EchoStar Corporation Q3 FY2025 earnings call

• Recently announced major transactions with AT&T (≈$23B) and SpaceX (≈$19B), resolving FCC spectrum utilization review. Amended definitive agreement with SpaceX to sell AWS-3 spectrum license for ~$2.6B in SpaceX stock. • Created new division focused on capital management and M&A, with Hamid Akhavan leading EchoStar Capital and continuing to manage Hughes Network Systems, and Charlie Ergen taking on EchoStar CEO role. • Transactions provide capital runway to expand operations and pursue new opportunities. Focus on new growth avenues broadens business scope. • Discussed AWS-3 spectrum: sale to SpaceX is timely, paired AWS-3 spectrum still held, valuable and considering meaningful transactions. • EchoStar Capital will use SpaceX equity investment as first investment, with strategic view on space industry growth.

• Transactions closing will provide capital runway for expanding operations and pursuing new opportunities. • New division focused on capital management and M&A will drive strategic investments. • Will consider additional strategic investments similar to SpaceX in areas with institutional heritage and thesis-driven understanding. • Paired AWS-3 spectrum will be transacted if meaningful opportunity arises.

• SEC investigation seen as force majeure, with one company commencing litigation souring communication. • Uncertainties in taxes, including potential application of 1033 stepped-up basis and impact of litigations on tax exposure. • Tower company negotiations affected by litigation, making communication between business people difficult.

Q: Talk about how EchoStar Capital will be capitalized, update on AWS-3 spectrum sale, and tower entity.

A: Hamid said proceeds from sales will be within EchoStar Capital, road map not fully laid out yet. Charles Ergen said sale to SpaceX of unpaired AWS-3 is timely, paired AWS-3 still held, network entity will handle tower negotiations.

Q: How to think about deploying net cash from SpaceX stake, rights in maintaining/growing stake?

A: Hamid said excited about SpaceX equity as strategic holding, will look for similar strategic investments. Charles said look at management, future business in space, and winners/losers in industry.

Q: Valuation of SpaceX, tax on spectrum sales and 1033 clause?

A: Charles said SpaceX has good management, growth in broadband and device, big moat, valuation likely higher. Hamid said range of $7B - $10B for taxes and decommissioning costs, 1033 clause possible but not contingent on litigation.

Q: Cash from spectrum sales and returning capital to shareholders?

A: Hamid said will be great stewards of capital, use institutional knowledge to deploy capital strategically, will distribute excess capital back to shareholders if not optimally used.

Q: Potential changes between now and Q4 earnings call, and unplugging radios?

A: Charles said pivot to capital-rich, asset-light company and long-term thinking, discussions ongoing with regulators on unplugging radios.

Q: Strategic vision for Boost business and path to cash flow positive?

A: Charles said strategy is use technology differently, already have agreement with SpaceX for Boost customers, will have strategic sessions on difference-making.

Q: Tax benefit from impairment charge, AWS-3 auction timing, converts settlement, DBS merger with DIRECTV?

A: Paul said some tax items already deducted, benefit from others included in $7B - $10B range. Charles said working with FCC on AWS-3 auction timing, premature to speculate on converts settlement. Hamid said look at inorganic transactions for value creation, DISH and DIRECTV combination is natural but hard to predict.

Q: Long-term update on Hughes business?

A: Hamid said Hughes shifting towards enterprise, expect over 50% enterprise revenue next year, progress in aero, will look for M&A opportunities in relevant domains.