| SEGMENT REPORTING |
NOTE 10. SEGMENT REPORTING Our chief operating decision maker (“CODM”) is our President and Chief Executive Officer. “OIBDA,” defined as “Operating income (loss)” plus “Depreciation and amortization,” is the primary measure used by our CODM to evaluate segment operating performance. The CODM regularly reviews budget-to-actual variances of OIBDA when evaluating segment performance and allocating resources to each segment. The CODM is not regularly provided assets in evaluating the results of our Hughes segment; therefore, such information is not presented. We manage our business activities on a consolidated basis and operate as a single operating segment, Hughes. | | | | | | | | | For the Three Months Ended March 31, | Hughes | | 2025 | | 2024 | | | | (In thousands) | Revenue | | | | | | | Revenue from external customers: | | | | | | | Service revenue | | $ | 277,701 | | $ | 319,504 | Equipment sales and other revenue | | | 88,363 | | | 60,500 | Total Revenue | | | 366,064 | | | 380,004 | | | | | | | | Operating Expenses | | | | | | | Cost of services: | | | | | | | Connectivity services (1) | | | 96,752 | | | 98,380 | Other (2) | | | 62,317 | | | 72,070 | Total cost of services | | | 159,069 | | | 170,450 | | | | | | | | Cost of sales - equipment and other | | | 81,586 | | | 56,380 | Selling, general and administrative expenses: | | | | | | | Subscriber acquisition costs | | | 44,519 | | | 49,294 | General and administrative expenses | | | 37,276 | | | 54,358 | Total selling, general and administrative expenses | | | 81,795 | | | 103,652 | | | | | | | | OIBDA (3) | | | 43,614 | | | 49,522 | | | | | | | | Depreciation and amortization | | | 83,801 | | | 93,782 | Total costs and expenses | | | 406,251 | | | 424,264 | | | | | | | | Operating income (loss) | | $ | (40,187) | | $ | (44,260) | | | | | | | | Unallocated Amounts | | | | | | | Interest income | | | 2,500 | | | 17,015 | Interest expense, net of amounts capitalized | | | (25,659) | | | (27,349) | Other, net | | | 1,750 | | | (1,424) | Total other income (expense) | | | (21,409) | | | (11,758) | | | | | | | | Income (loss) before income taxes | | | (61,596) | | | (56,018) | Income tax (provision) benefit, net | | | 12,556 | | | 5,752 | Net income (loss) | | $ | (49,040) | | $ | (50,266) | | | | | | | | Purchases of property and equipment, net of refunds | | $ | (31,648) | | $ | (68,526) |
| (1) | “Connectivity services” is the cost to deliver our services and products to customers, which includes, among other things, satellite and transmission and other related costs. |
| (2) | “Other” primarily consists of variable costs including call center, manufacturing, dealer incentive, bad debt, billing and other variable costs, as well as costs to retain our subscribers. |
| (3) | OIBDA is a non-GAAP measure and does not purport to be an alternative to operating income (loss) as a measure of operating performance. We believe this measure is useful to management, investors and other users of our financial information in evaluating operating profitability on a more variable cost basis as it excludes depreciation and amortization expenses related primarily to capital expenditures and acquisitions, as well as in evaluating operating performance in relation to our competitors. |
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