Q2 2022 EchoStar Corp Earnings Call
Yeah.
Good day and thank you for standing by welcome to the Echostar Corporation Conference call for second quarter 2022 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 session you will need to press.
Star one one on your telephone please be advised that today's conference is being recorded I would now like to hand, the conference over to your speaker today Jerry Brown. Please go ahead.
Thank you operator, and thanks to everybody for joining our second quarter earnings call.
I'm joined today by <unk>, our CEO and President David Rayner, COO and CFO .
<unk> Kaul, President of Hughes, 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 recording which we ask that you respect.
Let me now turn the call over to Dean for the Safe Harbor disclosure.
Thank you 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 be materially different from historical results and from any future results expressed or implied by the forward looking statements for a list of those factors and risks. Please refer to our annual report on Form 10-K for the year ended December 31 2012.
One filed on February 23, and our subsequent filings made with the SEC.
All cautionary statements, we make during the course to be understood as being applicable to any.
Forward looking statements, we make wherever they appear you should carefully consider the risks described in our report and should not place any undue reliance on forward looking statements. We assume no responsibility for updating forward looking statements I will now turn the call over to Hamid.
Thank you James and good day, everyone.
As some of you are aware, Dave Rayner, our Chief operating officer, and Chief Financial Officer.
Has decided to retire he has agreed to stay on board through the transition to.
<unk> success era.
An executive search is already underway.
Dave has served echostar shareholders diligently during his 18 years with the company and we thank him for his.
Many contributions and wish him well in the future.
As for agenda for the call today first the team will provide a brief overview of activity.
From the second quarter after that I will offer some comments on the business and our strategic planning process. We will then move to question and answer session.
Let me now turn it over to Pat.
Okay.
<unk> had a solid second quarter in 'twenty.
One that included $436 million of new enterprise order.
Our highest quarters on record.
I am proud to report that our Hughes satellite Internet service has been recognized not only has the best satellite Internet provider of correctly 32, but also the best Internet related by U S News and World book 360 reviews.
This is the third diamond in a row that we have been recognized as the best F&I ISP and both these accolades a strong endorsement of our commitment to service.
Erica.
And our team continues to focus on improving the north American consumer offering and customer satisfaction.
Our new service plans, which we began rolling out earlier this year are being well received by customers.
Driving more high speed data each month.
Our core remains strong increasing from the first quarter.
We continue to optimize capacity allocation to yield the best performance both from a satellite fleet.
Looking ahead in our U S consumer market. We're excited about our new used net fusion service plan, which we will soft launch both with existing customers.
And then in select U S markets beginning in September .
You will recall that we announced this first of a kind hybrid.
While the capability for consumers both in March and the satellite scope.
Combining satellite and wireless technologies.
Nevertheless to deliver an overall more responsibility that experience to meet market demand.
Additionally, we made a proud participant in the FCC affordable connectivity program. This helps ensure eligible households.
Speed Internet service they need.
Moving to our North American enterprise business in the second quarter, we executed an agreement with more than a $180 million the global business aviation.
This is the first phase of our flat panel electronically <unk> antenna technology.
In 2010.
First to start in 2024, using one web video capacity and network.
Also within the in flight connectivity market, we can.
Please see the multiyear development and deployment project, enabling us to launch <unk> services LLC 17, using the Jupiter system platform.
Our partners patterns.
<unk> deployment of Jupiter modem to initiate inflight Wi Fi for Spirit Airlines.
In the U S managed services arena business remains solid.
As just one example, we completed a project for <unk>.
Retail customer that involve upgrading network equipment at more than 2000 stores in less than five months.
And we continue to see success with contract and deployments in the retail retail petroleum and energy market.
One of that program, we continued deliveries of production gateways and systems that.
We have shipped 33 gateways, so far and expect to complete all gateways in 2023.
We have also started because the delivery of the production motive power users.
Our defense group had a strong second quarter also building either from the U S space Force.
Satcom programs.
U S Navy <unk> networks and classify systems development.
Is the civilian government market the team secured a four year renewal of our contract with the Commonwealth of Pennsylvania, providing managed terrestrial and satellite broadband services to multiple agencies.
Also the group received an award from the U S. Postal service for managed terrestrial broadband services at 150 sites, bringing the total number of U S. Postal service locations in our portfolio to more than 750.
Now to our international operations.
In the U S. A priority the Latin American market is to maximize yield on our capacity.
For the consumer business this means value Sterling.
Through tactics, such as selective screening and capacity optimized price plan.
Our output trend is positive increase from the first quarter.
We are also pursuing high value enterprise and Delaware projects in this region.
For example, during the second quarter, we won two additional orders from retailers to deliver broadband to schools throughout Colombia, using a ku band services bring.
Bringing our total to nearly 10000 sites.
Roger.
In Brazil, we secured a five year contract extension.
The biggest utility companies in the country.
Adding fleet automation for 3000 vehicles.
A large Brazilian customer expanded and extended our contract connecting 1700 additional retail sites to the satellite network.
And we won a new retail customer in Brazil, with an 80 site managed SD Wan contract.
In Europe , a large multinational oil and gas retailer extended our contract to support the digital transformation with higher speed services and manage life back.
An important element of our strategy is to expand connectivity in emerging market.
Focusing on large populations and businesses, either unserved or underserved by terrestrial.
<unk>.
We continue to successfully execute on this strategy leveraging the strong acceptance of our.
Our Jupiter platform worldwide.
As you know in January according to two we completed the formation of <unk>.
Joint venture in India with Dr.
Now operating under the Hughes Communications, India, Brad HCI the largest satellite.
It's secured its first major win with a five year contract with Indian Oil Corporation to provide managed SD Wan across 10000 sites.
Targeting enterprises telcos in small to medium businesses using the <unk> 29, and <unk> 11 satellite office.
Indonesia is developing into a highly active and important region for us.
Specific satellite to center selected Hughes.
Power the third high throughput satellite with 11, Jupiter Gateway that will provide 100 gigabit per second.
And we received an order from <unk>.
We look forward to the launch of our Jupiter three satellite is.
It will bring significant additional capacity to our markets as well as the ability to offer high speed service plan as demanded by our customers.
<unk> continues to progress at Baxter and his current fees and thermal vacuum chamber, where it can be tested and conditions similar to the space environment.
This testing is complete we will move into final integration.
I anticipate the satellites, we launched during the first half of 2023, let me now turn this call over to Dave.
Thank you <unk> and Hello, everyone.
Our revenue in the second quarter of 2022 was flat compared to the same period last year.
We have managed to sustain our revenue with higher equipment sales to our enterprise and government customers.
Domestically and internationally, while at the same time, managing our capacity constraints and other factors across our consumer business.
This change in our revenue mix has and will continue to put some pressure on our gross margin or.
Our adjusted EBITDA in the second quarter was 168 million dollar deal.
Increasing 10% from last year.
Decline in adjusted EBITDA was driven primarily by our gross margin as our operating expenses have remained relatively flat.
And the place you began to impact our operations in 2021, and we have experienced increased costs in certain functional areas, including field services and customer care.
We're making every effort to minimize impact to our operations and protect our margins.
Free cash flow defined as adjusted EBITDA minus Capex was $92 million during the second quarter increased $38 million sequentially.
Meanwhile, our balance sheet remains one of the strongest in the industry and we continue to seek opportunities to deploy cash for growth.
In the second quarter of 2022, we bought back one 9 million shares of our stock.
Open market at a cost of $43.
I'll turn the call back over to Amit.
Thank you Jay.
On our first quarter earnings call I shared some of my initial thoughts about echostar.
Our competitive environment, and our unique strengths, including our strong balance sheet.
Global presence and trusted reputation our engineering expertise.
And our S band spectrum assets.
Since then I have conducted a series of in depth reviews.
<unk> business lines and functional areas throughout the company.
In order to a certain operational strengths and areas of opportunity.
While I'm not ready to disclose a specific roadmap I will share some of the process with you as we chart our strategic course.
This is a methodical undertaking designed to safeguard our financial stability and independence, while capitalizing on long term growth opportunities of existing business lines and new ones.
Potential acquisitions.
We are pursuing three parallel work streams that I called horizon.
Referring to three concert consecutive time windows.
I would like to repeat that we are working on all three time horizons in parallel.
First for Horizon, one we're looking at current business and ways to optimize both our operations and our offerings over the next year or so.
You have touched on some of this already with the introduction of the Hughesnet fusion service value steering and more precisely managing churn.
To help combat profitability erosion due to the shift in revenue mix, we are focusing on capacity yield management rather than on subscriber growth.
Simply it seems.
Early in the international markets will direct our efforts towards the most scalable and profitable regions.
Across the organization, we are identifying areas for cross functional collaboration simplifying and centralizing our structure for greater efficiency.
Through these actions, we intend to improve our operating and financial trends in the near Horizon.
So there are a couple of years following horizon, one, which we're calling horizon. Two we are developing in defining organic growth opportunities and preparing the organization to pursue them. This includes a sophisticated go to market plan to best monetize our fleet capacity was superior III enter service.
You are outlining the focus areas for our enterprise business globally and plan to increase our scale through internal investments and potential complimentary acquisitions.
We will also pursue growth by leveraging our managed services portfolio and hybrid Leo Geo business solutions.
For Horizon III, we are currently evaluating opportunities for new long term avenues of growth, including commercialization of our S band assets and.
And potential M&A opportunities.
Regarding our <unk> initiatives I would like to share a couple of high level updates.
Echostar mobile our EU licensee introduced our Pan European lower ROI enables internet of things network.
At the low ROE Wan World Expo in Paris. This network is the world's first bi directional real time lower enabled satellite service.
<unk> provides seamless coverage of Europe combined with the ability.
For heightened devices to roam onto existing lower when terrestrial networks.
We are on track for commercial service launch in late 2022.
And we are excited to help transform the satellite Iot market with cost effective reliable and a standards based Iot services.
Echostar mobile made significant contributions of <unk>.
<unk> band satellite terminals, and accompanying voice and data services to EU and National government.
Military and relief efforts associated with the ongoing conflict in Ukraine.
We are grateful.
There are many team members across Europe , who did a superb job in responding to this crisis and we believe this effort demonstrated the vital role of high quality mobile satellite services in the region.
Essentially worldwide.
I know you're eager to hear more specifics on our strategic and financial direction and I look forward to sharing additional information with you.
On future earnings calls.
Let me now turn it over to the operator to start our Q&A session.
As a reminder to ask a question you need to press Star one one on your telephone.
And Thats Star one one please standby we compile the Q&A roster.
Our first question comes from the line of Ric Prentiss from Raymond James Your line is open.
Thanks, Good morning, everyone.
Good morning, Hey, good morning.
Dave.
Great working with you this might be the last earnings call I guess, so congrats and enjoy retirement.
Wanted to start first with Jupiter three.
Update us maybe more specifically as far as whats, causing the delays I think.
Supply chain manufacturing other projects may be jumping ahead, but comfortable are you that we now have a pretty good jade.
As far as when Jupiter three could get launched and when do you expect in service to be if you expect Jupiter three launch to be in first half.
Yes.
<unk>.
Very good.
Police Department. Please continue.
Yes, hi.
As you know we have no we.
We have a satellite in the chamber.
One of the biggest.
That one has been <unk> satellite and the testing so far is doing good.
So we're getting more and more confident that the data that we have projected.
Going to be give or take a few days.
So we began to feel good about it.
I think typically once we launch the satellite.
Couple of months after that we should be in service.
<unk>.
We're still being.
We can't predict the exact date will launch the satellite but by the end of the first half I think we should be in service business.
The total new satellite into service.
Okay. Good.
Obviously, some major industry.
<unk> news.
Over the last couple of weeks, one of which was one web and Eutelsat proposing a merger help us understand what that means for echostar and use since they are both customers of yours and what does it mean longer term as far as the relationships you had as far as having the ability to sell Leo.
<unk> into India, and the U S.
Yeah.
Go ahead, yes. Thank you.
So really it's a very positive development for us I think.
As you mentioned Rick.
Both.
<unk> and <unk>.
One of them are very good customers of ours.
So we feel good that we will continue to do business with them going forward. The current contracts that we have.
Significant.
We'll continue to look into that expected in that contract. In addition, as you as you noted in the past we are strong believers in the Geo Leo concepts and I think this merger along with the relationships, we have with them really facilitates the Geo Leo.
Advantages that we've been talking about for the last.
Six months so all in all we have.
We are positive and.
We hope it isn't.
Hence not only our business, but obviously using faster one reps business.
Any specific changes to what you expect to be able to do in India or in the U S. Maybe with those.
The one web relationship that you had.
No I think the state.
Those agreements are still very valid.
I think if anything we are hopeful that this.
Accelerated the process of starting phase two.
This gives us much more capacity at a much higher speed than phase one because potentially.
This could make the funding for phase two and one with a lot more practical.
Unlimited.
Yes.
Okay. Thanks, I'll come back for questions. If there's time.
Thank you.
One more for next question.
Our next question comes from the line of Michael Rollins from Citi. Your line is open.
Thanks, and good morning.
Couple of questions.
First question is just in terms of the performance of the Hughes consumer business.
Did you see any impact during the quarter from competition, which could be fixed wireless access some of these emerging fiber builds or or any other.
Competition.
However, another question after this.
I would like to direct that question to you as well.
Okay.
We are obviously.
Losing some subscribers.
Two other technologies.
Leo networks, the biggest threat right clearly styling.
Because they are.
They can address the latency issue.
Net.
The geofence.
So we're losing some sub clearly two filings.
And we've been working hard to try to come up with solutions that will compete on this latency issue.
<unk> solution, we are hoping in the interim will be fusions <unk> fusions those that we talked about which is the competition.
Of Geo and LTE.
Our capability.
Address the fusion fusion really address the latency issue very well.
So we are hoping once we do that that should reduce our churn from the.
The people who need.
Faster latency.
Compared to the other services that are needed in addition.
70% of our traffic is video.
And video broadcast video primarily.
Debt.
Application that is required.
<unk>.
So we're hoping that if you take the combination of customers that we have that require low latency.
And the introduction of fusion service beginning in August and September this year.
The view.
<unk> addressed the customer's journey.
Having said that we will turn up some customers decided that a formidable competitor.
And we'll have to continue to battle it out with them.
I think the market will support two or three.
Suppliers of this service of high speed service and.
We are winning business comfortable that view.
We will be one of those two or three.
Suppliers, let's stay in the business successfully.
Thanks, and the second question is I've noticed that as you embark on.
In the horizon one three.
For the year.
You've continued as a company with share repurchases.
And curious on the one hand, the governing thought.
Continuing of your purchases, while thinking about some of these.
Future strategic opportunities that you may have particularly on the S band.
And does that infer that whatever you may do on Essakane click youre, hoping for it to be very limited from.
Echostar balance sheet perspective, and to create a platform that others are investing and funding to take advantage of the opportunity.
<unk>.
Dave.
Direct it to you first and if theres additional comments on that at the end of your comments.
Yes, Mike.
We continue to.
The stock has been grossly undervalued.
And so we're continuing with the buyback program, it's something that we continue to evaluate.
Now on using a fraction of our operating free cash flow.
All of that share repurchase so we're it's not like we're growing the balance sheet by doing it.
Our growing cash balance as much as we could.
So I think we will continue to evaluate that in terms of.
What an S band networks.
Sure would look like I think that is very much still in play as to exactly what we will buildout we're aggressively.
Pursuing those opportunities to evaluate that network and to meet as discussed.
Sure he is willing to discuss it further.
But right now we're very cognizant Scott.
And I'm sure he's willing to discuss it further.
But right now we're very confident.
The positioning of our balance sheet, and our capability of making significant investments going forward.
And then thank you Dave.
And just one follow up to that as you think about the free cash flow.
Do you think about it in terms of free cash flow that the.
Our core consumer business throws off relative to the free cash flow.
Enterprise segment.
Yes.
Segment relative to maybe some of the.
Incubation.
Projects like the spending is there a way that you think about that internally that would be helpful for you.
<unk> to think about from an external perspective.
Yes, I think we evaluate all right.
All aspects of that as possible by growth of the enterprise business.
<unk> cash flow.
The consumer business, obviously generate significant free cash flow today.
Well I think a little bit of subscribers.
But at the same time, we're not spending as much on subscriber acquisition costs. So we continue to generate cash from operations related.
And it's always important to balance that against new investment not just that span, but other organic growth.
Opportunities that we may want to invest in other product enhancement.
Acquisitions that we may want to look at all of that is in the mix.
Certainly we don't look at it one dimensional weight and we know we have to trade off one against the other.
In the future if we see huge opportunities in one area.
We make significant investments and it may result in us.
Following the growth in some other areas.
It's all done with a lot of thought a lot of analysis.
With the intent of long term growth of both revenue and cash flow and obviously shareholder value increase.
Thank you.
Thank you our next question.
Our next question will come from the line of Chris Quilty from Quilty analytics. Your line is open.
Alright, Thanks, guys wanted to start off with a question regarding your one web relationship obviously youre supplying gateways to Utah sat in your supply and gateways to one web. So you seem pretty well positioned there can you talk about the opportunity beyond gateways I think I heard you mention.
And that you actually began shipping some CPE equipment to one web.
And if so.
How would you size that opportunity.
Okay.
Correct.
Pass this question to you.
Sure. Thanks.
<unk> gateways.
So these models are being supplied to manufacturers.
The parabolic antenna.
<unk> that other manufacturers are making for them. So every every user terminal will have a modem card in this.
So that's number one number two program.
Program of developing the electro electronic scanning array.
A very exciting program and we are.
That's a different ballgame once we get there.
Because.
We believe customers believe this is global data by signing a $180 million contract that we probably have one of the best.
<unk> in the market today.
So we are hopeful that.
A lot of the applications is one way of next year.
We'll use our.
Our Esa and that should generate significant.
Revenues.
For us in the next three to four years.
Got you no I thought last quarter when you talked about the <unk> you were talking mainly about the IFC market and clearly you've got the announcement with Gogo and I thought at the time you said.
We're not supplying consumer terminals. So is this a new product so you've got one for the IFC and now you have one for the consumer market.
Yes.
Not going to supply.
Neither is one of the client doesn't.
The consumer in mind, because the cost of an Esa.
It just didn't make sense for the consumer market, where you can.
It will generate.
Antenna cost of $40 $50, you just can't compete.
So the intent here is to address.
Mobility.
Ability market the airplanes ships trucks.
Was the high end.
Enterprise.
And so the idea there would be.
Today, they have to use these dooms doom parabolic antennas, because theres no theres no Esa in the market.
It meets the requirement, but once we do that that becomes a different ballgame.
And we will then start supplying to use a term loan using the USA.
All of these other applications, except the consumer with one another.
Addressing it at this stage.
Got you sorry, I said consumer I meant for enterprise, because clearly one way, but it's focused on the enterprise market yes.
Can you deploy that in some of your sort of Wi Fi hotspot community service as the economics work and that sort of a scenario.
Absolutely.
Work and work well.
Yeah.
Great and the planes.
Any mobility application the government is going to be a big market for us.
That is the U S government as the British government.
And a bunch of other governments that one.
Already either signed contracts.
In the process of signing.
Should be a big element and then certain types of big enterprise customers, where the economics.
Look or an Esa.
Got you.
I think next year, we should be deploying them all over the globe.
No I think in <unk> 8-K, they indicated 'twenty four 'twenty five sort of deployment is that just simply because of <unk>.
Aaron can FCC certifications that are.
Specific and much longer for the IFC market.
Yes.
As you said, we have to in order to fly a new piece of equipment that has to go through a whole bunch of safety and.
Erin kind of test to be done and that just takes time.
I understand.
Question on the PSS.
SaaS business.
And then a small contribution but margins, which had been in the <unk> were up to 60% in Q1 and in the 70% range in Q2.
And yet I hear you talking about starting to ship some hardware so.
I guess should we expect to see the margins correct down.
10 to 20 points or so as you actually begin to ship hardware.
And I thought you said sort of full scale shipping. Perhaps later this year early next year, but you did ship some to Ukraine you indicated.
And Dave if I may directly to you in terms of the margin question.
Yes, I'm not sure I'm. Following you there Chris because you seem to reference Esl's margin increases and then you went back to.
He was equipment, so I'm not sure I understand the question well in the 10-Q you break out.
<unk> SaaS as both service and hardware, but there has been no hardware up to this point and I'm kind of referring to the email business.
Okay, Yeah, the email business is not to.
To be clear <unk> is not part of VSS.
As part of corporate and other.
No that wasn't obvious.
Okay, Okay sorry.
Fair enough. So was there an underlying reason why the margins in <unk> have gone up by 20 points.
Yes, I mean part of it is.
A big piece of it as it were actually starting to see some increase in revenue in that and as you know that revenue incrementally is almost 100% 90%.
Margin, so as we grow that business, even on a small basis the margin increases significantly.
Okay and with the fusion service again.
How should we think about that in terms of the margin impact. If you are is it fair to assume you're basically going to be reselling terrestrial wireless service, which I'm assuming is going to be at a much lower margin contribution than your satellite broadband and have you Inc.
I should say, how many carriers have you integrate <unk> with so that you can be able to provide that on a national basis.
Yes, let me address the first part of that and I'll, let <unk> address the second part.
Yes, I mean from a pure margin percentage standpoint.
Youre going to see erosion, we would like to see the margin dollar stay relatively flat.
That obviously, there will be an upcharge for fusion.
That that incremental.
Cost.
But given that we haven't really introduced the product yet we havent seen the impact.
On the margins, but our expectations would be dollar margins flat, but the percentage margin, obviously erodes a little bit.
And I'll, let <unk> have effect.
Yes for the second part.
Sure. Thanks, Steve we have we have an agreement with one major wireless carrier.
But.
It is not exclusive and we're talking to everybody in the market right now.
I understand.
And the exclusive actually brings back a question regarding gogo in their 8-K, they indicate that they've got an exclusive on that business aviation product.
Is there in that.
Seems to be a good decision since they dominate that market.
But do you have plans for a version of that for the commercial aviation market.
Not right now we're focused on the business aviation product.
Unless we get into the business next year.
Certainly look at the commercial aviation market, but today furnaces is focused purely on the.
On the business aviation.
Okay and one final question this is a bit of a hypothetical.
But.
Our recently space.
Spacex made a filing four two gigahertz spectrum, specifically the spectrum that dish currently holds.
On there.
To be called the Terrestar satellite here in North America.
And I won't force you to to guess what happens with that.
That'll Royale, but I guess the question is the Echo 21 is in essence.
Terrestar two satellite that you operate in Europe .
And.
Yes.
Spacex were to get.
Accurate.
Access to that spectrum.
Does that impact you in your deployment plans of what you're doing in two gigahertz.
Dan if I may.
Direct this question to you and then I'll have comments at the end if necessary.
Sure Chris Yes, we noticed the filing obviously, we have an interest in the S band.
And do you monitor filings there.
You were still digesting it hasn't it has not been put on public notice.
It's definitely something that we intend to understand better.
At this point don't have or don't have a view on that.
Thank you.
Alright, well. Thank you that's my questions for now.
Thank you one for our next question.
Okay.
We have we have a follow up from Ric Prentiss from Raymond James Your line is open.
Yeah, a couple of follow ups.
Want to follow up on one of Michael's questions earlier with the competitive dynamic.
Do you see the west the wireless Internet service providers out there or are they.
<unk> not formidable something youre looking at just trying to think of how they are playing into the competitive environment.
Perhaps you can start these questions.
Sure.
We view.
All competitiveness as formidable.
We don't think of anybody not being able to be competitive, but I think at this stage.
We're not the major volume for us.
But because the markets that they're serving.
From the markets that visibility.
So we don't really run into them.
Everywhere, we do in some on the fringes.
Some overlap markets, but.
But not in a significant manner from a competitive technology, obviously a company like Starlink.
Is the competition, we worry about the most.
And.
So we'll see how it develops over the next year or two.
Okay. When you say, the west's or really a different market served can you give us just kind of an example of something they would serve that you wouldnt or vice versa.
Well the line is between number of subsequent square.
Okay.
We go to a certain density is very competitive.
And there's some more capacity than others.
And generally the other element that.
It comes into play obviously.
The financing.
The capitalization of the business.
It is not.
The best in the World right.
Fair point.
Okay.
Got it.
Scott Please.
Sorry, another question on kind of horizon, one two and three.
We think of Jupiter three coming in service then by the end of the first half 'twenty three what are you anticipating it will take to fill the Jupiter 310 years five years three years less I mean, how fast are you anticipating youll feel that burden, obviously that fits into Michael in my kind of competitive.
Landscape questions as well.
We have not completed that analysis.
But the way we think of Horizons right now is that we were assuming that.
At least for the first two to three years of the operations of supply Jupiter three we do have a significant market advantage with an enormous capacity at a very.
Reasonable cost per bit.
In.
Some new products that we're working on in that area. So at least for the two years to three years, which we consider horizon two we get an uplift in <unk>.
Nearly all of our financial metrics.
Top and bottom.
And by then.
Obviously geometry will continue to evolve and give us additional growth, but then our ryzen three kicks in we are working on additional investment opportunities beyond <unk>.
Horizon, two so we can see that horizon two to be about two to three years of course, which will be taken we will continue to grow but we expect to have additional growth above and beyond that based on the things. We're working on which you can see the horizon three I hope that answers the question what.
What you wanted.
That does.
And then.
Another one from me is as you think about what you've been looking at the landscape and how you think about horizon, one two and three and any early indicators of what products and markets geographies anything that stands out that you could call out again, not looking for specific maybe name or identification, but just kind of.
Dramatic growth.
Coming out that you'd like to add to the.
So the future of what you guys could address.
Right either organically or Inorganically.
Right.
As I mentioned, it would be difficult for us to disclose any of that because it's.
Working progress and also somewhat insensitive.
From a competitive perspective, you really can't disclose much.
Till you have made enough progress that it makes sense to let the market know, but perhaps I can say that.
Horizon two.
It's primarily organic but there may be some tuck ins where in the enterprise business, we can increase additional.
Density as opposed to scope, our enterprise business is very wide and broad we have.
To serve a very large set of products.
And we might choose to go deeper on two or three categories of enterprise verticals.
Michael offerings within the horizon within the enterprise business, which is very broad.
So there'll be more of a tuck in.
Acquisitions.
Just to give us enough depth and density.
But while we're doing a lot of organic work as well in horizon. Three we clearly are looking at a much larger scale.
Acquisitions are our investments obviously our S band.
Opportunity falls into horizon, three as I mentioned.
But we are certainly looking at.
What can be.
In the press where year adjacency of the space, we serve that can pump.
That could be synergistic with what we already have so that takes us.
From our core <unk>.
Adjacent rings, perhaps to us enterprise business, where we can have a bigger play in terms of the addressable market yet remaining cement synergistic with what we already have so that's probably.
As specific as I can be at this time.
But.
We are hoping to share with you in a future release Eric.
Earnings calls.
Much more specifics.
Makes sense and final question is can be related.
Any thoughts of the timeframe you'd like to.
Phil the CFO , <unk> overall, and where there any one timers in this quarter that I need.
He is gone.
Well the horizon is that as soon as I can so as I mentioned we are.
We are in the process right now we have some.
Qualified candidates. This is a position that I will absolutely take Larry.
So curious me in.
Incredibly important position for our company.
Not only because.
It is generally an important position, but also in the company that we expect ourselves to remain in transition and new growth opportunities, both organically and inorganically in.
Certain definite.
Jeff and his skill sets as required for that and that.
That is something that is.
Obviously, not easy to find however, I do expect that we can do within the within this.
This quarter, we will land on a.
I can do that again.
Please allow us to.
Take our time and do the best job, we can in terms of selecting but I would I would like to do this just in disposition within within the third quarter.
Okay.
Thank you.
Thank you.
Our next question.
We have another follow up from Chris Quilty. Your line is open.
So I should assume that Dave's exit package as a new set of golf clubs.
That's not correct, Chris I'm, hoping for sleeve of balls.
Okay, well I will leave with one final question for you which is just.
Any change on the Capex forecast for this year and then.
Post Jupiter three launch and assuming you don't commit to a Jupiter for for India, What should we think about as sort of the steady state Capex post launch.
Yes.
Second half of that.
It's hard really to address that sort of a status quo.
Youre going to have.
And by staff call I mean, the existing business now.
Horizon, two horizon, three initiatives, which could obviously change that capex mix.
But.
Post launch or geographically, what youre going to see probably an increase in sac. So consumer premise equipment, specifically on Obama capex piece and a decline obviously on the satellite launch related costs associated with that.
No.
And it just depends on how quickly we decide to grow the residential business or how much we take up that capacity into alternative abuses described.
Described.
All about yield management.
Subscriber counts.
In terms of this year's.
Capex, yes, it's going to be in the same range probably.
Hi.
$401 million range for the full year.
Very good thanks and enjoy the retirement.
Thank you Chris.
Thank you and I'm not showing any further questions in the queue turn the call back over to Terry for any closing remarks.
Yes.
Okay. Thank you operator, and thank you for everybody for joining the call today.
We will look forward to talking to you next quarter.
And this concludes the conference call. Thank you for participating you may now disconnect everyone have a great day.
We will begin shortly to raise your hand during Q&A you can dial star one one.
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