Brent Penter

Brent Penter asked about Fubo's investment priorities post-merger, specifically balancing subscriber growth with free cash flow generation, and how the merger enhances the ability to invest. He also sought quantification of any benefits from the Disney YouTube TV blackout during the quarter.

Answer

CEO David Gandler stated that Fubo has achieved three consecutive quarters of profitability and possesses a strong balance sheet, enabling greater investment in growth. He noted that leveraging the Disney ecosystem for efficient marketing channels means increased investment won't significantly impact cost structure. Gandler mentioned that standalone Fubo maintained solid numbers in Q4 despite less marketing spend. CFO John Janedis added that the impact from the YouTube TV blackout with Disney was immaterial. He highlighted significant balance sheet improvements, including reduced debt and later maturities, and emphasized that free cash flow generation should be an output of these investments.

Brent Penter asked about the ongoing evaluation of potentially separating Viasat's government and commercial businesses, seeking clarification on the stage of this process and elaboration on vertical integration, dual-use opportunities, and debt silos. He also inquired about Viasat's international spectrum holdings, including specific megahertz and priority rights, and the company's openness to alternative monetization strategies. Additionally, Penter requested more details on the Equitus project, its ideal customer profile, potential partners, and economic or capital expenditure implications.

Answer

Chairman and CEO Mark Dankberg stated that the evaluation of business separation is a continuous process, weighing the benefits of vertical integration and dual-use systems, exemplified by Europe's IRIS2, against potential spinoffs to create more attractive investment vehicles. Regarding spectrum, Dankberg highlighted Viasat's substantial global spectrum position, emphasizing its current use in critical services and the ongoing assessment of operating infrastructure versus collaborating with others for value creation, while upholding public interest obligations. For Equitus, Dankberg explained its role in providing modern, shared infrastructure for satellite-specific or supplemental satellite spectrum allocations, enabling regional operators to extend services economically and aggregate spectrum for cost-effectiveness. He mentioned discussions with regional operators and the European Space Agency as partners but deferred CapEx details as they are still being defined. CFO Gary Chase underscored the importance of shared infrastructure for capital efficiency.

Brent Penter asked about the evaluation process for separating Viasat's government and commercial businesses, including considerations for vertical integration and debt silos. He also inquired about Viasat's international spectrum holdings (megahertz, priority rights) and the company's openness to alternative monetization strategies, as well as details on the Equatys project, its ideal customers, potential partners, and economic/CapEx implications.

Answer

Mark Dankberg, Chairman and CEO, explained that the evaluation of business separation is ongoing, weighing benefits against competitive advantages from dual-use and vertical integration, especially in space systems. He highlighted the global and substantial nature of Viasat's spectrum, emphasizing its current use in critical services and the continuous evaluation of operating infrastructure versus alternative monetization. Gary Chase, CFO, added that shared infrastructure concepts like Equatys are key for capital efficiency. Mark Dankberg further detailed Equatys' purpose in providing modern, shared infrastructure for regional operators to extend satellite-specific or supplemental spectrum allocations, noting discussions with multiple regional operators and the European Space Agency, but deferred CapEx specifics.

Brent Penter asked about EchoStar's strategy for deploying capital into its growing SpaceX stake, inquiring if the company has rights to maintain or increase its ownership as SpaceX raises additional capital. He also followed up on the tower payments, asking what specific events would trigger EchoStar to cease payments and the expected timeline for resolving litigation and negotiations.

Answer

Hamid Akhavan, President and CEO of EchoStar Capital, expressed excitement about the SpaceX equity as EchoStar Capital's first investment, highlighting its strategic nature and growth opportunities in space technology. Charlie Ergen, CEO and Chairman of EchoStar, elaborated on the investment thesis for SpaceX, focusing on management, industry growth, and market leadership. Regarding tower payments, Ergen stated that the company would not comment on specific triggers for stopping payments, only noting that litigation is not positive.

Brent Penter inquired about EchoStar's strategy for deploying capital, specifically regarding the growing SpaceX stake, and whether the company has rights to maintain or increase its ownership. He also asked about the conditions under which EchoStar would cease tower payments and the timeline for resolving related litigation.

Answer

Hamid Akhavan, President and CEO of EchoStar Capital, expressed excitement about the SpaceX equity as EchoStar Capital's first investment, highlighting its strategic nature and growth opportunities in space technology. Charlie Ergen, CEO and Chairman of EchoStar, elaborated on the rationale for the SpaceX investment, focusing on management, industry growth, and market leadership. Regarding tower payments, Charlie Ergen stated that litigation complicates discussions and declined to provide specific details on payment cessation or resolution timing.

Brent Penter from Raymond James Financial asked about the timeline for shifting to owned IP, the potential cost savings, and the company's capital allocation priorities after reaching its deleveraging target.

Answer

President & CEO Jeffrey Hirsch stated the goal is for half of the calendar 2027 slate to be STARZ-owned IP. He estimated potential cost savings of $1-2 million per hour, plus international sales benefits, which supports the path to a 20% margin by 2028. Regarding capital allocation, Hirsch emphasized the immediate focus is deleveraging to 2.5x, after which the company will evaluate further content investment or potential capital returns.

Brent Penter from Raymond James Financial questioned the timeline for shifting to owned IP, the potential cost savings per show, and the company's capital allocation priorities after achieving its deleveraging target.

Answer

President & CEO Jeffrey Hirsch stated that Starz aims for half of its calendar 2027 slate to be company-owned IP. He estimated potential cost savings of $1-2 million per hour on new shows, plus additional revenue from international sales. Regarding capital allocation, Hirsch emphasized that the immediate focus is on deleveraging to 2.5x, after which they will assess opportunities to expand the content portfolio.

Brent Penter asked for the specific dollar impact of tariffs on guidance, the post-acquisition customer mix and its economic sensitivity, and a breakdown of Satcom Direct's 10% growth rate.

Answer

CFO Zachary Cotner quantified the tariff impact at approximately $5 million, split between EBITDA and working capital. CEO Christopher Moore stated that the company is not seeing any negative macroeconomic impact due to its diverse international and government customer base, which can be counter-cyclical. Cotner added that Satcom Direct's growth was primarily driven by GEO broadband, including in the Mil/Gov sector, and that the company is not updating its long-term growth guidance at this time.

Asked for details on Starz's plan to offer digital services to other platforms and for an outlook on Starz's OTT and linear subscriber trends.

Answer

Starz plans to leverage its robust digital backend and data stack to form commercial partnerships with other platforms that lack such infrastructure. Linear subscribers are expected to continue a slow decline, while OTT growth will be driven by an increasing number of bundling deals and a strong content slate.

Asked for an update on the production and release schedule for major upcoming films like "Michael," "Ballerina," and "Now You See Me," and inquired about the new AI partnership with Runway.

Answer

The "Michael" film was moved to a late fall slot to ensure quality, while "Ballerina" and "Now You See Me" are on track for their respective 2025 releases. The AI partnership with Runway is a strategic move to enhance filmmaking, and after initial clarification, it has received support from the creative community.

Brent Penter, on for Ric Prentiss, asked about the confidence level in the Maritime sale closing within 2-4 weeks, the drivers behind the 2026 growth acceleration, and the future path to positive free cash flow.

Answer

CEO Theresa Condor expressed confidence in the 2-4 week timeline for the Maritime sale, citing intense and regular engagement with the buyer, while also noting the company is pursuing a parallel legal track with a May 28 court date. Interim CFO Thomas Krywe explained that the 2026 growth confidence comes from $216 million in committed revenue and revenue recognition from 20 recently launched satellites. Condor added that growing defense budgets and demand for sovereign capabilities in Europe are also major drivers. Regarding free cash flow, Krywe stated that once abnormal legal and transaction costs subside, the company will return to its trajectory toward positivity, though a revenue 'build back' will be required post-divestiture.