AST SpaceMobile, Inc. (NASDAQ: ASTS) has provided the company’s 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 information release.
