AST SpaceMobile, Inc. (“AST SpaceMobile”) (NASDAQ: ASTS), the
company building the first and only space-based cellular broadband
network accessible directly by everyday smartphones, is providing
its business update for the third quarter ended September 30,
2023.
“The manufacturing of our first five commercial satellites is at
full speed at our Texas facilities, and we are looking forward to
our expected launch in Q1 2024 as we target initial commercial
service for both mobile network operators and governmental entities
starting in 2024,” said Abel Avellan, Chairman and Chief Executive
Officer of AST SpaceMobile. “In the third quarter, AST SpaceMobile
announced another historic achievement and the capstone of our
BlueWalker 3 testing program – the first-ever space-based 5G
cellular broadband connection directly to an everyday smartphone. I
am grateful for the dedication of our team and support of our
network partners who have helped us reach multiple groundbreaking
milestones this year.”
Business Update
- BlueWalker 3 Makes History Again
- Demonstrated space-based 5G cellular broadband
capabilities
- Increased performance to 14 Mbps data rates per 5MHz
channels
- First Five Commercial Satellites Expected to be Launched in
Q1 2024
- Manufacturing at full speed in Midland, Texas facilities
- Approximately 85% of planned capital expenditures paid as of
September 30, 2023
- Total and Adjusted Operating Expenses Expected to Decrease
by $10 Million to $15 Million Per Quarter Beginning Q1 2024
- Expected reduction driven by completion of Block 1 design and
development, substantial completion of the ASIC design, and partial
completion of Block 2 design, with no material change in
headcount
- IP Portfolio Has Grown to More than 3,100 Patent and Patent
Pending Claims Worldwide
- Strategic Investment Process
- We are moving forward on definitive documentation and
completion of diligence with multiple strategic partners
- Seeking to close and fund with multiple strategic partners in
November or December 2023
- There can be no assurance that we will enter into any such
transactions on acceptable terms, on this timing, or at all
Third Quarter 2023 Financial Highlights
- As of September 30, 2023, we had cash, cash equivalents, and
restricted cash of $135.7 million
- Total operating expenses for the third quarter of 2023 were
$59.0 million, including $21.6 million of depreciation and
amortization and stock-based compensation expense. This represents
an increase of $0.9 million as compared to $58.1 million in the
second quarter of 2023, due to a $4.9 million increase in
depreciation and amortization expense and a $0.8 million increase
in general and administrative costs offset by a $1.5 million
decrease in research and development costs and a $3.3 million
decrease in engineering services costs
- Total Adjusted operating expenses for the third quarter of 2023
were $37.3 million, a decrease of $1.1 million as compared to $38.4
million in the second quarter of 2023, due to a $1.5 million
decrease in research and development costs and a $0.3 million
decrease in Adjusted engineering services costs offset by a $0.7
million increase in Adjusted general and administrative
costs(1)
- As of September 30, 2023, we have incurred approximately $265.8
million of gross capitalized property and equipment costs and
accumulated depreciation and amortization of $41.6 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 Tuesday, November 14, 2023. 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. 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 and results of the BW3 satellite tests,
anticipated timing and level of deployment of 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 March 31, 2023.
The ongoing testing of the BW3 satellite may not be completed
due to a variety of factors, which could include loss of satellite
connectivity, destruction of the satellite, or other communication
failures, and even if completed, the BW3 testing may indicate
adjustments that are needed or modifications that must be made, any
of which could result in additional costs, which could be material,
and delays in commercializing our service. If there are delays or
issues with additional testing, it may become more costly to raise
capital, if we are able to do so at all.
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 March 31, 2023. 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.
Third Quarter Financial Results
AST SPACEMOBILE, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Dollars in thousands, except
share data)
September 30, 2023
December 31, 2022
ASSETS
Current
assets:
Cash and cash equivalents
$
133,310
$
238,588
Restricted cash
2,416
668
Prepaid expenses
6,261
4,100
Other current assets
21,084
24,954
Total current assets
163,071
268,310
Property and
equipment:
Property and equipment, gross
265,798
152,968
Less: Accumulated depreciation and
amortization
(41,556
)
(6,979
)
Total property and equipment,
net
224,242
145,989
Other non-current
assets:
Operating lease right-of-use assets,
net
13,212
7,671
Other non-current assets
1,605
16,402
Total other non-current assets
14,817
24,073
TOTAL ASSETS
$
402,130
$
438,372
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current
liabilities:
Accounts payable
7,811
13,929
Accrued expenses and other current
liabilities
17,706
13,145
Current operating lease liabilities
1,384
722
Total current liabilities
26,901
27,796
Warrant liabilities
17,492
38,946
Non-current operating lease
liabilities
11,979
7,046
Long-term debt, net
58,536
4,758
Total liabilities
114,908
78,546
Commitments and contingencies
Stockholders'
Equity:
Class A Common Stock, $.0001 par value;
800,000,000 shares authorized; 89,675,329 and 71,819,926 shares
issued and outstanding as of September 30, 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 September 30, 2023 and December 31, 2022,
respectively.
5
5
Class C Common Stock, $.0001 par value;
125,000,000 shares authorized; 78,163,078 shares issued and
outstanding as of September 30, 2023 and December 31, 2022,
respectively.
8
8
Additional paid-in capital
285,525
235,384
Accumulated other comprehensive income
11
229
Accumulated deficit
(157,736
)
(102,101
)
Noncontrolling interest
159,400
226,294
Total stockholders' equity
287,222
359,826
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$
402,130
$
438,372
AST SPACEMOBILE, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS (UNAUDITED)
(Dollars in thousands, except
share and per share data)
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2023
2022
2023
2022
Revenues
$
-
$
4,168
$
-
$
13,825
Cost of sales (exclusive of items shown
separately below)
-
2,525
-
6,714
Gross profit
-
1,643
-
7,111
Operating
expenses:
Engineering services costs
19,523
14,492
58,818
38,208
General and administrative costs
10,995
12,916
31,073
37,634
Research and development costs
9,418
13,543
36,721
30,969
Depreciation and amortization
19,029
1,172
34,877
3,457
Total operating expenses
58,965
42,123
161,489
110,268
Other income
(expense):
Gain (loss) on remeasurement of warrant
liabilities
7,481
(15,897
)
21,454
1,669
Other income (expense), net
1,002
24,875
(5,926
)
24,211
Total other income (expense),
net
8,483
8,978
15,528
25,880
Loss before income tax (expense)
benefit
(50,482
)
(31,502
)
(145,961
)
(77,277
)
Income tax (expense) benefit
(266
)
(550
)
408
(747
)
Net loss before allocation to
noncontrolling interest
(50,748
)
(32,052
)
(145,553
)
(78,024
)
Net loss attributable to noncontrolling
interest
(29,839
)
(22,286
)
(89,918
)
(54,613
)
Net loss attributable to common
stockholders
$
(20,909
)
$
(9,766
)
$
(55,635
)
$
(23,411
)
Net loss per share attributable to holders
of Class A Common Stock
Basic and diluted
$
(0.23
)
$
(0.18
)
$
(0.70
)
$
(0.45
)
Weighted-average shares of Class A Common
Stock outstanding
Basic and diluted
89,514,621
53,233,552
79,065,471
52,292,972
AST SPACEMOBILE, INC.
CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
(Dollars in thousands)
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2023
2022
2023
2022
Net loss before allocation to
noncontrolling interest
$
(50,748
)
$
(32,052
)
$
(145,553
)
$
(78,024
)
Other comprehensive loss
Foreign currency translation
adjustments
(358
)
(1,267
)
(526
)
(1,865
)
Total other comprehensive loss
(358
)
(1,267
)
(526
)
(1,865
)
Total comprehensive loss before allocation
to noncontrolling interest
(51,106
)
(33,319
)
(146,079
)
(79,889
)
Comprehensive loss attributable to
noncontrolling interest
(30,050
)
(23,083
)
(90,226
)
(55,915
)
Comprehensive loss attributable to common
stockholders
$
(21,056
)
$
(10,236
)
$
(55,853
)
$
(23,974
)
AST SPACEMOBILE, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in thousands)
For the Nine Months Ended
September 30,
2023
2022
Cash flows from operating activities:
Net loss before allocation to
noncontrolling interest
$
(145,553
)
$
(78,024
)
Adjustments to reconcile net loss before
noncontrolling interest to cash used in operating activities:
Gain on sale of Nano
-
(24,646
)
Depreciation and amortization
34,877
3,457
(Gain) loss on remeasurement of warrant
liabilities
(21,454
)
(1,669
)
Amortization of debt issuance costs
374
-
Non-cash lease expense
659
364
Stock-based compensation
10,595
7,093
Issuance of common stock for commitment
shares
-
332
Changes in operating assets and
liabilities:
Accounts receivable
-
(2,241
)
Prepaid expenses and other current
assets
1,601
(20,444
)
Inventory
-
(2,461
)
Accounts payable and accrued expenses
(6,215
)
12,259
Operating lease liabilities
(605
)
(323
)
Deferred revenue
-
2,395
Other assets and liabilities
1,680
(17,516
)
Net cash used in operating activities
(124,041
)
(121,424
)
Cash flows from investing activities:
Purchase of property and equipment and
advance launch payments
(96,462
)
(45,850
)
Proceeds from the sale of Nano, net of
cash deconsolidated and transaction costs
-
26,036
Net cash used in investing activities
(96,462
)
(19,814
)
Cash flows from financing activities:
Proceeds from debt
63,500
230
Repayments of debt
(180
)
-
Payment for debt issuance costs
(9,653
)
-
Proceeds from issuance of common stock,
net of issuance costs
63,476
16,994
Issuance of equity under employee stock
plan
225
60
Proceeds from warrant exercises
-
14
Net cash provided by financing
activities
117,368
17,298
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
(395
)
(1,068
)
Net (decrease) increase in cash, cash
equivalents and restricted cash
(103,530
)
(125,008
)
Cash, cash equivalents and restricted
cash, beginning of period
239,256
324,537
Cash, cash equivalents and restricted
cash, end of period
$
135,726
$
199,529
Supplemental disclosure of cash flow
information:
Cash paid for interest
1,071
-
Non-cash transactions:
Purchases of property and equipment in
accounts payable and accrued expenses
$
7,120
$
4,721
Right-of-use assets obtained in exchange
for operating lease liabilities
6,709
1,129
AST SPACEMOBILE, INC.
RECONCILIATION OF GAAP
REPORTED TO NON-GAAP ADJUSTED MEASURES (UNAUDITED)
(Dollars in thousands)
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
For the Three Months Ended
June 30, 2023
GAAP Reported
Stock-Based Compensation
Expense
Adjusted
Engineering services costs
$
22,813
$
(4,458
)
$
18,355
General and administrative costs
10,221
(1,074
)
9,147
Research and development costs
10,921
-
10,921
Depreciation and amortization
14,115
-
14,115
Total operating expenses
$
58,070
$
(5,532
)
$
52,538
Less: Depreciation and amortization
(14,115
)
Adjusted operating expenses
$
38,423
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/20231114308678/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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