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 second quarter ended June 30, 2024.
"We stand at a pivotal moment for AST SpaceMobile," said Abel
Avellan, Founder, Chairman and CEO of AST SpaceMobile. "The arrival
of our first five commercial satellites at the launch site marks
the culmination of years of relentless innovation and perseverance,
in partnership with industry leaders like AT&T, Google,
Verizon, Vodafone, and Rakuten, among others. The upcoming orbital
launch is a significant step toward fulfilling our mission to
eliminate dead zones and empower communities worldwide with
space-based cellular broadband connectivity."
Business Update
- First 5 commercial satellites on target for dedicated
orbital launch in first half of September, each the largest-ever
communications arrays to be deployed commercially in low Earth
orbit
- Final assembly and environmental testing completed successfully
at AST SpaceMobile manufacturing facilities in Texas
- Satellites are now at Cape Canaveral preparing for launch
vehicle integration ahead of a confirmed launch date
- Secured FCC approval with initial license for launch of first 5
commercial satellites
- Expanded the AST SpaceMobile commercial ecosystem, adding
Verizon as strategic investor and customer, joining AT&T in the
U.S.
- Strategic investment by Verizon brings $100 million financial
commitment, including $65 million of commercial prepayments and
$35 million of convertible notes
- Along with AT&T, which signed a definitive commercial
agreement in May, enables nationwide ~100% geographical coverage
target of the continental U.S. on premium 850 MHZ low-band
spectrum
- Continue to advance discussions with additional strategic
partners, following the blueprint of commercial prepayments
alongside commercial agreements
- First 5 commercial satellites capable of U.S. nationwide
non-continuous service with 5,600+ cells in premium low-band
spectrum
- Expect initial nationwide, non-continuous service to be
available with AT&T and Verizon beta test users following
in-orbit service activation over the coming months
- Coverage and service to increase as satellite constellation is
expanded with Block 2 satellites
- ASIC chip tape-out phase completed with TSMC, expected to
support up to 10x improvement of processing bandwidth per
satellite
- AST5000 ASIC is a novel, custom and low-power architecture
developed over five years and approximately $45 million of
development cost
- Initial Block 2 BlueBird planning and production of 17
satellites underway at AST SpaceMobile manufacturing facilities in
Texas
- Approximately 95% vertically integrated for manufacturing of
satellite components and subsystems, for which we own or license
the IP and control the manufacturing process
- Expanded U.S. Government relationship with initial in-orbit
testing and additional early-stage contract awards to one of our
prime contractors
- Successful initial in-orbit and ground tests for
non-communications applications, reflected in completed contractual
milestones and revenue
- Additional U.S. Government contract awards in recent months,
with outlook for additional and larger sized contract awards
Second Quarter 2024 Financial Highlights
- As of June 30, 2024, we had cash, cash equivalents, and
restricted cash of $287.6 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 second quarter of 2024 were
$63.9 million, including $29.3 million of depreciation and
amortization and stock-based compensation expense. This represents
an increase of $7.9 million as compared to $56.0 million in the
first quarter of 2024, due to a $5.6 million increase in general
and administrative costs, a $1.7 million increase in engineering
services costs, a $0.4 million increase in depreciation and
amortization expense, and a $0.2 million increase in research and
development costs
- Total Adjusted operating expenses for the second quarter of
2024 were $34.6 million, an increase of $3.5 million as compared to
$31.1 million in the first quarter of 2024, due to a $2.0 million
increase in Adjusted general and administrative costs, a $1.3
million increase in Adjusted engineering services costs and a $0.2
million increase in research and development costs(1)
- As of June 30, 2024, we have incurred approximately $347.5
million of gross capitalized property and equipment costs and
accumulated depreciation and amortization of $99.3 million. The
capitalized costs include costs of satellite materials for BlueBird
satellites, advance launch payments, BlueWalker 3 satellite,
assembly and integration facilities including assembly and test
equipment, 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 Wednesday, August 14, 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 could 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 SpaceMobile’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 Securities and Exchange Commission (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 in 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.
Second Quarter Financial Results
AST SPACEMOBILE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands, except share data)
As of
June 30, 2024
December 31, 2023
ASSETS
Current
assets:
Cash and cash equivalents
$
285,085
$
85,622
Restricted cash
2,482
2,475
Prepaid expenses
7,359
4,591
Other current assets
20,233
14,194
Total current assets
315,159
106,882
Non-current
assets:
Property and equipment, net
248,162
238,478
Operating lease right-of-use assets,
net
12,344
13,221
Other non-current assets
3,972
2,311
TOTAL ASSETS
$
579,637
$
360,892
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current
liabilities:
Accounts payable
$
12,175
$
20,575
Accrued expenses and other current
liabilities
13,653
23,926
Contract liabilities
21,780
-
Current operating lease liabilities
1,517
1,468
Current portion of long-term debt
258
252
Total current liabilities
49,383
46,221
Non-current
liabilities:
Warrant liabilities
77,886
29,960
Non-current operating lease
liabilities
10,952
11,900
Long-term debt, net
199,546
59,252
Total liabilities
337,767
147,333
Commitments and contingencies
Stockholders'
Equity:
Class A Common Stock, $.0001 par value;
800,000,000 shares authorized; 148,751,110 and 90,161,309 shares
issued and outstanding as of June 30, 2024 and December 31, 2023,
respectively.
15
9
Class B Common Stock, $.0001 par value;
200,000,000 shares authorized; 39,747,447 and 50,041,757 shares
issued and outstanding as of June 30, 2024 and December 31, 2023,
respectively.
4
5
Class C Common Stock, $.0001 par value;
125,000,000 shares authorized; 78,163,078 shares issued and
outstanding as of June 30, 2024 and December 31, 2023,
respectively.
8
8
Additional paid-in capital
427,096
288,404
Accumulated other comprehensive income
52
227
Accumulated deficit
(281,942
)
(189,662
)
Noncontrolling interest
96,637
114,568
Total stockholders' equity
241,870
213,559
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$
579,637
$
360,892
AST SPACEMOBILE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in thousands, except share and per share data)
For the Three Months Ended
June 30,
For the Six Months Ended June
30,
2024
2023
2024
2023
Revenues
$
900
$
-
$
1,400
$
-
Operating
expenses:
Engineering services costs
21,202
22,813
40,719
39,296
General and administrative costs
17,839
10,221
30,126
20,078
Research and development costs
4,460
10,921
8,711
27,302
Depreciation and amortization
20,392
14,115
40,336
15,848
Total operating expenses
63,893
58,070
119,892
102,524
Other income
(expense):
(Loss) gain on remeasurement of warrant
liabilities
(66,140
)
6,475
(47,926
)
13,973
Interest (expense) income, net
(2,238
)
1,724
(4,460
)
3,816
Other income (expense), net
252
(507
)
250
(10,743
)
Total other income (expense),
net
(68,126
)
7,692
(52,136
)
7,046
Loss before income tax (expense)
benefit
(131,119
)
(50,378
)
(170,628
)
(95,478
)
Income tax (expense) benefit
(231
)
789
(526
)
673
Net loss before allocation to
noncontrolling interest
(131,350
)
(49,589
)
(171,154
)
(94,805
)
Net loss attributable to noncontrolling
interest
(58,800
)
(31,181
)
(78,874
)
(60,079
)
Net loss attributable to common
stockholders
$
(72,550
)
$
(18,408
)
$
(92,280
)
$
(34,726
)
Net loss per share attributable to holders
of Class A Common Stock
Basic and diluted
$
(0.51
)
$
(0.24
)
$
(0.70
)
$
(0.47
)
Weighted-average shares of Class A Common
Stock outstanding
Basic and diluted
141,185,500
75,640,650
131,316,319
73,753,412
AST SPACEMOBILE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(UNAUDITED) (Dollars in thousands)
For the Three Months Ended
June 30,
For the Six Months Ended June
30,
2024
2023
2024
2023
Net loss before allocation to
noncontrolling interest
$
(131,350
)
$
(49,589
)
$
(171,154
)
$
(94,805
)
Other comprehensive loss
Foreign currency translation
adjustments
(123
)
(40
)
(339
)
(168
)
Total other comprehensive loss
(123
)
(40
)
(339
)
(168
)
Total comprehensive loss before allocation
to noncontrolling interest
(131,473
)
(49,629
)
(171,493
)
(94,973
)
Comprehensive loss attributable to
noncontrolling interest
(58,854
)
(31,196
)
(79,038
)
(60,176
)
Comprehensive loss attributable to common
stockholders
$
(72,619
)
$
(18,433
)
$
(92,455
)
$
(34,797
)
AST SPACEMOBILE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in thousands)
For the Six Months Ended June
30,
2024
2023
Cash flows from operating activities:
Net loss before allocation to
noncontrolling interest
$
(171,154
)
$
(94,805
)
Adjustments to reconcile net loss before
noncontrolling interest to cash used in operating activities:
Depreciation and amortization
40,336
15,848
Amortization of debt issuance costs
1,901
-
Loss on disposal of property and
equipment
2,221
-
Loss (gain) on remeasurement of warrant
liabilities
47,926
(13,973
)
Stock-based compensation
13,807
8,006
Paid-in-kind ("PIK") interest expense
2,959
-
Changes in operating assets and
liabilities:
Prepaid expenses and other current
assets
(10,128
)
(15,547
)
Accounts payable and accrued expenses
(14,873
)
(4,112
)
Operating lease right-of-use assets and
operating lease liabilities
(21
)
35
Contract liabilities
21,780
-
Other assets and liabilities
972
16,559
Net cash used in operating activities
(64,274
)
(87,989
)
Cash flows from investing activities:
Purchase of property and equipment
(61,770
)
(22,972
)
Net cash used in investing activities
(61,770
)
(22,972
)
Cash flows from financing activities:
Proceeds from debt
145,000
-
Repayments of debt
(124
)
(120
)
Payments for debt issuance costs
(5,162
)
-
Proceeds from issuance of common stock
189,921
64,284
Payments for equity issuance costs
(2,757
)
(717
)
Issuance of equity under employee stock
plan
105
180
Employee taxes paid for stock-based
compensation awards
(1,240
)
-
Net cash provided by financing
activities
325,743
63,627
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
(229
)
(451
)
Net increase (decrease) in cash, cash
equivalents and restricted cash
199,470
(47,785
)
Cash, cash equivalents and restricted
cash, beginning of period
88,097
239,256
Cash, cash equivalents and restricted
cash, end of period
$
287,567
$
191,471
Supplemental disclosure of cash flow
information:
Non-cash activities:
Right-of-use assets obtained in exchange
for operating lease liabilities
$
-
$
6,510
Non-cash investing and financing
activities:
Purchases of property and equipment in
accounts payable and accrued expenses
$
8,073
$
852
PIK interest paid through issuance of PIK
notes
2,959
-
Cash paid for:
Interest
$
4,422
$
105
Income taxes, net
902
370
AST SPACEMOBILE, INC.
RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED MEASURES
(UNAUDITED) (Dollars in thousands)
For the Three Months Ended
June 30, 2024
GAAP Reported
Stock-Based Compensation
Expense
Adjusted
Engineering services costs
$
21,202
$
(2,032
)
$
19,170
General and administrative costs
17,839
(6,842
)
10,997
Research and development costs
4,460
-
4,460
Depreciation and amortization
20,392
-
20,392
Total operating expenses
$
63,893
$
(8,874
)
$
55,019
Less: Depreciation and amortization
(20,392
)
Adjusted operating expenses
$
34,627
For the Three Months Ended
March 31, 2024
GAAP Reported
Stock-Based Compensation
Expense
Adjusted
Engineering services costs
$
19,511
$
(1,607
)
$
17,904
General and administrative costs
12,287
(3,326
)
8,961
Research and development costs
4,257
-
4,257
Depreciation and amortization
19,945
-
19,945
Total operating expenses
$
56,000
$
(4,933
)
$
51,067
Less: Depreciation and amortization
(19,945
)
Adjusted operating expenses
$
31,122
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/20240814230496/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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