volatility in the financial markets has made it more difficult at times for issuers of high-yield indebtedness, such as us, to access capital markets at favorable terms or at all. These developments may have a significant effect on our cost of financing and our liquidity position.
Wireless Segment – 5G Network
See Note 10 in the Notes to our Condensed Consolidated Financial Statements for further information.
Availability of Credit and Effect on Liquidity
The ability to raise capital has generally existed for us despite economic weakness and uncertainty. However, in light of the continued uncertainty related to the FCC inquiries, we elected not to make interest payments on a certain portion of our long-term senior notes on their respective scheduled due dates. We subsequently made such payments, including interest on the defaulted interest, within the applicable 30-day grace periods to make such interest payments. Although cured, this could negatively impact our ability to raise capital on favorable terms or at all. While modest fluctuations in the cost of capital will not likely impact our current operational plans, significant fluctuations could have a material adverse effect on our business, results of operations and financial condition.
Debt Issuances and Maturity
10 3/4% Senior Secured Notes due 2029
On May 8, 2025, we issued $150 million aggregate principal amount of our 10 3/4% Senior Secured Notes due November 30, 2029. Interest accrues at an annual rate of 10 3/4% and is payable semi-annually in cash, in arrears on May 30 and November 30 of each year, which commenced on May 30, 2025.
Term Loan Due 2025
During the three and six months ended June 30, 2025, we redeemed approximately $166 million and $333 million, respectively, of our Term Loan Due 2025. The remaining balance of approximately $167 million is paid monthly and the final payment is due September 30, 2025. We expect to fund this obligation from our current restricted and unrestricted cash, cash equivalents and marketable investment securities balances on hand and/or projected future cash flows.
**Item 2.**MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – Continued
5 1/4% Senior Secured Notes due 2026
During the six months ended June 30, 2025, we repurchased approximately $123 million of our 5 1/4% Senior Secured Notes due 2026 in open market trades. The remaining balance of approximately $627 million matures on August 1, 2026. We do not currently have cash, cash equivalents, marketable investment securities balances and/or projected future cash flows to fully fund our 2026 debt maturities. We will need to refinance or restructure all or a portion of such obligations prior to maturity.
New Accounting Pronouncements
See Note 2 in the Notes to our Condensed Consolidated Financial Statements for further information.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes in our market risk during the six months ended June 30, 2025. For additional information, see Item 7A. Quantitative and Qualitative Disclosures About Market Risk in Part II of our Annual Report on Form 10-K for the year ended December 31, 2024.
Item 4. CONTROLS AND PROCEDURES
Conclusion regarding disclosure controls and procedures
Under the supervision and with the participation of our management, including our Chief Executive Officer and Principal Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based upon that evaluation, our Chief Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.
Changes in internal control over financial reporting
There has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II — OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
See Note 10 “Commitments and Contingencies – Contingencies – Litigation” in the Notes to our Condensed Consolidated Financial Statements for information regarding certain legal proceedings in which we are involved.
Item 1A. RISK FACTORS
Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for the year ended December 31, 2024 includes a detailed discussion of our risk factors. The information presented below updates, and should be read in conjunction with, the risk factors and information disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.
In response to the uncertainty created by the FCC inquiries, we may take one or more significant actions in order to protect our interest in our Wireless Licenses and other assets, which actions could negatively impact your investment.
In order to protect our interest in our Wireless Licenses and other assets we may take one or more actions that may negatively impact the value of your investment in our securities, including, under certain circumstances, filing for relief under Chapter 11 of the United States Bankruptcy Code, if we determine that such an action is in the best interests of the Company and our stakeholders. Such a decision could be driven by a range of strategic considerations, including, but not limited to, the uncertainty created by the FCC inquiries and effective deployment of capital.
Certain actions that we may take, including a potential voluntary Chapter 11 bankruptcy filing could have material adverse consequences, including, but not limited to: (i) disruption of our relationships with vendors, suppliers, employees and customers; (ii) limitations on our ability to access capital markets or otherwise obtain financing on favorable terms or at all; (iii) limitations on our ability to take advantage of business opportunities; (iv) reputational harm; (v) potential delisting of our securities from trading exchanges; and (vi) significant administrative costs and diversion of management attention. Furthermore, the outcome of any of the actions that we may take, including a filing for relief under Chapter 11, is inherently uncertain and may result in a loss of control by our principal stockholder or a material reduction in the value or change in the relative priority of existing equity or debt securities.
There can be no assurance that any protective actions we may take, including a restructuring or reorganization process, whether pursued in or outside of bankruptcy, would be successful or would not materially adversely affect our business, financial condition, results of operations, liquidity or the market value of our securities.
The FCC’s review of our compliance with network build-out requirements could lead to the loss or impairment of certain of our existing spectrum licenses.
As previously disclosed, on May 9, 2025, the FCC informed us that it had begun a review of our compliance with certain of our federal obligations to provide 5G service in the United States and raising certain questions regarding our September 2024 build-out extension and mobile-satellite service utilization in the 2 GHz band. While we are currently working to address the concerns raised by the FCC in a way that is acceptable to us, there can be no assurance that such a resolution will be reached.
The FCC review has introduced the possibility of reversing prior FCC grants of authority to us. This uncertainty over our spectrum rights has effectively frozen our ability to make decisions regarding our 5G network build-out, has materially adversely impacted our ability to implement and adjust our overall business plan and has required us to re-evaluate the deployment of our resources. In light of the continued uncertainty related to the FCC inquiries, we elected not to make interest payments on a certain portion of our long-term senior notes on their respective scheduled due dates. We subsequently made such payments, including interest on the defaulted interest, within the applicable 30-day grace periods to make such interest payments.
If we fail to reach an acceptable resolution with the FCC, one or more of our wireless spectrum licenses could be cancelled or modified and/or our build-out requirements could be accelerated, any of which would have a material adverse effect on our business, results of operations and financial condition. During the pendency of the FCC review, our ability to make decisions with respect to our 5G network build-out and implement our business plans will continue to be materially adversely impacted, the attention of our management will continue to be diverted to this matter, and we will continue to evaluate the deployment of our resources and consider all strategic options.
Changes in trade policies, including, but not limited to, tariffs and other restrictions, could increase, among other things, our costs, disrupt our supply chain and negatively affect our business, operations and financial condition.
We depend on suppliers, including suppliers with manufacturing in China and other countries, for various materials in our 5G Network, satellite and related infrastructure, Pay-TV and Wireless businesses. Changes in U.S. or foreign trade policies, including, but not limited to, new or increased tariffs, export controls, trade restrictions or sanctions, have resulted, and may continue to result, in higher costs for the wireless devices and other equipment we procure.
Supply chain disruptions, customs delays, new compliance requirements and other challenges may cause delays in deploying network infrastructure and customer equipment, increase our operational expenses, and impact our ability to meet customer demand. Although we attempt to mitigate these risks through alternative sourcing and operational efficiencies, these efforts may not be successful or sufficient.
If we are unable to pass increased costs to customers without negatively impacting demand, or offset them through other measures, our business, financial condition and results of operations could be materially adversely affected.
We currently do not have the necessary cash on hand, projected future cash flows or committed financing to fund our obligations over the next twelve months, which raises substantial doubt about our ability to continue as a going concern.
As of the date of this report, we currently do not have the necessary cash on hand, projected future cash flows or committed financing to fund our anticipated working capital needs, capital expenditures, interest payments and other contractual obligations over the next twelve months. These conditions raise substantial doubt about our ability to continue as a going concern and, as a result, a ‘going concern’ disclosure appears in the Notes to our Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.
Among other things, our business and financial condition is negatively impacted by upcoming debt maturities and interest payments which may further constrain available liquidity. In addition, our cash flow from operations is negative and may continue and/or accelerate. If we are unable to improve our operating performance, raise additional capital, negotiate with debt holders or otherwise secure adequate sources of liquidity, we may be unable to achieve our business objectives and may be forced to delay, curtail or forego strategic initiatives.
The presence of a going concern uncertainty may also adversely impact the price of our securities, harm our current, future and potential relationships with suppliers, vendors, customers, employees and creditors, and may limit our ability to access additional financing on acceptable terms or at all. There can be no assurance that management’s plans to mitigate these risks will be successful on a timely basis or at all. If we are unable to secure adequate liquidity on an acceptable timeline or at all, we may not be able to continue as a going concern, which could result in a total loss of your investment. In addition, as our cash and cash equivalents balance declines, the risks described above may continue, increase or accelerate at any time and with or without notice. We cannot guarantee the timing or outcome of any resolution and any resolution we may negotiate may materially adversely impact our business, financial condition and/or operations.
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Issuer Purchases of Equity Securities
Stock Repurchase Program
The following table provides information regarding repurchases of our Class A common stock from April 1, 2025 through June 30, 2025:
| | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | Total Number of | | Maximum Approximate | |
| | | Total | | | | | Shares Purchased | | Dollar Value of Shares | |
| | | Number of | | Average | | as Part of Publicly | | that May Yet be | ||
| | | Shares | | Price Paid | | Announced | | Purchased Under the | ||
| Period | Purchased | per Share | Programs | Programs (1) | ||||||
| | | (In thousands, except share data) | ||||||||
| April 1, 2025 - April 30, 2025 | | — | | $ | — | | — | | $ | 1,000,000 |
| May 1, 2025 - May 31, 2025 | | — | | $ | — | | — | | $ | 1,000,000 |
| June 1, 2025 - June 30, 2025 | | — | | $ | — | | — | | $ | 1,000,000 |
| Total | | — | | $ | — | | — | | $ | 1,000,000 |
| (1) | On October 25, 2024, our Board of Directors authorized stock repurchases of up to $1.0 billion of our outstanding Class A common stock through and including December 31, 2025. Purchases under our repurchase program may be made through open market purchases, privately negotiated transactions, or Rule 10b5-1 trading plans, subject to market conditions and other factors. We may elect not to purchase the maximum amount of shares allowable under this program and we may also enter into additional share repurchase programs authorized by our Board of Directors. |
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Item 5. OTHER INFORMATION
10b5-1 Trading Arrangements
None of the Company’s directors or Section 16 officers adopted, modified or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company’s fiscal quarter ended June 30, 2025, as such terms are defined under Item 408(a) of Regulation S-K.
Item 6. EXHIBITS
Exhibits.
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| TEST | | | |
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| 22◻ | List of Subsidiary Guarantors | ||
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| 31.1◻ | Section 302 Certification of Chief Executive Officer. | ||
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| 31.2◻ | Section 302 Certification of Chief Financial Officer. | ||
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| 32.1◻ | Section 906 Certification of Chief Executive Officer. | ||
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| 32.2◻ | Section 906 Certification of Chief Financial Officer. | ||
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| 99.1* | Letter to EchoStar regarding review of compliance with its federal obligations to provide 5G service throughout the United States, dated May 9, 2025 (incorporated by reference from Exhibit 99.1 to EchoStar Corporation’s Current Report on Form 8-K filed May 13, 2025). | ||
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| 101◻ | The following materials from the Quarterly Report on Form 10-Q of EchoStar Corporation for the quarter ended June 30, 2025 filed on August 1, 2025 formatted in Inline eXtensible Business Reporting Language (“iXBRL”): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations and Comprehensive Income (Loss), (iii) Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit), (iv) Condensed Consolidated Statements of Cash Flows and (v) related notes to these financial statements. | ||
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| 104◻ | Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document). |
| ☐ | Filed herewith. |
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*Incorporated by reference.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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| | ECHOSTAR CORPORATION | ||||
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| | By: | /s/ Hamid Akhavan | |||
| | | Hamid Akhavan | |||
| | | President and Chief Executive Officer and Director (Principal Executive Officer) | |||
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| | By: | /s/ Paul W. Orban | |||
| | | Paul W. Orban | |||
| | | Executive Vice President and Chief Financial Officer, DISH (Principal Financial Officer and Principal Accounting Officer) | |||
| Date: August 1, 2025 | |