10-QPeriod: Q1 FY2023

AST SpaceMobile, Inc. Quarterly Report for Q1 Ended Mar 31, 2023

Filed May 15, 2023For Securities:ASTS

Summary

AST SpaceMobile, Inc. (ASTS) reported its first quarter 2023 financial results, highlighting continued investment in its satellite constellation development and testing. The company's balance sheet shows a decrease in cash and cash equivalents to $185.0 million from $238.6 million at the end of 2022, primarily due to operating and investing activities. Total assets decreased to $400.7 million from $438.4 million. Operationally, ASTS incurred a net loss of $16.3 million attributable to common stockholders for the quarter, compared to a net loss of $10.7 million in the same period of the prior year. This widened loss reflects increased operating expenses, particularly in engineering services and research and development, as the company advances its BlueBird satellite production and testing. Despite the losses, significant progress was made with the BlueWalker 3 test satellite, including successful two-way voice calls and initial compatibility tests confirming support for broadband speeds and 4G LTE/5G waveforms, which the company determined was ready for its intended use.

Financial Highlights

42 data points
Beta

Revenue

$0.00

Net Income

-$16.32M

Total Assets

$400.72M

Cash & Equivalents

$185.04M

Free Cash Flow

-$53.12M

Financial Statements
Beta
Revenue$0
Cost of Revenue$0
Gross Profit$0
R&D Expenses$16.38M
Operating Expenses$44.45M
Net Income-$16.32M

Key Highlights

  • 1Cash and cash equivalents decreased to $185.0 million as of March 31, 2023, down from $238.6 million at December 31, 2022, indicating ongoing cash burn for development and operations.
  • 2Net loss attributable to common stockholders for the quarter was $16.3 million, an increase from $10.7 million in Q1 2022, driven by higher operating expenses.
  • 3Total operating expenses surged by 36% year-over-year to $44.5 million, primarily due to substantial increases in engineering services (up 40%) and research and development costs (up 98%).
  • 4The company successfully completed two-way voice calls using its BlueWalker 3 test satellite, validating its technology for supporting cellular broadband speeds and 4G LTE/5G waveforms.
  • 5Capital expenditures remain significant, with $15.2 million spent on property and equipment and $0.16 million on the BlueWalker 3 satellite construction in progress during the quarter.
  • 6The company estimates needing $550.0 million to $650.0 million to fund operations and capital expenditures for 20 Block 2 BlueBird satellites and to operate a constellation of 25 satellites.
  • 7A potential liability of $10.0 million was recognized due to the company's expectation of not meeting certain Key Performance Indicators (KPIs) under the Rakuten Agreement by June 2023.

Frequently Asked Questions

As of March 31, 2023, AST SpaceMobile had $185.0 million in cash and cash equivalents. For the three months ended March 31, 2023, the company used $37.7 million in operating activities, indicating a significant cash burn rate that management believes can be sustained for at least 12 months with existing cash and access to equity programs.

AST SpaceMobile announced the successful completion of two-way voice calls using the BW3 test satellite on April 25, 2023. Initial compatibility tests confirmed the ability to support cellular broadband speeds and 4G LTE/5G waveforms, validating the company's patented system and architecture. The BW3 satellite is now considered ready for its intended use.

AST SpaceMobile estimates needing approximately $550.0 million to $650.0 million to fund operations and capital expenditures to design, assemble, and launch 20 Block 2 BlueBird satellites and operate a constellation of 25 satellites. The company plans to raise this capital through equity offerings, debt financings, and commercial agreements, utilizing existing equity programs like the ATM Equity Program.

The company has recognized an estimated liability of $10.0 million due to its expectation of not meeting certain Key Performance Indicators (KPIs) under the Rakuten Agreement by June 2023, which is due on June 30, 2023. Additionally, warrant liabilities were recorded at $31.4 million, with a gain of $7.5 million recognized in the period due to changes in their fair value.