Subscriber-Related Revenue Grew for Dish Network in 2Q15

Highlights of Dish Network's 2Q15 Results

(Continued from Prior Part)

Subscriber revenue

In 2Q15, Dish Network (DISH) reported subscriber-related revenue of $3.801 billion—compared to $3.645 billion in 2Q14. This rise of $156 million, or 4.30%, was primarily driven by a rise in pay-TV ARPU (average revenue per user), as we discussed in Part 3. It needs to be noted that revenue of $110 million and $92 million were related to the firms broadband services in 2Q15 and 2Q14, respectively. The same has been included in subscriber-related revenue as well.

The subscriber revenue for Comcast (CMCSA) and DIRECTV (DTV) rose by 5.06% and 4.20%, respectively, in 2Q15.

Subscriber expenses

In 2Q15, the subscriber-related expenses reported were $2.236 billion. This was a 6.20% or $131 million rise to expenses of $2.104 in 2Q14. The rise in subscriber-related expenses was driven by higher pay-TV programming costs. The rise in programming costs was due to increases in certain Dish Network contracts including the renewal of certain contracts at higher rates.

Net income

The net income reported by Dish Network during 2Q15 is $324 million. It rose 43.66% YoY (year-over-year)—compared to revenue of $213 million for 2Q14. During 2Q15, Dish Network’s EBITDA (earnings before interest, tax, depreciation, and amortization) was $924 million. This was a 24.60% or $183 million rise—compared to an EBITDA of $742 million in 2Q14. The EBITDA was positively impacted by other income of $135 million in 2Q15.

As we mentioned earlier, Dish also included the metrics of its online streaming service Sling TV into the firm’s pay-TV numbers for 2Q15. This helped the company reduce the fall of its subscriber base. It also capped the growth in ARPU. The service’s base package is offered at a considerably cheaper rate of $20 per month. Dish Network’s management thinks that Sling TV is well poised to take advantage. Consumers are shifting more towards alternative platforms to consume content.

You can get diversified exposure to Dish by investing in the PowerShares QQQ Trust, Series 1 (QQQ) and the Vanguard Consumer Discretionary ETF (VCR). QQQ and VCR had 0.28% and 0.48% exposure to the company, respectively, as of August 7, 2015.

Continue to Next Part

Browse this series on Market Realist:

• Part 1 - Dish Network’s Revenue and Net Income Rise

• Part 2 - Pay-TV Net Additions Fall for Dish Network

• Part 3 - Average Revenue per User Rises for Dish Network in 2Q15