AST SpaceMobile (ASTS) 14 Nov 242024 Q3 Earnings call transcript

Good day, and thank you for standing by. Welcome to the AST SpaceMobile Third Quarter 2024 Business Update Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your host today, Scott Wisniewski, President of AST SpaceMobile. Please go ahead.

Thank you, and good afternoon, everyone.

to harbor of disclaimer. you contains presentation, refer safe our me Slide the X which Let

and a During call. on forward-looking and to are expectations differ statements. call, uncertainties. These and today's we cause the statements based may Many factors materially on actual to from are this subject result, make could certain assumptions risks as events current statements forward-looking

on Exchange by refer Securities Commission Also, AST the after filed XXXX, information shareholders. our section more about be report XX-K AST time. SEC remarks, For initial SpaceMobile's SpaceMobile the Q&A of we will Factors section with and and year please with other documents these the our Risk starting to uncertainties, to XX, annual submitted that from questions and Form for time our by with December risks ended the

of For many travel. in mission, X we and are over you be company around live, coverage our world, may phones today and those experience new work gaps there us use still the mobile who billion as to in of but

through network supported broadband to are global our there we go us. The of to last everyday pleasure patent operate Additionally, solving Abel are and over space Avellan, pursuing cellular and my in extensive update. and by cellular and problem is our since this our who nearly Chairman and global IP is mobile pass In are AST the only public to directly now massive, devices we economy. are activities portfolio. It with unmodified will and markets building CEO, backdrop, and first to the unconnected important people who remain of is broadband touches billions the without all SpaceMobile

each few LEO. successfully our orbits, Thank months SpaceMobile. into of launched commercial phased launched amazing X We been into them and ever AST array low largest first commercial deployed Earth satellites one the have you, truly BlueBird for last Scott. The

government satellites commercial capacity become and operational, our XX we additional service and accelerated have start markets. key other initiative in U.S. we to continued and We have to launch secured providing up global as for the

targeting to do our XXX% with satellite the beta direct-to-device, of satellites now spectrum, our nationwide Verizon. with and and for this supported Their sheer unfold ever capacity to Temporary moving with the partner network initial coverage our on supported integration The successfully to innovative advantage filed and in clear largest ongoing with satellites operational. a begin Our low-band and patents also in close deep extensive is differentiator our States forward size basis. by networks. of coverage, to the FCC, our deliver Special AT&T our Authority ready we plan than United In cells integration we're are to our for in under BlueBird on United a premium we now the more X Block strategy, globally. a X unique and United orbit, the services we in a cellular States, ability Block BlueBird X,XXX design portfolio X noncontinuous our the invented. With is In States, ability request market by plan we broadband which and the rooted is that vertical to XX% pioneered field become

basis noncontinuous globally. capabilities key and the full will partners of satellites other across States all have markets United our Our on a

man-years equivalent achieved to front, over our XXX X chip. initial we and advantage years, the million novel represents On ASIC of development ASTXXXX $XX approximately competitive a costs. of This developed validation

and loan up improvement X service we're XX,XXX processing each announcing to Origin current Our bandwidth, also Block expected SpaceX. next-generation Block satellite. Today, ASIC our XXx of X a Blue from processing by are powered our new support of BlueBird bandwidth agreement megahertz with to

launch Europe, has strategic New For up and States, 'XX Glenn, United launch to coverage to Blue markets Origin of operational Block we in capacity payload India, systems the U.S. this of become from The cellular broadband year. the next 'XX. SpaceX, future AST Taking the vehicle X launch including up launch markets, suited as approximately Glenn ever with to new the continuous and we're planned launch These satellites give service achieve BlueWalker X-meter twice and well vehicle, satellites. volume X-meter SpaceMobile ultimately for Origin's other class of providers us space-based Japan, globally. Blue X government out the Cape can agreements offer X launch these used of enabling Florida largest is place, fairing Force Canaveral key launch as ISRO commercial planning we during previously agreements who of launch X. Station in and our secured our that network the confidence well New the a Alongside deployment increased to XX is in also the to launch Space with others all goals. together, our likely deliver

move now getting months, and more in of commercial a technology unconnected. I of successful AST business. to to several team in and validation by significant for new to is as past Scott we which and for point, Development Agency the contractor. of our program of SpaceMobile and Space contractor prime well, participate of the cases. With I new to this being directly strategy the commercial effort provide detail you have could connecting us pieces the achievement a Scott several am on our government progress. operationalizing achieve incredibly a over recorded as manufacturing government the being a for mission our but contracts progress, launch, the We our partners, government, in detail and that award are will can as selected is tireless proud a a place. X Additionally, particularly variety critical use see the a now that including with SpaceMobile of dual-use added our network enable will discuss pass government selected more step closer prime regulatory our wins the to to U.S. this AST lot we key compete

like Abel. I'd you, including detail regulatory to the initiatives, as government our to as a progress. time business Thank more on our our commercialization well provide little take

government. validating our to and to Our including first deploying our date, our X mobile and our commercial successfully partners, great technical AST for the technology a with support accomplishments commercial operators been network initiatives, satellites both has SpaceMobile U.S. new strategic

HALO As disruptor place the Abel directly during as the Department in of mentioned, were put SDA The Agency the by under Development multibillion-dollar space Trump we compete acquisition, with selected first a quarter, prime contractor Space the during program. is the constructive for administration Defense's budget. to a

core the and and new the us first alongside revenues for rather providing government pipeline strength national record contracts of U.S. technology contract our ability security. continues selection a clear programs for term for prototype be our particular the could as show cases we enables to with potentially award grow outlook participate development to near government pursuing further with it compete years than government to these use unique direct official in is U.S. annual that us accelerated improve, requisitions. This and on the this be use is of U.S. Our missions to contract to SDA paths In believe program millions the government, in our be initial of a subcontractor. directly to contributor additional cases programs This medium with commercial contract the here important The provides our we of with business several path and in contractor with fourth expect and to applications brief, hundreds alongside a of select time directly come, are to contracts contracted developed. the revenue and prime a meaningful these continues and SDA aggressively for to to business.

as to commercial our customer to on conversations expect as new the progress and able partners partners continue to front, be more well potential this On front report with soon. we key

including existing globally to subscribers. our key globally coverage network Our XX-plus coverage a of have markets approximately mobile among continues strategy select to the billion X.X be partners, initial who operators

we and front, networks network how U.S., have with it advance the regularly cellular On In improve can to approvals. in been our the in-orbit regulatory FCC our and continue offering service front of we the recently, commercial authority prior Authority in beta leveraging for approval with backhaul U.S., our Americans. building services use satellites, filed Most the partners TT&C Temporary on we BlueBird to for frequencies. Special our for technology, and first X

additional will through Andy update. the of from align the reaping to financial with pass both space coverage on the network, will you rulemaking now the supplemental filings partners and see the ground You and to which all continue our elements in for of us months from network, coming of FCC of both our space. I the our and over to with it weeks growth walk FCC, benefits

Thanks, Scott, afternoon, good and everyone.

stage divide our of to critical our the to The begun space-based AST network operating a cellular space-based connecting unconnected. broadband the launch SpaceMobile at at company. mission, and manufacturing marked of transition by broadband a and We've scale from XXXX the our R&D building efforts full-fledged to only accelerate cellular commercial first to third quarter beginning company the close digital

stakeholders of and on launch. BlueBird highlighted the to was Earth from quarter quarter continued as moment. Canaveral specifically subsequent of to to that I also warrants deployed The at-the-market communications ability in our our at commercial September and capital, low and Cape significant shared use which orbit. of deployment XX, excitement our on the of both public was third the through X of Block our or of appreciated array the raise facility, many the just each The ever more they ATM, a in our touch largest be I'll both opportunity satellites X the redemption event in meet by investors other successful in launch disciplined

X. Slide to Moving

the Let's review the metrics key operating quarter. for third

On payments was top the million the of the certain of $XX.X and ASIC QX items expenses including to operating expenses, and $X.X expected were onetime $XX.X proprietary depreciation the due associated second amortization quarter-over-quarter, expenses cash third bonus operating versus just million the chip of work, we million, our total excludes stock-based and non-GAAP our I included event Non-GAAP for related certain to operating of during see launch further launch gave with had of call. chart, slightly XXXX, $XX.X we at costs, our primarily expenses $XX.X costs. X million quarter range excluding operating adjusted were Operating the adjusted noncash up for last adjusted compensation. Block guidance expense, approximately that our Adjusting in earnings million quarter. first which ASIC expenses

towards Turning chart page. on this second the

in facilities direct million Our satellites and The square up capital million Texas. of labor and additional figure production made $XX.X the XXX,XXX Midland, for quarter was BlueBird quarter and facility XXXX expenditures capitalized foot for and second of our versus integration equipment the for test were assembly, third materials of $XX.X XXXX. our for

significant upward X As expected, bringing our from launch recent announced BlueBird our trended production. And balance quarter ramping the with slide, the on cash satellite the first ended third million the in prior balance at end in second the and $XXX.X our for periods above Block objectives, million of cash, cash with capital the on move expenditures the the us ability on in time. in increase $XXX.X up providing million $XXX quarter, quickly the securing today. flexibility from we agreements for important chart we connection our the of to strategic This final including is

in of public facilities cash QX, during and in raised September. $XXX.X $XXX.X end from announced includes $XXX.X exercises of we newly ATM the net million cash raised million facility balance created million million warrant quarter including early proceeds our from from quarter ATM $XXX our This

that Block X As X expect to Block ample providers contracted. the of capacity $XX the a prior launch are satellite efforts our Despite actual with us to for options enable additional approximately BlueBird balance million, materials proper and recently to this we million up BlueBird launch time constellation an launch of launch early key X securing continuous with to of be as in the for desired to markets. satellite launch range Scott XXXX $XX launch increase, responsible estimate We per $XX augment fourth satellites XX contracts costs our secured we up million XXXX. through achieve during between $XX Abel we detailed, result striking million XX coverage expense feel confident and of increase and to vehicles from to to the line and our approximately average Block per and in satellites to direct currently quarter, our costs

fourth range quarter ramp payments satellite of and increase million expenditures the $XXX support we to the production as to and we expect of in launch this prior planned As our launch the will in compared believe operation campaign, cash quarters, to of contract XXXX. CapEx secured. capital including Block the us including flows of XX sources potentially a additional recently free of funding, those of secure satellites to additional fund the for satellites generating BlueBird enable launches constellation constellation, X will remaining We buildup

issuance result interest the credit triggered we plus we go-forward facility proceeds late was a time our our reduced and in XXXX. million of we other of doing the so, a resulting $XXX obligation into of This established of accrued significantly excess As $XX.X under September, senior credit equity successful obligation this principal at of in facility, net amount our in entered August In have million, interest expense. the in expenses. producing prepayment prepayment

to continue credit We options securing future will attractive consider facilities. several for

financing the to service strategic with including quarters of that credit precedence prepayments raising some million BlueBird for will cash nondilutive XXXX as MNO capital, continue come first, excluding schedule. XXXX, quarter, operating in third within traditional XXXX the preparation in we our fourth adjusted and second continue to efforts satellites our for our as our of ASIC launch from costs, sources. Consistent over our partners we $XX for ready we of take estimate However, to range remaining a million expenses Block X and scale in production $XX

These large each delayed efforts may to adjusted as upon to continue to that debt could at the period. capital successful, for be the use long-term just export that a a low to believe filed package changes described, in If the is realized have variety pleased work from factors. I cost-effective can of expenditures result We a figures debt on Timing progressing our in this rate manufacturing a will expenditures, formal our range. operating we our be optimize or of is long-term not am proceeds report due nicely, and funding in to projects. end agencies financing I application activity have also package. the depending vary and of credit of application now will OpEx source run we

partner We will the will provide advisers as and banks we appropriate, alternatives. and with our refine our updates working be to

Our Scott. employees to broadband our value I'll component commercial earnings for as ready cellular first this it continue to call, the unmodified to only our everyday the hard back globe for direct full-scale network smartphones. And shareholders deliver we work operations and of pass drive completes and with across that, to presentation space-based the to

Andy. you, Thank

analyst questions, like first us questions go we a submitted could question? of Before to the to by the address queue Operator, of please investors. we'd our few you start the off with

has satellites XX Jeff asks, provide ] could company that necessary to coverage XX many are XX [ from commercial Jersey How the U.S. cover? to potential satellites those the in subscribers New to XX stated continuous

the At the satellites, in high XX be network process expect we're to with the market Japan, millions potential markets that's world, to satellites you broadband many to because that most most ]. XX you service a initial and XX in to ability this today, United important level, With we to XX level of fact, basically to Thank markets for world, consumer of true announcement we cellular including us Europe, us an in hundreds sized mass valuable markets gives strategic other And how a we question, estimate XX satellites a the our us service the that launch for to the and Jeff government the of able is network of This offering. important the it allows wireless States, provide the U.S. to of satellites, get strategy [ the capacity agreements continuous service selecting. from to offer as the coverage. around XX services be the and to launch signed. those see wireless in subscribers. in we the

present ] Hybrid proliferated Sean [ satellite-based program for asks, services Application earning the orbit from proliferated California what contracts? program low does opportunities orbit low DoD Earth Earth for

additional Agency to bring [ Sean one new is Space technologies. prime Development ], the the prototype for HALO used DoD contractors and the online by program evaluate being

additional We and of contractor programs stand-alone term of flexibility generate the could in role the primes, larger us in. be valuable think continue with -- be tens work that cases. as a this use feeder a the revenue to a to of is for for So and to program plan for contractor be prime and other a becoming a to near time, over having company but this prime millions

we've billion. In date, they a bespoke. so example the it space our than we terms program positive program has PLEO was backdrop for easily with for this communications a to that cases been were B. is of billions to $XXX especially there's that usage, consumable, where in noncommunication how scalable are experiencing is that from the recently the will is to this scalable with great that's both of and million that a government exactly Yes, services. meant and DoD This in successful announced offering. our And rather that $XX PLEO, is a an be system buy fact, purchasing services is U.S. designed extremely vehicle expanding offering. it And The expect

from [ what the asks, ASIC time Colorado Tanner is chips? line ] delivery current for of

ASIC configuration on that bring The satellites. next in our mid-XXXX 'XX, the is under will quarter to post launches. initial XXx term. is -- the The quick up the Thank a Yes, achieve X tape-out, with FPGA, Tanner our production. FPGA will or for ], the third And per also our you, question. XXXX, coverage. satellite, of current longer which that clarification. either the ASIC obviously in in have be to same Block later launch with is network order [ We launch ASIC is is actually The be test capacity ASIC our including focus subsequent is we we satellites increase a just

asks, X launch? [ first learned the manufacturing Dan recent responding as BlueBirds from what from since launch? BlueBirds you have Are Texas expected ] the and their

happy as performance. happy to Yes. they expected. very operating actually their report that with We're We're are

getting satellites. to ready And is basically Block light the BlueBirds one United Micron that on to nationwide the starting them noncontinuous we X States main -- are X. We first same with and building we're which I or basis, on the use cover close is up coverage the our block, in nationwide to the BlueBirds, mean, these as

in So and production integrate important advancement the fully learning a a that capability. vertically up was getting very set of manufacturing our significant

to us production helped has the them, that are part which on blocks and So up X of most the which important of the satellites, for our Block lines lines set our the is Microns. building

The other is these and progress the is X network satellites, core very which important, have we we into we're aspect, integrating are our integrating network of that with partners.

that are core. something we of to we're trivial satellites we agreements including not that the becoming and a that going doing part that integrating And all And to had task. network Block So a starting our using operators part satellite are their of that's is be systems, our major with X.

is which them. of very to a were operation one, trivial, the fully satellite intervention the people satellites fly lot it X, These are other manual not fly autonomously. new of is BlueWalker The -- on with they autonomous

several into X having that's Block and that also that And Block integrated -- translate immediately So broadcast transmit into autonomously. they broadband and something X.

We're the company low of a Earth obviously lot into that are that soon into in been doing a start stay the on here learn that next by a you learned. and significant and move built X. orbit significant Block flying for achievement and is the objects the will having that ever lesson largest with launches and business So learning

those Operator, analyst shareholders call like questions. thank I'd the now. that, with open our to And questions let's for submitting to

the of B. Our with first Instructions] Riley [Operator line Securities. Mike Crawford comes from question

you're production? X like satellite that what it you in fuller about How doing scale build production? Block time scale X takes more once Block long talk look to you up frame what today and or a a Midland now to Could might to

during are and basically meet produce for Microns In Midland, then satellites to Block required X 'XX. 'XX up the we ability have of our basically have scaled target that XX and to the

the X, have same that. all will for be it X relate satellites. for Block vast did will And be basically, as Microns launch satellites the it it technology majority investment that we subsequent on in what Block used Block done to of X We the the required

Micron Microns, in Block So same they're successfully basically the using that is launches. few next X. infrastructure our current now the the operating same for

Okay.

Just one me. more for

in aim to they provide its agreement starting coverage third specifically with One Rakuten? should nationwide we of quarter your definitive strategic in SpaceMobile stated presentation XXXX. expect that results partners, to AST When a with Rakuten, see

They operator. Rakuten an have are and network We agreement a an investor with already.

We United be the But with engaged them we are market. also Japanese for applications the one first and very in with to Europe are slotting in-country them, after and other hard working we of markets already are the them fully Japan. States,

UBS. Schoell question line comes next Our Chris from with the of

fair color Just a the launch been it and on the New not XX previously. loaded? schedule? agreement. the launched? gives in Can potentially New is back-end delays will falls follow-up on assume Glenn cadence And event being further satellites had And behind I can for talk the see to just services you give the you it Any through options delayed you you backup confidence believe your rocket Glenn be what will

noticed, from partners, Blue and as is the I Glenn New ISRO Origin. agreement Yes. multi-launch with you mean, multiple including what we SpaceX, a I announced mean,

multiple double is is in the in possible New to stack all the We roughly satellites actually ability to have the Glenn, the Falcon X X. way what which

in launch to significant take them. to basically it of with satellites, up campaign I to Glenn, order X New our the number of we're them stack ready and large said, accelerating year, to the fairing in ability launch a this is advantage and as with working

with XX. the times built being actually this Glenn XX scheduled to designed and X, X, we one of until reused will to is be to we probably And New be and year. the the will the X, first So -- multitude cadence be X, X X, get them

days, still policy I or I how for can if to would but potential your regulation hear And Great. new the thinking it's on could early about under spend one space impacts appreciate just love you're administration? thoughts business. more. evolve Any

will to administration into major mission, a SDA lot believe sector. United what States. a solve administration believe coming we will we for is the environment the We is that bipartisan the that which Well, space that this granted. created, every will the for in And it be provide did an administration. of was the we be broadband it where That initiative was a space maintain that first of growth support a and connectivity of problem, think the ability in there in incoming corner funding significant

We also believe that X path our government we opportunities see become more this very first basically administration what a is relevant, happen And the years and saw good in we from here. ago.

Our comes Space. from next with line question the Chris Quilty of Quilty

in you potential the I should mentioned the we millions Or of think in are script, service hardware of those are revenues? dollars. that revenues? Scott, -- revenues those hundreds Was assume government the

-- are But was the time, general those we contracts sizing that a received. Chris, right? over it to that speaks

contracts So now. X there's awards

sell contemplate, U.S. the the to a for government large have we ability commercial are in getting make satellites over to technologies of programs have phased operational -- And services those, are we suppose. these I time although primarily, those all we're But path a some to manufacturer, that partners. over that and business, contracts we to the we of are primarily these be the figures. getting contracts time, our services think, we and for record, And would that

the fair bespoke could would are Is often with there network Or system? networks build-out. those a it component And the ground sort government to assume of the to -- Understand. ground use existing have that any be of of lowest a it out government it's infrastructure? turned

Yes.

pretty ground for U.S. built. Our -- infrastructure footprint the actually the is for existing much

What government been have what using And do some disclose testing we limited explained, of been very say, satellites. We they have Scott satellites. they significant that will will X have our are which with as be led, the of our They over believe to agreements, to not time. access how network I them. can

implementations. them infrastructure sharing on government a the commercial we of have for we're -- where setup dual where also All use

Good.

As you explain the the long to don't technology. you as revenues, deliver need

Our next the Bank. Bryan Kraft from Deutsche question line with comes of

could. I had X, I if

you service? could level and the the commercial the activity of us And time a then commercial pipeline agreements in launched for it Scott, X as line you about testing give with secondly, those new and relates satellites September First, you just sense to could signing into talk MNOs? of putting

Yes.

talk in about the satellites they Let operation. actually, current X me are

as today an FCC supplemental STA, on close turn around imminent, usage it the with that the to actually them to submitted United and for have temporary authority, And expect will beta beta be basically they to to the are But are deployed, from fully FCC. pending authorization are and They be they We nationwide on them ready operational. services operating we States. is them.

agreements, And they the other quickly. and will revenue which vehicle the these offered, agreement are commercial long, Bryan, a our because similar is with on basically they're definitive flow are Those we legal second with we've announced on working through dense important are large question, service have partners. agreements and before very AT&T, important are to in but place

front around and is of we've -- additional our as -- said, on these the increased strong. with them have get strategy, also the so quite yes, as recently very the that harvest agreements to seen, we're types agreements and right talk those These interest agreements and go are world. partners is important because, have commercial for And big pipeline we've that the our we those today we we And around are out steps. hiring to XX-plus you partners. And may

level in especially of good So satellites these them XXXX, we've X all the really by It's a that had deploying is and with been first activity successfully supported of pipeline. in orbit.

continue harvest that to going we're activity it. good, and So to is

the comes Henry of from question next Quilty Our line Analytics. Caleb with

answered, been if launching X Block AST anticipate already to Block just the has X? satellites this many sorry, clarification. switching does question, One a over before How

X. Yes. Block to already No. We switched

X are BlueWalker So X in the Block orbit, ] but sizes. X that [ are

is next launching So size X-meter what bigger It going arrays is and X. forward. X,XXX the we're square array, space by which X-meter is X.Xx feet Block the the roughly than

right. All Okay.

about color lot need and like see space filings where with ground terms can commercial expecting you You you've progressed of any for many the And the give to service? for segment. rollout of those around FCC also teleports space mentioned kind what a to in talked and network ground you world on more side, but you've how date

Japan, partners for States. will with cells Vodafone regional Japanese X the the up we with we we those then to is in and Rakuten will what we're with Japan stations coming light up Europe be into market. have market be announcing to be gateways we with operations conjunction and ready turning additional additional in lighting then in lighting done similar Yes, X,XXX for are for markets prioritizing up deals then to hopefully, the in Verizon, the And U.S. ground we'll basically and that We and This United AT&T have in European strategic be we markets. in where

to the have focusing one that as in we're we access and States the to or prepay satellites, what the first network, a focus United either So operators are of markets. prioritizing network in and that's services invested regions of lot with the us, to with specific

Okay. just And one more then question.

smaller ISRO Falcon X satellites GSLV the are can X. larger for for How So anticipating PSLV the Glenn, that many it New launch And is sounds with launch? the like rocket? X you or for

with the largest. is It

large focus on our We New fairing use X up the ones very, then enthusiastic launch are of very on satellites. large that their of the with launching the expect to course, we're also the original SpaceX we Glenn, and and to that that But Glenn launch, of about first ability to capable others have. New

Scott comments. have end we reached the the Thank now you. over turn call question-and-answer to closing session. Wisniewski back I'll the of for And

joining providing and We everyone's you. Thank mission. to for shareholders the call support of forward and Thank strong research of you, operator. further all to analysts thank updates. our We want look continued our

concludes ladies call. And today's and gentlemen, this conference

You this Thank may lines you your disconnect participation. at time. for your