Q3 2021 EchoStar Corp Earnings Call
Good day and thank you for standing by welcome to the Echostar Corporation Conference call for third quarter 2021 results.
This time, all participants are in a listen only mode.
After the Speakers' presentation, there will be a question and answer session. You'll ask a question. During the session you will need to press star one on your telephone. Please be advised that today's conference is being recorded if you require any further assistance you May press Star Zero I would now like to hand, the conference over to your speaker for today.
Mr. Terry Brown. Please go ahead Sir.
Thank you good morning, everybody and welcome to our earnings call for the third quarter of 2021, I'm joined today by Michael <unk>, Our CEO, David <unk> and CFO.
<unk> Kaul President of Hughes, Anders Johnson, Chief strategy Officer, and President of Echostar satellite services, and Dean Manson General Counsel and Secretary.
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.
Let me now turn this over to Dean Foods Safe Harbor disclosure.
Thanks, Terry 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 1095.
These forward looking statements involve known and unknown risks uncertainties and other factors that could cause our actual results to materially differ from the historical results and from any future results expressed or implied by the forward looking statements.
For a list of those factors and risks please refer to our annual report on Form 10-K for the year ended December 31, 2020, which we filed on February 23rd 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 appear you should.
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 forward looking statements.
Now I'll turn the call over to Mike Dugan.
Thank you Dean and thank you to everyone joining us for our Q3 2021 earnings call.
As a management team we continue to focus on operating the business in an efficient manner attempting to balance short term and long term opportunities I am pleased to report the third quarter was another strong one with increases in revenue net income and adjusted EBITDA compared to the same period last year.
Let me now turn the call over to Brad Anderson, Dave to expand on our results before closing with questions and answers.
Thank you Mike.
As you know we are focused on delivering outstanding financial results.
To that end Hughes revenue was up 7% and adjusted EBITDA increased 9% over the same period last year.
Our adjusted EBITDA margin in Q.
321 was 48%.
90 basis points increase over the same quarter last year.
Year to date through September 30th.
Adjusted EBITDA margin is 41, 8%.
300 basis points higher than the same period in 2020.
We ended Q3 of 2021.
<unk> 1.510 million.
Hughes this subscribers across the U S and Latin America down towards 2000 from June 32021.
Our U S consumer offering remains capacity constrained and we continue to manage our sales and marketing efforts proactively to optimize those to existing subscribers.
Although our U S subscriber base declined by approximately 24000 U.
U S. Retail also continued to increase.
Given the strong demand for broadband capacity.
Similar to the U S or Latin American consumer offering has become capacity constrained in certain markets.
Our subscriber base declined by approximately 8000 during the quarter.
We are balancing network utilization to the subscriber levels in these areas and to improve the customer experience.
Adjusting our service plans to better match the way.
Our customers are using the service.
Despite these challenges our <unk> increase for the second quarter of 2021.
We are currently focused on increasing the yield on our capacity through a mix of high value subscribers community Wifi and enterprise opportunities.
Now, let's talk about our enterprise business. It continues to gain traction with orders up 56% on a year to date basis relative to last year.
The in flight connectivity market continues to improve.
This resulted in an increase in deployment of new aircraft.
Yes.
Within the 17 program, we continue to meet the milestones in preparation for deployment of this system next year.
Both our defense and civilian government teams.
We're very active in Q3.
The orders of our defense group are up 63% on a year to date basis compared to last year.
Italy, we had several key wins in the federal and state markets with bookings from contract extensions.
Well as the expansion of support for state agencies.
In Europe, we received a number of expansion orders for managed network services.
These include upgrading our solution.
Petroleum by implementing an SD Wan solution.
Our robust network security and 1100 locations expanding our SD Wan services body shop to include new locations and signing a term commitment extension with catalogs luxury.
In India, we continue to see strong growth in the banking sector and the addition of more than 3000 locations.
This includes those for banks, such as bank of Baroda, UC or bank NH Dfc bag.
As well as the expansion of services to ATM service providers like VDI Hitachi and unit.
In addition, Hughes, India has received a license.
To run.
Hi, throughput capacity based services from India, as Jean said multi beam satellite.
This will address low cost services for cellular backhaul enterprise and SMB services.
And we continue to work towards the completion of our joint venture agreement again use India as <unk>.
And we expect to make an announcement on that shortly.
In terms of system sales I would like to highlight a couple of recent orders the first as part of the users that connect the HTS.
Light that expands users has to use of the Jupiter system beyond the current connect satellite which is already in service.
<unk> employs a sophisticated digital channel.
Neutralizes Q and V band <unk>.
Also the National company for Telecommunications services of Egypt has selected the Jupiter system to deliver satellite broadband services or the <unk> satellite.
These awards underscore the Jupiter system as the de facto standard for satellite broadband.
Yes.
Elsewhere around the world.
We've seen expansion revenues for a number of companies, including multiple operators in Indonesia. The satellites remains a critical component for bridging the digital divide.
We received a number of orders for mobility equipment and services, including a dedicated network for the Indian Army to support land mobility using quick deploy antennas.
And we signed an agreement with <unk> in Italy.
Thereby helo SAP solution has been selected for the lot of those helicopters.
This product has unique capabilities that enable high speed transmission through heavy copter grocery blades.
Our effort to support the system engineering and gateway deployment for one web is progressing well.
We plan to have the necessary gateways deployed to support one <unk> initiatives service, we anticipate the deliveries and increase.
In 2022.
One of those lesions expand.
We have been talking about the evolution of complex hybrid notebooks and a multi transport innovations for quite some time.
And jointly hosted a session at the 2021 shows September.
We share the demonstration.
Sure.
Of multi orbit connectivity in action. The demonstration featured the successful real time seamless switching between the use Jupiter two satellite and one webs concentration.
It's highlighted advantages of each type of connectivity as Hugues active technology software.
Strategically instantaneously evaluated the type of traffic and transformation into the most efficient.
We signed agreements with one web that provides us the ability to integrate the one web service offering into a multi transport network and portfolio covering the United States in India.
Hope to incorporate this capability into other regions around the world.
To date, our business has not been materially impacted by worldwide delays in the supply of components materials in box.
We continue to work closely with our suppliers and monitor our inventory levels, making every effort to limit any future impact to our operations.
Hybrid solutions and technology enabled connectivity anywhere and everywhere.
Mark of use.
And increasingly rallying cry for the entire telecom industry.
As we continue to celebrate our <unk> anniversary as an organization in 2021.
I take great pride in reflecting upon our ongoing innovation and industry leadership.
<unk> exciting future of seamless multi orbit multi transport a multi network connectivity that Hughes is poised to deliver let.
Let me now hand, it over to Anders.
Thanks, Pablo and good morning.
Let's start with satellite services revenue for Q3 was $4 million flat to Q3 of last year.
Main focused on pursuing revenue opportunities in the Ku band sector as the market continues to slowly recover.
On the S band front, we are pleased to report that we've brought into use our Syrian one Itu filing through the successful launch and operations of Echostar Global III.
We are excited about completing this milestone and we are moving forward with planning for the next steps in the development of our global S band capabilities.
Our European subsidiary Echostar Mobile also continues to make good progress in the development of new satellite Iot services.
We recently completed initial testing of the war a protocol and have been very pleased with the performance of the wave form over our Echostar 21 satellite.
We are on track for an alpha launch of this new service in the EU in Q1 of next year.
In addition, we continue to explore new and emerging applications that can benefit from our unique ability to offer high performance hybrid satellite terrestrial networks, leveraging our MSS CGC authorizations. These.
These include air to ground network supporting the development of urban air mobility, as well as unmanned aerial systems.
We're excited to progress our development of a truly seamless worldwide hybrid connectivity to this end we are pursuing our goal of taking <unk> to the next level through full integration of S band satellite services into global <unk> networks, and we continue working on multiple fronts towards that long term strategic.
<unk>.
I will now turn it over to Dave.
Thank you Anders.
As usual my narrative will include comments on adjusted EBITDA, which is reconciled to our GAAP measure in our press release.
Consolidated revenue in the third quarter was $505 million up $31 million compared to the same period last year driven by our Hughes segment.
<unk> equipment revenue increased $25 million from higher sales activity to both domestic and international enterprise customers.
Service revenue increased $5 million, primarily due to higher Latin American consumer subscribers.
DSS revenue in Q3 was $4 million flat compared to the same period last year and corporate and other revenue was up compared to last year.
Consolidated adjusted EBITDA in the third quarter was $187 million, an increase of 12% from last year.
Hughes' adjusted EBITDA in Q3 was $203 million higher by $17 million from Q3.
The growth in Hughes adjusted EBITDA was driven primarily by the higher revenue and lower cost of services provided to our consumer customers.
<unk> adjusted EBITDA was flat as compared to Q3 of last year.
Corporate and other adjusted EBITDA was a loss of $18 million compared to a loss of $22 million last year with the primary driver of the lower loss being an improvement in earnings of unconsolidated affiliates and lower corporate overhead expenses.
Our consolidated adjusted EBITDA margin was 37% increasing one 8% from the same period last year.
Net income increased $7 million to $30 million.
The increase was primarily due to the high to higher operating income $26 million and lower net interest expense of $20 million, partially offset by higher income taxes of $17 million.
<unk> changes in foreign currency of $13 million and lower gains on investments of $11 million.
Capital expenditures in the quarter were $90 million compared to $98 million last year the.
The majority of our capital expenditures are related to our consumer business and our Jupiter three satellite program and related ground infrastructure.
We expect the launch of our Jupiter three satellite in the second half of 2022.
Free cash flow defined as adjusted EBITDA minus Capex was $97 million during the quarter, increasing $29 million from the same period last year.
In the third quarter of 2021, we bought back two 6 million shares of our stock in the open market at a cost of $62 million.
Our balance sheet remains strong and we continue to seek opportunities to deploy cash for growth.
Let me now turn it back over to Mike. Thank.
Thank you Dave.
Echostar will continue to operate in an evolving global industry and changing marketplace in that environment. Our focus remains on providing bandwidth networks support infrastructure and secure surfaces that across a wide range of opportunities we.
We continue to evaluate the risks and rewards associated with specific strategies in order to ensure prudent decisions on long term results.
Now I'll turn it over to the operator, so we can start our question and answer session.
Yes.
Thank you so much the floor is now open for questions I would like to remind everyone in order to ask a question you May press star one on your telephone keypad.
For just a moment to compile the Q&A roster.
Your first question comes from the line of Ric Prentiss from Raymond James Your line is open.
Thanks, Good morning, everyone.
Good morning, Rick.
First of all head on.
Dave you mentioned the strong balance sheet, obviously very strong balance sheet.
How should we think about.
Talked also about evaluating strategies, how should we think about investing in the business what segments or geographies or skill sets.
Do you need or want as you look out there.
Future.
Well I think as both.
Anders and <unk> discussed their strategy for their relative segments, our focus and investment going forward is an hybrid networks.
That both broadband as well as narrow band.
And integrating into the <unk> network.
So I think thats, where our focus is.
On future expenditures and investments.
When we think about share buyback is clearly you've got the ability to do that <unk> been executing on that looks to us like you maybe did another almost 900000 in October based on the.
In Q filings, so you're doing $2 five to 3 million shares a quarter it looks like.
The ability to accelerate that.
Even a higher amount per quarter or is it really volume limited or <unk>.
Help me understand why not do more given where the stock prices.
Yes.
That's something that we discussed with the board.
On a regular basis.
We have the ability obviously, given the balance sheet to do more we're comfortable at the levels that we've been buying back.
And any changes going forward.
We'll be done with the advice of the board.
Okay.
And speaking of the board.
On this call.
Proactively brought up.
Talking about their <unk> network.
Where opportunities to partner with.
<unk> sister company Echostar and wondering how do you see the potential in what might be involved in what echostar can offer up to do so as we think over the medium and long term.
Rick.
This is Andre I think a lot of that overlap has to do with the fact that.
Dish has the license holder in the United States for the AWS four spectrum, which they plan on using trust really but they are also the license holder for S band.
And MSS standpoint so.
We're working very closely with them and evaluating how.
Some of those rates might integrate into our global ambitions utilizing our GSO frequencies and.
<unk>.
It's a great opportunity for us to also understand how to integrate the satellite services into <unk>.
The network that they are building out terrestrial Lee which is using the.
State of the art when it comes to how they are configuring that software defined network.
Okay, and how important is latency sad that latency low versus amount of bandwidth and coverage how should we think about what satellite spectrum brings to the table as far as advantages versus disadvantages to terrestrial.
Well a lot of the applications that we're looking at are probably latency tolerant.
Because we are talking about a narrow band world when we're talking about S band.
No.
Okay.
The ability to utilize and GSO network for reach but then densify that network through the use of Geos.
Otherwise exceed the capacity of <unk> and GSO network is really integral to our strategy.
Okay. Okay. Thank you stay well.
Thank you.
Again in order to ask a question you May press Star one on your telephone. Your next question comes from the line of Chris Quilty from quality analytics. Your line is open.
Good morning, gentlemen.
I wanted to follow up on some of the international market opportunities and specifically, where you stand in terms of capacity access for some of your international consumer and I guess community Wi Fi opportunities.
Are there opportunities to add additional partners or capacity and perhaps looking longer term behind.
Jupiter three where some of those plans may lie either domestically or internationally.
Padma.
Yes.
Yes, it's a good question, Chris if you look at.
Global network today, we have.
Internationally, obviously besides of the U S. We have great coverage in South America from Mexico down to Chile and of course <unk>.
A fast growing business growing in Brazil, So the Americas, we have our own networks, our own satellites covering that led you to go around the world we have the JV with <unk>.
<unk> said that covers the middle East and Africa.
We not only own the <unk> satellite.
<unk> networks.
Is offering the same kinds of services that we offer in the United States.
In other parts of the world.
Basically set up really good partnerships.
With.
With people both in our verticals and.
Geographic diversity.
Example, the cover regulatory perspective.
Ownership of satellites are not allowed by private parties, but it looks like Thats just about too.
At least publicly they have said is changed that policy now.
I think we will see a rush there.
In Southeast Asia, we have good partnerships.
Companies in Indonesia, and Malaysia.
In Thailand, So we have good coverage so between our partnerships.
<unk>.
Ownership of assets and chalk joint ventures, we pretty much have the globe covered for broadband satellite communications.
Great.
And then I guess.
Light of <unk> announcement yesterday between them.
In March that Viasat.
They also are attempting to address that sort of global market active global market opportunity.
You clearly have an infrastructure play on the gateway side, but perhaps less control over the amount of capacity that's available through your partners.
Is there a strategy that you need to undertake to to ensure that.
For partnerships.
Ken can have the same type of capacity availability that prospectively, a joint inmarsat buys that will happen in the future.
I think I think effectively you are right. We are both trying to do the same thing, but I think.
We are significantly ahead with our distribution capability in the actual business that we're doing in all these countries.
Our strategy has always been when we enter the region.
New region, we start off being partners with a company that owned satellite assets in that region, then step to recreate a JV.
<unk> business development insight and step two would be to own our own assets.
And so if you go country by country, you can see it's in stage, one two or three.
The whole Americas is in stage III, we owned assets are lower.
Other parts of the world.
Stage, one stage two and welcome.
This strategy has worked well because it optimizes the deployment of our capital assets, where there is business and we have a potential to grow significantly in the next few years.
Great I wanted to circle back on on India, I Didnt catch either the name or the capacity on the <unk> sat satellite that you gained access to and can you maybe detail is this the first time that you've used.
I guess, what would formally be considered is Roe.
As a partner for capacity.
No we win.
Obviously, you have been using satellites.
Satellites for the last 20 years.
But they were not high throughput satellites.
Similar to traditional 36 megahertz transponders.
So but.
<unk> launched.
Launched the high throughput satellite and now we have the ability to deploy a Jupiter platform.
India using that high throughput satellite, but it was a new space policy that we announced a month ago.
Sure.
People private entities, both foreign and domestic can put up.
The appropriate licenses can put up their own Isa with satellite, but initially will be we'll start with those by the end of the year with Dan.
High throughput satellite and then later on we will see who else puts hub capacity in the country.
Great and maybe on that high throughput.
Satellite.
First of all you affirmed the launch date for Jupiter, three but maybe a quick update on on where you stand in terms of.
Final assembly testing and sort of the process to get it on orbit.
And secondarily when you think about what comes after Jupiter three.
Do you see a path forward to either increase capacity or flexibility.
Future satellites, I mean, what would be your priority in terms of design in the basket.
But.
Most of them.
We've got an ankle.
Clearly capacity is.
Most most important element.
<unk>.
Every time, we put up a satellite business.
Fast increasing dramatically.
We ended up taking more capacity, which is a good problem to have so with Jupiter three within airlines 500 550 <unk>.
Bits of capacity over the Americas.
About 70, or 80 gigabytes of that capacity will be South America, and the remaining will be over in North America, both Canada and the United States.
So thats going to give us a lot of capacity for a few years, but but again.
Then if we could.
We're going to continue to grow we need to add more capacity and that is something we are working hard on rate.
To decide what type of capacity.
<unk> satellite that is slightly smaller satellite.
It's going to be a hybrid network so as we work with.
One web and.
And it'll be a combination of all of that but right. Now we are focused on getting Jupiter three up getting the ground network of Jupiter three operators.
And once we are we will achieve those objectives.
Element one of many plans that we are working on for <unk>.
Pasty and not really the Americas business.
Great and a final question for <unk>.
Can you give us an update of where you stand in terms of.
The email business in Europe.
Bringing on new partners, and where we might see significant.
Hardware deliveries and service rollout is that still dependent on yet to be determined.
Three GPP standards.
Well that will certainly accelerate things once those standards are established but in the meantime.
We've already picked a couple of development track this.
<unk>.
Very recently initiated the orders for those.
Electrical parts that have long lead times associated with them for our first set of devices utilizing Laura protocol, but no. We've got a number of things in development.
At this point as I mentioned before we're going to stand up sort of an alpha test in the first quarter of next year sort of working with some partners in Europe in adapting our radio module into their devices.
Is to create an infrastructure that will allow a lora type system be utilized across the entire EU.
So we've got a sort of a staged series of things, but I would say that once.
Once released 17 gets adopted early next year that should then open the door for some more <unk> associated developments, which would be forthcoming sometime thereafter.
Great. Thanks for the update.
We have a follow up question from Ric Prentiss from Raymond James Your line is open.
Thanks, I appreciate it I want to follow up on Chris's questions. There on the Jupiter three launch.
Any supply issues labor issues I know couple of quarters ago, there had been some concern of ours.
Manufacturing was growing but can you update us on kind of the status quo.
Second half launch date, and when do you think will get actual announcements on dates as far as the launch and targets were in service.
Yeah.
The supply side problems.
I will not impact the.
The satellite.
Because we've got all of the materials and soldiers Mexico.
So that's not going to be a problem.
This work testing integrating most of the subsystems almost all of them.
Now being built.
One or two that I assume is a process of manufacturing.
So we got to get them built we've got to get them tested and then we've got to get it integrated so it's nuts and bolts work.
Not a material procurement task at this stage.
Well for us when we might get update as far as targeting.
More than just a second half that we're now in November of 'twenty, one when do we think we'll get updates as far as.
A little more concrete on the on the actual launch date on potential for in service.
This is Mike Dugan I mean, we've given you guys as much information as we really can as you know things are changing on a daily basis with the impacts from COVID-19.
A lot of the work what's going on in California, We're just really struggled to get people back in the office and so on.
And we're not going to give you dates that are unreasonable. So as soon as we have.
More information will certainly share.
I appreciate that Mike.
Obviously, a lot of curiosity out there what do you see that capacity come online so.
And on the other part of the question of the narrative.
Euro is anxious to see that capacity online as private label, that's all I can.
Yes.
How should we think about it.
Cash flow for a while obviously, we spend the capex and.
Opex will have to get ahead of time as well before the revenue can come on.
If you think about it.
Ballpark bottom what kind of magnitude of costs come in at what point in time.
For the in service date.
As far as what the impact on EBITDA in the short term might be before we went to selling all that capacity.
Yes, I mean, we'll have to start testing the ground in Brazil.
We've already got much of the ground infrastructure built was allowed to start.
Testing.
That network in advance of the satellite being launched obviously.
And much of that work will start and well as I said, it's already started but it will start ramping up in 'twenty two.
Team has done a great job of balancing constant updates on satellite build versus not pre building the infrastructure too far in advance.
And that in itself by the way is the infrastructure has suffered.
Covid related delays so.
I've just been the satellite.
We've made great progress on the ground infrastructure and I think the team's done a great job.
Manage them to stay in sync with the satellite.
And the ground infrastructure isn't an issue.
We're in great shape, there, but to your point there are operating expenses that do get start getting ramped up in advance of the service offering.
But I think we'll start seeing some impact to the P&L sometime in first half 'twenty, two but I don't expect it to be material.
Okay. That's helpful.
One for me is.
I mean can you talk about the demonstration number one.
Handoff.
When you look at what that one web relationship that we signed.
The conference could mean as far as service revenue or applications that youre going to bring to market.
The timing on that as we are working with one go to market strategy.
Well.
We have our first network, which should be operational.
For the U S government.
In.
In a few months.
So that's a very very.
The imminent.
The next <unk>.
We are going to sign definitive plans for in India.
<unk>.
That's part of the main network.
<unk>, which probably is at the end of next year.
And then we'll go on from that point on this to other regions.
Okay that helps I appreciate it.
Are there other places <unk> booking two.
I am only speaking.
Two the <unk> coffee <unk> web as a separate company owns its own and they are working in many other parts of the world.
Exactly when we've seen announcements of them with AT&T communications and other obviously with Bharti other regions out there specifically.
I think going all over the world.
One very briefly.
<unk> you have total coverage of the globe. So you can sell capacity or services.
Anywhere in the world.
Great. Thanks.
There are no further questions at this time I would like to turn the call over to back to our presenters for closing remarks. Please go ahead.
<unk>.
Yes, thanks, everybody for joining today.
We'll look forward to talking to you here.
Q4, thank you.
This concludes today's conference call. Thank you all for joining you may now disconnect.
Okay.
[music].
No.
[music].
[music].
Good day and thank you for standing by welcome to the Echostar Corporation Conference call for third quarter 'twenty 'twenty. One results at this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question during the <unk>.
You will need to press star one on your telephone please be advised that today's conference is being recorded if you require any further assistance you May press Star zero.
I'd now like to hand, the conference over to your speaker for today, Mr. Terry Brown. Please go ahead Sir.
Thank you good morning, everybody and welcome to our earnings call for the third quarter of 2021, I'm joined today by Michael Dougan, Our CEO, David Rayner, COO and CFO PRASM Kaul President of Hughes honors Johnson, Chief strategy Officer, and President of Echostar satellite services.
<unk> and.
Dean Manson General Counsel and Secretary as.
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 let.
Let me now turn this over to Dean Foods Safe Harbor disclosure.
Thanks, Terry 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 1095.
These forward looking statements involve known and unknown risks uncertainties and other factors that could cause our actual results to materially differ from the historical results and from any future results expressed or implied by the forward looking statements.
For a list of those factors and risks please refer to our annual report on Form 10-K for the year ended December 31, 2020, which we filed on February 23rd 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 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 forward looking statements.
Now I'll turn the call over to Mike Dugan.
Thank you Dan and thank you to everyone joining us for our Q3 2021 earnings call.
As a management team we continue to focus on operating the business in an efficient manner attempting to balance short term and long term opportunities I am pleased to report that third quarter was another strong one with increases in revenue net income and adjusted EBITDA compared to the same period last year.
Let me now turn the call over to per admin honors and Dave to expand on our results before closing with questions and answers.
Thank you Mike.
As you know we are focused on delivering outstanding financial results.
To that end Hughes revenue was up 7% and adjusted EBITDA increased 9% over the same period last year.
Our adjusted EBITDA margin in Q.
321 was 48%.
90 basis points increase over the same quarter last year year to date through September 30th.
Adjusted EBITDA margin is 41, 8%.
300 basis points higher than the same period in 2020.
We ended Q3 of 2021 with approximately 1.510 million Hughes this subscribers across the U S and Latin America down total 2000 from June 32021.
Our U S consumer offering remains capacity constrained and we continue to manage our sales and marketing efforts proactively to optimize those to existing subscribers.
Although our U S subscriber base declined by approximately 24000.
U S. Retail also continued to increase.
Driven by the strong demand for broadband capacity.
Similar to the U S or Latin American consumer offering has become capacity constrained in certain markets.
Our subscriber base declined by approximately 8000 during the quarter.
We are balancing network utilization to the subscriber levels in these eight years Andrew.
<unk> grew the customer experience.
Adjusting our service plans to better match the way.
Our customers are using the service.
Despite these challenges our <unk> increase for the second quarter of 2021.
We are currently focused on increasing the yield on our capacity through a mix of high value subscribers community Wi Fi and enterprise opportunities.
Now, let's talk about our enterprise business. It continues to gain traction with orders up 56% on a year to date basis relative to last year.
The in flight connectivity market continues to improve.
This resulted in an increase in deployment of new aircraft.
Yes.
And then the 17 program, we continue to meet the milestones in preparation for deployment of this system next year.
Both our defense and civilian government teams.
We're very active in Q3.
The orders of our defense group are up 63% on a year to date basis compared to last year.
Actually we had several key wins in the federal and state markets with bookings from contract extensions.
As well as the expansion of support for state agencies.
In Europe, we received a number of expansion orders for managed network services.
These include upgrading our solution.
British petroleum by implementing an SD Wan solution.
Our robust network security at 100 locations.
Expanding our SD Wan services body shop to include new locations and signing this term commitment extension with catalogs luxury.
In India, we continue to see strong growth in the banking sector and the addition of more than 3000 locations.
This includes sales to a bank such as bank of Baroda, UC or bank NH Dfc bag.
As well as the expansion of services to ATM service providers like BPI, Hitachi and euro debt.
In addition, Hughes, India has received a license.
I meant to run.
The high throughput capacity based services from India.
<unk> multi beam satellite.
This will address low cost services for cellular backhaul enterprise SME services.
And we continue to work towards the completion of our joint venture agreement routine use India as both DSO and we expect to make an announcement on that shortly.
In terms of system sales I would like to highlight a couple of recent orders. The first is for the users that connect the HTS.
Satellite that expands user has to use of the Jupiter system beyond the current collect satellite which is already in service.
<unk> employs a sophisticated digital channel.
<unk> utilizes Q and V band <unk>.
Beams.
Also the National company for Telecommunications services.
Egypt has selected the Jupiter system to deliver satellite broadband services or the <unk> satellite.
These awards underscore the Jupiter system as the de facto standard for satellite broadband.
Elsewhere around the world.
While we have seen expansion.
For a number of companies, including multiple operators in Indonesia, where satellite remains a critical component for bridging the digital divide.
We received a number of orders for mobility equipment and services, including a dedicated network for the Indian Army to support land mobility using quick deploy antennas.
And we signed an agreement with <unk> in Italy.
Hello, SaaS solution has been selected for the lot of those helicopters.
This priority is unique.