10-QPeriod: Q3 FY2023

AST SpaceMobile, Inc. Quarterly Report for Q3 Ended Sep 30, 2023

Filed November 14, 2023For Securities:ASTS

Summary

AST SpaceMobile, Inc. (ASTS) reported its financial results for the third quarter ended September 30, 2023. The company continues to invest heavily in its satellite constellation development, leading to significant operating expenses and net losses. Revenue generation remains in the pre-commercial phase, with no sales reported for the current periods. Cash burn remains a key concern, although the company has secured new debt financing and continues to explore equity financing options to fund its ambitious growth plans. The primary focus for investors in this report revolves around the company's progress in technological development and its path to commercialization. Significant expenditures on engineering, R&D, and property and equipment, particularly related to the BlueWalker 3 test satellite and the upcoming BlueBird satellites, highlight the capital-intensive nature of its business. While the company has demonstrated successful testing of its technology, the substantial capital required for full constellation deployment and the timeline for generating meaningful revenue remain critical uncertainties for the company's future financial health.

Financial Highlights

43 data points
Beta

Revenue

$0.00

Net Income

-$20.91M

Total Assets

$402.13M

Cash & Equivalents

$133.31M

Free Cash Flow

-$109.54M

Financial Statements
Beta
Revenue$0
Cost of Revenue$0
Gross Profit$0
R&D Expenses$9.42M
Operating Expenses$58.97M
Interest Expense$1.40M
Net Income-$20.91M

Key Highlights

  • 1AST SpaceMobile reported a net loss of $20.9 million for the three months ended September 30, 2023, compared to a net loss of $9.8 million for the same period in 2022, primarily driven by increased operating expenses.
  • 2Total operating expenses for the third quarter of 2023 rose to $59.0 million from $42.1 million in the prior year's quarter, largely due to a significant increase in depreciation and amortization expenses related to the BlueWalker 3 test satellite.
  • 3The company has secured new debt financing, including a senior secured credit facility of up to $100 million and a $15 million capital equipment loan, indicating efforts to bolster its liquidity.
  • 4Cash and cash equivalents decreased to $133.3 million at September 30, 2023, down from $238.6 million at December 31, 2022, highlighting ongoing cash burn.
  • 5Property and equipment, net, increased substantially to $224.2 million from $146.0 million, reflecting continued investment in satellite development and infrastructure.
  • 6No revenue was generated during the three or nine months ended September 30, 2023, consistent with the company's pre-commercialization stage. The company previously generated revenue from its now-divested subsidiary, Nano.
  • 7AST SpaceMobile is actively pursuing further capital raises, noting that it estimates needing $550 million to $650 million to fund operations and capital expenditures through the deployment of 25 BlueBird satellites.

Frequently Asked Questions

AST SpaceMobile is currently in the pre-commercialization phase and generated no revenue during the three and nine months ended September 30, 2023. All prior revenue was attributed to its former subsidiary, Nano, which was sold in September 2022. The company expects to generate revenue from its SpaceMobile Service and resale of gateway equipment starting in 2024, contingent on launching its BlueBird satellites and obtaining necessary approvals.

The company is funding its operations through cash on hand and by actively pursuing capital raises. As of September 30, 2023, it had $133.3 million in cash and cash equivalents. AST SpaceMobile has secured new debt financing, including a senior secured credit facility and a capital equipment loan, and continues to utilize its ATM Equity Program and Equity Line of Credit. The company estimates a significant need for additional capital, between $550 million and $650 million, to fund future operations and satellite deployments.

The BlueWalker 3 (BW3) test satellite has successfully completed two-way voice calls and achieved download speeds of approximately 14 Mbps using 5G connectivity. The company has begun depreciating BW3 and is continuing testing. Preparations for the BlueBird (BB) satellites are ongoing, with the company aiming to launch the first five Block 1 BB satellites in the first quarter of 2024. The design for the next generation Block 2 BB satellites, featuring an ASIC chip for improved performance, is also progressing.

The company anticipates significant future capital requirements to deploy its full satellite constellation and launch the SpaceMobile Service. While successful commercial service is expected to generate revenue in 2024, substantial ongoing investment is needed. AST SpaceMobile acknowledges that its ability to raise additional capital is crucial for executing its roadmap and that failure to do so could lead to delays or reductions in its commercialization efforts. Profitability is not yet on the horizon, as the company is still in its heavy investment phase.