AST SpaceMobile, the pioneering company behind the first and only space-based cellular broadband network directly accessible by everyday smartphones for both commercial and government use, has released its business update for the second quarter, ending June 30, 2024.
“We are at a crucial juncture for AST SpaceMobile,” stated Abel Avellan, Founder, Chairman, and CEO. “The arrival of our first five commercial satellites at the launch site is the culmination of years of relentless innovation and collaboration with industry leaders like AT&T, Google, Verizon, Vodafone, and Rakuten. The upcoming orbital launch represents a significant step toward our mission of eliminating dead zones and empowering communities worldwide with space-based cellular broadband connectivity.”
Business Update Highlights:
- The first five commercial satellites are on track for a dedicated orbital launch in the first half of September, marking the largest-ever communications arrays to be deployed commercially in low Earth orbit.
- Final assembly and environmental testing were successfully completed at AST SpaceMobile’s manufacturing facilities in Texas. The satellites are now at Cape Canaveral, preparing for integration with the launch vehicle, with a confirmed launch date.
- AST SpaceMobile has secured FCC approval, including an initial license for launching these first five commercial satellites.
- The company’s commercial ecosystem has expanded, with Verizon joining as a strategic investor and customer, alongside AT&T in the U.S. Verizon’s strategic investment includes a $100 million financial commitment, comprising $65 million in commercial prepayments and $35 million in convertible notes. This partnership, along with AT&T’s definitive commercial agreement signed in May, aims to provide nearly 100% geographical coverage of the continental U.S. on premium 850 MHz low-band spectrum.
- The first five commercial satellites will be capable of providing nationwide non-continuous service across the U.S., with over 5,600 cells in premium low-band spectrum. Initial nationwide service is expected to be available to AT&T and Verizon beta test users in the coming months after in-orbit service activation. Coverage and service will increase as the satellite constellation expands with Block 2 satellites.
- The company has completed the ASIC chip tape-out phase with TSMC, which is expected to support up to a 10x improvement in processing bandwidth per satellite. The AST5000 ASIC, a novel, custom low-power architecture, has been in development for five years at an approximate cost of $45 million.
- Initial planning and production of 17 Block 2 BlueBird satellites are underway at AST SpaceMobile’s Texas manufacturing facilities. The company is approximately 95% vertically integrated for manufacturing satellite components and subsystems, with ownership or licensing of the IP and control over the manufacturing process.
- AST SpaceMobile has expanded its relationship with the U.S. Government, including initial in-orbit testing and additional early-stage contract awards to one of its prime contractors. Successful initial in-orbit and ground tests for non-communications applications have been reflected in completed contractual milestones and revenue. Additional U.S. Government contract awards have been secured in recent months, with a positive outlook for further and larger-sized contracts.
Second Quarter 2024 Financial Highlights:
- As of June 30, 2024, AST SpaceMobile had cash, cash equivalents, and restricted cash totaling $287.6 million, with additional liquidity of $51.5 million in gross proceeds available under the Senior Secured Credit Facility, subject to certain conditions and approvals.
- Total operating expenses for Q2 2024 amounted to $63.9 million, including $29.3 million in depreciation, amortization, and stock-based compensation expense, reflecting a $7.9 million increase compared to $56.0 million in Q1 2024. This increase was driven by a $5.6 million rise in general and administrative costs, a $1.7 million increase in engineering services costs, a $0.4 million increase in depreciation and amortization expense, and a $0.2 million increase in research and development costs.
- Adjusted operating expenses for Q2 2024 were $34.6 million, up $3.5 million from $31.1 million in Q1 2024, due to a $2.0 million rise in adjusted general and administrative costs, a $1.3 million increase in adjusted engineering services costs, and a $0.2 million increase in research and development costs.
- As of June 30, 2024, AST SpaceMobile had incurred approximately $347.5 million in gross capitalized property and equipment costs, with accumulated depreciation and amortization totaling $99.3 million. These capitalized costs include satellite materials for BlueBird satellites, advance launch payments, the BlueWalker 3 satellite, assembly and integration facilities, and ground antennas.
Non-GAAP Financial Measures:
This press release references certain non-GAAP financial measures, including adjusted operating expenses, adjusted engineering services costs, and adjusted general and administrative costs. These non-GAAP measures are considered useful for evaluating AST SpaceMobile’s operating performance over time and are used for managing the business, including in preparing annual budgets and financial projections. However, these measures are not standardized under U.S. GAAP and may not be comparable to similar measures used by other companies. They are provided solely to give investors additional information for understanding management’s assessment of performance and should not be considered as substitutes for GAAP measures. A reconciliation of non-GAAP to GAAP financial measures is included in the tables accompanying this press release.
Conference Call Information:
AST SpaceMobile will host a quarterly business update conference call at 5:00 p.m. Eastern Time on Wednesday, August 14, 2024. The call will be available via a live webcast on the Events page of AST SpaceMobile’s Investor Relations website at https://ast-science.com/investors/. A recording of the webcast will be available shortly after the call.
