EchoStar Q1 2023 Earnings Call Transcript

Quartr
Provided by Quartr
May 9, 2023

There are 7 speakers on the call.

Operator

Good day and thank you for standing by. Welcome to the EchoStar Corporation First Quarter 2023 Results Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. You'll then hear an automated message advising your hand is raised.

Operator

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Dean Manson, Chief Legal Officer. Please go ahead.

Speaker 1

Thank you. Good morning, everyone, and welcome to our earnings call for the Q1 of 2023. I'm joined today by Hamid Aqavan, our CEO and President Paul Gasky, our Chief Operating Officer Jeffrey Boggs, Senior Vice President of Finance And Veronika Tekes, our Chief Accounting Officer. As usual, we invite media to participate in a listen only mode on the call and ask that you not identify participants or their firms in your report. We also do not allow audio recording, which we ask that you respect.

Speaker 1

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.

Speaker 2

For a list

Speaker 1

of those factors and risks, please refer to our annual report on Form 10 ks for the year ended December 31, 2022, filed on February 22, and our subsequent filings made with the SEC. All cautionary statements we make during the call should be understood as being applicable to any forward looking statements we make wherever they may appear. You should carefully consider the risks described in our reports and should not place any undue reliance on any forward looking statements. We assume no responsibility for updating any forward looking statements. We refer to adjusted EBITDA during this call.

Speaker 1

The comparable GAAP measure A reconciliation thereto are presented in our earnings release. I'll now turn the call over to Hamid.

Speaker 3

Thank you, Dean, and good day, everyone. Our agenda for the call today is

Speaker 4

as follows. First, we'll provide

Speaker 3

a brief overview of financial activity from the Q1. After that, we will discuss our business strategy, which includes the 3 parallel work streams that are called Horizon's And our progress on all three. We'll then move to question and answer session. Let's start with our financials. Our revenue in the Q1 of 2023 was $440,000,000 lower by $62,000,000 compared to the same period of prior year.

Speaker 3

The revenue decrease in the Q1 was partially driven by our consumer broadband business Due to capacity constraints and other related factors as we wait for the in service of our Jupiter 3 satellite. We also had an anticipated decrease in our enterprise revenue, primarily due to lower domestic and international deployments and shipment timing for Q1. As mentioned previously, most enterprise orders are recognized over several years, which can create some variation and irregularity in our revenue stream, which is what occurred in the Q1. However, We continue to generate momentum in this area of our business with $215,000,000 of new orders booked in the Q1, Increasing 38% compared to the same period last year, bringing our total enterprise backlog to $1,600,000,000 We are continuing to see success in our strategy to shift our efforts to opportunities within the enterprise market, which will continue to grow our backlog, diversify our business and provide sustained cash generation Through low capital requirements and through greater operating leverage. Our adjusted EBITDA in the first quarter $135,000,000 a decrease of 19% from last year, primarily driven by the lower revenue.

Speaker 3

We continue to be disciplined on our cost structure in line with the change in revenue mix to sustain our cash generation performance. Capital expenditures, net of receipt of refunds in the quarter were $44,000,000 Compared to $112,000,000 in the Q1 last year, the decrease was primarily due to lower spend on the JUPITER-three satellite program And consumer premise equipment as well as $15,000,000 of cash received from Maxar, the manufacturer of the Jupiter 3 satellite As part of our agreement with them related to the manufacturing delays, operating free cash flow Defined as adjusted EBITDA minus capital expenditures was $91,000,000 during the quarter, $37,000,000 higher than Q1 of last year. We ended the quarter with $1,700,000,000 of cash And marketable securities. This balance excludes an additional $148,000,000 of debt repayment proceeds Received in early April. I remain confident about the strength of our balance sheet as it affords us the flexibility to explore investment opportunities.

Speaker 3

Let me now turn the call over to Paul, who will provide some additional specifics On the quarter and our Horizon 1 and 2 activities.

Speaker 4

Thank you, Hamid. As a reminder, Horizon 1 is our near term priority To maximize our current services and operations, while managing costs as we prepare for the launch of Jupiter 3 EchoStar 24 satellite. To that end, we continue to focus on operational efficiencies and yield optimization of our North America satellite capacity. In the Q1 of 2023, we again updated our HughesNet service plans to improve customer experience and upgrade subscribers to higher value plans. The changes in our service plans have continued to build on our strategy of creating a natural shift to higher capacity, higher priced plans For our consumers, improving our ARPUs while delivering an enhanced customer experience.

Speaker 4

We also remain focused on improving our cost structure Through additional automation and improved processes. The market continues to react positively to our HughesNet Fusion plans, A considerable percentage of our new subscribers select Fusion plans, which generate some of our highest ARPUs. The plans have been well received by existing and new subscribers, And we expect Fusion to continue attracting new customers and helping reduce churn while improving ARPU. We believe the combination of our enhanced HughesNet and HughesNet Fusion plans will help us combat the ongoing competitive pressures in our industry. Moving forward to our North America Enterprise business, we continue to expand our managed services footprint and notably announced That we completed the rollout of the Vitamin Shoppe secure SD WAN network at their 700 plus retail outlets.

Speaker 4

We were also pleased to be recognized by Fortinet as their SD WAN Partner of the Year. We had a strong quarter for orders in the retail petroleum segment And completed the deployment of 2 network upgrades that were awarded last year. In our OneWeb program, we continued deliveries of production gateways and systems as planned and expect to complete all the gateways in 2023 scheduled. As of the end of Q1 of 2023, We have produced and shipped more than 16,000 subscriber satellite subscriber core modules for inclusion in OneWeb user terminals. We are also seeing significant interest in our Hughes LEO terminal, which includes our electronically steered antenna and we are very pleased to have been awarded Another large contract from a customer for a version of this terminal.

Speaker 4

We will begin deliveries of terminal products later this year, also enabling sales of our managed LEO services To the enterprise and government markets featuring OneWeb connectivity. In our Defense and Government Systems division, We secured numerous service renewals, including follow on orders from Boeing for PTAS, the Navy for additional work on 5 gs And one of our digital signage products for the Social Security Administration. We are pleased to participate in the ribbon cutting ceremony for our standalone Open RAN Secure 5 gs Network Deployment at Whitby Island Naval Air Station in Washington State on March 30, which helped demonstrate the potential of 5 gs services in DoD applications. We look forward to growing our 5 gs capability at Whitby Island Naval Air Station as well as on other DoD installations in the near future. Now to our international operations, we continue to allocate satellite capacity to address various enterprise applications in Latin America.

Speaker 4

As one great example of this effort, we announced a project with Star Group To provide sailor backhaul services to hundreds of locations in Mexico. In other parts of Latin America, we continue to develop enterprise opportunities and are running pilots with several operators. As for our HughesNet service in Latin America, we remain focused on adding high value subscribers, which is lowering churn and optimizing the yield in our existing Latin American capacity. In Brazil, we won a significant expansion of 800 vehicles Our fleet automation customer, in India, we received an initial order for cellular backhaul services in support of the operators universal services obligation services. And we were recognized in India by The Economic Times as best managed service provider, a prestigious recognition of the role Hughes plays in the Indian market.

Speaker 4

In terms of Jupiter, the Jupiter system equipment sales, we continue to win orders around the world. This includes a significant number of remote terminals For deployment on the Eutelsat Connect VHTS satellite, additionally, as we announced, MEASAT selected the Jupiter system To enable broadband services on the MiaSat 3d satellite, which will help connect the unconnected across Malaysia. And we announced that UZ SAT chose the JUPITER system to help bridge the digital divide in Uzbekistan. Now let me focus on Horizon 2 activities. These include our efforts to bring Jupiter 3 into service for expansion of our offerings in North and South America, as well as growing and diversifying our global enterprise business.

Speaker 4

I'm pleased to report that the Jupiter-three satellite is in the final stages of assembly. Maxar continues to work diligently and expects to complete The ship and ship the satellite to the launch site in June. We are coordinating with SpaceX to schedule the launch of Jupiter 3 at the first window that SpaceX Can allocate to it, which is subject to preemption by certain higher priority government launches. Once launched, Jupiter 3 will deliver new broadband service in North and South America and quickly allow us to focus on growth By addressing the continued demand for high speed broadband throughout the region. In preparation for the launch of JUPITER 3, Internet experience to rival any LEO satellite in that service.

Speaker 4

We believe the market is eager for these robust offerings and we We plan to have a highly competitive suite of services to meet a variety of our customers' needs. Verizon 2 also has a strong focus on expanding our global enterprise business, including the government sector. We plan to leverage our managed services portfolio, hybrid LEO Geo Business Solutions and our manufactured products to pursue growth. Nasty and Steins of Horizon 2 direction can be seen in the large enterprise orders and 5 gs activities reported here today. Increased participation in this vast market segment is a key element of our diversification strategy as is improving our operational scale through Potential small acquisitions, which we continue to explore.

Speaker 4

Now let me turn the call back over to Hamid. Thank you, Paul. That was

Speaker 3

a good summary of our Horizon 1 and 2 activities from the Q1 of this year. I want to reiterate that while we are in Horizon 1, We are working on our other work streams Horizon 23 in parallel. And to that end, we have had a busy quarter. Let me now focus on Horizon 3 and our longer term strategy to expand into new markets through both organic innovation as well as potential acquisitions. While we continue to evolve acquisition opportunities, we are also evolving our S band prospects.

Speaker 3

As we announced during the Q1, we have begun construction of what we are calling the EchoStar Lidar constellation of 28 LEO satellites. We are moving quickly to launch the first of these satellites to begin offering the store and forward Internet of Things, machine to machine and other data services Starting in 2024. At the same time, we are pursuing many avenues of exploration for our global S band assets. For instance, we continue to bring on new customers in Europe for our EchoStar Mobile LoRa enabled IoT service And we have recently demonstrated our direct to smartphone capabilities in Europe using NTN IoT Over our EchoStar 21 satellite. We are testing similar services in North American markets Using 2 DISH Network Satellites and we are actively working to expand our services into additional global markets.

Speaker 3

With what we are learning from these deployments, we continue to refine our plans for bringing the Liara constellation to market. These activities are not the only business development initiatives we have undertaken in service of bringing our global S band network. We continue to actively engage with companies across the 5 gs NTM ecosystem to leverage the opportunities of the 3 gsPP Release 17 In developing a truly global 5 gs non terrestrial network for real anytime, anywhere device connectivity It is ubiquitous and transparent. Let me now turn it over to the operator to start the Q and A session.

Operator

Our first question comes from the line of Ric Prentiss With Raymond James.

Speaker 2

Yes. Good morning, everyone. Can you hear me okay?

Speaker 3

Yes.

Speaker 4

Yes. Okay. Thanks. Hey, I want to

Speaker 2

start with, obviously, EBITDA came in a little better than we were looking for. And one of the areas that we noticed is cost of service Seems a little light year over year and quarter over quarter. Were there any one time benefits in cost of service? And associated with that, when should we think about Costs coming in ahead of the J3 launch that might cause cost of service to go up to a new level.

Speaker 4

Well, I guess, first off, what you I think you can see there is there's been a focus on cost savings, efficient spend, And that's true in the operation of the systems as well as trying to be more efficient with how we spend our sales and marketing dollars. So across those two elements, that's the primary pickup for the quarter. We believe that's a continuing trend till we get to the Jupiter 3 satellite.

Speaker 2

Okay. And when you get to Jupiter 3, how should we think about incremental cost levels to kind of layer in that new Infrastructure and support costs.

Speaker 4

Well, two things. 1, we already have ingested a lot of the costs Since the Ground network has been in place now for over a quarter. So you kind of see that already in the cost. Where we'll see additional spend will be in sales and marketing as we ramp And you'd expect it's the same sort of growth you might see from the previous satellite launches.

Speaker 2

Glad you finally have Maxar getting ready to ship in June, it sounds like. How should we think about How long from launch to in service will it take? And is there any indication from SpaceX on where in the manifest you might be possibly says we monitor The J3 going up.

Speaker 4

Well, in terms of the actual launch of service, we expect that in the Q4 And it will depend on exactly when we get the satellite in place and so on, but we would expect to be in full service in the Q4.

Speaker 3

At the moment Rick, at the moment, we are in August of schedule for launch at the SpaceX as so June shipment. Our satellite will remain at the SpaceX site. Currently, we are in a manifest for an August timeline. As As Paul mentioned previously, because there's not that many launch systems in the world right now other than SpaceX, Some of the military and government projects as they call DX and DO projects take precedence. What we know so far with all of those projects, We are still on the schedule for August.

Speaker 2

Okay, good. That helps. Last one for me. Obviously, Horizon 1, hopefully, almost done. And as you look for Horizon 2 in service in Q4, how should we think about Horizon 3, you gave us some color there.

Speaker 2

Some of the direct to smartphone are doing demos in Europe, testing in the U. S. But How should we think about the opportunity unfolding and when you can publicly kind of help us see the roadmap, particularly in that direct to device space, which seems Could be quite vast, but it might take some time.

Speaker 3

Yes. So I'll focus on that one. Well, before I focus on that one, listen, the S band opportunity is not the only thing You've seen how actively and aggressively we are pursuing enterprise business and Our backlog is growing at an incredible pace and we expect that to continue. So Horizon 3 It's very promising for us in the enterprise sector. And so I'll leave that for now on the side.

Speaker 3

And coming back to The S band and direct to device, we couldn't be busier.

Speaker 4

We have

Speaker 3

already Mention the Lyra constellation, which will give us a global coverage using the S band, the global coverage of IoT services and direct to not smartphone, but other devices and we see a lot of demand for that and this is something as a result of Our early trials in Europe of last year using our GEO satellites, but and we are in the design phase In design and engineering phase of a larger system, which we expect to come into service just a couple of years later after Lyra, We have not disclosed the exact timing for that and exact specifics of that simply because that's still in development and Some of the strategic to our business, we don't want to disclose that till we have secured certain additional gains before we come to market with additional information. But You should expect that in the second half of this decade, we'll have 5 gs, what we call wideband service Based on a new constellation, much larger constellation that we're working on. As time goes on, hopefully not too distant future, we'll disclose all the details of that, but we're not able to do it this today.

Speaker 4

Makes sense.

Speaker 2

Thanks a lot. Stay well, guys. Thanks.

Operator

Our next question comes from Michael Rollins With Citi.

Speaker 5

Thanks and good morning. I'm curious to explore The ways in which EchoStar is working with DISH currently, I think you mentioned one of The 5 gs Open RAN examples where you may be working with DISH and the filings for both companies still refers to the possibility Of additional opportunities to work together. And I'm just kind of curious what the range of possibilities that could include? And specifically, could that include co investment opportunities as well as merger scenarios between the two companies? Thanks.

Speaker 3

Look, our relationship with DISH is very collaborative. We obviously have an arms length relationship with the company As you know, you're both publicly traded stocks and we highly guard that Aspected relationship to make sure we are obviously protecting shareholders in the best interest. Having said that, we find ourselves A number of cases and opportunities in a mutual beneficial situation. So I think we have a number of areas where we can collaborate. So we highlighted a couple of those.

Speaker 3

Our spectrum filings around the world are very complementary for theirs in terms of the S band spectrum. So and we have satellite S band coverage over Europe. They have satellite S band coverage over United States and Canada And North America essentially and so to the degree that we can prove a service in Europe, we can Collaborate with DISH, we have not disclosed all the details of the agreements as some of the agreements are preliminary and has been limited So small type services, but as we are our aspirations are growing in terms of our S band offerings will put in place several agreements with DISH for the use of their assets and Potentially work with them on their 5 gs core network capabilities where We probably do not want to build in house at EchoStar. They have the only pure 5 gs core In the world and also is available, is unused, underutilized. I think that's something that we can In an outsourced fashion, we're with them.

Speaker 3

We're not at a point where those agreements are necessary yet, But we'll in due time, we'll disclose any related party transactions related to those activities. The 5 gs with the island has been just the we have used DISH as a sub To our programs, though, we have had a number of subcontractors and service providers, whether it be Cisco, whether it be Dish, whether it be some of the others that we have worked with, There is a number of piece providers that we have kind of brought together as a complete solution to the Navy. And for the time being and going forward, our relationship with DISH will remain in the same concept. There's no reason For us to consider any other alternative at the moment, we're not looking for joint acquisitions with DISH and that's not and we're not working on any As we said in Horizon 3, we're looking to acquire companies. If you're asking us whether we are co investing in companies, We're not co investing in companies with DISH.

Speaker 3

It's purely an EchoStar activity.

Speaker 5

Thanks. And just one follow-up on Horizon 3. What are the things that investors should be looking out for That could accelerate the timetable in which the investment case And maybe even some of the return opportunities become more visible and tangible in terms of Quantifying what that would represent for EchoStar?

Speaker 3

So for EchoStar, 2 things that we can point you to. 1 is, As we go forward, we'll report our enterprise backlog. And these are booked Committed contracts. These are not just funnel activities. These are sold.

Speaker 3

And I think you should keep a close eye On that and as we will report our progress on a quarterly basis, as you look at that, you could see the trend of revenue in the future. This is different than consumer. Consumer has a disadvantage that you really don't know the trend In a very long horizon, but in the enterprise, you actually see that. One of the advantages of the enterprise business is that It can grow in very large chunks. For instance, if there is a it's possible to within a year sign it Within a quarter, we signed a $500,000,000 enterprise over there.

Speaker 3

But how long does it take to get a $500,000,000 of consumer revenue, right? I mean, so enterprise can grow Very, very large and very quick steps. So first of all, we encourage you to take a look at our backlog and carefully examine that because That shows that the trend a few years down the road will be how much of our business is going to be enterprise revenue and how much of it is going to consumer. We're not putting any projections today, But we're giving you some of the one of the biggest drivers, which is the backlog, is the biggest proof of the future benefits. And we try to be more precise with that as we go forward.

Speaker 3

We try to give you even more timing as we are finding that useful to you and ourselves. We We'll disclose more of that potentially second half of this year, beginning of next year. So that's one. The second one is as it comes to the Airspan development. Look, one of the most the timing in this industry, as you're well aware, To develop satellite systems, takes several years.

Speaker 3

And so the That's why we call this Horizon 3. You should start seeing as of 2026, 2027, 2026, 2027 The biggest impacts, potentially first impacts are showing up. And this is not just because of the satellites, but also please think that to provide direct to device For devices that are 5 gs compliant, immune release 17 and 3 gsPP compliant for direct to satellite, Those devices, the chipsets are just beginning to be manufactured starting now. That will take a year and a half cycle for Chipsets to be ready, then it takes another year for the chipsets to get to the phones. So phones get out of the market.

Speaker 3

And on the very first day where the phones are introduced, Well, that's not too many phones. I mean, that very day, the small number of phones are released, right? For that base to grow, it takes another year. So when you add that up, you're talking about 4 year window, 3 year window from here to your 4 year window. And that's exactly the same window The satellites will take to be prepared.

Speaker 3

These are tonnage of satellites in large sizes to be produced. And So as I said, this will be vastly impactful in the second half of this decade. I would say starting with 20 27 Time line, you should expect to see very material meaningful revenues from then forward. That's by the way, that is only Related to the big 5 gs wideband. In between, we have the Lyra constellation, which as of 2024, which is Just next year in 12 months from now, potentially 18 months from now, we will be generating revenues From that system in between while we get to the larger system.

Speaker 3

I hope that gives you a bit of a Road map for where we think the revenues will fall and we hope to give you more information again potentially End of this year, beginning of next year as we solidify our segment reporting and some of these plans. That's helpful. Thank you.

Operator

Our next question comes from Chris Quilty with Quilty Space.

Speaker 6

Hi, can you hear me?

Speaker 3

Yes, barely, but yes.

Speaker 6

Okay. Sorry about that. So how many satellites is that new constellation going to have? Just kidding. I had to at least ask.

Speaker 6

No, actually, Hamid, I wanted to follow-up on something you were saying about the backlog. And more specifically, can you give us a sense, I mean, obviously, It's enterprise in general, but is there a specific area where you're seeing the strongest growth in that backlog, whether it's The government side, is it retail, is it oil and gas, any color in that direction?

Speaker 3

I don't know if I can be disclosing that. I think we're seeing growth in a number of areas, including areas, segments that we have not had a historical business yet. And I think in hopefully not too distant future, maybe during the course of the next couple of quarters, We'll give you more specifics on that. Our enterprise business is growing in a number of directions and we are Primarily focusing on obviously, we're focusing on highest margin, highest profitability segments. We have vastly Deprioritize and in fact discontinued anything that had low margins, lower margins.

Speaker 3

So don't look at our enterprise business As compared to some of the undifferentiated enterprise businesses, ours includes high expertise, a lot of manufacturing of our own products, Solutions that we home create and unique IP involved in some of those. So we are very excited about the Enterprise Business, again lower capital requirements, vastly lower capital requirements and very large size orders come in. I think for now, we are not yet in position for competitive reasons. We're not yet in position to kind of dissect The new business that we're getting, but you should assume that it involves some groundbreaking new areas where we have not done business before.

Speaker 6

Great. And maybe turning in a different direction, can you give us your sense of what you're seeing regionally In terms of demand in different parts of the world and perhaps maybe a little bit higher level thought What you're seeing, obviously, good backlog and good orders, but in terms of the economic environment, the demand from your customers?

Speaker 4

Sure. Well, I guess sort of generically, if you look, let's start with The South America, we've sort of mentioned the cellular backhaul world. We're seeing a lot of projects for connecting the unconnected. So that's a very active market. That theme continues pretty much across most of the rest of the world except for Western Europe.

Speaker 4

So that's a pretty strong theme, both the unconnected aspect as well as the second half of the backhaul aspect. We are seeing growth in the broadband where you have direct terminals to homes and schools and so on. And That we've talked about the Miasat project. We obviously have a lot of activity in other places like Indonesia. India certainly is a case in point.

Speaker 4

And then in Western Europe, Eutelsat is actively deploying broadband. So we have a whole series of these broadband projects all the way from end users up to schools and communities. In North America, it's a whole series of industrial projects, a lot of connectivity where in North America, the object is to have more than one path To the broadband services, most of the corporations and users can't afford to be down anymore, Especially with cloud services, so we see a lot of activity in that space.

Speaker 6

Great. Also you talked about the Fusion Service offering, can you give us any sense of how quickly that product line is growing and Maybe even what percent of the installed base or some other metric that might be useful? And what sort of impact are you Seeing on those plans in terms of the monthly ARPU.

Speaker 4

Yes. I guess, well, 2 parts. 1, I think we can in future Quarters give you a little more background. We haven't completed our rollout across the U. S.

Speaker 4

Yet. So I think once we have that, we can give you a better sense of it. And then I think as we look forward, if you look at our service plans, I think you can see the base pricing That is a $99 plan. So certainly, that's skip above most of the plans we sell today in the GEO Service. So we would expect some combination of blending of customers buying that kind of a plan As well as our standard go to plans, which are lower priced.

Speaker 6

Great. There was a mention on CapEx of One of the $15,000,000 receivable from Maxar. Can you just remind us, are there any additional payments that you expect throughout the course of this year?

Speaker 3

Yes, we expect that the Q2 will continue We received payments and they've disclosed that in their filing. So our payments will continue at the same pace through End of June and if for any reason, which we're not anticipating at the moment, The satellite delivery is further delayed. There'll be additional payments beyond June, but we're not expecting that. So there will be another $30,000,000 of additional payments, $15,000,000 for the quarter. Yes, dollars 15,000,000 for the next quarter.

Speaker 6

Okay. Also the your ESA and electronically steered antenna, that aviation antenna, it sounds like you've gotten Surprisingly good traction. There haven't been that many announcements of aviation installs. Can you give us a sense of what your Expectations are for that product line and how broadly you're shopping that in front of other airline customers?

Speaker 4

Well, certainly, one of the attributes of the aviation world is it's quite a rigorous certification process. So actual antennas that go on aircraft will be delayed until we complete that process. But We think what we've done is technologically quite sophisticated. It provides a lot of, I think, Very good benefits to an airline that might consider it. So we hope that as time goes We'll see a pickup of that.

Speaker 4

I think the main thing we've announced is, of course, the antenna we're going to be supplying to Gogo Business Aviation, Which is a nice bit for that kind of an aircraft. So I think we'll continue to get that developed and get it out Approved and out to market and then at which point we'll be able to see how big an opportunity it is.

Speaker 6

Great. And final question, I think you mentioned That you had shipped 16,000 core modules, for integration into OneWeb terminals. Remind me, you're not assembling the terminal that Someone else, you're just shipping the core module. And second question, since OneWeb products are now Shipping, are you guys seeing any activity in your Indian operations?

Speaker 4

Well, okay. On the first part, So the industrial structure that was created was we build the core module, which any partner OneWeb can use in whatever aspect of a terminal or a set of services they might create. So we're just an enabling component. And so in that respect, we ship these out to their various partners and their partners then make use of them in their applications. And as far as India, I think mainly we deferred to OneWeb to describe their Plans there.

Speaker 4

Obviously, we stand by ready once the services are lit up, but they can, I think, speak more to that?

Speaker 3

All right.

Speaker 6

Great. Thank you very much, gentlemen.

Operator

Our next question comes from the line of Ric Prentiss with Raymond James.

Speaker 2

Hey, just out of time we got for

Speaker 4

a few more follow ups.

Speaker 2

Want to follow back up on one of Michael's questions.

Speaker 5

I

Speaker 2

think your answer alluded to it, but under what or any Circumstances, would it make sense for EchoStar shareholders for DISH and EchoStar to recombine? Is there any Potential out there scenario that says that should happen is even a thought.

Speaker 3

That is not a topic that we have contemplated and can discuss here in the call. We do have, as I mentioned earlier, we are not limited with respect to any opportunities in the existing situation we have with Dish. So we have a great working relationship with them. We have not had any issues with respect The company is not being able to come to an arm's length agreement on any aspect of the opportunities. As I said, we find ourselves In a number of cases where there's mutually beneficial opportunities, they seem to have somewhat of a complementary assets to us In many ways, but we have not had any limitations on being able to put those 2 assets, class of assets to use in an opportunity.

Speaker 3

So we're not hampered by anything at the moment.

Speaker 2

Okay. And to follow-up on some of Chris' questions, Obviously, some concern about global economy out there, potential recessions, enterprise. What are you seeing as far as Enterprise, obviously, the backlog can speak for itself, but any concerns you're hearing from the customer base about economic concerns or purchase orders or timing and trends?

Speaker 4

Well, I think nothing specific. Obviously, the customers we talk to are in different positions depending on what part of the world they're in. There are certainly some concerns, especially with enterprise customers, but we do see them proceeding to make decisions perhaps a little bit slower in some cases, but They are proceeding. So we're not seeing yet the forecasted effect that people feel is out there in the market.

Speaker 3

And I want to also say that at the moment, we're not seeing we're not exposing ourselves in any sort of Any material meaningful way to bad debt. So our business, our enterprise business, it Stands on solid credit ground. We're not using our balance sheet to float other enterprise businesses. In some of our manufacturing activities, we actually get paid before even we buy the equipment and materials. So we are in We are not exposed to bad debt in any material way in the enterprise business.

Speaker 2

Okay. And last one for me. Any update on the CFO search as far as candidates, Timing, when we could expect someone joining the team?

Speaker 3

Yes, joking with my team and I'm saying I love the job so much myself that I just I might as well not never feel it. But kidding aside, look, the nature of our business has been first of all, we have been very busy. I've Interviewing a number of candidates. I have not I have a complete team now and I'm happy with everybody that I have on my team. So we're not in any way Kind of short of leadership here and CFO is the only open position that I have that is still open.

Speaker 3

I have been Candy, the part of it has been my own schedule and just lining things up, getting the right candidate. But part of it is that As the nature of our business has been changing, we're doing this shifting towards enterprise, taking a look at the S band and others. I've been Very picky about the profile that's changing, continuously changing and trying to figure out who is the right person to join us. But I do expect that this will not take hopefully too much longer. But again, I wanted to say that as you have seen from our results, from our Ability to focus on proper financials and developing the business that we are not in any way limited by lack of a sitting CFO.

Speaker 3

Great.

Speaker 2

Thanks for the follow-up questions. Have a good one.

Operator

That concludes today's question and answer session. I'd like to turn the call back to Dean Manson for closing remarks.

Speaker 3

Okay. Well, thank you, Liz.

Speaker 1

I think we're ready to Bring the meeting to a close. Thank you everyone for calling in.

Speaker 3

Thank you. Thank you.

Operator

This concludes today's conference call. Thank you for participating. You may now disconnect.

Powered by Quartr
Earnings Conference Call
EchoStar Q1 2023
00:00 / 00:00