EchoStar Corporation Q2 FY2026 earnings call

Chapter 11 Bankruptcy Filing for Hughes Entities

• Only domestic Hughes entities filed for Chapter 11 bankruptcy; the filing does not include EchoStar Corporation, non-Hughes subsidiaries, or Hughes international entities
• Management has filed first-day motions with the court to enable Hughes to continue normal business operations, including paying employees, fulfilling customer and vendor commitments
• Management will not answer questions about the Hughes bankruptcy process during the call and refers investors to the official press release and court filing for full details

Capital Allocation Framework

• The Board of Directors increased the share repurchase authorization to $5 billion, to preserve financial flexibility for future capital deployment decisions
• Capital allocation priorities are ordered as: 1) Investing in existing core EchoStar businesses; 2) Evaluating external investment opportunities via EchoStar Capital; 3) Share repurchases; 4) Dividend payments
• EchoStar Capital has been folded into the corporate development team for improved efficiency and faster decision-making, with no change to its core investment philosophy
• After closing the AT&T transaction and setting aside $2.4 billion in FCC-mandated escrow for network shutdown, EchoStar holds approximately $14 billion to $15 billion in total cash, with a conservative overall debt profile excluding the restructured Hughes entities

Strategic Business Updates

• Boost Mobile has new leadership that is implementing fresh strategic initiatives to reinvigorate performance; management retains significant contractual flexibility to pursue M&A or partnerships for Boost
• Management is pursuing an internal company restructuring to capitalize on the AI paradigm shift and adapt the business to new operational and market opportunities
• The DISH Wireless bankruptcy confirmation hearing is scheduled for October 13, 2026, with management expecting the process to conclude in Q4 2026
• EchoStar has completed required build-out commitments for its remaining spectrum licenses, and a waiver request to extend the build-out deadline while monetizing the spectrum is pending before the FCC
• Management is open to a potential combination of DBS assets with DIRECTV, with no preconceived notions of which entity would be the buyer/seller; any deal would proceed only if valuation terms are mutually acceptable

No detailed segment-level financial performance (absolute values or revenue contribution percentages) was provided in the conference call transcript. Management only offered high-level commentary on individual business lines: the traditional video business continues to generate positive operating cash flow; Boost Mobile was slightly cash positive in Q2 2026 but experienced net subscriber losses; Hughes entities are in Chapter 11 bankruptcy restructuring and were excluded from updated performance discussion.

• Management estimates the combined total liability for wireless network termination and tax obligations related to the SpaceX transactions remains in the $5 billion to $7 billion range, unchanged from prior guidance. This estimate accounts for potential tax reductions from provisions like 1033 exchanges, but actual outcomes may vary slightly above or below the range depending on litigation outcomes and SpaceX share price movements • Management maintains a patient, cautious approach to new external investments due to frothy market valuations across most asset classes, and does not plan to rush into unpriced deals just to deploy cash • There is no formal earnings or operational guidance provided for future quarters, consistent with the company's historical practice of not issuing quarterly guidance

• The Chapter 11 restructuring process for Hughes entities involves expected litigation, and the timeline for emerging from bankruptcy is uncertain • There is ongoing litigation related to DISH Wireless network termination, primarily with tower infrastructure companies, which has extended the timeline for resolving bankruptcy and may increase total network shutdown costs • The FCC has not yet ruled on EchoStar's requested waiver for remaining spectrum licenses, creating uncertainty around the ability to monetize these assets • A large portion of EchoStar's net asset value is tied to SpaceX equity, which is currently trading at historically high valuations, creating downside risk if market valuations decline • EchoStar has not yet achieved sustained profitable growth at Boost Mobile, creating uncertainty around the future performance of this business segment

• Forward-looking statements are subject to a range of known and unknown risks that could cause actual results to differ materially from expectations; full risk details are included in the company's SEC filings

Q: Given EchoStar trades at a large discount to its net asset value (including its SpaceX stake), and the company has new cash from the AT&T transaction, why hasn't the company started share buybacks, and what are the current capital priorities? / A: The Board increased the buyback authorization to $5 billion to retain flexibility for future opportunities, but the company is not required to repurchase shares immediately. Capital is first allocated to investing in existing core businesses, then external opportunities via EchoStar Capital, then share buybacks, then dividends. Management follows a long-term, owner-oriented approach to building shareholder value and will only deploy capital when opportunities meet prudent return thresholds. Bond indentures currently impose restrictions on open-market common share repurchases. There is also uncertainty around the ultimate size of the company's $5 billion to $7 billion estimated total liability for network termination and SpaceX-related taxes.

Q: What is the current estimated tax liability for the SpaceX transactions, given the much higher current market valuation of SpaceX compared to the original deal's $400 billion valuation, and is the company pursuing any strategies to reduce or delay this tax? / A: Management still estimates total combined liability for wireless network termination and SpaceX-related taxes remains in the $5 billion to $7 billion range. This estimate already accounts for potential tax reduction strategies like 1033 exchanges, and the company is actively evaluating all options to optimize tax outcomes. The final outcome may vary slightly above or below the range, due to pending litigation on network termination and future changes to SpaceX's valuation.

Q: How is management approaching Boost Mobile strategically, and what contractual flexibility does the company have to pursue M&A or partnerships for Boost, given existing agreements with T-Mobile and AT&T? / A: Management acknowledges it has not yet achieved the desired level of performance at Boost, which has treaded water for 4 years with slight cash profitability in Q2 2026 but continued subscriber losses. New leadership has implemented fresh strategic initiatives to reinvigorate the business, which remains strategically important to EchoStar. While management cannot disclose specific contract terms, EchoStar has meaningful contractual flexibility to pursue M&A or partnerships for Boost, and will continue working to improve the business's performance.

Q: Does the more cautious tone for external investments mean that new investments via EchoStar Capital are being deprioritized? / A: There is no change to the core investment strategy for EchoStar Capital; existing opportunities identified by the prior leadership team are still being evaluated. Investing in core existing businesses is the first priority, but external opportunities that meet return thresholds will still be pursued. Management is more cautious overall because current market valuations are frothy, so it will not rush into overpaying for deals just to deploy excess cash. The company will remain patient and disciplined when evaluating all opportunities.