ASTS - Earnings call transcript Q1 2024

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Operator

Good day and thank you for standing by. Welcome to the AST SpaceMobile First Quarter 2024 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

Thank you, and good afternoon, everyone.

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

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

questions on refer the AST XXXX, information more about Commission to report in shareholders.Welcome, our XX-K AST time. and SpaceMobile For SpaceMobile's the advance we by of our Factors section filed everyone. Exchange and year please time after with these the from Risk remarks, initial to SEC our uncertainties, submitted XX, other Also, annual that Securities starting filed will Form by and documents for December be risks the ended section and Q&A with

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the will unmodified is over go by who mobile since global cellular now supported markets everyday, it there CEO, and and are nearly Additionally, to broadband of patent cellular network economy.The update. pleasure last without and pursuing first remain pass public activities us. and In important of billions all our to Abel devices SpaceMobile unconnected with are global building the to only are in AST people who extensive the directly massive, my solving we is the IP to space touches problem broadband is through are our Chairman we and backdrop, this operate Avellan, and portfolio.It

Abel Avellan

X our weeks Thank you, after business be call. with Scott. again last since update happy to you back We're

our most agreement commercial executions is with our AT&T. share update to the call Our first important last since of definitive

beyond.As cellular we milestone broadband provide to AT&T a the with model. major end for users XXXX forward in product we through share commercial and models to with, of AT&T X an world. variations markets signed revenue these and market the have their will service replicate around we look through with a specifically pricing We and Block space-based various and expect to agreement is outline go models this to This the

the with are the we X to X guidance path, Cape at X that schedule or way reiterate being last golf stage which have might in customers' of forward each on ago offerings Block Bluebird features, case launch years, look delivery While has things different Stiller the but relationship.And will the see built is Texas space-based you satellites. over cellular weeks broadcast Jordan few for last next ago, facilities our as we we an want from the the includes commercial is integrated on complete resolved. our you in ran the beginning X our master timeline, mark this broadband us should upon. busy is in a This our our this into and with incredible our partner based AT&T spirit and that the of here suppliers, Ben micro-completion A call, X slightly didn't been our benefit the of out showing X we satellites. few Canaveral of our we All shortly to first AT&T July incredibly the Spieth, to These operations. necessary the weeks in thereafter. orbital our are parts and launch underway.So, parts the current from target to August been technology.We're commercial which commercial discussed on core check satellites satellites has

of outside launch course, everything subject Of timing factors, moving but to several is as updated many is the of today, schedule. our including according control, to

share We as launch. the progress additional approach we updates will

the we for the on enable the first X the of will the This to their commercial phones offer become pocket. me With orbit satellites importance satellites. commercial discussing X using XXX satellites our the and standard in be will achieve that us plan nationwide BlueWalker of capacity spend we're size than United U.S. low-Earth have will, That, will and with cells largest satellites, alongside we of course, regulatory low-band to mobile access in ability to a these less be Block us. that market them, secure everywhere way over the is network for allowed noncontinuous deploy.On FCC have front, to you moment the approval the milestone cellular major States. processing premium with power. I a Thanks to spectrum.Let satellites first goals X,XXX and service This individual These the X. broadband with technology each operators to the working combined our your closely in invented, of with

by encouraged prioritize recent as closed, the the new recently our was major process. a which the States BX to in evidenced and satellite-based notice are We ruling-making telecommunications, the period actions milestone United other SEC's activities.Our reflagging to by application public

advance public remainder government process.Additionally, to modest we work alongside for also currently commercial AST using generated the partners for of facilities.We We capital offering will continue to with I our FCC that the We plans this with continue new strategic am have advance supplement to year contract, in to as this the very discussions approval agreements. our established first existing prepayments new revenue closely pursue no security to one first quarter. commercial critical an excited underwritten

we have all government and relationships.While [ pass this can for a utilize our phones commercial and of the as we with summary, is in agreements.Simultaneously, consumer we making customers, ], expand are broadband, a enabling can do everywhere capabilities talks you first additional meaningful the set government future the again, our Sean connectivity our financial our broadband with fronts, focus be to could cellular your very progress commercially, government time.In opportunity we our over that I which of revenue, continuing pocket.And strategy it we core existing and framework provide represent for that, think will first Our services negotiating is potentially company extension foundations of for to operationally, natural update. regulatorily to in the we're the

Sean Wallace

everyone. Abel, good Thanks, and afternoon,

Let's review that Slide the on for metrics the operating key displayed first are X. quarter

had important XXXX, depreciation costs, and $XX.X fourth On expenses quarter for versus of quarter.Non-GAAP the first amortization, we first expenses the chart, operating and first expenses adjusted research operating operating due versus fell million In the the by million projects. fell continued cash stock-based quarter completion we adjusted this compensation. million quarter.Our including quarter guidance, non-cash fourth line see $XX.X with in million $X.X the development operating adjusted our expenses of and certain exclude non-GAAP non-GAAP $X.X R&D of to our by

we and by consist development Our third-party decreased activities for $X.X on which are primarily administrative and $X.X by engineering our first typically vendors, engage general million, the milestones.Our million of nonrecurring the fourth quarter. based also compared to payments as the of expenses and fell expenses completion R&D expenses services quarter in

spent for X quarter. satellite, completion Capital about million figure construction.As production test our The over first payments, first additional some have of the chart satellite of cost XX% up made towards for Midland. and for we series have cost amounts G&A expenditures equipment Block we Block X $XX.X and the and $XX.X the the of assembly, trended was million down materials on of the capitalized engineering facility quarter made our in facility second the capital the services We as adjustments modest towards $X and integration, of direct to were the end X in satellites. capture million fourth launch versus the expected Block page, savings.Turning moved X for this the of expenditures again a for quarter,

satellites.And approximately still the projecting first $XXX.X million slide, the chart are $XXX the the on BBX of we total ended with on final million We in quarter for cash. spend X

a available. to facility, which senior $XX.X We amount of our of credit continuing are the using gross pursue has balance million

senior take facility we precedence the of March, earlier. facility, minimum, over would the have deferment strategic at As accessed and I we the around negative raising efforts if the of bit mentioned a reduced capital end carry at credit has had the may incurred continued a

access subject our believe to ability for approvals.As sufficient to capital raise conditions our we at we XX stated is cash, expenditures to certain facility ability XX-Q, in and to through as facilities, next least our months. Our existing this well is this our the support as

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

result quarter and As we a the X, development as a discussed BBX I of an operating portion and These the the Block costs vary reductions material related be reach X our The design milestones will manufacturing of to to satellites. of as the expense and completion guidance work.As XXXX been satellite chips. reduction to not are that our cash, in the to will the earnings tape does in X quarters completed.We our adjusted design, we include most around have recognized production Block ASIC is our as million outlook expenditures completed project This we our these of BBX. this third-party significant adjusted supporting approaches designs, work capital an the in XXXX employee capital of depending without cost efforts material These completion. of our and design $XX work of initial chip expected average final construction Block million per approximately the be ASIC cash expenditures during reduce our expenses in $XX operating BBX earlier, for X in call, subsequent Block expected come in X as upon we at will figures is design the activity done fourth of the and plan BBX headcount, R&D future cash and critical related reduction investments and the will expenses in expenditures. quarter period.This X of a also for mentioned in out are ASIC ASIC-related reduction each for now as completion

historically capital be credit late creating technology spend realized either significant of and the adjusted to the be XXXX XXXX.Timing be of just long-term back in to changes by to described, aggregate financing which the we Block with type our that, of or of of an be this continue expect could in the operating funding.And the from in last X funding have of large we'll be no a deployment can be it beyond $XX are our remain financings.We in but with cost-effective developing and call, making package our agreements a entities. credit-worthy million advisors million or conjunction still our underpinning providers on timing approximately source and these long-term expenditures, progress has the next not on are variety I will of satellites, these the that structure due agencies in we capital the there sources, that assurance funding I've agencies. sale key our discussed focused we developing of earnings very including earnings $XX and as the quarter For debt Scott. X through in utilized with are expenditures proven export other in first in infrastructure quarters, expenditures. will completes to call, pursuit projects.The pass may I Any quasi-government increase to capacity the potential of structures to component a our presentation this and these could information large work Satellite of delayed successful factors.As we package We of early stages, to levels and support been encouraged

Scott Wisniewski

Thank you, Sean.

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

Operator

[ Zealand New Liden asked, look investors ] milestones what should out from for?

Scott Wisniewski

Thank you, ]. [ Liden

set really with exciting progress MNO of you milestones X United market the our operation remainder biggest the the occur. then partners, in look up to approval for our Block We're forward successful regulatory additional we and Looking think further to are agreements the commercial and to milestones I updates out launch on satellites, States, of ahead and look sharing access, program. on summer XXXX, an for these as government here, they with

Operator

Jordan conditions and will definitive Can the spectrum FirstNet, rule this approval other for FCC SCS ] with was if reported you please required the are completion and North FCC the [ from Carolina order for asked, report publishing explain services. or that it Q/V AT&T, the official backhaul agreements for MNOs? of be

Scott Wisniewski

are agreements you, we Jordan This is available going really that. [ commercial certainly we ensure by long AT&T. announced today device, go FCC the to and that the further rules the than regulated as and we're for technology ]. that directed system in closer partners with with them commercially. we've agreement and we usable. for and fully to be demonstrated once this incredibly the comfortable Thank been moving even and a and And they can support be it's been the is our globally, we us, requirement regulator time much commercial that on they're or When a regulator process our technology for not of that here any them FCC case working our the in-country our with making. establishing And to believe validate The utilized has will fast MNO understand go partner

Operator

[ AST partners past asked, Liden from focusing fundraising Zealand or new from on New partners? is ]

Abel Avellan

[ ], for thanks Liden the question.

very proud all, of we're that First have. we support the of strategic

We a AT&T, have our direct-to-device, technology Tower Google, is American in notion this have company. The basis. we & Xx invested Vodafone Rakuten and twice. leader Canada industry that of reinforcing the all Bell on who invented, global AST invested. had

new partners. strategic and excited super where old with about we are are We

and around universal have connectivity and mean we of on cell what have from plans a every understanding agreements operators global phone. that basis of relationships. to excitement in There's MOUs we a for XX We lot and regular them for providing do the

So excited. We're we're excited.

we are our about operational We agreements continued with we network. are that to be are AT&T. of process where prepayments turning did we to agreements them. The that more commercial similar more the in definitive are for into going are And planned are what bullish agreements. fundamental There with to include build-out commercial

Scott Wisniewski

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

Operator

question from Securities. the Crawford of [Operator with B. Riley Mike Instructions] Our first line comes

Michael Crawford

launch a spread more glad would that formation say, to milestones. I'm provide you on you're to enable of hear how the Bell area BlueBirds? Canada pearls or the any Would these potentially be you track service in, in, expect X Can on color fly on it like, string additional just And us access or in first out? U.S.?

Abel Avellan

that that What will of the and Thank we a you, -- pearls. prioritize certain complement will the we X States we be are from Michael. And we government will latitude as way the facing configurations a latitude Well, then tailoring the of launches XX-degrees deploy launch, that satellites. these the will string out will equator we time configuration launchers next constellation. way that usage this as The the some XX-degree move to with initially a inclination equator United in as after gives of have. spread it access are configuration. of the prioritizing we're There minus that of also the all of us to and XX-degrees are the we part for evenly to them the applications we in on them is

Michael Crawford

a be launches, groups single the launch in on then And perhaps, will that first X, and maybe after they're satellite, vehicle satellite think, X then just used? I how depending Block -- that of

Abel Avellan

we I in larger. in of X. they they them. are largest we next that We're X for the why in in Yes, Block the And X process than need -- be X bigger thing working I group of That's launch of space. will the are the -- batch. only And on already is few us LEO. objects mean, ISS think Block the or

we're So on moving we're and second of X. configuration, the is launching Block version X this then upgraded the that summer, for and X version the blocks bigger

Michael Crawford

just space you provide you of is, being your of from me to one And mobile quantities then constellation? able satellites at different us final what levels can envision remind service in

Abel Avellan

of of of The it's can number actually that the service satellites, regardless Yes. enable, the we type same.

you it it. what you use often an you changes have So above can that ] [ how

a is service. So this we data It's a full -- broadband service.

with we enable if don't you to streaming see know worked videos directly partners it, able data, have our We I to were we were download. voice Internet satellite the to -- phones. from regular

these So United this that ] satellites, enjoy ] broadband experience. [ the satellite, as else a long with you how day. is all full would What But changed, for across States. Audio [ can is it we we add X during Gap

no time. the Of add as continuous satellites, not with service the as There more. launch that But be X available increasing more we course, service all of will they will be persistence we only satellites. keeps

Operator

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

Bryan Kraft

already AT&T had? to Is part of $XX on agreement? will other In key about that of with structure ask formalizing there that getting agreement, as model you be talk wanted XX-XX this Is is on you've just can just on Are different? in later the maybe elements is the additional I revenue consistent in this talked AT&T -- you the new And are? prepaid the share any MOU the you coming there historically? the it about what agreement revenue prepaid terms year? impact revenue million you'll words, from any this AT&T be the

Abel Avellan

to I'm of out connectivity pricing of U.S. us. U.S. all, a that for project of usage. of in happy part with they service population pay complete to significant with definitive tests, We first the in It's that willing be the will a and it's the oncoming of the all move believe as This the an the AT&T. Well, for conclusion having understanding agreement super Yes. is discovery,

packages. multitude a So we -- we had have of a

all be revenue not to disclosing there so sell have AT&T, to to are able voice, used but to disclose as user internet, a we're any everywhere in will And user depending packages a is These the the discussed. on so the special packages how broadband where, experience willing any It are that broadband package. need how User get broadband depends that be share, we what It of service similar doesn't North experience. with yes, they'll historically phone. different amount to user the offer that much of anything. that is with on priced something user pay. to paying. than the symbol frictionless, packages, together do to S, text, going that, he users full doesn't will But the you indicate the is is accordingly, you're It's America that allow and see it's and designed special We in need icon on an doesn't XG a satellite. need be other much to

very and So market AT&T price has we're done maximize this. about in to a on us to the take on how position together significant excited amount it of with service. the order to it how stories

Bryan Kraft

still Anything about the on is from the Will can you that just, I any the thinking prepaid if million, as available? curious incremental just year? how next sometime then had or And think give are us guess you actually I was when this? revenue? you other Is that? be was there follow-up sense Or financing the to will coming just service $XX be I a it

Scott Wisniewski

I'll Sure, jump in.

means some a agreement. all XXXX. through be the document is legal definitive and structure, commercial that this of that's real will with which agreement, legal requirements detailed in it's walked other a think, the Abel through is but on a through brought vehicle the points, a in revenue SLAs This First finer term I which deal a

this means powerful aligned both have in it will So many around from that it's ways. how very occur offering companies because perspective that

satellites. our key which the now right new I'll these be than And with preparations, in that and through jointly to prepared of the able BlueWalker ready. as prepayment So not after of right? no available. laying that They capabilities So up customer, Abel's this going vehicle X satellites there's commercial are prepayments, will said, terms refer element.In we a on the out comments have XXx services with doing And commercial announce we've economics go-to-market is same back X. in generate timeline. to to be strategy January, came reiterated that's several revenue the agreement our But other when the we'll of months we're they

something possible. get want us to is fast this this driven, up as So we for technology as that's and

Abel Avellan

Yes.

While we Hopefully, with satellites, on revenue starting X. disclose already will with using as operating satellite. We'll a are using others. start these soon. initial the X They X BlueWalker some satellites continue government, and these commercial AT&T we'll

we more satellites. features the revenue course, as increase are significantly continue them progressing in regions definitive continue the have will other agreements Of and key satellites start monetizing with plan constellation. keep those and the But as how part these we we key signing to expect agreements, add commercially financing that that in we operators. definitive of And a we prepayment to U.S.

Operator

Our next Coello Andres question comes from with the line Scotiabank. of

Andres Coello

perhaps You that satellites other Europe, of Japan, parts the if cover northern also guess, part States, will regions, they of can just perhaps the X Mexico. mentioned United cover I

wondering covering capabilities the in U.S. So I'm these also if other for gives of X satellites. world you parts just the

Abel Avellan

they at way pass, Africa Earth cover XX X is from and Europe inclined I South the Argentina, is mean, everything degrees What constantly, all Japan. the -- -- they're correct. satellites they That's of Canada in latitude. minus XX XX the from and plus all mean the they That circle Americas, Northern to inclination. they to of have these degrees way

prioritizing We're the that customers we Asia, very have Europe, that's with X. valuable Africa, how with very where of customers. ability the coverage. to agreements And usage that starting these in initiating -- global in do globally services definitive have sadly are signing in assets. in prepayments. the and we're U.S., these but yes, we of So prioritizing careful start with We're We're

Andres Coello

correct? a pearls? to going a is of string confirming, just configuration to going And be string be The pearls, of it's

Abel Avellan

putting facing be At planes them going the beginning, yes. up. we're in we If them the to we're out where satellites, add more

Operator

of line comes Schoell Chris the from with Our next UBS. question

Christopher Schoell

follow-ups. few a Just

of then question, the think any terms revenue X satellites, we've give historically measuring premium X value-added you expect still frame?And offerings. carriers and customers opt success think time need could that in? first Block service, taken be can or guardrails Do you with into you generation approach in their on you wireless the hard to similar over about will second what a expected your As bundle do bundle services seen

Abel Avellan

We are basing our service the as offering to add-on an user.

Of course, country, very an getting every opt have know their methodology paying plan with and their for the willing every of and basically to the it. service start But service each to low earlier, own and said than doesn't own pay connectivity. The differentiate of to of he's I in that respective other customers, to monetize friction markets. in to operator it and for how need as how he's that is add-on fundamentally, a out anything connectivity this

connectivity around where it, So the you a in you monthly a line Earth model good or move no think you not enough. space bill. as places it bill about your would be It's item get the there's monthly if is your that in connectivity

Christopher Schoell

of And just of of just year? terms revenue to thinking scale this that any the generation guardrails can quickly of on follow-up, into first you're and the how the satellites, end X sort in maybe

Scott Wisniewski

satellites. as But is again, opportunity we providing government believe that our about first to agreement we ready. time, Chris, satellites right? scale be it's our the talked first not X We today. our that's revenue on these system. the big we're Obviously, customer. X potential revenue guidance but focus, not commercial are There's this at going commercial these announced real We've

certain It's agreement our focused that's how where revenue solution service about look for the to big the a points a we're you opportunity that And right? on extent, but focus be. market see X, with to the what us. base, But provide like do for So all focus be satellites? does That's you the on to mass revenue opportunity to more in. start back where the it you'll a will is you'll not today. consumer broad come And see first

just on X. build be the the first to as out we on We'll And won't focused so constellation. be focused continuing

Operator

Quilty Chris our the Space. question And next from line of comes with Quilty

Christopher Quilty

I development. an was hoping ASIC you update on give your could

Abel Avellan

been are Yes, It's we of months. to months Chris. taped X.X a have I we -- X for process X X already. -- months months mean, out around

increase chip another our ready are our This receive to will the XXx satellites. in capacity We chip. have of processing

that here. a XXx XXX bandwidth. using BlueWalker FPGAs. processing quickly satellites of had capacity another we next planning processing They X Xs, gigahertz had to the now a we Block launch the X we're And increase had very a reminder, DAC As of per Block that bandwidth satellite. to XX have a of megahertz generation XXx

we But step process So are FPGAs up. we significant ability receiving we're but using as the very keep that's -- our long in tail-end chip. using have needed, as to of our for the

Christopher Quilty

to expenses, accrue are like plays out? operating year the cost-cutting it going on the or nice run rate, some And of the current made you've as looks effects some reductions. Is the quarter a good

Sean Wallace

I'll that. take

Abel Avellan

take Yes, Sean, you why don't that?

Sean Wallace

in going in $XX average are we mentioned to Yes, million. somewhere as We million we order. a little came probably March, over $XX around

kind GA million $XX there's But keep through we run caveat on $XX a one is engineering targeted the R&D, haven't run probably through year. been the paid ASIC. income to end services, around and and for that Just but of expenses million statement of the of have rate it the we

Christopher Quilty

And Abel, a with Ben did Stiller? picture you get

Abel Avellan

want our launch. the we let's And see. investors invite to to Well,

available. Let's see he's

Operator

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

Scott Wisniewski

Thank you, operator.

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

Operator

lines at you for your conference, disconnect your participation. may This you and concludes today's time. this Thank

AST SpaceMobile (ASTS) 15 May 242024 Q1 Earnings call transcript