AST SpaceMobile, Inc. (“AST SpaceMobile”) (NASDAQ: ASTS), the
company building the first and only space-based cellular broadband
network accessible directly by everyday smartphones, and designed
for both commercial and government applications, is providing its
business update for the three months and fiscal year ended December
31, 2023.
“It has been a busy and exciting start to 2024 for AST
SpaceMobile, with new partners joining our mission, manufacturing
ramping, and commercialization approaching,” said Abel Avellan,
Chairman and CEO of AST SpaceMobile. “With a clear vision and a
strong foundation, AST SpaceMobile is well-positioned to lead the
charge in bridging the digital divide.”
Business Update
- Key Investments and Commercial Agreements With AT&T,
Google, Vodafone and the United States Government
- Milestone strategic financing is a vote of confidence in AST’s
tech and business model
- Fixed-firm-price contract award announced with the United
States Government through a prime contractor, expected to produce
initial revenue in Q1 2024
- Necessary funding on-hand to execute near-term strategic plan
for the launch of five 700 sq. ft. Block 1 BlueBird satellites and
first next generation 2,400 sq. ft. Block 2 BlueBird satellite,
which will surpass Block 1 BlueBird satellites as the largest
commercial phased array in low Earth orbit
- Continue to advance discussions with additional strategic
partners, following the blueprint of strategic investments
alongside commercial payments
- FCC Approves Framework for the Use of Terrestrial Spectrum
for SpaceMobile (Direct-to-Device)
- Potential to unlock 200+ MHz of terrestrial low band spectrum
for satellite direct-to-device use
- FCC voted 5-0 on March 14 to approve the Supplemental Coverage
from Space NPRM draft rules published in February
- Should facilitate AST’s FCC application to provide commercial
services in the US
- We anticipate many regulatory entities globally will follow the
new US regulatory regime
- Simplifies overall application process by making standard rules
which cover the majority of AST’s application
- Production, Assembly and Testing Capabilities Now Fully
Operational at Texas Facilities
- Continue to ramp production capability of microns, the building
blocks of our Block 1 and Block 2 satellites
- Production of five 700 sq. ft. Block 1 BlueBird satellites was
impacted by two suppliers, leading to delays in integration and
testing; In order to accelerate production of our next satellites
and reduce dependency on these suppliers, we acquired a
non-exclusive and worldwide license to manufacture one of the
subsystems, and replaced the supplier of the other subsystem with a
new supplier with whom we have completed a new design and now own
the IP
- We will now be able to manufacture in-house or through
third-parties using our own IP approximately 95% of all satellite
subsystems for our next generation Block 2 BlueBird satellites
- Orbital Launch Updates Provide Near-Term Timeline
- Five 700 sq. ft. Block 1 BlueBird Satellites expected to be
transported from our assembly facilities to the launch site between
July and August of 2024
- Secured launch contract for first 2,400 sq. ft next generation
Block 2 BlueBird satellite, with a contractual launch window from
December 2024 to March 2025
- Custom ASIC Enters Tape-Out Phase With TSMC, Planned to
Enable Up To 120 Mbps Peak Data Rates on 40 MHz Spectrum Channels
and Processing Bandwidth of Up To 10,000 MHz Per Satellite
- Novel, custom and low-power architecture developed to enable up
to a tenfold improvement in processing bandwidth on each next
generation 2,400 sq. ft. Block 2 BlueBird satellite
- Represents a competitive advantage developed over four years,
equivalent to an estimated 150 man-years, with approximately $45.0
million of development
- Progressing Non-Dilutive Quasi-Governmental Funding Sources
With Non-Binding Letters of Interest from Three Institutions
- Framework for accessing significant long-term, lower-cost
non-dilutive capital
Fourth Quarter and Full Year 2023 Financial
Highlights
- As of December 31, 2023, we had cash, cash equivalents and
restricted cash on hand of $88.1 million. We ended the first
quarter of 2024 with cash and cash equivalents and restricted cash
of approximately $210.8 million. We have additional liquidity of
$51.5 million in gross proceeds available to draw under the Senior
Secured Credit Facility, subject to certain conditions and
approvals
- Total operating expenses for the fourth quarter of 2023 were
$60.9 million, including $22.3 million of depreciation and
amortization and stock-based compensation expense. This represents
an increase of $1.9 million as compared to $59.0 million in the
third quarter of 2023, due to a $0.6 million increase in
depreciation and amortization expense, a $0.5 million increase in
engineering services costs, and a $1.4 million increase in research
and development costs offset by a $0.5 million decrease in general
and administrative costs
- Total operating expenses increased by $69.5 million to $222.4
million for the year ended December 31, 2023, as compared to $152.9
million for the year ended December 31, 2022
- Total Adjusted operating expenses for the fourth quarter of
2023 were $38.6 million, an increase of $1.3 million as compared to
$37.3 million in the third quarter of 2023, due to a $1.4 million
increase in research and development costs and a $0.5 million
increase in Adjusted engineering services costs offset by a $0.6
million decrease in Adjusted general and administrative
costs(1)
- As of December 31, 2023, we have incurred approximately $299.7
million of gross capitalized property and equipment costs and
accumulated depreciation and amortization of $61.2 million. The
capitalized costs include costs of our BlueWalker 3 satellite,
assembly and integration facilities including assembly and test
equipment, satellite materials, advance launch payments and ground
antennas
(1)
See reconciliation of Adjusted operating
expenses to Total operating expenses, Adjusted engineering services
costs to Engineering services costs and Adjusted general and
administrative costs to General and administrative costs in the
tables accompanying this press release.
Non-GAAP Financial Measures
We refer to certain non-GAAP financial measures in this press
release, including Adjusted operating expenses, Adjusted
engineering services costs and Adjusted general and administrative
costs. We believe these non-GAAP financial measures are useful
measures across time in evaluating our operating performance as we
use these measures to manage the business, including in preparing
our annual operating budget and financial projections. These
non-GAAP financial measures that have no standardized meaning
prescribed by U.S. GAAP, and therefore have limits in their
usefulness to investors. Because of the non-standardized
definitions, these measures may not be comparable to the
calculation of similar measures of other companies and are
presented solely to provide investors with useful information to
more fully understand how management assesses performance. These
measures are not, and should not be viewed as, a substitute for
their most directly comparable GAAP measures. Reconciliation of
non-GAAP financial measures and the most directly comparable GAAP
financial measures are included in the tables accompanying this
press release.
Conference Call Information
AST SpaceMobile will hold a quarterly business update conference
call at 5:00 p.m. (Eastern Time) on Monday, April 1, 2024. The call
will be accessible via a live webcast on the Events page of AST
SpaceMobile’s Investor Relations website at
https://ast-science.com/investors/. An archive of the webcast will
be available shortly after the call.
About AST SpaceMobile
AST SpaceMobile is building the first and only global cellular
broadband network in space to operate directly with standard,
unmodified mobile devices based on our extensive IP and patent
portfolio, and designed for both commercial and government
applications. Our engineers and space scientists are on a mission
to eliminate the connectivity gaps faced by today’s five billion
mobile subscribers and finally bring broadband to the billions who
remain unconnected. For more information, follow AST SpaceMobile on
YouTube, X (Formerly Twitter), LinkedIn and Facebook. Watch this
video for an overview of the SpaceMobile mission.
Forward-Looking Statements
This communication contains “forward-looking statements” that
are not historical facts, and involve risks and uncertainties that
could cause actual results of AST SpaceMobile to differ materially
from those expected and projected. These forward-looking statements
can be identified by the use of forward-looking terminology,
including the words “believes,” “estimates,” “anticipates,”
“expects,” “intends,” “plans,” “may,” “will,” “would,” “potential,”
“projects,” “predicts,” “continue,” or “should,” or, in each case,
their negative or other variations or comparable terminology.
These forward-looking statements involve significant risks and
uncertainties that could cause the actual results to differ
materially from the expected results. Most of these factors are
outside AST SpaceMobile’s control and are difficult to predict.
Factors that may cause such differences include, but are not
limited to: (i) expectations regarding AST SpaceMobile’s strategies
and future financial performance, including AST’s future business
plans or objectives, expected functionality of the SpaceMobile
Service, anticipated timing of the launch of the Block 1 Bluebird
satellites, anticipated demand and acceptance of mobile satellite
services, prospective performance and commercial opportunities and
competitors, the timing of obtaining regulatory approvals, ability
to finance its research and development activities, commercial
partnership acquisition and retention, products and services,
pricing, marketing plans, operating expenses, market trends,
revenues, liquidity, cash flows and uses of cash, capital
expenditures, and AST’s ability to invest in growth initiatives;
(ii) the negotiation of definitive agreements with mobile network
operators relating to the SpaceMobile service that would supersede
preliminary agreements and memoranda of understanding and the
ability to enter into commercial agreements with other parties or
government entities; (iii) the ability of AST SpaceMobile to grow
and manage growth profitably and retain its key employees and AST
SpaceMobile’s responses to actions of its competitors and its
ability to effectively compete; (iv) changes in applicable laws or
regulations; (v) the possibility that AST SpaceMobile may be
adversely affected by other economic, business, and/or competitive
factors; (vi) the outcome of any legal proceedings that may be
instituted against AST SpaceMobile; and (vii) other risks and
uncertainties indicated in the Company’s filings with the SEC,
including those in the Risk Factors section of AST SpaceMobile’s
Form 10-K filed with the SEC on April 1, 2024.
AST SpaceMobile cautions that the foregoing list of factors is
not exclusive. AST SpaceMobile cautions readers not to place undue
reliance upon any forward-looking statements, which speak only as
of the date made. For information identifying important factors
that could cause actual results to differ materially from those
anticipated in the forward-looking statements, please refer to the
Risk Factors incorporated by reference into AST SpaceMobile’s Form
10-K filed with the SEC on April 1, 2024. AST SpaceMobile’s
securities filings can be accessed on the EDGAR section of the
SEC’s website at www.sec.gov. Except as expressly required by
applicable securities law, AST SpaceMobile disclaims any intention
or obligation to update or revise any forward-looking statements
whether as a result of new information, future events or
otherwise.
Fourth Quarter and Fiscal Year 2023 Financial Results
AST SPACEMOBILE, INC.
CONSOLIDATED BALANCE
SHEETS
(Dollars in thousands, except
share data)
December 31,
2023
2022
ASSETS
Current
assets:
Cash and cash equivalents
$
85,622
$
238,588
Restricted cash
2,475
668
Prepaid expenses
4,591
4,100
Other current assets
14,194
24,954
Total current assets
106,882
268,310
Non-current
assets:
Property and equipment, net
238,478
145,989
Operating lease right-of-use assets,
net
13,221
7,671
Other non-current assets
2,311
16,402
TOTAL ASSETS
$
360,892
$
438,372
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current
liabilities:
Accounts payable
20,575
13,929
Accrued expenses and other current
liabilities
23,926
12,903
Current operating lease liabilities
1,468
722
Current portion of long-term debt, net
252
242
Total current liabilities
46,221
27,796
Non-current
liabilities:
Warrant liabilities
29,960
38,946
Non-current operating lease
liabilities
11,900
7,046
Long-term debt, net
59,252
4,758
Total liabilities
147,333
78,546
Commitments and contingencies
Stockholders'
Equity:
Class A Common Stock, $.0001 par value;
800,000,000 shares authorized; 90,161,309 and 71,819,926 shares
issued and outstanding as of December 31, 2023 and December 31,
2022, respectively.
9
7
Class B Common Stock, $.0001 par value;
200,000,000 shares authorized; 50,041,757 shares issued and
outstanding as of December 31, 2023 and December 31, 2022.
5
5
Class C Common Stock, $.0001 par value;
125,000,000 shares authorized; 78,163,078 shares issued and
outstanding as of December 31, 2023 and December 31, 2022.
8
8
Additional paid-in capital
288,404
235,384
Accumulated other comprehensive income
227
229
Accumulated deficit
(189,662
)
(102,101
)
Noncontrolling interest
114,568
226,294
Total stockholders' equity
213,559
359,826
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$
360,892
$
438,372
AST SPACEMOBILE, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Dollars in thousands, except
share and per share data)
Year Ended December
31,
2023
2022
Revenues
$
-
$
13,825
Cost of sales (exclusive of items shown
separately below)
-
6,714
Gross profit
-
7,111
Operating
expenses:
Engineering services costs
78,811
54,212
General and administrative costs
41,601
48,332
Research and development costs
47,486
45,620
Depreciation and amortization
54,469
4,711
Total operating expenses
222,367
152,875
Other income
(expense):
Gain on remeasurement of warrant
liabilities
8,986
19,114
Interest income (expense), net
2,675
2,633
Other (expense) income, net
(10,290
)
21,521
Total other income (expense),
net
1,371
43,268
Loss before income tax expense
(220,996
)
(102,496
)
Income tax expense
(1,681
)
(617
)
Net loss before allocation to
noncontrolling interest
(222,677
)
(103,113
)
Net loss attributable to noncontrolling
interest
(135,116
)
(71,473
)
Net loss attributable to common
stockholders
$
(87,561
)
$
(31,640
)
Net loss per share attributable to holders
of Class A Common Stock
Basic and diluted
$
(1.07
)
$
(0.58
)
Weighted-average shares of Class A Common
Stock outstanding
Basic and diluted
81,824,122
54,437,073
AST SPACEMOBILE, INC.
CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (LOSS)
(Dollars in thousands)
Year Ended December
31,
2023
2022
Net loss before allocation to
noncontrolling interest
$
(222,677
)
$
(103,113
)
Other comprehensive loss
Foreign currency translation
adjustments
(6
)
(295
)
Total other comprehensive loss
(6
)
(295
)
Total comprehensive loss before allocation
to noncontrolling interest
(222,683
)
(103,408
)
Comprehensive loss attributable to
noncontrolling interest
(135,120
)
(71,704
)
Comprehensive loss attributable to common
stockholders
$
(87,563
)
$
(31,704
)
AST SPACEMOBILE, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS (UNAUDITED)
(Dollars in thousands, except
share and per share data)
For the Three Months Ended
December 31,
2023
2022
Revenues
$
-
$
-
Cost of sales (exclusive of items shown
separately below)
-
-
Gross profit
-
-
Operating
expenses:
Engineering services costs
19,992
16,004
General and administrative costs
10,528
10,698
Research and development costs
10,766
14,651
Depreciation and amortization
19,592
1,254
Total operating expenses
60,878
42,607
Other (expense)
income:
Gain on remeasurement of warrant
liabilities
(12,468
)
17,445
Interest (expense) income, net
(1,635
)
1,612
Other expense, net
(55
)
(1,669
)
Total other (expense) income,
net
(14,158
)
17,388
Loss before income tax (expense)
benefit
(75,036
)
(25,219
)
Income tax (expense) benefit
(2,088
)
130
Net loss before allocation to
noncontrolling interest
(77,124
)
(25,089
)
Net loss attributable to noncontrolling
interest
(45,198
)
(16,860
)
Net loss attributable to common
stockholders
$
(31,926
)
$
(8,229
)
Net loss per share of common stock
attributable to common stockholders
Basic and diluted
$
(0.35
)
$
(0.14
)
Weighted average shares used in computing
net loss per share of common stock
Basic and diluted
90,008,459
60,799,275
AST SPACEMOBILE, INC.
CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
(Dollars in thousands)
For the Three Months Ended
December 31,
2023
2022
Net income loss before allocation to
noncontrolling interest
$
(77,124
)
$
(25,089
)
Other comprehensive loss
Foreign currency translation
adjustments
520
1,570
Total other comprehensive loss
520
1,570
Total comprehensive loss before allocation
to noncontrolling interest
(76,604
)
(23,519
)
Comprehensive loss attributable to
noncontrolling interest
(44,894
)
(15,789
)
Comprehensive loss attributable to common
stockholders
$
(31,710
)
$
(7,730
)
AST SPACEMOBILE, INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Dollars in thousands)
Years Ended December
31,
2023
2022
Cash flows from operating activities:
Net loss before allocation to
noncontrolling interest
$
(222,677
)
$
(103,113
)
Adjustments to reconcile net loss before
noncontrolling interest to cash used in operating activities:
Gain on sale of Nano
-
(24,542
)
Depreciation and amortization
54,469
4,711
Gain on remeasurement of warrant
liabilities
(8,986
)
(19,114
)
Loss on sale of Property and equipment
110
305
Amortization of debt issuance costs
1,155
-
Stock-based compensation
13,289
9,391
Issuance of common stock for commitment
shares
-
332
Changes in operating assets and
liabilities:
-
Accounts receivable
-
(1,993
)
Inventory
-
(2,461
)
Prepaid expenses and other current
assets
12,082
(24,588
)
Accounts payable and accrued expenses
(149
)
18,438
Operating lease right-of-use assets and
operating lease liabilities
48
40
Deferred revenue
-
2,395
Other assets and liabilities
1,717
(16,265
)
Net cash used in operating activities
(148,942
)
(156,464
)
Cash flows from investing activities:
Purchase of property and equipment and
advance launch payments
(118,807
)
(57,284
)
Proceeds from sale of Nano, net of cash
deconsolidated and transaction costs
-
25,932
Net cash used in investing activities
(118,807
)
(31,352
)
Cash flows from financing activities:
Proceeds from debt
63,500
230
Repayments of debt
(242
)
-
Payment for debt issuance costs
(9,653
)
-
Proceeds from issuance of common stock,
net of issuance costs
63,767
102,023
Issuance of equity under employee stock
plan
225
73
Employee taxes paid for stock-based
compensation awards
(865
)
-
Proceeds from warrant exercises
-
14
Net cash provided by financing
activities
116,732
102,340
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
(142
)
195
Net (decrease) increase in cash, cash
equivalents and restricted cash
(151,159
)
(85,281
)
Cash, cash equivalents and restricted
cash, beginning of period
239,256
324,537
Cash, cash equivalents and restricted
cash, end of period
$
88,097
$
239,256
Supplemental disclosure of cash flow
information:
Non-cash transactions:
Purchases of property and equipment in
accounts payable and accrued expenses
$
18,409
$
4,926
Right-of-use assets obtained in exchange
for operating lease liabilities
6,739
1,129
Cash paid during the fiscal year for:
Interest
$
3,243
$
224
Income taxes, net
492
684
AST SPACEMOBILE, INC.
RECONCILIATION OF GAAP
REPORTED TO NON-GAAP ADJUSTED MEASURES (UNAUDITED)
(Dollars in thousands)
For the Three Months Ended
December 31, 2023
GAAP Reported
Stock-Based Compensation
Expense
Adjusted
Engineering services costs
$
19,992
$
(1,475
)
$
18,517
General and administrative costs
10,528
$
(1,219
)
9,309
Research and development costs
10,766
10,766
Depreciation and amortization
19,592
19,592
Total operating expenses
$
60,878
$
(2,694
)
$
58,184
Less: Depreciation and amortization
(19,592
)
Adjusted operating expenses
$
38,592
For the Three Months Ended
September 30, 2023
GAAP Reported
Stock-Based Compensation
Expense
Adjusted
Engineering services costs
$
19,523
$
(1,507
)
$
18,016
General and administrative costs
10,995
(1,082
)
9,913
Research and development costs
9,418
-
9,418
Depreciation and amortization
19,029
-
19,029
Total operating expenses
$
58,965
$
(2,589
)
$
56,376
Less: Depreciation and amortization
(19,029
)
Adjusted operating expenses
$
37,347
Adjusted operating expenses, Adjusted engineering services costs
and Adjusted general and administrative costs are alternative
financial measures used by management to evaluate our operating
performance as a supplement to our most directly comparable U.S.
GAAP financial measure. We define Adjusted operating expense as
Total operating expenses adjusted to exclude amounts of stock-based
compensation expense and depreciation and amortization expense and
define Adjusted engineering services costs and Adjusted general and
administrative costs as engineering services costs and general and
administrative costs adjusted to exclude stock-based compensation
expenses.
We believe Adjusted operating expenses, Adjusted engineering
services costs and Adjusted general and administrative costs are
useful measures across time in evaluating our operating performance
as we use these measures to manage the business, including in
preparing our annual operating budget and financial projections.
Adjusted operating expenses, Adjusted engineering services costs,
and Adjusted general and administrative costs are non-GAAP
financial measures that have no standardized meaning prescribed by
U.S. GAAP, and therefore have limits in their usefulness to
investors. Because of the non-standardized definitions, these
measures may not be comparable to the calculation of similar
measures of other companies and are presented solely to provide
investors with useful information to more fully understand how
management assesses performance. These measures are not, and should
not be viewed as, a substitute for their most directly comparable
GAAP measure of Total operating expenses, Engineering services
costs and General and administrative costs.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240401244632/en/
Investor Contact: Scott Wisniewski
investors@ast-science.com
Media Contact: Allison Eva Murphy Ryan 917-547-7289
AstSpaceMobile@allisonpr.com
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