Earnings call transcript Q2 2023

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Operator

Good day, and thank you for standing by. Welcome to the AST SpaceMobile Second Quarter 2023 Business Update Call. Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your host 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 from these the the Securities for December of to XX-K and and AST ended Exchange AST by time the XX, report SpaceMobile filed with refer Form SEC Risk time. that to Commission information year documents with other XXXX,

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

referring X. Slide Now to

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

finally to billions productive The are update we few to and today's significant the massive, quarterly billion gap pursuing by have unconnected. space an active and X broadband markets mover eliminate call. a It scientists the and the subscribers are extremely engineers advantage. are has since connectivity remain first months we and mission last been Our on a who mobile faced bring

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to pleasure Abel. my is over the presentation It to now pass

Abel Avellan

would earnings call. welcome Thank to Scott. to our I everybody you, like QX XXXX

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our We around over MNOs in billion that also commercial with have XX agreements X.X MOUs continue advance to globally having initiatives, subscribers. place now and

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multiple to the our target and capital have of payments. Proceeds commercial interest of technically, through and nondilutive both investment initial progress back of the this XXXX company, and XXXX. satellite is industrially, equity-linked we launch our on Block with indications Lastly, received our raise from commercially strategic the for operations intended a from of fund X

to moving Page Now X.

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partners The wireless a industry, and the MNO great we with are collective us, Our our globally proud sharing in working such representing partners. have to footprint telcos our with closely established with working are leaders in success. are we

our regulatory to application spectrum updating lease also with SEC the advance efforts reflect continue We ongoing our AT&T. to

to conversation with plan. continue FCC Our the constructive our of and supportive be

We're in Texas. manufacturing on facilities first manufacturing X our Page X. of Block in ramping our Moving the to X satellites

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fully Our for Block production further Block implemented many for as progress with manufacturing program. opportunities lines into X, completed and process are and automation we X

solar of We antennas, and strategy manufacturer. vertically a panels, have our production from power integrated mechanical set systems, line up implementing new being structures

to launch timing when equipment assembly our We compared installed from will also have to X. additional which improve to facilities, BlueWalker test Texas our

system every inaugurated we're part an as center, announce development separate one They every incredible we control, Texas part-by-part build provide for that on new hub completed our in access to space wireless quality an a a talent, in the Lastly, to the tracked. of the R&D X.X year and tagged globally in access our can in have happy largest be technology facility, to we a [start-up] including India. note, will traceability have On engineers India. graduate engineering and help us markets facility Hyderabad, I'm that million center

want to it I Sean. to on that, With pass

Sean Wallace

engineers, the the our new without AT&T, communications in of most Nokia. who our continued using and existing to wireless a hard-working innovations working team that ubiquitous XX on most one by industry of able will of the coverage and spectrum and satellite-to-device and exciting cellular has Thanks, everyone. afternoon, the continues partners suppliers industry years. define define last offer in this not Integrating sophisticated broadband terrestrial infrastructure available Abel, and companies MNO wireless without widely one and and service devices. to constellation support Vodafone as into are We some call, the good the last in Since could and be significant of progress to smartphones AST satellite make technicians be including the the will our confirmation world,

Beyond second plan drive in defining execution also continue new our the of industry, to the this wireless segment quarter. we in

the Specifically, milestones and of launch manufacturing service target quarter in on we and for X we commercial, outlined, commercial the remain of progress of in initiation as and Abel satellites next made BlueBird commercial XXXX. the our first regulatory around year

some are time operating Let's displayed X. metrics our of spend quarter second discussing on couple Slide that a key for the

noncash $XX.X including see amortization we the chart, and X reflect second expenses for exclude $X.X of amortization in we costs, which noncash quarters, XXXX, first certain million totaled the Non-GAAP adjusted in the and Most $XX.X operating which at first last non-GAAP quarter. Looking operating respectively. million for quarter second and versus the the initiation operating we and noncash increase adjusted million of compensation, $XX.X our BlueWalker the had depreciation quarter. cash operating disclosed expenses expenses in million satellite, of the stock-based of our first of

adjusted first non-GAAP quarter second expenses versus the million $X.X Our by quarter. decreased operating

a fell of expenses Our research result level which timing of as milestones, reduced quarter the this and the of payments. development certain

construction expenses operating third-party the nonrecurring we XXs on as typically the general mid- based of development and in engineering of in and to first Our to commercial expenses non-GAAP milestones. second quarter. level our adjusted continue projects Conversely, the XXXX. for for consist modestly high activities in that engage services are will administration R&D more X payments satellites remain satellites for launch our X of BlueBird rose planned and principally execute R&D completion the of the at We and quarters important vendors expect expenses our the of which quarter BlueBird we currently pursue first least

second Turning towards the chart.

quarter first million second for the quarter. were for capital Our $XX.X million expenditures versus the $XX.X

X of directly related expenditures of facility. we made many the our completion capital expenditures These Site have manufacturing were the to around

We expect capital include that increase well and satellite the in third capital costs improvements as manufacturing of as for infrastructure, fourth expenditures, for and direct material our ground expenditures levels will and our which facilities quarter. launch

have to our in $XX to last order around the manufacturing per our $XX to averaging in quarters $XX We $XX nearly increase X expect commercial the assembly the X and that which first million capital been of million to satellites. quarter, million BlueBird expenditures, year begin million to will fund of

equipment to and BlueBird made $XX X pay million figures, all commercial services, of in completed, we quarter. have these these the expenditures our projected addition related well XX% for for $XX launch Once to In over payments to and will we also are satellites. the third services first million expect

quarter we And cash $XXX million second slide, ended on just final chart the the on shy on the hand. in of

cash support in for our believe raise XX expenditures existing this the capital is as to stated facilities XX-Q, next sufficient least our months. our to we to well we As at ability our as

rate in of us flexibility As expenditures this rate cost are our depending dynamically capital. of And raising decrease our characteristic and plans our build-out in upon modular. plans we increase or This profile and availability provides our capital. also liquidity our quite on that provides we to have the discussed capital of comfort us our manage positions depending flexibility XX-Q, can changes the

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facilities. We million facility. closed $XX.X a credit senior million draw debt on secured X also These a and equipment million $XX loan facility include a facilities $XXX

such structured Midland, growing Star facility. at drawn facility enable These Texas should sources, building another equipment facility an facilities and up ability of additional over portfolio by that XX the months, draw close to million a at to of we have the certain new The have will equipment and set represent subject leverage providers. X we Lone desire. The senior $XX Bank our credit to arranged to is manufacturing ability next the capital to $XX Site conditions, in debt us to our close access including diverse million

to ecosystem around wireless the I large, business capital commercial support strategic ties will of efforts fund bottom develop also raising explicit discussion this strategic and in of around the wanted desire our sophisticated number in our efforts from comment the a of our development After advisers, on we help markets half Abel's on financial hiring players financial world. to with approached the on and page. key the plan that players

progress. making are We

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of be time, their parties potential we reached, guarantee the will commitment. any the nor the name this that of type can and As disclose cannot agreement we of

evolve, discussions detailed will As we provide these information. more

this earnings our I presentation of Scott. component it back with And and the pass to completes that, call,

Scott Wisniewski

Thanks, Sean.

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

Operator

successes the test from are at that California is the overall asked, key you What "What accomplishing plan? Tim in plan? challenges?" Where are and

Abel Avellan

our needed has for BlueWalker And all, how largest X our that the Thank want and you, It to array has knowledge integrate our the to I customers with And Vodafone design, delay been and fly orbit, process XG, compensation, commercial like essential. XG. knowledge turning our serve have ever Tim, all and look customers to patented AT&T learn that use how the into satellites. operational we future network to now in communication emphasize the XG to question. implement of next X been we and delivered to deployed all company. -- these attention long been how this a are build in first our to of incorporate up doppler the to into operators have their

this positioned to of to which the phase, satellites And X start the move launch services. commercial very to basically well next next the is

that first X. had will satellites. a our Now And that in all X very rollout with we translate very, everything incorporated are IP, that being with are these accomplished of lessons we BlueWalker to these faster happy

directly to call space phone first-ever from cellphone the made standard have device. a We

we the to extremely demonstration device. majority And -- in that can something of LTE from of and is billion made the that phones market. also can that also have broadband we manufacturer, the connection, space X in access circulation, that the for is the first-ever us type which a the of that regardless is of connection, regardless ever those done are scale We we phone directly is the important vast

very to now. incorporated to significant basically at have we're into basically, that doing is the BlueWalker look the what amount But which design learnings results, So we're of our been able and were our to with we our IP move happy and manufacturing, X, design. with

Operator

that when asked, from operation, took "Considering become BlueWalker satellite Dennis the months fully positioning testing satellite will and the X for first before BlueBird opening, Chile operational?"

Abel Avellan

Dennis, you, question. the for Thank

our are and process Midland. satellites in manufactured X being XXXX, We to satellites, are in our the first still launch they on in X -- X track QX commercial they have first and Block tested of been

once milestones significantly faster there how to the will orbit coming BlueWalker connect said with the we as first spend and that And to lot calibrate SpaceX, these satellites be test around did for phones. what to launch. as lesson and how calibrate window to expect to will several in clarity a X we X do I to fly, the more were satellite. launch we BlueWalker earlier, directly narrow well the it, to of With will exact have how said, of than We to it, to learned how the which provide timing months X launch, and that

I that of all part know, lessons how to are what we mean know already we do.

but in-orbit preparing So we that estimate what approximately X months, both service it commercial -- that governmental The may And ready we're we are are satellites. satellites. these X broadband, to we being using take other services to that's other commercial that satellites anticipate X had first these with testing, longer, applications the start estimating. and for Block on anticipating with only not type with of be we're operational

Operator

FCC met? Leedin ASTS and Zealand [ph] the during been FCC "Has where from meetings the New supportive asked,

Scott Wisniewski

new focused of rule-making that also their public have we the space, that quarter, technology the in to our multiple And us. division they've FCC priority I'll very last filings we have informed with believe one. enabling you'll this tight created from believe comment the initiative coverage process space of FCC for calls communications, take new Absolutely, a We that service. a is periods over supplemental satellite new ours, a the by continued like see Thank on with fact the encouraging meetings entirely and and with planned you, this them. responsiveness which support [Leedin]. is

And we're the we'll the confident we forward, timing, the AT&T ready. with begin to be U.S. to the U.S. once on in alongside network FCC cannot service commercial course, near-term further we space-based while going of able comment in look forward So engagement is

Operator

military [Eduardo] from Officer applications there senior shared this Is testing with anything London year. DoD integrated can about that asked, commented "A be next commercial service on regard?"

Abel Avellan

governmental there very satellite are in We're in low our for [Eduardo], our to capabilities evaluating you, is to application thanks maintain power broadband. several applications progress the we and continue side, space the IP, believe which of to basically the size our because the that array Earth interest of we on various particular, for technology. strong commercialization but Thank on question. orbit. operational continue This on to while in start satellites, we opportunities our the focus and of our first launch to using QX expect government planning to X We're U.S. government. for Listen,

Scott Wisniewski

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

Operator

Boss [Operator Instructions] question the Securities. And B. the Riley line first Griffin from of comes with

Griffin Boss

also Samsung how was just feature emergency I about could satellite in and are Apple curious an it talked of your what I feature yesterday, services? Globalstar are expected start want for via just the to opportunity SOS looking doing. first it's SXX think And an So to you to similar I'm off, just, that's 'XX. if that at as launch quarter Galaxy early

Abel Avellan

mean, I -- we for question. well, the you thank Listen,

in I this we megabits. announced really this -- XX mean did focusing where are that broadband. that mean with I we believe we speeds of We announcement quarter,

megabits, when means. If that can SOS, a basically normal in you can application XX terrestrial connected can area you you in do do through every do do you are you can you phone your have voice,

agnostic focus the completely manufacturer. is our to being So

have the -- That's also calls, a that design were means. is [indiscernible] basically that major capable of to broadband technology and all are are we done device. position doing other the just support on the but is that you terrestrial in way few phone Our calls tested phones Samsung, the ourselves. we you way when applications That's every it

Griffin Boss

that in Is facility. payable on for interest And or Okay. Got credit kind it. cash? then one just Sean the in

Sean Wallace

a was aside. set it it, almost of like of portion synthetic portion it's A X

be fortunately, on funded be hand. cash So in set it escrow with will will and,

Operator

the with question from And the [Operator comes of Chris next line Quilty Instructions] Analytics. Quilty

Chris Quilty

customer ask question wanted Just of of on terms first are to about where you a batch satellites. decisions in potential that

Scott Wisniewski

here. Thanks, Chris, Scott

we to MOUs them. as now grow over XX agreements over we've list globally that subscribers MNOs X.X know, and with So continue you among the and have -- we logos. We're of billion

had have we potential a great So list of sources.

we launch who one and most by first, which interesting driven a are are I to markets considerations: think close our service number it's is to two, as think partners; about where us. of obviously

around market, So for choice the I candidates But for list, can at attractive first we're that we obvious all milestones commercial, partners a to as U.S. several those. believe look as look is that. this and I on an map world, think fit our the other at and there's major but pretty you within focused think the technology and road regulatory stage,

as timing, be But within pretty table think think with at will with I partners you So that have it time the about happy now. the frame. that us we're we

Chris Quilty

and Got on question you. to ready basis. of It you've equipment place most in manufacturing And your like roll. a the then gotten production sounds

applicable building all ramp that in Assuming larger rate, batch that at a satellites? at to you for are terms is build, high up of production looking what the the capability a of to next time

Abel Avellan

X XX planned month. there to months. to ramp-up we Yes, yet. that set of Chris. X manufacturing But of it number ourselves, X parts up we square the feet have, way obviously And in support capability facility, do enough We're given satellites per have it's Midland month. is per facility the mean XXX,XXX we're having up not aiming, satellites can the I to to that components, and the that's what take that next

Chris Quilty

you. supply I much you Rivada particular in-house, are you're chain, had good in in concern where just or look at And you brought satellites. any vertically so the Friday, shape? there your last that satellites; the the supply you base When areas online about XXX last XXX Telesat, with have year, guess Got we've fact come

Abel Avellan

XX about all, satellites on than mean, talking satellites needs not We're Right, a I I any XX mean, broadband global satellites. talking Chris. first to think, satellites. tens is of I about of number around capability to listen, having other global thousands constellations, We're our different basis. for broadband or get total of connectivity

and integrated. most vertically factor composite very, start that us is mean of parts. very and all substantially substantially other build our are we -- I we The literally for material, with we aluminum

chain. satellite, antennas, integrate the also each all it So of these part panels, we by we all control not cost our manage ourselves our every to batteries, do major parts, structures, only of but structures, solar to and control of [indiscernible] literally supply

Chris Quilty

out on Got road know question, are just And for long of FCC FCC a steps but level, waiver, final high approval? I the what next coming the should of we a it's at you. sort the expect

Abel Avellan

think services FCC has the in that process. see Well, bullish not the new and that the commercial do delaying our where regulatory we the year. are set we're up about see initial processes I FCC, we very, our FCC way very the current We next

make first support immediate are step sure with launching. will We now leasing we I that continue are The BlueWalker services -- XXXX. satellite was we're that to was licenses have they them order AT&T time then that experimental the confident. and mean, however, the in we the -- step the on dependent be satellites our with in to following active the X immediate for spectrum. And on with

Scott Wisniewski

rule-making key parallel commercial both Yes. paths license data FCC add, show Chris, that a we the been satellite this. the fast. remember, to and would been on differentiator FCC public The and only leader because information right, has paths like have X a notice for One is is orbit, pretty of to which a in short which show for for have U.S. we comments the to on a I has the the period days, big XX process, was is very rule-making

clearly interested on are the they in So rule-making. speed

process another like up. process where the with the we we the have back for information the said to then their that lease low-band on data and all earlier, AT&T individual licenses, substantially filed over And of licenses X,XXX I other that's it

limiting on line. a view time don't our this we overall factor So as

Operator

Bank. the And the with Benjamin line Soff from question Deutsche comes of next

Benjamin Soff

a got I've here. couple

revenue you from still launch, wondering, still you satellite in changed inputs the as costs. So the and like factors lot changed as back you sort of think some if you -- the far well? as obviously, Or to today if those and assumptions versus the the a of I'm the the the if terms timing commercial timing to may plan, those sense? maybe when has if makes beginning, per ramp But think some hold have and go of of initial business

Abel Avellan

the completion you of number the confirmations, business able Listen, lean X the basically our that question. we're confirms with Thank the of BlueWalker devices testing, for of plan. budget that fundamentals the interoperate of to our technology, types all

Benjamin Soff

Okay. sufficient the their investments anticipate you And weren't like if fund that other generate Would would able the cash business? to on alone the to satellite you Block X own, going be be make free in to commercial satellites would flow additional those launches?

Scott Wisniewski

Yes.

the we're I a on update part the raise, that reason manufacturing, a status that's technology, the capital to financing comprehensive the don't point first We've with those not think point and build. X with see the business today regulatory. we package satellites. reached commercial kind we've strategic for commercial where visibility and think of interim reached announcement revenue of had on We we looking the to

in And Abel satellites you that terms interesting be in very the we're clearly think build to market to as even can will feedback well, need do X more satellites. broadband. you looking based said, of and revenue. X things press first As that, cellular clearly, read those But on we than

or or those from noncontinuous services monitoring. X cash whether benefit you first don't we opportunities government but satellites, it So applications at -- revenue that we they look can flow like will there do positive, other will or service IoT on predict take of advantage be believe be

cash So plan commercialize we fully. interesting we think that interesting opportunities there, but flow to positive, opportunities not there's and definitely ones

Benjamin Soff

for last Okay. And me. then one

the that there the deciding or could might not another, if for market color whether or you the said some you others. for into to the of I U.S. one -- Just about when appreciate curious markets, go being be factors you that just look example. on I'm early talk one of

Abel Avellan

or we There in obviously a with to loan first. markets announced otherwise. us operators the but are of their Well, we had MOUs will have then we and that financially I to they is where agreements. according or that -- closely interest the lease working prioritize participation had obviously we supporting mean how we also XX market, technically us, size having on

interest So and MNOs. we support that lot to it we get will prioritize had according multi from using -- is to of we a our start a services, the the

Operator

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

Scott Wisniewski

Thank you, operator.

Our everybody company use and broadband shareholders phone I building pocket your a is want questions, analysts space-based of the a week. for cellular I for network and everyone for their today. both in thank the great design has to Thank joining, the hope you.

Operator

Ladies that and teleconference. today's does conclude gentlemen,

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

AST SpaceMobile (ASTS) 14 Aug 232023 Q2 Earnings call transcript