Earnings call transcript Q3 2022

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Operator

Good day, and thank you for standing by. Welcome to the AST SpaceMobile Third Quarter 2022 Business Update Call. Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Scott Wisniewski, Chief Strategy Officer of AST SpaceMobile. Please go ahead.

Scott Wisniewski

afternoon, good and you, everyone. Thank

you Let presentation, X the Slide contains me our refer which safe of to harbor disclaimer.

During forward-looking forward-looking this statements. actual events current may statements and uncertainties. make on are to differ could are we and on cause factors result, assumptions, expectations today's based and materially risks call. a subject to Many These call, statements as certain from the

and annual For section uncertainties, on about more risks please Factors the SpaceMobile's the these the with the for December of to XX-K Commission Securities AST ended and filed documents SEC SpaceMobile XX, report by other and refer Form with Risk time that from Exchange time. information year on AST and XXXX, to

not and remarks, put be forward-looking may obligation submitted our shareholders. to Q&A disclaims any be on reliance Also, advance session the by initial with we call. update the specifically after cautioned the statements statements, to undue our discussed will Readers forward-looking that our in company are starting questions during

to referring Slide X. Now

patent in unmodified In standard travel. mobile of For still may cellular around first to mission, in the and devices company use X be broadband but SpaceMobile phones are who over world, on this only portfolio. many and those work with is our based there billion live, gaps today we extensive new global experience operate mobile to network AST backdrop, building of and IP coverage directly the in you our as space in us

to unconnected. mobile broadband faced on connectivity subscribers by billion a X and mission remain engineers billion to gaps are bring Our and to finally the scientists today's space eliminate

the several quarterly strong progress, last technology achievement have made milestones. our business we Since of critical update, including

Abel is who take my Abel? will through Avellan, CEO, to pass and pleasure that over now. It you it Chairman now to

Abel Avellan

space-based operating I foot excited that the normally this that communication. input. Andes am announced to regular arrays broadband XXX is square from Blue for large Satellite is order As arrays technology new Why extremely deployed array key essential involved configuration. from successfully necessary of super First, in direct-to-home morning, broadband this report in largest we his and to this Wacker believe space, to face we key are type technology are connectivity phone the the In support space. provide important?

critical only are Now to build we and them only connect miles as which we also the capability low to orbit XX,XXX approximately is hour, to that how low cost, at not the company fly. fly them mastered per has for first regular how in phones but at it think to they

to of have the patent deep portfolio this of claims. and pending off, Second, now technology of in more they hundreds are than years R&D resulted in starting pay patent invested of and X,XXX a millions IP and

feet XXX and be Third, next but achievement, learnings can incorporate orbit. in our and actually cost, them is we design lower complete. also several that execution the the build square in process our for of satellite. to and build This a we how how with a the building consider flying achieved the at through space only of process them this substantially fly complete going by only we successful communication assets of of these in low-band array not designed way satellite unfolding us validating improvement, plan essential to for We budget pave key

the different taken industry. one our satellite the satellite is assay architecture approach Fourth, to by patented fundamentally

capability has will and change new Now one what cost. we and we terms have been own a flown do that invented, architecture point patented, with satellite think in to to possible we now up built this and satellite of

large consider a connectivity advantage build derisking the successfully unfolding from for key space. enabler market system, it regular the clear our that This several impact extremely we the network to have to relates for to architecture. satellite capability of where we largest fly global the is commercial of technological major we and technology have approve phone to an the provide prove array, and Fifth, communications and our timing as cell operate planned this the space, our architecture

look collaboration Argentina, MNOs others. Esperance, Telecom, Vodafone, Mobile, forward Indosat, Africell we America among including Liberty Orange, Telstra, Canada, AT&T, the around Now world, to Rakuten Smart, our Globe continuing Bell's Etisalat, Group, MTN Latin and Millicon, with Telefonica, Telecom

that, pass I'm Sean. with And to to it happy

Sean Wallace

Thanks, Abel. Good afternoon, everyone.

and X currently another array Walker the entire SpaceMobile earth orbit. I orbiting of through. technology and was step productivity-enhancing to designed to infrastructure achievements of eventually erase And our commercially speeds. and deployed subscribers communications zones to people. quarter all of This the provide dead unfolding importantly, ever to an cellular the efforts successful of around The team billions the forward launch want suffer that AST earth, congratulate third on test their the execution, important XG phone is satellite the demonstrate communications represents of in period for cellular in Blue coverage at the milestone enjoy the efforts currently largest can we more This that globe mobile unconnected low mobile technology those

move discussion to are a operating on that about me presented on X. some key Slide Let our of metrics

had $X.X Non-GAAP for second expenses quarter, and see $XX.X exclude million noncash quarter quarter. expenses Looking $X.X operating in operating respectively. stock-based amortization including operating third the $XX.X adjusted first the million of quarter versus totaling adjusted and of third we compensation second costs depreciation million and at non-GAAP the chart, million and the in we XXXX,

non-GAAP increase in certain due to forward milestones a quarter third the certain projects, million engineering in of increased costs expenses in services Our increase count. of achievement R&D an which increase quarter. head This and payments brought mostly our by $X.X milestone second result an operating adjusted versus is the

expect of to pursue expenses Our for on adjusted we which continue we projects quarters in R&D decline milestones. to bluebird high next and XXs thereafter. satellite quarters, research level important and operating we vendors low of and remain the X will for based our principally evaluating for milestones expenses engage as of nonrecurring the payments R&D the the the non-GAAP are that XXs over development next activities few future development typically completion third-party After consisted

Our other operating in operations. and trend X of Engineering the range slightly will remain time about the as is Services quarters components same and over namely adjusted result next growing up expenses, to expected for non-GAAP of a GA

towards quarter. capital Turning $XX.X million expenditures was for our versus chart, the the second the $X.X third quarter for second million

costs, our $XX levels capital million include expenditures, quarters. direct and We of next average the expect infrastructure improvements around capital will X material ground facilities AIT of which over

next slide, this Black to cash second We next million construction months, cash XX support on expenditures believe is the the cash X for the hand. including on final of our quarter $XXX Satellites. sufficient of on chart we ended And the X just in the completing our shy

efforts. of to understand our are rapidly. and our enable our we've are reevaluate goal been nature our this we of we additional the of coverage If on capital-intensive to a expenditures fund activities. more addition further and highly designed successful project, on cash working range us and and develop to hard certain investments supplement capital, of we We In focused options attracting other in in hand, business sources order liquidity R&D to to would our accelerate cash might other achieve wide efficiently to plan exploring global look to

production Symphony of the as Rakuten, of as investments infrastructure to towards such by and Tower, perform X we As infrastructure network American ground our Blue to focusing terrestrial technology connect setting half are and latter of our expected, the partners MNOs now supported the satellites Walker to bluebird in up XXXX the and Nokia. continues

deployed us coverage first-to-market We a to believe in limited Mobile advantage introduce ability we in key be System work and enable the to market. MNOs can services phased Space in to provide satellites manner, and where a specific target believe modest of a countries. will We with of a to this its develop to phase provide our advantage us ability number the coverage is

continue midpoint $XXX to project first our at with We satellite remains million a of to $XX our per for materials cost XX and launch costs $XXX that between million million. satellites

and launch I'm of equipment, projected available I of for Mobile supply could our costs on costs in and future numerous and the the about increases development a transition certain your are commercial factors costs, launch Space of satellite that design we assumptions cost estimated excited has support satellites. to other disruptions, based components, and team changes assembly information and to to these as from made, as us estimates design materials, mission. factors. progress launch on factors the aspects of These satellites the including the affected production. change and be preliminary in based adversely The inflation, design, described Thank electronic chain are you number cost and increased assembly phase our of has well continued salaries by assemble to of other the subject cost activities and by and and satellite the components the encouraged am development as earlier delays currently company's

to I'll with it that, And Scott. turn back

Scott Wisniewski

Thanks, Sean.

to questions Operator, of first us investors. go start the submitted by the could few the call question? ahead I we would please address queue analyst a of like of to Before off our questions, the you with

Operator

program, key so some of X-month a results certain the asks, can expect feel you testing when during to from could Damian that during the milestones we program. England provide types have

Abel Avellan

complete step it that very major deployed forward for the milestone us having Well, having now how a us the question. was program. good behind path give had first on that not And the of for to let on testable that us left was completely the you, Damian, all, as Thank me test array, say, phase is ground. our a

done is we like to ground phones a and and had is that which basically first, and X, Blue Walker will the have will connecting that something lot the our everything the array, directly we partners Rakuten we been then what left that step. So next Nokia with advanced deployed, cell be on with

over all deployment required of have operating, the now completing and And the by we flying satellite. for had that testing accumulated spacecraft. launching, X months So storing, flying and learnings been this last the

we capabilities, many time we Walker In the our ground line of occur testing technology network that and the and XXXX. of expect changes X, do of months next with over our next term mobile operators have. partners. to we we several confident to our and to plan to order call X. next which block with batch foresee network for that very we're into So infrastructure In commercialize don't any Blue We steps architecture satellites,

that, MNOs, have the for testing we in parallel, virtually Japan, with Hawaii. we together where would and to among license working Africa, Rakuten with and be U.S., other continent. In will Europe an Texas we testing every AT&T in start plan in in So incremental Vodafone

Operator

for how half for schedule launch? Steve on is Arizona still it Is X the asks, a progressing? the bill XXXX Birds first from second Blue of

Abel Avellan

late in in they We're second XXXX. Yes, are. XXXX, the launching believe first Birds for we half targeting of Blue

We have been in making all investments second X, site our Midland. in site the necessary

And Blue XXXX. gives contracted so us $XX million are have planned assemblies, We which integration we on his equipment only confidence the the build at the have line satellite invested the the to we early program, in-sourced. and buying the and been Also, our far lead the base one-part Bird inventory the to Walker have with day go. the $X location, all million assembly X Blue of of in time order we support this from of next to including well testing in much have long supply for learnings and day items, to

Operator

isn't line happens elaborate in its that from asks to back there on sight a when network. transferring how Jay, bluebirds the to Can the California gateway in works? you ships of of middle to what relay to Pacific

Abel Avellan

Yes. size. the their also is field to large of per given satellite We very a geometry, had view

cover we up So to X,XXX can kilometers.

There's in work areas, locations and and global have cities oceans. to populated and outside main land latitude. people then basis. parks place national can autos, is we desserts, where all we capability but there is live So I able of mean said the always XXXXXX-degree where market populated their that, and full areas be cover the our having mass, in cover a gateways is to our regular on

Operator

brightness the reduce by next will from test to set perceived asks, of Sweden astronomers some Carl satellites? you on measures

Scott Wisniewski

Thanks, Carl.

society. designed devices. good universal network for digital a connect of development address is support our millions globally people to and And economic to broadband hundreds being diverse of designed more build helps poverty, is network support Our cellular a

groups with to within attractive. and issue the bid impact manage the objects for So astronomy to achieve community of the broadband. to participate working much has innovations certain very a The innovations, actively that, aperture do its with the together view. for quite We're size we're And long-standing require and we been issue. brightness engaged eager satellites working and is the and To complaint solutions. below that, we're because use including also our to field of our for is satellites and of compared NASA coverage lastly, industry on next-generation experts materials. scope the antireflective latest the latest thousands global constellations impact advance industry in important. satellite and that, of require think other of to fewer We And with cellular our scope that

Operator

from of always competition. that question asks, comes do ahead you you final Tom Tom. years you think Our How mentioned are? many you're ahead

Abel Avellan

Well, that one see we a not We and regular modified We for who solutions problem, phones. think to launched pursuing months, pending into of had solution don't connectivity that we to have And solutions, direct through and patented many is XG solution that handsets very or XXX lot and years the today, them see were as SOS do that point data And size competitors claims. best to given world. connecting we is operated ahead. working modify a surprised [velo] or partners years else actively direct seen broadband. and large -- challenging around the in. anyone we new few that patent of our low we providing broadband now cellular patents we the supported with is of as are we connecting many direct to the have the cellphone. is by XG are a architecture been at ultimately, as competitors ultimately attention not last by a devices space in obviously playing But market opportunity

Scott Wisniewski

call with now. submitting our analyst the And that, shareholders these let's to I'd like questions thank for to open questions. Operator,

Operator

first be will coming Riley. Our line Instructions] [Operator of with from the B. Boss question Griffin

Griffin Boss

morning, if your to reference manufacturing from X you needed? to are versus Blue? just this to certain testing language of get of some waiting for there bluebird what the the production in are that modifications satellites data be from you going data to determine X-K waiting more Walker extent So curious from Blue until already the are Or you're any on aspects

Abel Avellan

me Yes, clarify let that.

been start manufactured not are for to the factories. on of cross a deploy, we design stabilize be need Parts The very the that received no, So and not that and any have architecture basically our data. next do unification, ongoing. being This productions in our waiting we fly batch reconfirmed to satellite. the satellite is were able successfully making the over to and

on there that has next do So flying applying of the course, been them presented. is by are satellite a essence, operating and we and satellite ongoing, based have to that the in nothing of operated. But satellite plan with software, the lot of the manufacturing schedule all modified is they learnings the on have the we that how is

Griffin Boss

number curious issued $XX.X for haven't XX.X? million you that was Okay, stock Abel. that of just I seen I many gave released then And were -- shares A Class yet. so in Q how the guys

Scott Wisniewski

that. I you have don't back with we'll to on have offline We think hand. that Brian, to come

Griffin Boss

problems. No the quarters Did clarify last say clarification just one for hear then remain the OpEx OpEx X non-GAAP that adjusted XXs Sean. you want – you the said Okay. I Did me And will right? to guidance, just I in declining. before on high over next for

A –Sean Wallace

this was all down quarter. in back milestone level will the quarters. correct. level and around X R&D we’ll related, go the is That It about same following it be XX the That increases to

Operator

Thank you.

Bank. question line Our Bryan is from with of Deutsche the next Kraft

Bryan Kraft

also of of successful it's proof the Walker the on is of for don't with unfolded Blue mind. X, are the the the guess read-through I is how larger to arrays I array arrays? that see a trying much understand just understand unfolding than BlueBird you've is question few, Blue to guess, there a had you array point that how bluebird the a first, Blue probability Walker the Walker so into the great I I end think success of And we much of pace successfully the the should and that if has of of guess question how going XXXX there And or been BlueBirds the next design how about ramp then now? technology launch much the launches just based success 'XX in risk the of revenue with I off is, by that velocity minimized trying in satellites quickly would XXXX that launches. the into the of number guide. of yes, 'XX and X understand on be how to having

Abel Avellan

me let answer Brian, that.

The software, same what identical spacecraft. basically same same satellites also of batch is mechanism, next importantly, operate architecture. very X architecture Block technology these deployment manancontrol doing the For call for the and same and we

just will did basically block we the satellites. of we repeating on what So first

As it -- we're yet And we to in not satellites, to that question pace. sites, and to half be That's to we we launching we during be your get in have the exactly to the of guidance preparation first we how ramping what XXXX, them. X automated the get cadence, X X that's XXXX, Site of up and many next disclosed second what in X Texas, on XXXX, done satellite to will the that's but in to Site giving and eventually X production how that per X budget will we satellites relates that in month. our get had

Bryan Kraft

'XX. way a And be clear, a to will right So then the it? that little be launches bit Is about the be base think that. from the just to satellites I X manufacturing lag of in on would guess the

Abel Avellan

during in per for X think right the 'XX up to X up way to satellites about it. Yes. month. That's and XXXX ramping

Bryan Kraft

Got it.

Apple T-Mobile with I and ask long the I How business, all, term. if the StarLink one. you Globalstar do one And your affect if Okay. other you with I on is services. you're relationship relationship will at perspective just something announced could into evolve guess those that offering. with wondering was your what know maybe pretty what their more those are that limited I initially, ability to But competitive that's think capability

Abel Avellan

We it services the carrier subscribers to top All very been are on the very, only globe. limited the limited number other amount from broadband global cellular now space-based believe X.X the or significant beginning, to architectures are Well, telcos of billion that focus, has be capacity. that based we a access usage access will very, very these people network. our the broadband that have selecting through we around and through is SOS of

do we what competition that So we're doing. to a not as direct see yet

broadband phone, basically the spectrum operator broadband, everywhere, in service reducing dedicating of global partnership billion to is spectrum partnership in and of always and the basis out in the a accessing without around the the proposition they X subscribers the the move globe as on Our with operator with telcos.

very that doing. what cell of to a few not direct So competitor connectivity a we believe or is limited we're megabits per

Operator

question from next Henry The the Analytics. line is Quilty Caleb of with

Caleb Henry

a antenna Has the on Congratulations -- satellites There quarter switching on milestone. question first I a a to should some had what deployments. the are So been equatorial Has or X orbit, go? I I where mid-inclination. think that that X there about will from -- say. big satellites? inclined those was was last been about those discussion finalized

Scott Wisniewski

retained is this We've point. flexibility Scott. Caleb, that on

not have versus guidance equatorial on at incline given this time. we So

Caleb Henry

also XX And part were going for the I the originally satellites, Okay. look what's clones think XX the Blue of Will Block Walker? Block plan the to those other And that be centered for then those are X, of discussion like on also is satellites. to the recent X? supposed X be

Scott Wisniewski

Yes.

So to our MIMO. on XX of network, to coverage and for talked build we've then top XX that another global equatorial get us to on satellites about clarify, out for

build right, can retain our network those are phased, out And and we so that as we intentionally flexibility. go so

our design that's our and network we So about network build over think time. how

guidance of X satellites relates to that on are given those for frankly. those satellites next networks, either could As play quite that it we've the year, in

have fill design III and the or So how order Those is beyond the with to the construction. first satellites out don't accelerate X nearly are their the to XX Locker designed we in come Blue necessarily development it as identical to XX. just possible the

network next the about thought links builds we've X, it how that's how about. that to so talked the and we've other And

Caleb Henry

Okay.

phases, for time do sense in I orbit? have, X have you'd you the the of XXX For a line when guess, satellites

Scott Wisniewski

line as month guidance XXXX. late we're cadence. The those X ramping we've satellites building going can, for be is then fast as X given time Yes. XXXX, in we to into per on And that

and numbers, what point completed at follow is those top we haven't satellites and more that. on of guidance that. X our do given to But objective to launch quickly as So total on get possible build being the we as

Caleb Henry

the And -- those, more can projects that accelerating impact some my then what of you there what and rollout? mention the in can have secured or just in to interest do the be kind last R&D give was on of exactly service Earlier Okay. call, an goals you color for that constellation question. might or on funding R&D hope what

Sean Wallace

I'll Abel start then will some add and things.

of We in it's satellite. the R&D have projects, the variety or some whether a RF of components solar the of or side

the get continue improve order continue going what of going we accelerate power to to will continue constellation capacity, sooner. might the the the some market satellite, of we money so we're to So point bring could that to my was expenditures of the launch on that to forward we those spend and in because are RF to

how guidance you over give X Abel? to the to we want just we're more money had we a [indiscernible]. for update spend next quarters, good -- much So going

Abel Avellan

forward. Yes. own the move ASIC I our we mean as The primary areas R&D, ASIC. upgrade of of we part have the be will

use of development continue satellites. progress last phase for So production. to is manufacturing, can we architecture the on which continue AC into first entered XX we this to And our the

that We R&D be completed phase. will

a cost wheels, our our also including We our in pretty major our them avionics, today, system. to is the subsystems internally been own fly that in reaction market solar own on developed available all panels, much own not at make have order own

is number and whole system then is there a So the in own integrated of facility. -- fully our

satellites. lower to because as and we an will refer our that's continue we So of to R&D what that

Operator

to back showing further like questions. management the remarks. closing call no to I for I'm over At would turn time, this

Scott Wisniewski

Thank you, operator.

to network for analysts is a space-based announcement, to thank building your a today's and the wish everyone joining great broadband for speak shareholders cellular want in pocket company use with of questions, the phone for you, And to everybody happy I very their Our the and both and today. designed week. we're

Operator

conference. This today's concludes

time. your your you disconnect participation. for this at may lines Thank You

AST SpaceMobile (ASTS) 14 Nov 222022 Q3 Earnings call transcript