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AST SpaceMobile: 17 satellites in construction

August 16, 2024

By Chris Forrester

AST SpaceMobile already has five of its BlueBird satellites at Cape Canaveral waiting for launch by SpaceX. They are expected to be launched during the first half of September. It also has 17 of its advanced ‘Block 2’ satellites under construction at its Midland, Texas facility.

CEO Abel Avellan told analysts during AST’s Q2 results call that the business was in good shape financially and would not be tapping the public markets for more shareholder equity cash this year.

AST stated: “We are building the first and only global Cellular Broadband network in space to be accessible directly by everyday smartphones (2G/4G-LTE/5G devices) for commercial use, and other applications for government use
utilising our extensive intellectual property (“IP”) and patent portfolio.”

The 17 new craft being built will launch in Q1 2025.

Avellan confirmed that he expected to provide nationwide 100 per cent geographical coverage target of the continental US on premium 850 MHZ low-band spectrum helped by AT&T and Verizon, and with up to 5,600 active cells, noting: “[We] continue to advance discussions with additional strategic partners, following the blueprint of commercial prepayments alongside commercial agreements.”

AST says it will be reaching about 70 per cent of US cellular users. Thereafter, AST would be targeting beta-testing with the likes of Japan’s Rakuten and other telcos.

Avellan said that AST had won new US government contracts in recent months, with the outlook for additional and larger-sized contract awards. The value of the government contracts won during Q2 was about $900 million.

AST ended June 30th with $287.6 million cash position +$51.5 million additional liquidity in a credit facility. This was a bit less than expected but does not include the money they raised in July in Q3 which is reportedly a lot more. AST’s revenue-generating financial future was explained: “Our vision is that users will not need to subscribe to the SpaceMobile Service directly through us, nor will they need to purchase any new or additional equipment. Instead, users will be able to access the SpaceMobile Service when prompted on their mobile device that they are no longer within range of the land-based facilities of the MNO operator or will be able to purchase a plan directly with their existing mobile provider. We intend to seek to use a revenue-sharing business model for SpaceMobile Service in our agreements with MNOs.”

Investment bank comments are favourable. In summary, AST’s numbers to June 30th were:
• Cash & Equivalents: $287.6 million
• Revenue: $900,000 vs $0 YoY
• OpEx: $63.9 million, +10 per cent YoY
• Gross Capitalised Costs: $347.5 million
• Net Loss: $(72.5) million vs $(18.4) million

AST’s share price jumped almost 51 per cent (from $21.80 to $31.36) in trading on August 16th. Its share price closed at a record high. The jump in value is huge, but so is the increase over the past 3 months. In May AST’s shares were trading at about $2.30. The stock surge places AST SpaceMobile’s market value at more than $8 billion.

“Initial US regulatory approval, the imminent launch of its first commercial satellites, and partner/funding progress add to our conviction,” UBS analysts wrote in a note to clients, adding they see “a meaningful revenue ramp in 2026 in target areas.”

UBS gave a price target of $30. UBS said it now anticipates revenues for AST by 2028 of $1.88 billion. It recommended a ‘Buy’ rating. The price rise overtook some analysts in their assessments. Scotiabank, for example, issued a price target of $28.

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