AST Spacemobile Inc.
11/14/2024 | Press release | Distributed by Public on 11/14/2024 15:28
AST SpaceMobile Provides Business Update and Third Quarter 2024 Results Form 8 K
AST SpaceMobile Provides Business Update and Third Quarter 2024 Results
MIDLAND, Texas, November 14, 2024 - 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 third quarter ended September 30, 2024.
"We achieved many significant milestones in the quarter and continue our momentum with several key pieces now in place." said Abel Avellan, Founder, Chairman and CEO of AST SpaceMobile. "With the first five BlueBird satellites successfully unfolded and entering initial operations, our business is progressing according to plan. We've advanced our strategy across multiple efforts including progress on securing orbital launch capacity, growing our manufacturing capability, and expanding our customer ecosystem."
Business Update
•
First five commercial BlueBird satellites achieved successful initial operations and filed Special Temporary Authority (STA) request with FCC to begin beta service with AT&T and Verizon
o
All five satellites successfully unfolded as of late October, completing a key post-launch activity
o
Preparing satellites for operational readiness through ongoing integration with partner networks
•
Secured orbital launch capacity to enable continuous space-based cellular broadband service coverage in key markets, including U.S., Europe, Japan, the U.S. Government and other strategic markets globally
o
New launch services agreements with Blue Origin and SpaceX for launches during 2025 and 2026
o
The agreements enable the orbital launch of up to approximately 60 Block 2 BlueBird satellites
o
Achieved initial validation of our AST5000 ASIC chip, with test software, test equipment, procedures, and main infrastructure in place to commission during 2025
o
Combination of novel ASIC and larger Block 2 array will offer beams designed to support a capacity of up to 40MHz, enabling peak data transmission speeds up to 120Mbps, supporting voice, full data and video applications
•
Expanded the AST SpaceMobile customer ecosystem, adding three new contract awards with the U.S. Government and continued to advance discussions with multiple commercial partners
o
Selection by the Space Development Agency (SDA) to compete directly as a prime contractor under the Hybrid Application for proliferated low Earth orbit (HALO) program
o
Added three new contract awards with U.S. Government to leverage and expand existing in-orbit technology capabilities, directly and through prime contractors
o
Growing pipeline of government opportunities for non-commercial applications demonstrates significant advantages of AST SpaceMobile's dual-use technologies
•
Strong balance sheet with $518.9 million in cash, cash equivalents, and restricted cash, benefiting from warrant redemption and ATM program
o
Received $153.3 million in net proceeds from the redemption of publicly traded warrants
o
Repaid $48.5 million of Senior Secured Credit Facility in Q4, lowering go-forward interest expense
o
Filed formal application with the Export-Import Bank of the United States (EXIM) for debt financing
o
Continue to prioritize raising strategic capital through non-dilutive approaches, including commercial prepayments and commitments from our MNO partners
Third Quarter 2024 Financial Highlights
•
As of September 30, 2024, we had cash, cash equivalents, and restricted cash of $518.9 million
•
Total operating expenses for the third quarter of 2024 were $66.6 million, including $21.4 million of depreciation and amortization and stock-based compensation expense. This represents an increase of $2.7 million as compared to $63.9 million in the second quarter of 2024, due to a $10.3 million increase in research and development costs and a $0.6 million increase in engineering services costs, partially offset by a $2.3 million decrease in general and administrative costs, and a $5.9 million decrease in depreciation and amortization expense
•
Adjusted operating expenses(1) for the third quarter of 2024 were $45.3 million, an increase of $10.7 million as compared to $34.6 million in the second quarter of 2024, due to a $1.2 million increase in Adjusted general and administrative costs(1), and a $10.3 million increase in research and development costs, partially offset by a $0.8 million decrease in Adjusted engineering services costs(1)
•
As of September 30, 2024, we have incurred approximately $374.0 million of gross capitalized property and equipment costs and accumulated depreciation and amortization of $113.9 million. The capitalized costs include costs of satellite materials for BlueBird satellites, advance launch payments, Block 1 and BlueWalker 3 satellites, 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 Thursday, November 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 2 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.
Investor Contact:
Scott Wisniewski
Media Contact:
Allison
Eva Murphy Ryan
917-547-7289
Third Quarter Financial Results
AST SPACEMOBILE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands, except share data)
|
As of |
||||
|
September 30, 2024 |
December 31, 2023 |
|||
|
ASSETS |
||||
|
Current assets: |
||||
|
Cash and cash equivalents |
$ |
516,389 |
$ |
85,622 |
|
Restricted cash |
2,497 |
2,475 |
||
|
Prepaid expenses |
7,073 |
4,591 |
||
|
Other current assets |
19,662 |
14,194 |
||
|
Total current assets |
545,621 |
106,882 |
||
|
Non-current assets: |
||||
|
Property and equipment, net |
260,068 |
238,478 |
||
|
Operating lease right-of-use assets, net |
12,088 |
13,221 |
||
|
Other non-current assets |
3,872 |
2,311 |
||
|
TOTAL ASSETS |
$ |
821,649 |
$ |
360,892 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||
|
Current liabilities: |
||||
|
Accounts payable |
$ |
8,962 |
$ |
20,575 |
|
Accrued expenses and other current liabilities |
16,480 |
23,926 |
||
|
Contract liabilities |
22,468 |
- |
||
|
Current operating lease liabilities |
1,534 |
1,468 |
||
|
Current portion of long-term debt |
44,635 |
252 |
||
|
Total current liabilities |
94,079 |
46,221 |
||
|
Non-current liabilities: |
||||
|
Warrant liabilities |
57,460 |
29,960 |
||
|
Non-current operating lease liabilities |
11,057 |
11,900 |
||
|
Long-term debt, net |
156,252 |
59,252 |
||
|
Total liabilities |
318,848 |
147,333 |
||
|
Commitments and contingencies |
||||
|
Stockholders' Equity: |
||||
|
Class A Common Stock, $.0001 par value; 800,000,000 shares authorized; 170,039,305 and 90,161,309 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively. |
17 |
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 September 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 September 30, 2024 and December 31, 2023, respectively. |
8 |
8 |
||
|
Additional paid-in capital |
762,426 |
288,404 |
||
|
Accumulated other comprehensive income |
353 |
227 |
||
|
Accumulated deficit |
(453,888 |
) |
(189,662 |
) |
|
Noncontrolling interest |
193,881 |
114,568 |
||
|
Total stockholders' equity |
502,801 |
213,559 |
||
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
821,649 |
$ |
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 September 30, |
For the Nine Months Ended September 30, |
|||||||||||
|
2024 |
2023 |
2024 |
2023 |
|||||||||
|
Revenues |
$ |
1,100 |
$ |
- |
$ |
2,500 |
$ |
- |
||||
|
Operating expenses: |
||||||||||||
|
Engineering services costs |
21,828 |
19,523 |
62,546 |
58,818 |
||||||||
|
General and administrative costs |
15,551 |
10,995 |
45,677 |
31,073 |
||||||||
|
Research and development costs |
14,724 |
9,418 |
23,435 |
36,721 |
||||||||
|
Depreciation and amortization |
14,543 |
19,029 |
54,880 |
34,877 |
||||||||
|
Total operating expenses |
66,646 |
58,965 |
186,538 |
161,489 |
||||||||
|
Other income (expense): |
||||||||||||
|
(Loss) gain on remeasurement of warrant liabilities |
(236,912 |
) |
7,481 |
(284,839 |
) |
21,454 |
||||||
|
Interest (expense) income, net |
(1,386 |
) |
495 |
(5,846 |
) |
4,311 |
||||||
|
Other income (expense), net |
1,410 |
507 |
1,661 |
(10,237 |
) |
|||||||
|
Total other income (expense), net |
(236,888 |
) |
8,483 |
(289,024 |
) |
15,528 |
||||||
|
Loss before income tax (expense) benefit |
(302,434 |
) |
(50,482 |
) |
(473,062 |
) |
(145,961 |
) |
||||
|
Income tax (expense) benefit |
(646 |
) |
(266 |
) |
(1,172 |
) |
408 |
|||||
|
Net loss before allocation to noncontrolling interest |
(303,080 |
) |
(50,748 |
) |
(474,234 |
) |
(145,553 |
) |
||||
|
Net loss attributable to noncontrolling interest |
(131,134 |
) |
(29,839 |
) |
(210,008 |
) |
(89,918 |
) |
||||
|
Net loss attributable to common stockholders |
$ |
(171,946 |
) |
$ |
(20,909 |
) |
$ |
(264,226 |
) |
$ |
(55,635 |
) |
|
Net loss per share attributable to holders of Class A Common Stock |
||||||||||||
|
Basic and diluted |
$ |
(1.10 |
) |
$ |
(0.23 |
) |
$ |
(1.89 |
) |
$ |
(0.70 |
) |
|
Weighted-average shares of Class A Common Stock outstanding |
||||||||||||
|
Basic and diluted |
155,644,888 |
89,514,621 |
139,485,036 |
79,065,471 |
AST SPACEMOBILE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)
(Dollars in thousands)
|
For the Three Months Ended September 30, |
For the Nine Months Ended September 30, |
|||||||||||
|
2024 |
2023 |
2024 |
2023 |
|||||||||
|
Net loss before allocation to noncontrolling interest |
$ |
(303,080 |
) |
$ |
(50,748 |
) |
$ |
(474,234 |
) |
$ |
(145,553 |
) |
|
Other comprehensive loss |
||||||||||||
|
Foreign currency translation adjustments |
529 |
(358 |
) |
190 |
(526 |
) |
||||||
|
Total other comprehensive loss |
529 |
(358 |
) |
190 |
(526 |
) |
||||||
|
Total comprehensive loss before allocation to noncontrolling interest |
(302,551 |
) |
(51,106 |
) |
(474,044 |
) |
(146,079 |
) |
||||
|
Comprehensive loss attributable to noncontrolling interest |
(130,906 |
) |
(30,050 |
) |
(209,944 |
) |
(90,226 |
) |
||||
|
Comprehensive loss attributable to common stockholders |
$ |
(171,645 |
) |
$ |
(21,056 |
) |
$ |
(264,100 |
) |
$ |
(55,853 |
) |
AST SPACEMOBILE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in thousands)
|
For the Nine Months Ended September 30, |
||||||
|
2024 |
2023 |
|||||
|
Cash flows from operating activities: |
||||||
|
Net loss before allocation to noncontrolling interest |
$ |
(474,234 |
) |
$ |
(145,553 |
) |
|
Adjustments to reconcile net loss before noncontrolling interest to cash |
||||||
|
Depreciation and amortization |
54,880 |
34,877 |
||||
|
Amortization of debt issuance costs |
3,047 |
374 |
||||
|
Loss on disposal of property and equipment |
2,221 |
- |
||||
|
Loss (gain) on remeasurement of warrant liabilities |
284,839 |
(21,454 |
) |
|||
|
Stock-based compensation |
20,617 |
10,595 |
||||
|
Paid-in-kind ("PIK") interest expense |
2,959 |
- |
||||
|
Changes in operating assets and liabilities: |
||||||
|
Prepaid expenses and other current assets |
(7,940 |
) |
1,601 |
|||
|
Accounts payable and accrued expenses |
(7,998 |
) |
(6,215 |
) |
||
|
Operating lease right-of-use assets and operating lease liabilities |
357 |
54 |
||||
|
Contract liabilities |
22,468 |
- |
||||
|
Other assets and liabilities |
1,081 |
1,680 |
||||
|
Net cash used in operating activities |
(97,703 |
) |
(124,041 |
) |
||
|
Cash flows from investing activities: |
||||||
|
Purchase of property and equipment |
(92,095 |
) |
(96,462 |
) |
||
|
Net cash used in investing activities |
(92,095 |
) |
(96,462 |
) |
||
|
Cash flows from financing activities: |
||||||
|
Proceeds from debt |
145,000 |
63,500 |
||||
|
Repayments of debt |
(187 |
) |
(180 |
) |
||
|
Payments for debt issuance costs |
(9,435 |
) |
(9,653 |
) |
||
|
Proceeds from issuance of common stock |
338,911 |
65,003 |
||||
|
Payments for equity issuance costs |
(6,903 |
) |
(1,527 |
) |
||
|
Proceeds from warrants exercises |
153,307 |
- |
||||
|
Issuance of equity under employee stock plan |
3,058 |
225 |
||||
|
Employee taxes paid for stock-based compensation awards |
(3,325 |
) |
- |
|||
|
Net cash provided by financing activities |
620,426 |
117,368 |
||||
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
161 |
(395 |
) |
|||
|
Net increase (decrease) in cash, cash equivalents and restricted cash |
430,789 |
(103,530 |
) |
|||
|
Cash, cash equivalents and restricted cash, beginning of period |
88,097 |
239,256 |
||||
|
Cash, cash equivalents and restricted cash, end of period |
$ |
518,886 |
$ |
135,726 |
||
|
Supplemental disclosure of cash flow information: |
||||||
|
Non-cash activities: |
||||||
|
Right-of-use assets obtained in exchange for operating lease liabilities |
$ |
- |
$ |
6,709 |
||
|
Non-cash investing and financing activities: |
||||||
|
Purchases of property and equipment in accounts payable and accrued expenses |
$ |
5,086 |
$ |
7,120 |
||
|
PIK interest paid through issuance of PIK notes |
2,959 |
- |
||||
|
Settlement of warrant liabilities by issuing shares |
257,337 |
- |
||||
|
Cash paid for: |
||||||
|
Interest |
$ |
6,694 |
$ |
1,071 |
||
|
Income taxes, net |
1,135 |
510 |
AST SPACEMOBILE, INC.
RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED MEASURES (UNAUDITED)
(Dollars in thousands)
|
For the Three Months Ended September 30, 2024 |
|||||||
|
GAAP Reported |
Stock-Based Compensation Expense |
Adjusted |
|||||
|
Engineering services costs |
$ |
21,828 |
$ |
(3,431 |
) |
$ |
18,397 |
|
General and administrative costs |
15,551 |
(3,379 |
) |
12,172 |
|||
|
Research and development costs |
14,724 |
- |
14,724 |
||||
|
Depreciation and amortization |
14,543 |
- |
14,543 |
||||
|
Total operating expenses |
$ |
66,646 |
$ |
(6,810 |
) |
$ |
59,836 |
|
Less: Depreciation and amortization |
(14,543 |
) |
|||||
|
Adjusted operating expenses |
$ |
45,293 |
|
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 |
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. We 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.