Q4 2025 EchoStar Corp Earnings Call
Speaker #1: On a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star 0 on your telephone keypad.
Speaker #4: We also do not allow audio recording, which we ask that you respect. 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.
Speaker #1: As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Dean Manson. Thank you, you may begin.
Speaker #2: Thank you. Welcome to EchoStar's third quarter, no, year-end 2025 earnings call. We will begin with opening remarks from Hamid Akhavan, CEO of EchoStar Capital, followed by Charlie Ergen, CEO and chairman of EchoStar.
Speaker #4: 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: We request that any participant producing a report not identify other participants or their firms in such reports. We also do not allow audio recording, which we ask that you respect.
Speaker #4: For a list of those factors and risks, please refer to our annual report on Form 10-K for the fiscal year ended December 31, 2025, filed today, March 2, and our subsequent filings made with the SEC.
Speaker #2: 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.
Speaker #4: This information and supplemental materials relating to today's call will be posted on our investor relations website. All cautionary statements we make during this call should be understood as being applicable to any forward-looking statements we make, wherever they appear.
Speaker #2: 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 #4: 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.
Speaker #2: For a list of those factors and risks, please refer to our annual report on Form 10-K for the fiscal year ended December 31, 2025, filed today, March 2nd, and our subsequent filings made for the SEC.
Speaker #4: We refer to OIBDA and free cash flow during this call. The comparable gap measure and a reconciliation for OIBDA is presented in our earnings release and in the case of free cash flow in our Form 10-K as filed today with the SEC.
Speaker #2: This information and supplemental materials relating to today's call will be posted on our investor relations website. All cautionary statements we make during this call should be understood as being applicable to any forward-looking statements we make wherever they appear.
Speaker #4: Before we begin, I will also note that EchoStar has filed an application that would allow it to participate in the FCC's upcoming AWS-3 spectrum auction, designated as Auction 113.
Speaker #2: 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.
Speaker #4: Pursuant to the FCC's anti-collusion rules, we are currently in a quiet period. Accordingly, we will not be making any comments or responding to any questions that relate to auction 113.
Speaker #2: We refer to OIBDA and free cash flow during this call. The comparable gap measure and a reconciliation for OIBDA is presented in our earnings release and in the case of free cash flow, in our Form 10-K as filed today with the SEC.
Speaker #4: With that, I'll turn it over to Hamid. Thank you, Dean. Welcome, everyone, and thank you for joining us today to discuss our 2025 end-of-year results.
Speaker #2: Before we begin, I will also note that EchoStar has filed an application that would allow it to participate in the FCC's upcoming AWS 3 Spectrum auction designated as Auction 113.
Speaker #4: Before I hand over to Charlie, I would like to briefly comment on a few topics relevant to EchoStar Capital. As we await final regulatory approvals for our spectrum sale and the resulting influx of capital, expected during the first half of this year, we remain committed to being excellent stewards of capital.
Speaker #2: Pursuant to the FCC's anti-collusion rules, we are currently in a quiet period. Accordingly, we will not be making any comments or responding to any questions that relate to Auction 113.
Speaker #4: We're preparing to allocate and utilize these funds based on our view of how we might maximize shareholder returns with actions spanning from immediate to over a long horizon.
Speaker #2: With that, I'll turn it over to Hamid.
Speaker #3: Thank you, Dean. Welcome, everyone, and thank you for joining us today to discuss our 2025 end-of-year results. Before I hand over to Charlie, I would like to briefly comment on a few topics relevant to EchoStar Capital.
Speaker #4: Our decisions are based on many considerations, including paying down expensive or maturing debt obligations, our current and anticipated tax liabilities and any mitigating avenues, and investments and development opportunities at EchoStar Capital, versus returning excess capital to the shareholders through the common short-term remuneration options.
Speaker #3: As we await a final regulatory approvals for our spectrum sale and the resulting influx of capital, expected during the first half of this year, we remain committed to being excellent stewards of capital.
Speaker #3: We're preparing to allocate and utilize these funds based on our view of how we might maximize shareholder returns with actions spanning from immediate to over a long horizon.
Speaker #4: These considerations are both complex and interrelated. Further complicated by dynamic external factors such as the possibility and the timing of a potential SpaceX IPO.
Speaker #3: Our decisions are based on many considerations, including paying down expensive or maturing debt obligations, our current and anticipated tax liabilities, and any mitigating avenues, and investments and development opportunities at EchoStar Capital, versus returning excess capital to the shareholders through the common short-term remuneration options.
Speaker #4: With this context as background, it would be difficult and potentially misleading for us to provide significant detail on most of these topics at this time.
Speaker #4: EchoStar is in midst of a large-scale positive transformation arising from its vision, long horizon of strategic bets, and decades of diligent execution. We feel confident about our ability to continue operating on the same success principles and navigate for the best shareholder outcome in the long run.
Speaker #3: These considerations are both complex and interrelated. Further complicated by dynamic external factors such as the possibility and the timing of a potential SpaceX IPO.
Speaker #4: With that, I will now turn the call over to Charlie. Thanks, Hamid. And as you guys know, I don't have any—I normally have any opening statements, and I don't today.
Speaker #3: With this context as background, it would be difficult and potentially misleading for us to provide significant detail on most of these topics at this time.
Speaker #4: So we will just jump into questions. Thank you. At this time, we'll be conducting a question-and-answer session. If you'd like to ask a question, please press star 1 on your telephone keypad.
Speaker #3: EchoStar is in midst of a large-scale positive transformation, a rise in from its vision, long horizon of strategic bets, and decades of diligent execution.
Speaker #3: We feel confident about our ability to continue operating on the same success principles and navigate for the best shareholder outcome in the long run.
Speaker #4: A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue.
Speaker #3: With that, I will now turn the call over to Charlie.
Speaker #4: For participants using speaker equipment, it might be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions.
Speaker #2: Thanks, Hamid. And as you guys know, I don't have any I don't normally have any opening statements, and I don't today, so we will just, jump into questions.
Speaker #4: Our first question comes from Sebastian Petty with JP Morgan. Your line is live. Hi, everyone. Thank you for taking the question. Hi, Charlie. Hi, Hamid and team.
Speaker #4: Thank you. At this time, we'll be conducting a question-and-answer session. If you'd like to ask a question, please press star 1 on your telephone keypad.
Speaker #4: Charlie, or Hamid, I want to see if you could update us on how you're thinking about passive versus active investments. Within EchoStar Capital, notwithstanding your prepared remarks, is that still the right avenue or how you're kind of thinking about it?
Speaker #4: A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue.
Speaker #4: For participants using speaker equipment, it might be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions.
Speaker #4: And within that context, given anticipated IPO of SpaceX, would increasing your—or EchoStar's stake within SpaceX—be something you would be considering? And then, Charlie, big picture question: EchoStar did have an announcement about a D2D constellation, which obviously you will not be pursuing.
Speaker #4: Our first question comes from Sebastian Petty, with JP Morgan. Your line is live.
Speaker #5: Hi, everyone. Thank you for taking the question. hi, Charlie. Hi, Hamid and team. Charlie, I just or, Hamid, I wanna see if you could update us on how you're thinking about passive vers-versus active investments, within EchoStar Capital, notwithstanding your, your prepared remarks.
Speaker #4: But how do you think you see—how do you see that ecosystem evolving, having spent decades around the industry, particularly the convergence of wireless and satellite?
Speaker #5: is that still the right avenue, or how you're kind of thinking about it? And within that context, given anticipated IPO of SpaceX, would increasing your or EchoStar's stake within SpaceX be something you would be considering?
Speaker #4: I think you have a unique perspective. So just love to hear your thoughts. Do you see this as complementary? Do you see this as a threat to the incumbents having experienced trying to be a fourth player yourself?
Speaker #4: Thank you both. I will try to—I'll try to answer the first few questions that are all wrapped in one. I apologize if I missed some of it.
Speaker #5: And then, Charlie, big picture question. you know, EchoStar did have a announcement about a D2D constellation, which obviously, you will not be pursuing. But how do you think you see how do you see that ecosystem evolving, having spent, you know, decades around the industry, particularly the convergence of wireless and satellite?
Speaker #4: Please repeat that. Look, EchoStar Capital, as I mentioned, we are looking at every possibility for utilization of the liquidity and cash when it arrives.
Speaker #4: As I mentioned, we're looking at short-term options. Traditional return to the shareholders through the best means. Obviously, we're looking at the long horizon for creating value.
Speaker #5: I think you have a unique perspective, so just love to hear your thoughts. Do you see this as complementary? Do you see this as, a threat to the, the incumbents having experienced try to be a fourth player yourself?
Speaker #4: All of this in the context of taxation and how the net return to the shareholders may be—we're obviously looking at our opportunities every single day.
Speaker #5: Thank you both.
Speaker #3: I will try to especially and I'll try to answer the first few questions. We're all wrapped in one. I apologize if I missed some of it.
Speaker #4: And judging that against what other options may be available. So it's a long answer to a short question, but honestly, that is the case.
Speaker #3: Please repeat that. look, EchoStar Capital, as I mentioned, we, we are looking at every possibility for utilization of the liquidity and cash when it arrives.
Speaker #4: It would be foolish to do anything other than that. We don't actually—until the closing, we don't actually have SpaceX's equity. So that is not something that we can make any plans onto.
Speaker #3: As I mentioned, we're looking at short-term options, traditional, return to the shareholders to the best means. obviously, we're looking at the long horizon for creating value.
Speaker #4: We actually get the equity. We have a right to it, but we don't have the—we actually don't have that equity yet. So we'll see how that plays out.
Speaker #3: All of this in the context of, you know, taxation and how the net return to the shareholders may be we obviously looking at our opportunities every single day.
Speaker #4: IPO may happen—obviously, it will happen independent of our plans, but we'll make sure that we maximize our options around the timing whenever that shows up and what options you might have.
Speaker #3: And, and judging that, against what other options may be available. So it, it is a it's a long answer to a short question, but honestly, that is the case.
Speaker #3: it would be foolish to do anything other than that. we, we don't actually until the closing, we don't have actually the, that SpaceX's equity.
Speaker #4: In terms of holding, the size of the equity we have from SpaceX, I think we're very happy with that at this point. I don't think we are actively looking necessarily to make any transactions at this point based on that.
Speaker #3: So, that is not something that we, we can make any plans onto. We actually get the equity. We have a right to it, but we don't have the we actually don't have that equity yet.
Speaker #4: So that remains on our balance sheet. And until we get it, and then after that, we'll decide how to proceed depending on the conditions at that time.
Speaker #3: So we'll see how that plays out. IPO may happen, obviously, will happen independent of our plans, but we'll make sure that we, we maximize, our options around the timing whenever that shows up and what options you might have.
Speaker #4: I am looking at both active and passive investments. Again, depending on the return. So we'll keep you posted as soon as we get to the point that we actually have that cash at hand and ready to make some transactions.
Speaker #3: in terms of holding, the size of the equity we have, from, SpaceX, I think we're very happy with that at this point. I, I, I don't think we are actively looking necessarily to make any transactions at this point based on that.
Speaker #4: Charlie, I think the rest for you. Yeah. So on direct advice, I mean, obviously, we're disappointed that we weren't able to continue with something we'd built over 17 years.
Speaker #4: And I think we're proud of the fact that we've helped and created an ecosystem for a direct advice. And I think that we're also pleased that—and we've made our bet, and that's what SpaceX and Starlink we see them as the most viable company to do that.
Speaker #3: So, that remains on our balance sheet. And until we get it, and then after that, we'll decide how to proceed depending on the conditions at that time.
Speaker #3: I, I am looking at both active and passive investments. again, depending on the return. So we'll keep you posted as soon as we get to the point that we actually have that cash at hand and, ready to make some transactions.
Speaker #3: Charlie, I think the rest for you, for you.
Speaker #4: And with their tremendous technology and launch capabilities, they're well positioned to certainly be a leader in that. And as we publicly discussed, we already have an agreement with them.
Speaker #2: Yeah. So on, on, direct to device, I mean, obviously, we're disappointed that, that, you know, we weren't able to continue with what, you know, something we'd built over 17 years.
Speaker #2: And, and, you know, I think I think we're proud of the fact that we've, we've, we've helped, and, create a, an ecosystem for a direct to device.
Speaker #4: To provide that to our customers. They're obviously going to—Mobile World Congress is going on now. I expect there'll be quite a few announcements there.
Speaker #2: And I think that, you know, we're also pleased that and we've made our bet, and, and, and that's what's, what's SpaceX and Starlink, we see them as the most viable, company to, to, to do that.
Speaker #4: There'll be other players. And the marketplace. But I don't think you're going to see too much from anybody except SpaceX and in their term, our Starlink and in their term.
Speaker #2: And, and, with their, tremendous technology and launch capabilities, their, you know, well-positioned to, to certainly be a leader, in that. And we're and as we publicly discussed, we already have an agreement with them, to provide that to our customers.
Speaker #4: And I think that, based on our experience, that's the company we think will be the leader. Thank you both. Our next question is from Brent Penter with Raymond James.
Speaker #2: they're obviously you're gonna you know, Mobile World Congress is going on now. I expect there'll be quite a few, announcements there. there'll be other players.
Speaker #4: Please proceed with your question. Hey, good morning, everyone. Thanks for taking the questions. First one for me, a follow-up on Sebastiano's question on SpaceX.
Speaker #2: and the marketplace. But I don't think you're gonna see too much from anybody except, except, you know, SpaceX and in their term, our Starlink and in their term.
Speaker #4: So based on the deals I think you all were supposed to get around a $2.8% stake which at the time was valued at $400 billion, as you mentioned, those deals haven't closed yet.
Speaker #2: And I think that, based on our experience, you know, that's the that's the company we think will be the leader.
Speaker #4: But they've since announced the merger with XAI. So how does that XAI deal affect your ownership in terms of percentage? And how can we think about any kind of mark-to-market associated with that deal?
Speaker #5: Thank you both.
Speaker #4: Our next question is from Brent Penter, with Raymond James. Please proceed with your question.
Speaker #6: Hey, good morning, everyone. Thanks for taking the questions. First one for me, a, a follow-up on Sebastiano's question on SpaceX. So, based on the deals I think you all were supposed to get a-around a $2.8% stake, which at the time was valued at $400 billion, as you mentioned, those deals haven't closed yet.
Speaker #4: Yeah. This is Charlie. I don't think we know. I mean, I think we're not privy to what that IPO—if an IPO happens or what it would happen when it looked like.
Speaker #4: I think the merger appeared publicly to be something like 80/20 between XAI and Starlink. So, that probably gives you a feel for what our investment might look like.
Speaker #6: But they've since announced the, merger, with XAI. So how does that, XAI deal affect your ownership in terms of percentage? And how can we think about any kind of mark-to-market associated with that deal?
Speaker #4: But we just don't have any—we don't have any internal information yet today. Okay. That makes sense. And then the power companies—the power companies have announced that you all stopped paying them and you all talked about the litigation and your 10K.
Speaker #2: Yeah. This is Charlie. I, I don't think we know. I mean, I, I think, we're not privy to what that IPO if an IPO happens or what it would happen and what it looked like.
Speaker #2: I think the merger, appeared publicly to be something like 80/20 between, XAI and, and, and Starlink. So, that's that's probably the gives you a feel for what our, our investment might look like.
Speaker #4: Last quarter, you had said you believed that you were relieved of these payments, but now you've actually stopped paying them. So I'm just wondering, what actually went into the decision to take that next step and stop paying?
Speaker #4: Well, yeah, thanks for the question. The first thing—the most important to us was, of course, to make sure that all of our customers on our network were not disenfranchised by the existential threat that we got when the FCC informed us of an investigation to take our spectrum.
Speaker #2: but we just don't have any in we don't have any internal information then today.
Speaker #6: Okay. That makes sense. And then, the power companies, the power companies have, announced that you all stopped paying them and you all talked about the litigation and your 10K.
Speaker #4: So we believe that without question is a force majeure event. But we wanted first and foremost to take care of our customers, which we did.
Speaker #6: last quarter, you had said you believed that you were relieved of these payments, but now you've actually stopped paying them. So I'm just wondering, what actually went into the decision to take that next step and, and stop paying?
Speaker #4: And we've moved successfully all our customers last year. And in the fourth quarter, we moved all our customers off of our network. At that time, given the force majeure event and the FCC's action, obviously, we having network that generates—we had a network to generate no income.
Speaker #2: Well, yeah, that's thanks for the question. The, the, the first thing most important to us was, of course, to make sure that all of our customers on our network were not disenfranchised by the, you know, the existential threat that, that we got when the FCC informed us of an investigation to take our spectrum.
Speaker #4: So, we informed all of our vendors that we had had a force majeure event, as we're allowed—as we have per contracts. And as you know, since that time, several companies have commenced litigation.
Speaker #2: So, we believe that we believe that without question is a force majeure ure event. But we wanted, first and foremost, to take care of our customers, which we did.
Speaker #2: And we've moved successfully all our customers, last year. And the and the fourth quarter, we moved all our customers off of, of our network.
Speaker #4: Against our independent dishwasher entity. Which is party to the relevant tower agreements. And I'm disappointed in that because by contrast, those companies who haven't litigated, we've had good open faith negotiations.
Speaker #2: at that time, given the force majeure event and, and, and the FCC's action, obviously, we having network that, that generates no we had a network that generated no income.
Speaker #4: And we've settled hundreds of contracts. And most recently, we signed a settlement agreement with a large tower company who didn't commence the litigation because at that point, principles can talk to principles.
Speaker #2: So it, it, it, we informed all of our all of our vendors that, we had had a force majeure event as we're allowed as we have per contracts.
Speaker #2: So, at that you know, and as you know, since that time, several companies have, commenced litigation, against our independent dishwasher entity. you know, which is party to the relevant tower agreements.
Speaker #4: When the other companies—it's lawyers. And so you can expect my experience has been that that'll be protracted litigation. Because the lawyers talk to the lawyers.
Speaker #2: And I'm disappointed in that because because by contrast, those companies, who haven't litigated, we've had we've had, you know, good open faith negotiations. And we've settled, you know, hundreds of, of, of, of contracts.
Speaker #4: And they don't typically are in a hurry to get anything done. And it's just different than when business people talk to business people. I wish we weren't here.
Speaker #2: And, you know, most recently, we signed a, a settlement agreement with a, a large tower company who didn't commence, litigation because at that point, principles can talk to principles.
Speaker #4: I wish—it’s an ongoing and evolving situation. But we'll continue to appropriately respond to any litigation that's been commenced. We'll assess all of our available steps in front of any courts or venues.
Speaker #2: When, when, when the other companies it's, it's lawyers. And so you can expect procract, you know, at, at my experience has been that that'll be protracted litigation.
Speaker #4: And we'll engage with more tower companies to seek a consensual solutions. And we'll consider all our alternatives available to the company that's party to the tower contracts to resolve these matters.
Speaker #2: Because the lawyers talk to the lawyers and they don't they don't typically in a hurry to get anything done. You know, and it, it's just a different than when business people talk to business people.
Speaker #4: And but it's obviously where the tower companies have commenced litigation. That's all public. And that likely typically the wheels of justice don't move very quick.
Speaker #2: I wish we I wish we weren't here. You know, I wish, you know, it's an ongoing and evol-evolving situation. But we'll continue to appropriately respond to any litigation that's been commenced.
Speaker #4: And that'll probably take some time before we actually know all the results of that. But we don't believe—just to be clear—we don't believe we'll owe any money.
Speaker #2: You know, we'll, we'll, we'll ex we'll, assess all of our available steps. In front of any courts or venues and, and we'll engage with more tower companies to, to seek a consensual solutions.
Speaker #4: And I think it shows our good faith that we've settled with a lot of people. And attempted to engage in negotiations with people when people don't pick litigation.
Speaker #2: And, and we'll consider all our alternatives available to the company. to the company that's party to the tower contracts to resolve these matters. And, but, you know, it's obviously for the for the, tower companies that, that commenced litigation, that's all public.
Speaker #4: Okay. And can you remind us what assets exactly are held at that dishwireless entity? In general, Paul, you want to take that? Yeah. Sure.
Speaker #2: And that, that likely you know, typically, the wheels of justice don't move very quick. And that'll probably take some time before we actually know all the, the results of that.
Speaker #4: In general, it's the 5G network build. So it's all the assets that were deployed to build the network and have it operational—so antennas, servers, and so forth.
Speaker #2: But, we don't believe just to be clear, we don't believe we'll owe any money. And I think, I think I think it's a it shows our good faith that we've settled with a lot of people.
Speaker #4: Anything you would need. Radios—radios, so forth and so on. So yeah. So, kind of the other segment that you're now reporting, correct? The other segment has those assets in it.
Speaker #2: And attempted to engage in negotiations with people when people don't pick litigation.
Speaker #6: Okay. And can you remind us, what assets exactly are held at that dishwireless entity?
Speaker #4: Yes. Okay. Thanks, everyone. Our next question comes from David Barton with New Street Research—your line is now live. Hey, guys. Thanks so much for the questions.
Speaker #2: in general, Paul, you wanna take that?
Speaker #5: Yeah. Sure. I-i-in general, it's, it's the 5G network build. So i-it's all the assets that were deployed, to build the network and have it, operational.
Speaker #4: Two, if I could. First would be just, Hamid, could you talk about how the approach to the vendor payment situation impacted fourth quarter results in the wireless segment from an EBITDA perspective?
Speaker #5: So antennas, servers, so forth. All a-anything you would need.
Speaker #2: Radios.
Speaker #5: Radios, so forth, and so on. So yeah.
Speaker #6: So kind of the, the other segment that you're now reporting?
Speaker #5: Correct. That, that the other segment has those assets in it. Yes.
Speaker #4: And how, when you do reach the settlement, how does that all run through? Is there—I guess we're not going to be able to predict it.
Speaker #6: Okay. Thanks, everyone.
Speaker #4: But it would be fun to know how it’s all working? And then I guess, second, Charlie, just to confirm, you don’t have it in any dilution provision.
Speaker #3: All right. Next question comes from David Barton. With new street research, your line is now live.
Speaker #7: Hey, guys. Thanks so much for the questions. two, if I could. First would be just, Hamid, you know, could you talk about how the approach to the vendor payment situation, impacted fourth quarter results i-in the wireless segment from an EBITDA perspective?
Speaker #4: It sounds like. But when you see Elon kind of plucking a trillion dollars of valuation for SpaceX out of the air, when it was $400 billion in June, and $250 billion for XAI, as a large shareholder where a large part of your stock value is this holding, how much credence do you put in that?
Speaker #7: And, and how when you do reach the settlement, how does that all run through? is there, you know, I guess we're not gonna be able to predict it.
Speaker #7: But I d it would be fun to know how it's all working. And then, I guess, second, Charlie, just to confirm, you, you don't have it any dilution provision.
Speaker #4: What do you really think it's worth? Or do you really believe that it's worth $1.25 trillion put together? Thanks. Let me take the first part.
Speaker #7: It sounds like. but when you when you see Elon kind of plucking a trillion dollars o-of valuation for SpaceX out of the air, when it was $400 billion in June, and $250 billion for XAI, as, you know, a large shareholder where, you know, a large part of your stock value is, is this holding, how much credence do you put in that?
Speaker #4: I'm going to generally answer the—I mean, take the second part. And I'll generally answer the first part and turn to Maverick or to Paul.
Speaker #4: But again, I think that, again, having spent decades on direct-to-device and space, it's our belief that SpaceX is a one-of-a-kind company. And I can't speak to the valuations, markets, or up and down.
Speaker #7: Like, w-what, what do you really think it, it's worth? 'Cause or do you really believe that it's worth $1.25 trillion put together? Thanks.
Speaker #4: But space is going to be an increasingly important aspect commercially. But obviously, you're seeing militarily and other things as well. So in direct-to-device, when you can connect, it's not just phones.
Speaker #2: Let me let me take the first part. And I'm, I'm gonna generally answer the I mean, take the second part. And I'll generally answer the first part and turn it maybe over to Paul.
Speaker #2: But again, I, I think that, again, our you know, having spent you know, decades on direct-to-device and, and space, you know, it, it, it, it's our belief that's that SpaceX was is a one-of-a-kind company.
Speaker #4: It's IoT. It's cars. It's anything mobility. When you connect any square inch of the planet, that's just a big business. And so I can only say—we, I can only say it this way—that SpaceX as a company—and I'm not talking about just Elon.
Speaker #2: and I can't speak to the valuations markets. You know, we're up and down. But space is gonna be an increasingly important aspect commercially, but obviously, you're seeing militarily and other, other things as well.
Speaker #4: I'm talking about the company and the management of that company—they've been the best company I've ever worked with in 45 years. So they're just responsive.
Speaker #4: They're creative. They move at a pace that most companies don't. So I think I don't think any amount of valuation is probably crazy there.
Speaker #2: So, in direct-to-device, when you can connect, it's not just phones. It's, it's IoT. It's o it's, it's, it's, it's, it's cars. It's, it's, it's any it's anything mobility.
Speaker #2: It, it when you connect any square inch of the planet, that, that's just a big business. And so, I can only say we I can only say it this way, that, that SpaceX as a company and I'm not talking about just Elon.
Speaker #4: Obviously, we're not privy to their numbers. So we invested on faith. And we invest in people. And we felt that the best people we could invest in.
Speaker #2: I'm talking about the company and the management of that company. they've been the best company I've ever worked with in 45 years. So they're just responsive.
Speaker #4: So I'm anxious to see if they do, in fact, do an IPO. Obviously, there will be a lot of things to look at. I'm anxious to look at that.
Speaker #4: But we're not—we don't have insight as to what—we don't have—we don't know what the value is, right? Other than we believe that in the transaction that we did, we thought that initially we weren't getting the value for our spectrum.
Speaker #2: They're creative. they move at, at a pace that most companies don't. So I think, you know, I don't think any a-any amount of valuation is, is, is probably crazy there.
Speaker #2: Obviously, we're I'm we're not privy to all to their numbers. So, we we invested on faith. And, and, and we invest in people. And we felt that the best people we could invest in.
Speaker #4: We thought with the growth of SpaceX that we likely could see that we could get to the value that we thought that our spectrum held.
Speaker #4: And it remains to be seen. As far as what the question was about. The cost for the. Yeah. We can add to Paul's question.
Speaker #2: So, I'm anxious to see if they do, in fact, do an IPO. Obviously, they'll be a lot of numb a lot of things to look at.
Speaker #4: The cost of the network? Yeah. So let me address that. Thank you for the question. First of all, it's a little complicated. You have to go back to Q3 where we took the impairment charge that we recorded.
Speaker #2: I'm anxious to look at that. But we're not we don't have insight as what the we don't have a we don't know what the value is, right?
Speaker #2: other than we believe that in the transaction that we did, we thought that initially, we weren't we weren't getting the value for our spectrum.
Speaker #4: In that impairment charge, were costs related to any future commitments where we had contracts? So for instance, the tower expenses would have been accrued for in that impairment charge.
Speaker #2: We thought with the growth of SpaceX that we likely could see that, that we could get to the value that we thought that our spectrum help spectrum held.
Speaker #4: So you don't see those in the Q4 numbers. However, what you do see is just normal operating costs and accruals for normal operating costs that you have to run the network that's running through Q4.
Speaker #2: And it remains to be seen. as far as what the question was about,
Speaker #5: The cost for the. The cost of the of the network? So, so let me, address that. Thank you for the question. first of all, it's a little complicated.
Speaker #4: Hopefully, that makes sense. That helps. Thank you. As a reminder, if you'd like to ask a question, please press star one on your telephone keypad.
Speaker #5: you have to go back to Q3 where we took the impairment charge, that we recorded. In that impairment charge, were costs related to any future commitments, that where we had contracts?
Speaker #4: One moment, please, while we pull for questions. Our next question comes from Brian Kraft with Deutsche Bank. Please proceed with your question. Oh, hi.
Speaker #5: So, for instance, the tower expenses would have been accrued for in that impairment charge. So you don't see those in the Q4 numbers. However, what you do see is just normal operating costs and, and accruals for normal operating costs that you have to run the network.
Speaker #4: Good morning. Thanks for taking the question. I had a couple, if you don't mind. First, I wanted to ask what the path is to getting the wireless business to profitability on an EBITDA basis.
Speaker #5: That's running through Q4. Hopefully, that makes sense.
Speaker #4: Secondly, I just want to ask you how quickly do those connectivity expenses and the other segment go away over the course of 2026? It looks like about 70% might have been gone in 4Q based on the math I did.
Speaker #7: That helps. Thank you.
Speaker #3: As a reminder, if you'd like to ask a question, please press star one on your telephone keypad. One moment, please, while we pull for questions.
Speaker #4: I don't know if that's right. But trying to figure out, does that go to zero in 1Q or 2Q? And then the last part of my question is, is it still your expectation that total decommissioning costs will be in that 7 to 10 billion range?
Speaker #3: Our next question comes from Brian Kraft. With Deutsche Bank, please proceed with your question.
Speaker #7: Oh, hi. Good morning. thanks for taking the question. I had a couple, if you don't mind. first, I, I wanted to ask what the path is to getting the wireless business to profitability on an EBITDA basis.
Speaker #4: And is there any further granularity that you could share on the tax liability component of that? Thank you. Paul, you want to take that?
Speaker #7: secondly, I just wanna ask you how quickly do those connectivity expenses and the other segment go away over the course of 2025 2026? It looks like about 70% might have been gone in 4Q based on the math I did.
Speaker #4: Yeah. So the first—on the Q4 costs that you had for the other segments, what you’re going to see is, over time, as we decommission all of our tower sites, that that number will decline.
Speaker #7: I don't know if that's right. but trying to figure out, does that go to zero in 1Q or 2Q? And then the last, part of my question is, i-is it still your expectation that total decommissioning costs will be in that 7 to 10 billion range?
Speaker #4: As you pointed out, it's not down to zero yet. But you'll see a big decrease in that in Q1 and Q2. One thing to keep in mind, though, those numbers do include that.
Speaker #4: Back into that number. It does include the non-cash accretion on the lease liability. So like we talked about in the Q3 earnings call, we discounted back to today's dollars the amounts that we owed on the lease and took that as an impairment charge.
Speaker #7: And is there any further granularity that you could share on the tax liability component of that? Thank you.
Speaker #2: Paul, you wanna take the?
Speaker #5: Yeah. So, so the first on the Q4 costs that you had for the other segments, th what you're gonna see is over time, as we decommission all of our, tower sites, that that number will decline.
Speaker #4: We need to accrete that up over time. And so that's probably about half of the number that you're seeing going through the P&L there.
Speaker #4: Okay. And then, on how do we get Dish Wireless positive profitable? I've now been involved the last couple of months on the day-to-day operations.
Speaker #5: as you pointed out, it's not it's not down to zero yet, but you'll see, a big decrease in that in Q, Q1 and Q2.
Speaker #5: One thing to keep in mind, though, those numbers do include that if you back into that number, it do it does include the non-cash accretion on the lease liability.
Speaker #4: And so the it's just a pointing where we are. After four years, but we're very close to a break-even business there. And I can tell you the way I look at it.
Speaker #5: So, like we talked about in the, Q3 earnings call, we discounted back to today's dollars, the amounts that we owed on the lease and took that as an impairment charge.
Speaker #5: We need to accrete that up over time. And so that's probably about half of the number that you're seeing, going through the P&L there.
Speaker #4: The way I look at it is, I look at the total cost of running that, including the hybrid core, because that obviously has cost.
Speaker #2: Okay. And then and then on the on how do we get dish wireless, positive profitable, you know, I've I've now been involved the last couple of months a-at a, you know, an on the day-to-day operations.
Speaker #4: It doesn't have as much cost as the network, but it obviously has cost. And then I look at it for every new customer we get, are they a profitable customer?
Speaker #4: In other words, I know we're making profit on the customers we have today. We've already invested in those customers. Yeah. But every company that we have here has to stand on its own.
Speaker #2: And so, the, it's just a pointing where we are. after four years, but we're, we're very, very, very close to, to a break-even business there.
Speaker #2: And, and the w here I can tell you the way I look at it. The way I look at it is I look at the total cost of running that, including the, the hybrid imi im hybrid core because that obviously has cost that, that doesn't have as much cost as the network, but it obviously has cost.
Speaker #2: And then I look at it for every new customer we get or they have profitable customer. In other words, I know we're making profit on the customers we have today.
Speaker #2: We've already invested in those customers. I've seen and, and, and that we can do that. And, you know, but every company every company that we have here has to stand on its own.
Speaker #4: And we're not—we're for-profit companies. And.
Speaker #2: And, you know, we're not you know, we're you know, we're for-profit companies, and we have to make a profit in every all our all our businesses.
Speaker #2: And, and so that, that will be the focus there. But we're, we're close to, to being where we need to get to turn the corner, but we're not there yet.
Speaker #2: And then there was one other question, which I didn't qu I didn't qu-quite understand the other question. Oh, there was a question.
Speaker #3: Is your expectation on the decommissioning cost, the 7 to 10 billion range that you had previously given, is that still what you expect? And is there any further, update you could give on the tax liability on, on the spectrum transactions?
Speaker #2: Yeah. I, I think that the, I think we've written off about 16 billion on the network decommissioning, which includes all the operational costs. And so it, it, it's a significant I mean, we made significant investment.
Speaker #2: And I think we wrote off about 16 billion. We think that in terms of taxes and further decommissioning, that that is somewhere in the fi I think we believe that's in the 5 to 7 billion dollar range.
Speaker #2: today. And I think that's what we I think that's what we announced last quarter, but it's definitely there's nothing there's been no movement in, in our analysis of that yet.
Speaker #2: And obviously, it may take some time, g-given the litigation, it may take some time, to get the final answer. But it's in the 5 to 7 ma billion 5 to 7 billion dollar range.
Speaker #2: is where we are today.
Speaker #7: But so, so f sorry. 5 to 7 is, is, is your updated view versus the 7 to 10 previously, or?
Speaker #2: No. I think that's. I think what, I think our really initial reaction was, was 7 to 10. And I think when repairs, maybe that number came out.
Speaker #2: But I think last quarter, I think I think we I think there was a range even in Paris of 5 to 10. And I think we, we, we got that down to 5 to 7.
Speaker #2: That doesn't mean that I mean, that's our best guess today, right, for taxes and, and decommissioning costs.
Speaker #5: A-and to clarify, that-that's cash payments that we think we would make.
Speaker #7: Yes. Thank you. Okay.
Speaker #2: So all this is dynamic, as, as I mentioned in my opening remarks, taxes, liabilities, investments, everything else, value of a SpaceX, everything else is interrelated.
Speaker #2: It's a dynamic picture. It's impossible, literally impossible, to nail it down right now given all the movements some internal, some external beyond our control.
Speaker #2: So anything we give you, outside of the estimation that we have, even the estimation we have, is, is, i-i-it, it, it's just an estimation.
Speaker #2: I mean, things are changing very rapidly, and to be misleading for us to give you a very precise number that can change tomorrow afternoon.
Speaker #2: So, just th-th-that's the best we could do today. But obviously, as the as the variables get reduced over time, we, we can give you a much narrower range.
Speaker #7: Okay. Great. Thank you.
Speaker #3: Our next question comes from John Hodulik with UBS. Your line is live.
Speaker #8: Great. Thank you. a couple of questions for Charlie, if I could. First, Charlie, any high-level thoughts on the paramount Warner Brothers deal? What, what did that mean for, for linear TV distribution and maybe d-do you think it'll affect the, the industry's ability to, to offer skinny bundles going forward, which, which seem to be driving a lot of the improvement we've seen in cord cutting?
Speaker #8: And then number two, I don't know how much you can comment on this given the, the, you know, the upcoming auction, but just a-anything you can say about further spectrum sales, maybe timing or, or, w you know, w-whether we should expect them and, and sort of the value of your of your sort of remaining spectrum holdings.
Speaker #8: Thanks.
Speaker #2: Yeah. on paramount Warner Brothers, I, I'd say we've had good relationships with both of those comp-companies for a long, long time. obviously, they're gonna have a lot they're gonna have a long regulatory process.
Speaker #2: So, we'll have to see how that goes. But, it's, you know, it's further concentration in an industry. that, is changing. And, you know, from to i-i you know, technically, and, and, you know, the, the I always worry when you're competing against your own distributors I mean, when they have a direct line to the consumer and you're competing against that, and they're, they're a valued vendor, that obviously will, will, is something that, that we have to keep our eye on.
Speaker #2: But, we'll wait for their filings and, and, you know, they're both great companies, and, great management for both of those two. So, we'll s we'll see h you know, we'll see at the appropriate time w-whether we have any concerns.
[Company Representative] (EchoStar): Our next question comes from John Hodulik with UBS. Your line is live.
Operator: Our next question comes from John Hodulik with UBS. Your line is live.
Speaker #2: The, and then on, what was the second question?
John Hodulik: Great. Thank you. Couple of questions for Charlie, if I could. First, Charlie, any high-level thoughts on the Paramount Warner Bros. deal? What that means for linear TV distribution? Maybe do you think it'll affect the industry's ability to offer skinny bundles going forward, which seem to be driving a lot of the improvement we've seen in cord-cutting? Number 2, I don't know how much you can comment on this given the, you know, the upcoming auction, but anything you can say about further spectrum sales, maybe timing or, what, you know, whether we should expect them and sort of the value of your remaining spectrum holdings. Thanks.
John Hodulik: Great. Thank you. Couple of questions for Charlie, if I could. First, Charlie, any high-level thoughts on the Paramount Warner Bros. deal? What that means for linear TV distribution? Maybe do you think it'll affect the industry's ability to offer skinny bundles going forward, which seem to be driving a lot of the improvement we've seen in cord-cutting? Number 2, I don't know how much you can comment on this given the, you know, the upcoming auction, but anything you can say about further spectrum sales, maybe timing or, what, you know, whether we should expect them and sort of the value of your remaining spectrum holdings. Thanks.
Speaker #5: The spectrum sales.
Speaker #2: Oh, spectrum sales. You know, again, again, because of the, the auction, I'll be very I'm gonna be very careful here. But look, it, it, I think I think we agree with the es the leadership of the of the FCC that, that and, you know, which is the, the one of the things to do here is to get Spectrum into and, and, and get it used as quickly as we can.
Speaker #2: and that's led to kind of the situation that we're in today. And, and I think our goal is to find i the spectrum that we continue to use as continue to have is find, a home for that for the make sure that that's gonna get used in the in the quickest and fastest and the best way for, you know, for, for consumers and for leadership, technical leadership in the United States.
[Company Representative] (EchoStar): Well, on Paramount Warner Bros., I'd say we've had good relationships with both those companies for a long, long time. Obviously, they're gonna have a long regulatory process, so we'll have to see how that goes. It's, you know, it's further concentration in an industry that is changing and, you know, technically, and, I always worry when you're competing against your own distributors. I mean, when they have a direct line to the consumer and you're competing against that, and they're a valued vendor, that obviously will. It's something that we have to keep our eye on.
Charles Ergen: Well, on Paramount Warner Bros., I'd say we've had good relationships with both those companies for a long, long time. Obviously, they're gonna have a long regulatory process, so we'll have to see how that goes. It's, you know, it's further concentration in an industry that is changing and, you know, technically, and, I always worry when you're competing against your own distributors. I mean, when they have a direct line to the consumer and you're competing against that, and they're a valued vendor, that obviously will. It's something that we have to keep our eye on.
Great. Thank you. Uh, couple questions for Charlie if I could first Charlie. Any high-level thoughts on the Paramount Warner Brothers deal. What what? That means for, for linear TV distribution and maybe do do you think it'll affect the the industry's ability to to offer skinny bundles going forward, which it seemed to be driving, a lot of the Improvement we've seen in cord cutting. And then number 2, um, I don't know how much you can comment on this, given the the, you know, the upcoming auction. But just anything, you can say about further Spectrum sales, maybe timing or or um, you know whether we should expect them and and sort of the value of your of your sort of remaining Spectrum Holdings. Thanks.
Speaker #2: And I hope maybe we you know, play a part in that, but we may not. So, but it's still obviously a valuable asset that we have.
Yeah. Um, I'm fairing, my warm Brothers, um, I I'd say we've had good relationships with both of those come companies for a long, long time. Um, obviously they're going to have a lot of they're going to have a long regulatory process. So, um, we'll have to see how that goes but, um, it's, you know, it's further concentration in an industry.
Speaker #8: Great. Thanks, Charlie.
Speaker #2: So I, I don't think we have any further questions. So I just wanna make one thing. We're not we are not gonna we don't plan today to have a conference call in a couple of months after the first quarter.
Um, that, um, is changing and, uh, you know, from to, you know, technically and, and—
U, um,
Speaker #2: we certainly will have filings. but I don't think we'll have a lot to add to what we had today. I think we do plan to have a conference call after the second quarter.
you know, the the I always worry when you're competing against your own Distributors, I mean when they have a direct line to the consumer and you're competing against that and they're they're a valued vendor that obviously will will
[Company Representative] (EchoStar): We'll wait for their filings and, you know, they're both great companies and great management for both those two, so we'll see, you know, we'll see at the appropriate time whether we have any concerns. On, what was the second question?
Speaker #2: I think that, hopefully, regulatory and, and, our company looks, you know, and Hamid's had time to, to get some structure around what he's doing.
Charles Ergen: We'll wait for their filings and, you know, they're both great companies and great management for both those two, so we'll see, you know, we'll see at the appropriate time whether we have any concerns. On, what was the second question?
Speaker #2: and I think we can give you a pretty good snapshot of, of, of, of, of where we're going. But we're obviously, we're optimistic about, about what we have and, and, and, and our ability to compete.
Do something that we have to keep our eye on, but we'll wait for their filings, and, you know, they're both great companies and great management for both those two. So, we'll see, you know, we'll see at the appropriate time whether we have any concerns, the, uh, uh,
John Hodulik: Spectrum sales.
John Hodulik: Spectrum sales.
[Company Representative] (EchoStar): Oh, spectrum sales.
Charles Ergen: Oh, spectrum sales.
John Hodulik: Spectrum.
John Hodulik: Spectrum.
[Company Representative] (EchoStar): You know, again, because of the auction, I'm gonna be very careful here. Look, it, I think we agree with the leadership of the FCC that, you know, which is one of the things to do here is to get spectrum in the... and get it used as quickly as we can. That's led to the kind of situation that we're in today. I think our goal is to find the spectrum that we continue to use, to continue to have, find the home for that, for the... make sure that that's gonna get used in the quickest and fastest and the best way for, you know, for consumers and for leadership, technical leadership in the United States.
Charles Ergen: You know, again, because of the auction, I'm gonna be very careful here. Look, it, I think we agree with the leadership of the FCC that, you know, which is one of the things to do here is to get spectrum in the... and get it used as quickly as we can. That's led to the kind of situation that we're in today. I think our goal is to find the spectrum that we continue to use, to continue to have, find the home for that, for the... make sure that that's gonna get used in the quickest and fastest and the best way for, you know, for consumers and for leadership, technical leadership in the United States.
Speaker #2: and so we look forward to, to August. If there's material changes in the marketplace or something, we could have a call. But at this point, we believe it's gonna be August or right into July or early August before we have another another call unless something happens in the meantime, which we could have a call at any time.
And then on what was the second question the Spectrum sales? Oh, Spectrum sales, you know, again again, because of the the auction, I'll be very, I'm going to be very careful here, but look, it it
Ooo. Um,
Speaker #2: I-if that was the case. So thanks, everybody, for joining.
Speaker #5: Thank you, everyone.
I think I think we agree with the the leadership of the FCC that and you know, which is the 1 of the things to do here. Is it gets Spectrum in the in, in, in and get it used as quickly as we can. Um, and that's led to the kind of situation that we're in today. And, and I think our goal is to find the spectrum that we continue to use is to continue to have, is find, uh, the home for that for the make sure that that's going to get used in the in the quickest and
[Company Representative] (EchoStar): I hope maybe we, you know, play a part in that, but we may not. It's still obviously a valuable asset that we have.
Charles Ergen: I hope maybe we, you know, play a part in that, but we may not. It's still obviously a valuable asset that we have.
fastest, and the best way for, you know, for for consumers, and for leadership, technical leadership in the United States and I hope, maybe we, you know, play a part in that, but we may not
So but it's still obviously a valuable asset.
John Hodulik: Okay. Thanks, Charlie.
John Hodulik: Okay. Thanks, Charlie.
[Company Representative] (EchoStar): I don't think we have any further questions. I just wanna make one thing. We are not gonna. We don't plan today to have a conference call in a couple of months after the Q1. We certainly will have filings, but I don't think we'll have a lot to add to what we had today. I think we do plan to have a conference call after the Q2. I think that, hopefully regulatory and our company looks, you know, and Hamid's had time to get some structure around what he's doing, and I think we can give you a pretty good snapshot of where we're going. Obviously, we're optimistic about what we have and our ability to compete.
Charles Ergen: I don't think we have any further questions. I just wanna make one thing. We are not gonna. We don't plan today to have a conference call in a couple of months after the Q1. We certainly will have filings, but I don't think we'll have a lot to add to what we had today. I think we do plan to have a conference call after the Q2. I think that, hopefully regulatory and our company looks, you know, and Hamid's had time to get some structure around what he's doing, and I think we can give you a pretty good snapshot of where we're going. Obviously, we're optimistic about what we have and our ability to compete.
Okay, sir.
[Company Representative] (EchoStar): We look forward to August. If there's material changes in the marketplace or something, we could have a call. At this point, we believe it's gonna be August or end of July or early August before we have another call, unless something happens in the meantime, which we could have a call at any time if that was the case. Thanks, everybody, for joining. Thank you, everyone. This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.
Charles Ergen: We look forward to August. If there's material changes in the marketplace or something, we could have a call. At this point, we believe it's gonna be August or end of July or early August before we have another call, unless something happens in the meantime, which we could have a call at any time if that was the case. Thanks, everybody, for joining. Thank you, everyone.
So I don't think we have any further questions, so I just want to make 1 thing. We're not we are not going to, we don't plan today to have a conference call in a couple months after the first quarter. Uh, we certainly will have filings, um, but I don't think we'll have a lot to add to what we had today. Um, I think we do plan to have a conference call after the second quarter, I think that hopefully Regulatory and, and our company looks, you know, and I made that time to, to get some structure around what he's doing. Um, and I think we can give you a pretty good snapshot of of, of, of of, uh, but we're going. But we're obviously, we're optimistic about about what we have and, and, and, and our ability to compete. Um, and so, we look forward to to August, if there's material changes in the marketplace or something, we could have a call. But at this point, we believe it's going to be August or in July or early August. Before we have another another call, unless something happens in the meantime, which we could have a call at any time. If that was the case. So, thanks everybody for joining.
Operator: This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.
Thank you, everyone.
This concludes today’s conference. You may disconnect your lines at this time, and we thank you for your participation.