Hughes Network Systems campus in Germantown, MD. Photo Credit: Hughes

Hughes Network Systems has now seen four quarters in a row of revenue growth despite a decline in subscribers. The company also confirmed its on track for the Jupiter 3 launch date. 

In parent company EchoStar’s third quarter 2021 financial results released Tuesday, Hughes reported $497 million in revenues in Q3, up 6.5% from the same period last year. Hughes attributed the revenue boost to higher equipment sales of $25 million to domestic and international enterprise customers, which also drove growth last quarter. The company said that during the quarter, approximately 66% of Hughes segment revenue was attributable to our consumer customers, with approximately 34% attributable to our enterprise customers.

Yet Hughes logged the fourth quarter in a row of subscriber loss, shedding 32,000 subscribers during the quarter. The company now has 1,510,000 subscribers. This was also the first time over the last four quarters that Hughes lost subscribers in Latin America. Hughes lost 24,000 in the United States and 8,000 subscribers in Latin America. 

Subscriber growth in Latin America has helped offset U.S. subscriber decline, but this was not the case this quarter. Hughes reported the Latin American subscriber base has become capacity constrained in certain areas.  

“While the balancing of total subscribers relative to capacity utilization resulted in lower subscribers, average revenue per user increased in both regions from the second quarter of 2021,” Hughes said. 

A year ago, in the Q3 2020 results, Hughes had a streak of subscriber growth and had 1,580,000 total subscribers. The company has lost 70,000 subscribers since then. 

Hughes confirmed that the Jupiter 3 satellite is on track for launch in the second half of 2022. Jupiter 3 will bring about 550 Gigabits of capacity over the Americas, primarily over the United States and Canada, allowing Hughes to grow subscribers in this area where it is currently capacity constrained. 

Hughes President Pradman Kaul said on a call with investors Tuesday that Hughes’ primary focus at this point is to get Jupiter 3 launched and finalize its ground network. But looking to the future, Hughes is exploring what its next investment may be to further increase capacity. 

“If we are going to continue to grow, we need to add more capacity. That is something we are working hard on right now, to decide what type of capacity — is it a big satellite or a slightly smaller satellite? It’s going to be a hybrid network, working with Oneweb,” Kaul said. “Once we achieve [Jupiter 3] objectives, we will implement one of many plans that we are working on for capacity in the Americas and the rest of the world.” 

Hughes revenue makes up nearly all revenue for parent company EchoStar. Overall, EchoStar reported $505 million in Q3 revenue, up 6.6% from the same quarter last year. Net income was $30 million, an increase of $6.9 million year over year. The increase was primarily due to higher operating income and lower net interest expense, partially offset by higher income tax expense, unfavorable changes in foreign currency exchange rates, and lower gains on investments.