AST SpaceMobile - Earnings Call - Q3 2025

Executive Summary

• Q3 2025 revenue ramped to $14.7M from $1.2M in Q2, driven by gateway hardware deliveries and U.S. government milestone achievements; GAAP net loss per share was -$0.45, compared to -$0.41 in Q2 and -$1.10 in Q3 2024.
• Management disclosed “over $1.0B” in aggregate contracted revenue commitments and a $175M prepayment from stc; definitive commercial agreements with Verizon and stc deepen the partner ecosystem across ~50 MNOs with ~3B subscribers.
• Liquidity strengthened to >$3.2B pro forma (cash, restricted cash, and available ATM capacity), fully funding a 100+ satellite constellation; Q4 2025 guidance: adjusted OpEx mid-$60Ms and capex $275–$325M.
• Near-term catalysts: BlueBird-6 launch in December and BlueBird-7 shortly thereafter; five orbital launches by end of Q1 2026, intermittent U.S. nationwide activation early 2026, with Canada, Japan, Saudi Arabia, and the UK also planned in early 2026.

What Went Well and What Went Wrong

What Went Well

• Signed definitive commercial agreements with Verizon (U.S.) and stc (Saudi Arabia/MENA), including stc’s $175M prepayment and long-term revenue commitment; management highlighted over $1.0B in total contracted revenue commitments as commercialization accelerates.
• Technology and spectrum progress: announced EU constellation plans with Vodafone (Germany operations center), closed deals for global S-band priority rights and long-term L-band access in the U.S.; rights to >80 MHz in the U.S. support throughput and capacity.
• Management quote: “We have secured over $1 billion in aggregate contracted revenue commitments from our commercial partners.”.

What Went Wrong

• Adjusted operating expenses rose above prior expectations due to non-recurring transaction costs and gateway COGS; Q3 adjusted OpEx was $67.7M vs. $51.7M in Q2 (excl. D&A/SBC), with ~$7.1M transaction-related expenses cited.
• Capex remained elevated given manufacturing/launch cadence, at ~$259M in Q3 (slightly below midpoint of prior guidance), with Q4 expected to tick up to $275–$325M on launch timing.
• Execution risks persist: commercialization revenue depends on successful launches, gateway deliveries to MNOs, and service activations; management reiterated contingencies and regulatory approvals needed, including CST in Saudi Arabia.

Transcript

Speaker 0

Good day, and thank you for standing by. Welcome to the AST SpaceMobile Third Quarter 2025 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, President of AST SpaceMobile. Please go ahead.

Speaker 1

Thank you, and good afternoon, everyone. Today I'm also joined by Chairman and CEO Abel Avellan and CFO and Chief Legal Officer Andy Johnson. Let me refer you to slide two of the presentation, which contains our Safe Harbor Disclaimer. During today's call, we may make certain forward-looking statements. These statements are based on current expectations and assumptions, and as a result, are subject to risks and uncertainties. Many factors could cause actual events to differ materially from the forward-looking statements on this call.

For more information about these risks and uncertainties, please refer to the Risk Factors section of AST SpaceMobile's annual report on Form 10K for the year that ended December 31, 2024, Form 10Q filed with the SEC on May 12, 2025, Form 10Q filed with the SEC on August 11, 2025, and the Form 10Q filed with the SEC today, as well as other documents filed by AST SpaceMobile from time to time. Also, after our initial remarks, we'll be starting our Q&A section with questions submitted by our shareholders. For those of you who may be new to our company and mission, there are nearly 6 billion mobile phones in use today around the world, but many of us still experience gaps in coverage as we live, work, and travel. Additionally, there are billions of people without cellular broadband and who remain unconnected from the global economy.

The markets we are pursuing here are massive, and the problem we are solving is important and touches nearly all of us. In this backdrop, AST SpaceMobile is building the first and only global cellular broadband network in space to operate directly with everyday, unmodified mobile devices and supported by our extensive IP and patent portfolio. It is now my pleasure to pass the conversation over to Chairman and CEO Abel Avellan, who will go through our activities since our last public update.

Speaker 2

Thank you, Scott. AST SpaceMobile delivers standout progress in the third quarter as we continue seizing the advantages of our leadership position in the space-based direct-to-device industry. We're executing against all of our key initiatives in this rapidly developing market, and especially on deepening our commercial ecosystem with customers' partners over the past few months. We continue to build commercial momentum, most recently highlighted by our definitive agreements with Verizon and Saudi Telecom Group. Scott will discuss our business progress in more detail, but I want to highlight the traction we are achieving with our commercial initiatives. We signed a definitive commercial agreement with Verizon in the United States and STC in Saudi Arabia, and other key markets across the Middle East and North Africa.

These definitive commercial agreements demonstrate the meaningful progress in our commercial ecosystem, which includes agreements with over 50 MNO partners with nearly 3 billion subscribers globally. These agreements are the product of our trusted, long-standing relationship with both partners and their confidence in our ability to deliver space-based cellular broadband connectivity to their subscribers. Our definitive commercial agreement with Verizon is an extension of our transformational partnership, which has been cultivated over several years, including the $100 million commitment in May of last year. The agreement also provides us with a formal commercial pathway to provide direct-to-device cellular broadband services to their customers starting in 2026. Our opportunity to bridge the digital divide and target 100% coverage of the continental United States has never been stronger. Together, we partner with AT&T in premium 850 megahertz low-band spectrum.

Our definitive agreement with STC provides us with a long-term partner in a key region with a large geographical area, significant population growth, and a strong need for broadband connectivity. More broadly, our 10-year long-term agreement is a promising look into how AST SpaceMobile can collaboratively shape the future of direct-to-device mobile connectivity as we continue to grow our mobile network operator partner ecosystem. Our direct-to-device satellite technology enables native cellular broadband capabilities directly to modified mobile devices, including voice, text, data, video, and full internet access to native cellular apps. As an example of our native cellular capability, we recently completed a Bluebird satellite-enabled technology milestone with Verizon, completing direct voice and video calls, as well as two-way RCS messaging between standard and modified smartphones. This followed additional milestones with Bell Canada in anticipation for a broader commercial rollout.

Specifically, we showcased Canada's first successful space-based direct-to-cell voice-over LTE call, video call, and other broadband data and video streaming activations. We believe Canada will represent another attractive market for our direct-to-device cellular broadband service. Space-based cellular broadband connectivity is an industry that we invented, and a recent technology milestone with Verizon and Bell follows several breakthroughs using our direct-to-device technology, including the first-ever 4G and 5G voice calls, voice-over LTE calls, live video calls, streaming, full internet access, and tactical non-terrestrial network connectivity for military and defense purposes, from space to modified smartphones. Our direct-to-device cellular broadband network will help our partners deliver on one of their highest priorities, which is extending connectivity for their customers as part of our effort to deliver on those priorities. We are advancing partners and ecosystem network integration as we progress towards service activation in key partner markets.

Specifically, we have already begun activation in fixed network locations. We expect to continue scale deployment efforts early next year as we progress activation of an intermittent nationwide service by early 2026 and prepare for continued service later in 2026. Taking a step back, AST SpaceMobile has now built the largest and most diverse commercial partner ecosystem in the industry. Our network includes agreements and understanding with over 50 MNO partners with nearly 3 billion subscribers globally. We have access to some of the most important markets covered and exposure to billions of subscribers, as well as long-term access to valuable spectrum. Our key strategy during 2025 has been to deepen this partner ecosystem through definitive commercial agreements. Today, we're happy to disclose for our first time that we have secured over $1 billion in total contracted revenue commitment from our commercial partners.

This represents an incredible snapshot into how our business is developing, and not only to the commitments our partners have to AST SpaceMobile, but also the way they are starting to think about the financial impact of this massive opportunity. Turning to manufacturing and launch, our manufacturing efforts are on track with our goals and expectations. Bluebird 8 to 19 are in various stages of production, and we are on schedule to complete 40 satellites equivalent of microns by early 2026, bringing us to Bluebird 46. Leveraging our 95% vertically integrated manufacturing, we continue to accelerate and improve our manufacturing process and expect to exit calendar 2025 at a manufacturing cadence of six satellites per month. A detailed cadence of our 2025 and 2026 deployment plan is shown in the accompanying quarterly presentation found on our IR website.

This effort is supported by a steadily expanding manufacturing footprint, soon to be over 500,000 sq ft of manufacturing and operations space supported by a global workforce of nearly 1,800 people. We have shipped Bluebird 6 to its launch site in India, with launch expected to occur in the first half of December. We also expect to ship Bluebird 7 to Cape Canaveral later this month, with launch anticipated shortly thereafter. Additionally, we continue to expect five orbital launches by the end of Q1 2026, with launches every one to two months on average to reach our goal of 45-60 satellites launched by the end of 2026.

Additionally, we anticipate our novel ASIC chip will be integrated into our Block 2 Bluebird satellite during Q1 2026, enabling peak data transmission speed of up to 120 megabits per second, which is a throughput large enough to achieve the native cellular capability the customers are used to having, even when they are in areas unconnected by terrestrial networks. On our comprehensive global spectrum strategy, since our last earnings call, we closed our deal to acquire global S-band spectrum priority rights and our deal to acquire long-term access to premium lower mid-band L-band spectrum in the U.S. That has been approved by the court.

AST SpaceMobile owns and shares spectrum profiles, including access to 1,150 megahertz of low-band and mid-band tunable MNO spectrum globally, 45 megahertz of AST SpaceMobile licensed MSS lower mid-band spectrum, 60 megahertz of AST SpaceMobile licensed S-band spectrum priority rights, and low-band spectrum allocated by our MNO partners. Between our own and mobile network operator partner spectrum, we have rights to access over 80 megahertz of paired and high-quality spectrum in the United States alone, more than any other direct-to-device provider today and in the future. We have developed our comprehensive spectrum strategy by balancing costs and disciplined capital allocation. By making a smart and cost-effective investment in spectrum, we are able to preserve the value of our spectrum assets while protecting the long-term viability of our business. This robust portfolio of spectrum creates a durable competitive advantage for AST SpaceMobile.

Spectrum enables us to provide more lanes for direct-to-device cellular broadband services at a faster speed and a greater capacity. Lastly, we strengthened our financial footing significantly in the last few months, reaching over $3.2 billion in cash and liquidity as of quarter end, pro forma for our recent financial transaction and available liquidity under the ATM facility. We continue to fortify our capital base in a responsible way while building long-term shareholder value. As a result of our funding effort, we are now funded from cash on hand to enable continued service in our worldwide key strategic markets. In summary, our manufacturing and launch activities are on plan, and our commercial activities are accelerating.

We anticipate an active manufacturing and launch cadence for the remainder of 2025 through 2026 as we progress towards our stated goal of 45-60 satellites for continued service coverage in key markets like the U.S., Europe, Japan, Saudi Arabia, and other key strategic markets like the U.S. government. We're advancing our commercial activities on the ground, installing gateways, integrating them into partner networks, and completing key technology demonstrations around the world as we scale our constellation. We have built models around multiple aspects of our business, including our extensive IP portfolio with approximately 3,800 patent and patent-pending claims, satellite technology, partner ecosystem, comprehensive global spectrum strategy, and a strong capital base. I could not be more excited for what's coming as we continue to run commercial activity going into 2026.

Let me now turn the call over to Scott to provide more detail on our progress and initiatives. Thank you, Abel. We have been making rapid and continuous progress against our key business initiatives. Specifically, the third quarter was marked by milestone achievements as we develop our commercial ecosystem, delivering on our previously stated goals of definitive commercial agreements, non-dilutive service prepayments, and long-term revenue commitments. Most significantly, we are thrilled to announce today for the first time that we have now secured over $1 billion in aggregate contracted revenue commitments from our commercial partners. These revenue commitments have always been integral to our comprehensive capital raising strategy, but also provide a powerful validation of our ecosystem partner strategy, our business model, and the massive size of the direct-to-device market we are creating.

For some context, AST SpaceMobile has incredible strategic assets, including our breakthrough technology, vertically integrated manufacturing capabilities, long-term spectrum access, and an ecosystem partner strategy that has set the stage for our commercialization strategy, which is really taking shape. Since our last public update, we signed two additional definitive commercial agreements with Verizon and Saudi Telecom Group. These agreements represent years of relationship building and organizational alignment and are the business and legal frameworks through which future services and revenue will flow. These agreements represent a key step in our commercialization journey as we significantly expand our relationship with two additional incredible operators pulled from our ecosystem of over 50 leading global mobile network operator partners who collectively cover nearly 3 billion subscribers. This adds to previous definitive commercial agreements signed with AT&T and Vodafone.

Our strategy is to continue to sign similar agreements with more of our top partners on a rolling basis as we prioritize initial global services on the AST SpaceMobile network. As you know, Verizon is a very important partner as we develop the U.S. market and target full geographic coverage of the continental United States. This agreement, of course, builds on the strategic partnership with Verizon announced last year with a $100 million commitment. Together with AT&T, we plan to deploy services next year with two of the major U.S. mobile network operators. Moving to Saudi Telecom Group, or STC, this is an innovative leading mobile network operator partner in the Gulf region, who we first signed an MOU with in early 2023. This agreement, signed just last month, provides a framework for direct-to-device services across the Middle East and North Africa.

Importantly, this agreement also included a prepayment of $175 million to be made by the end of 2025 and a significant long-term commercial revenue commitment. Lastly, we announced our intention to further deepen our ties in Europe through the SATCO joint venture with Vodafone, announcing a constellation of mid-band satellites dedicated to the EU. These satellites will provide a scalable European satellite mobile broadband service for use by mobile network operators and for the benefit of all European citizens, businesses, and public sector organizations. This step represents further accretive organic growth opportunities available to the AST SpaceMobile platform, facilitated by our first-mover advantages in space-based cellular broadband, our development of the commercial ecosystem, as well as our recent strong capital markets access to growth capital.

SATCO, based in Luxembourg, is continuing to scale with key leadership and employee hires, accelerating our commercialization efforts in Europe with MOUs signed in 21 of 27 member states to date. Linking our strategies back to third-quarter performance, we grew to double-digit revenue with approximately $15 million of recognized revenue on the back of milestones in our U.S. government contracts and delivery and installation of gateway equipment versus approximately $2 million in the prior quarter. This represents continued progress with our U.S. government work and the acceleration of gateway deliveries and installations with our mobile network operator customers in the U.S. and globally. With this progress and our expectations going into year-end, we continue to expect second-half 2025 revenue in the range of $50-$75 million.

We also replenished the pipeline of gateway bookings with approximately $14 million in new gateway equipment sales during Q3, and we continue to believe we will book over $10 million of new gateway equipment sales per quarter on average. For a little more detail on our U.S. government business, our breakthrough technology continues to garner interest from many U.S. defense and government entities for both dedicated and dual-use applications. Our differentiated technology and growing list of capabilities across communications and non-communications use cases fits nicely within the framework of the current administration's space and on-orbit plans. This is the most positive backdrop for U.S. government investment in space since the space race of the 1960s. We see no change to this massive trend over the past few months, despite the government shutdown. In fact, we recently received an award as a prime contractor with the U.S.

government, subject to final contract negotiations when the government reopens. In summary, we continue to ramp our U.S. government efforts as we plan for large contracts going forward. Overall, we are encouraged with our commercialization progress to date and believe our recent achievements across both commercial and government initiatives serve as important signals of our continued positive momentum. I'm now happy to pass the call over to Andy to walk through our financial update. Thanks, Scott, and good afternoon, everyone. The progress on commercial objectives, service activation, scaled manufacturing, and launch of our Block 2 Bluebird satellites described by Abel and Scott was complemented by the continued strength and flexibility of our financial position during the third quarter of 2025. This year has been characterized by rapid growth at AST SpaceMobile.

The transition from an emerging R&D-focused startup to an operating company on the path to optimizing our manufacturing and launch cadence has been hard, yet invigorating and gratifying work for our now nearly 1,800-person worldwide workforce. The speed at which we are moving across all operational fronts to manufacture and launch a constellation of 45-60 Block 2 Bluebird satellites creates a dynamic financial backdrop that I am pleased to share with you in more detail today. We continue to balance a prudent approach to our spending while moving quickly to protect and capitalize on our first-mover advantage of bringing space-based broadband connectivity direct to unmodified smartphones in the rapidly growing direct-to-device market. This intentional focus on investing in our operational growth led to increased operating expenses in Q3, while capital expenditures decreased from the prior quarter as capital commitments ebb and flow as expected from quarter to quarter.

Importantly, this quarter marked the start of our revenue ramp with revenue from commercial hardware sales, services, and contract awards from our U.S. government milestone achievements. Moving to the operating and capital metrics slide, let's review the key operating metrics for the third quarter of 2025. On the first chart for the third quarter, we incurred non-GAAP adjusted operating expenses of $67.7 million versus $51.7 million in the second quarter. As a reminder, non-GAAP adjusted operating expenses exclude certain non-cash operating costs, including depreciation and amortization and stock-based compensation. This quarter-over-quarter increase of $16.0 million resulted from a $7.6 million increase in adjusted engineering service costs, a $5.5 million increase in the cost of goods sold, and a $3.8 million increase in adjusted general and administrative costs, which were partially offset by an approximately $900,000 reduction in R&D costs.

This variance in adjusted OPEX in Q3 was above the quarterly guidance I provided after the second quarter, due in part to the approximately $7.1 million of non-recurring transaction-related expenses, including our L-band and S-band spectrum transactions, the non-recourse senior secure delayed draw term loan facility, and now completed pre-regulatory approval bridge loan, in addition to the continued work of standing up our joint venture with Vodafone, which we launched in the second quarter. The Q3 adjusted operating expenses guidance I gave in our last earnings call did not include any cost of goods sold related to gateway sales. If you compare our Q3 operating expenses on that same basis by excluding the $5.5 million in cost of goods sold, our run rate operating expense would be $55.1 million, which is approximately $5 million more than the run rate guidance for adjusted OPEX previously provided.

Turning towards the second chart on this slide, our capital expenditures for the third quarter of 2025 were approximately $259 million versus $323 million for the second quarter of 2025. This figure was made up of approximately $231 million of capitalized direct materials, labor for our Block 2 Bluebird satellites, and payments made in connection with multiple launch contracts, with the balance relating to facility and production equipment expenditures. This amount was just below the midpoint of the quarterly guidance of $225-$300 million that I provided during our last earnings call. For the fourth quarter of 2025, we estimate that our adjusted operating expenses, excluding cost of goods sold, will come in at a similar range in the mid-$60 millions, as we continue to design, manufacture, launch, and operate our growing satellites constellation, as well as pursue the monetization of our L and S-band spectrum usage rights.

We expect our capital expenditures to increase slightly in Q4 of 2025 as compared to the third quarter to a range of $275-$325 million, primarily driven by the timing of launch payments related to our near-term launches, which, as I've previously explained, do vary from quarter to quarter. We continue to estimate that the average capital costs, including direct materials and launch costs for our constellation of over 90 Block 2 Bluebird satellites, will fall in the range of $21-$23 million per satellite. This is the same range of per satellite cost that I've provided since our Q1 2025 earnings. Our cost per satellite estimates are subject to fluctuations based on dynamic geopolitical factors, which could impact our costs.

Within our go-forward OpEx profile, we continue to believe that the operation of a constellation of 25 Bluebird satellites will allow us to enable non-continuous SpaceMobile service in selected, targeted geographical markets and should enable us to potentially generate cash flows from operating activities from both commercial and U.S. government opportunities to further support the buildup of the remaining constellation. As a reminder, the timing of the changes in our adjusted operating expenses and capital expenditures, as I have just described, could be delayed or may not be realized due to a variety of factors. Our revenue ramp began in earnest during the third quarter, and we expect it to continue to grow in Q4.

With respect to revenue generation, we believe we can enable continuous SpaceMobile service across key markets such as the United States, Europe, Japan, and other strategic markets, with the launch and operation of approximately 45-60 Bluebird satellites, and additional strategic worldwide markets with the launch and operation of approximately 90 Bluebird satellites. Further, as we continue to launch and deploy our constellation, we will continue to support U.S. government applications currently ongoing and accelerating as our constellation grows. In the third quarter, we recognized GAAP revenue of $14.7 million, primarily driven by gateway hardware sales and various commercial and U.S. government service milestone achievements. Additionally, in Q3, we completed initial technical trials with an MNO partner, which revenue will be accounted for as we provide future services.

We are reiterating our belief that we have a revenue opportunity for 2025 in the range of $50-$75 million and expect revenue in Q4 will continue to be driven by gateway equipment sales, achievement of U.S. government milestones, and recognition of initial commercial service revenue. The achievement of our revenue plan remains subject to several contingencies, including: one, the successful launch and deployment of Block 2 Bluebird satellites related to U.S. government applications' contractual milestone achievements; two, critical gateway equipment sales to our MNO partners in support of their anticipated commercialization efforts of SpaceMobile service; and three, service revenues in connection with the activation of our commercial service provided by our existing and planned deployed and operational satellites. There can be no assurances that we will achieve any or all of these objectives, and our actual revenue results will vary based on a multitude of factors.

Finally, on the final chart on the slide, on a pro forma basis inclusive of cash raised in October via the convertible notes offering with a 2.00% 10-year coupon at an effective strike price of $96.30 per share, and the currently available liquidity under the at-the-market or ATM facility, our cash, cash equivalents, and restricted cash as of September 30, 2025, was approximately $3.2 billion. Primary drivers for this cash increase include execution of two convertible notes offerings in July and October for a total of approximately $1.6 billion of net proceeds, approximately $389 million net proceeds raised from the 2025 ATM facilities during Q3 and through October, and the unwinding of the cap call that we purchased earlier this year in connection with the January 2025 convertible note offering for $74.5 million of proceeds to the company.

In addition to the work we did raising additional capital via the recent 2% 10-year convertible notes, we also took action since our last earnings call by further reducing our outstanding debt related to the January 2025 convertible notes due in 2032. Among three equitization transactions, including another $50 million equitized in October, we have now converted $410 million of the outstanding $460 million of the 4.25% convertible notes due in 2032 into 17.3 million Class A shares. We now have just $50 million of outstanding notes related to our January 2025 convertible notes due in 2032. I should also mention that subsequent to Q3, in October, we put in place a bridge facility to manage one-time payments related to the Legato LBAN usage rights transaction ahead of planned funding by the SPV delayed draw term loan upon receiving FCC approval.

Given the current strength of our balance sheet that now includes cash, cash equivalents, and restricted cash, and available liquidity under the ATM facility of over $3.2 billion on a pro forma basis as of September 30, we are fully funded to manufacture and launch a constellation of over 100 satellites to provide worldwide SpaceMobile service. The combination of increasing commercial and government opportunities, rapidly scaling manufacturing and satellite launch operations, and a fortified balance sheet position AST SpaceMobile for an exciting end to 2025. Through the third quarter of 2025, we remain on target to execute against our plans to bring SpaceMobile service to market in the coming periods as we begin to launch our Block 2 Bluebird satellites beginning in December. With that, this completes the presentation component of our business update call, and I'll pass it back to Scott. Thank you. Thank you, Andy.

Before we go to the queue of analyst questions, we'd like to address a few of the questions submitted by our investors. Operator, could you please start us off with the first question? Kevin from Vancouver asks, what is the difference in processing capacity between Block 2 FPGA satellites and Block 2 ASICs? Hi, Kevin. That's a great question. Listen, we have been improving on a tenfold steps, our processing capacity for the satellites. We started with 100 megahertz on BlueWalker 3, which, by the way, is still working and functioning. Then to upgrade it to 1 gigahertz, which is the current, so a tenfold increase with the current satellites that are currently in orbit and in operations. The one that we're starting to launch immediately here has another increase factor of 10 gigahertz, going up to 10 gigahertz for 9 gigahertz, so another 10 times factor.

When you combine the processing capacity that we have on the satellites with AI, with the AI engine that we're developing to basically managing very efficiently the spectrum allocation of both power and bandwidth, this is a very, this is the way that we do the true broadband connectivity from the space. For that, we developed our own chip. We call it the AST 5000 that had a processing capacity of 10 gigahertz. We enhanced features to take the most of that 10 gigahertz using our AI engines. Alvin from Massachusetts asks, as a forward-looking investor, I would like to know if the company is weighing the benefits of AI for its spectrum management. Hi, Alvin. We are more than weighing the benefits. We're working on it. We are implementing our AI engine for managing and administrating the spectrum.

Each satellite had a capacity of 10 gigahertz processing bandwidth, but we feel that effectively we multiply that by several factors by effectively managing the allocation of spectrum and resources dynamically across the network using AI. That's something that we've been working for a while. The system and the satellite have already been designed to have all the hooks and all the management capability to take maximum benefit of AI on spectrum management. When you think about that, in average terrestrial operators have, you know, per market in countries like the United States, maybe around 250 megahertz to deploy spectrum. Between our own spectrum and spectrum provided by the operators, we, just in the United States alone, we have access to around 80 megahertz. We will have access to around 80 megahertz of spectrum, 50 to be our own.

You add an AI, our AI engine to basically multiply that spectrum and make it much more efficient. This is a very significant new leg of the telco stack. We see a world where you have Wi-Fi, terrestrial, and now with the amount of capacity and spectrum that we can manage with our satellites and our AI engine to basically effectively use that spectrum, we believe that the usage of satellites becomes more and more and more relevant as we add satellites and as we add spectrum to the system. Kevin from Oregon asks, with the next series of launches starting possibly next month at Cape Canaveral, I have been wondering if or how AST SpaceMobile will structure a future launch event for retail shareholders. Thanks, Kevin, for the question.

As you can tell from the topics on this call, you know, we're very, very much in a commercial mindset at this point and moving towards service delivery. Nonetheless, the launch campaign is very exciting, and we're very excited as well. We just shipped Bluebird 6. We're getting ready to ship Bluebird 7, and the rest of the Bluebirds are starting to come out of the factory. We are very excited about the launch campaign. It is going to be a fantastic stretch of launches. Just like with our last launch where we had about 1,000 retail investors, we plan to invite as many as we can to the launch and each of the launches. It is going to be a great campaign. We're super thrilled. You know, five launches before the end of Q1 2026 and our 45-60 satellites during 2026.

There's going to be a lot of opportunities for retail to come see, and we hope everybody comes along to participate on this journey with us. Ruper from Zurich asks, despite confirming fully funded for a full constellation through balance sheet cash and future revenue, why was additional capital raised? I'll take that. This is Andy. Ruper, thank you for the question. It's clear that 2025 has been a fantastic opportunity for AST to access the capital markets. It's been a great climate for that. As you point out, we recently completed our third convertible note deal of the year, the first in January, the second in July, and the third one just recently last month. This was an incredible transaction for us and strengthened the balance sheet.

As a reminder, we were able to raise net proceeds of a little over $1 billion at a 2% coupon with a 10-year term, a convertible note deal that has not been done in many, many years. We are very happy with that result. The opportunity was there. Importantly, you point out, Ruper, that it is true, and we talked about it at the last earnings call, that we were previously fully funded for a constellation of 45-60 satellites. What this additional financing does is it provides us the ability to move faster with more flexibility on the balance sheet to go beyond those initial markets of the U.S., Europe, Japan, and others that we talked about at 45-60, and to look worldwide in our coverage at a constellation of now being fully funded at 100-plus satellites.

Consistent with our STC announcement, we are looking and working hard on commercial opportunities in other strategic markets across the world, and our balance sheet is now fortified to provide a runway to manufacture and launch satellites to support that worldwide constellation base. Thank you. With that, I'd like to thank our shareholders for submitting those questions. Operator, let's open the call to analyst questions now. Thank you. We will now be conducting a question and answer session. If you'd like to ask a question, please press Star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press Star 2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the Star keys.

Our first question comes from the line of Michael Funk with Bank of America. Please proceed with your question. Yeah, hi, good evening. Thank you for the questions tonight. Congratulations on the funding activity during the quarter and the fully funded status. You know, wanted to tie that back to the comments on the prepayments and the billion-dollar contract to date. You know, what is your appetite or thoughts on future prepayment deals with customers, other commercial financial benefits to signing these now that you are fully funded? Maybe part B to the question, if I could, any more broad details around those prepayment contracts, whether they're for capacity, subscribers, any details on the broad terms would be helpful. Hey, Michael, Scott here. Oh, hey, Scott. Our strategy. Hey, how are you doing? Can you hear me okay?

I can, thank you. Great. Our strategy for about two years now has been to pursue our very long funnel of agreements, right? We have 50-plus agreements with operators globally and we have nearly 3 billion subscribers. The strategy has been start with our best partners who are most aligned, build out those relationships, build out those agreements, and bring in prepayments and long-term capital, long-term revenue commitments. That strategy is unchanged. I think clearly we have demonstrated access to the capital markets, but signing up these agreements with prepayments and commitments is still very much our strategy, and we'll balance all those factors appropriately. The way to think about them is relatively simple. You know, prepayments are for commercial services in the near term, and the commitments can be near term, medium term, long term.

We balance each of those on each relationship and each situation as appropriate. The strategy is really unchanged. We think it's playing out well, and we're going to continue it. Great. Thank you guys so much. Thank you. Our next question comes from the line of Mike Crawford with B. Riley Securities. Please proceed with your question. Thank you. When you start manufacturing L-band satellites, do you intend to put L-band and S-band on the same satellites? Also, were you awaiting formal FCC approval before starting to make those? Hey, Mike, how are you? We plan to have start, first of all, when we launch the satellites, they have all the 3GPP frequencies, either in the low band or the mid band, including all the MSS band, the L and the S that we had acquired.

Our plan is to interleave them between the low band and the mid band. Now we're fully funded for doing that. Our plan is to start launching mid band satellites by the end of next year. We want that to be in line with the roadmap that we have for in the U.S., Europe, and Japan, and now Saudi Arabia. As we said, we want to use this capital to basically deploy more globally in both operator spectrum and our own spectrum and be able to combine in the network both in order to facilitate 120 Mbps basically everywhere as we deploy both our bands and the operator bands. Okay, thank you. Just a follow-up to that is your Saudi Telecom agreement. You anticipate to launch commercial services in the fourth quarter of 2026. I don't think you specified over what spectrum.

Then the other part to that is if there were, if I heard that there's additional service revenue commitments on top of the $175 million prepaid. Thank you. I'll go ahead and call to explain how the agreement with STC works, but we are always starting with operator spectrum available in every device. We focus on using a spectrum that is 3GPP that is already on devices. That's how we're starting with STC and all our partners here in the U.S., in Europe, in Japan. It will be no different in the Middle East region led by Saudi Arabia. On the commitments, you know we put forward this new disclosure, Mike, this quarter of over $1 billion of commitments. Those are not soft commitments.

Those are designed to be very valuable to us and very indicative of future expectations and very valuable both in the debt context and also as guidance to the equity markets. When we say we have over $1 billion of revenue commitments, those are very hard commitments. We purposely put that out and we're not going to identify that with individual customers or individual contracts. I would point you to the STC press release. We did mention that there was a prepayment and then also a long-term revenue commitment. We're not going to map that to individual contracts going forward, but it is our strategy and we'll provide updates from time to time as appropriate.

Very importantly, we're now over $1 billion in total, which is a good outcome for us in line with our strategy and we think consistent with the customer excitement about us and our customer excitement about putting this product into their customer hands. Great. Thank you very much. Thank you. Our next question comes from the line of Bryan D. Kraft with Deutsche Bank. Please proceed with your question. Hi. I had a few if I could. First, I know that you reiterated your launch timing guidance in terms of the number of launches you're targeting by the end of one Q and the end of next year. It seems like the launch timeline though has become a bit more compressed with some delays, you know, at the front end, the summer, and into the fall.

Just with that in mind, I wanted to ask you about your confidence in achieving the five launches by the end of one Q and the 60 satellites by the end of next year. Is there any more risk now in that timeline from your perspective? Then separately, I wanted to ask you about the EU satellite constellation announcement. Are these satellites incremental to the plan or are they part of the existing 60 satellites by the end of next year? If they are incremental, can you talk about the timing for launching them and what the CapEx and funding implications are? Lastly, related to that, there's been some talk in the market about AST winning part of the IRIS2 mandate in Europe. Is that something that is happening? Is that real or is that just noise in the market? Thanks so much. Okay.

Brian, I would like to set the question in three parts. Let me start with the launch, and I want to start with where are we with manufacturing. By early 2026, Q1, first part of Q2, we will have 40 satellites built. We are at 19, satellite 19 at the moment. We are at a pace of six satellites a month starting in December. That matched very well with the launches that we had already financially committed, and we are in the manifest of our partners, our launch partners to take them, starting the one in India mid-December and then following the launches from the Cape to add up to the five launches by the end of Q1. We feel very confident on our launch campaign.

This has been, you know, the culmination of our roadmap where we now have the ability to start launching by Q1 also our 10 gigahertz satellites that we plan to take the maximum out of them in the way that we manage that 10 gigahertz processing bandwidth per satellite. So we feel very comfortable there. As it relates to your question in Europe, I mean, we are an American company that operates globally. And as such, we are that market by market. Our go-to market is exclusively through the partners and telcos that we operate with, I mean, including European markets. You see the reception of what we're doing in Europe jointly with Vodafone has been incredible.

Twenty-one of the twenty-five top operators in Europe have basically committed or are expected to be part of the network and the constellation that we are building as part of our constellation, but with certain features for the European MNOs. That really, you know, adds up to the fifty-plus agreements that we have globally, reaching us over 3 billion subscribers that we can reach through the agreements that we have globally. Just to clarify then, you are saying that the satellites for this constellation are part of the existing plan. They are not incremental. Is that correct? That is correct. Okay. Can you comment at all on just the talk about IRIS2 and whether AST might be part of that? Seems like you could be well positioned for it, you know, given this announcement today or over the weekend.

Yeah, we don't want to comment on, you know, new contract awards or anything like that. But, you know, given that we are already building a constellation with multiple capabilities, we think we're very well positioned for any country or any customer that's looking to get this capability, right? The incremental ability for us and the marginal economics for us to build out additional capabilities in orbit is very high, given our tech, given our manufacturing, given our existing ecosystem we've created. So I think we're very well positioned for opportunities like that. But, Bryan, we're not going to comment on any new contracts right now. Certainly understood. Thank you so much. Thank you. Our next question comes from the line of Colin Canfield with Cantor Fitzgerald. Please proceed with your question. Hey, thank you for the question.

Appreciating the sensitivity in terms of kind of IRIS commentary, but maybe just talking about kind of your supply chain versus the European supply chain. I think when investors kind of saw the 2030 targets around IRIS and some of the recent headlines in terms of kind of antitrust and mergers between kind of the, we'll say, the existing supply chain folks for that domain, it's pretty obvious that that sort of like back and forth is going to limit their capability. Maybe without mentioning IRIS, if you could maybe talk about kind of how you think about your aperture for additional bands and leveraging the economies of scale that you have to do more than just SL and C-band.

Yeah, I mean, first of all, our platform, it is designed to basically capture over 1,000 megahertz of spectrum that can be tuned across all 3GPP bands in the low band and the mid band. So we basically design our network where we can take any band in any country, as long as 3GPP, as long as in the devices, we can tune into it. So our incremental call for that is practically zero because that is all software defined. In terms of who we manufacture and who we are, we are an American company. We manufacture in the United States. We're based in Midland, Texas. We operate globally. We're in the business of partnering with MNOs, which are local, are in their local jurisdictions. We partner with them. They provide the spectrum.

Sometimes we bring our own spectrum and complement that in order to deliver the best experience possible in the future for the end user device that basically, no matter what phone they're using, they get 120 megabits per second from the space. That is really who we are. That was our strategy. We're Americans. We're based here. We announced, you know, we had over 1,800 people working on our system. Yeah, we obviously want to look very aggressively all around the globe to add a spectrum that is in local jurisdictions that is managed by local regulators and partner with local MNOs to offer the best of our services to each of the customers. I wanted to make it clear where, you know, our focus is. We're an American company that operates in America. Got it. Got it.

As we think about kind of the sizing of the war chest that AST has put together that tracks, you know, kind of roughly in terms of cash on hand to some of the legacy satellite communications debt levels, how do you think about kind of going out and acquiring either future spectrum or even something that might kind of get you closer to free cash flow positive sooner? How do you think about kind of that potential takeout versus investing organically and essentially kind of taking business away through your own investment in IP? Yeah, I mean, at the core of our strategy is partnering with the MNOs. The MNOs in the United States, we had access to around 80 megahertz of spectrum, call it 50 of our own, and another 30 in combination of low band and mid band spectrum available for us.

That, we believe, is a significant amount, especially when you start applying AI techniques to maximize it and make it more efficient. If you take into consideration roughly by market and roughly each market in the U.S. has around 250 megahertz of terrestrial deployed spectrum, and we had access to around 80 for satellite, you can see that that is a very significant portion. We feel that we are very equipped to globally compete. That is why we acquired the 50 megahertz in the U.S. We have priority rights for another 60 in the U.S. We are partnering with the global MNO ecosystem in Europe for Europe. You know, our focus is building satellites, which we are now at a rate that we feel proud and meet our business needs, which is around six per month of the largest satellites ever launched into LEO. We are doing that.

We're breaking a world record every time that we take a satellite out of the factory. It's the largest ever launched. That's our primary focus: manufacturing. Second to that is launching them. Third to that is bringing this service globally with a combination of local spectrum from the MNO and our own to basically offer the broadband experience as close as possible to terrestrial by using space. Got it. Thank you for the comment. Thank you. Our next question comes from the line of Chris LaShoal with UBS. Please proceed with your question. Great. Thank you. I just want to follow up on the funding progress. I recognize that you were saying you're fully funded, I believe, for 90 satellites in your queue, but will you continue to be opportunistic? How should we think about additional capital raises as we go into 2026?

Thank you for the color on the Q4 OpEx and CapEx. Just given the ramp in Block 2 production into 2026, should we view Q4 as a good run rate when modeling out next year, or will the timing of the launch payments cause spending to fluctuate? Thanks. Hey, Chris, I'll take the first part, and then Andy can take the second part. In terms of, you know, fund flows, I guess is the best way to think about it. I would look to the model on the commercial side and the comments we've made earlier in the call where we're laser-focused on bringing in commercial repayments, commercial commitments, and ultimately commercial revenue as soon as possible. We've reiterated our expectations on revenue in Q4, and going into 2026, we certainly expect continued growth.

We are very, very focused on the commercial side, which is why you saw the big announcements in the last month or so and the new disclosure on commitments for this call. That is definitely our focus. We thought the moment was right to continue to build the cash balance and accelerate the timelines and run towards the growth opportunity. In terms of our focus and our energy and where we are going to spend our time, it is 100% with customers, and the prepayments and commitment strategy is the right one. On launch, I would just add that, you know, as Scott said, the focus is commercial. I mean, we are always going to be opportunistic and open-minded about good capital markets, of course.

You know, given where we are now, we have the flexibility to perhaps pull launch forward as opportunity allows, and we'll be prudent about that, continue to kind of weigh opportunities on the equity side. We also look at attractive things on the debt side. We believe that market will open up a little bit as we progress. It's, you know, our priority is the commercial aspects of the business now, and we'll continue to give good thought. I spend my time thinking about how to prudently deploy that capital that we've now raised on the balance sheet. Great. Thank you. I can just follow up on the 4Q OpEx and CapEx. Is that a good run rate when we start thinking about next year, or can that be a little volatile? It'll be a little volatile.

I think on OpEx, it's pretty darn close because we've been growing so dynamically as the years progressed. We're at a stage now, as Abel and I have said, at close to 1,800 employees and workforce. That OpEx feels pretty good and consistent. On the CapEx side, it's going to ebb and flow. We've been roughly in that close range the last couple of quarters. As we get closer to launch, and clearly 2026 is closer to consistent cadence over every 30-45 days, we'll have some spikes and some lulls when launch payments are due. I think what our plan is on that, though, is, you know, we've told you how we feel in Q4, and we're halfway through that quarter. We have good visibility.

Then we'll come out after the year and give you an outlook on 2026 holistically, both on OpEx and CapEx when we talk again toward the end of February, early March. Hey, great. Thank you very much. Thank you. Our next question comes from the line of Louis Di Palma with William Blair. Please proceed with your question. Bell, Scott, and Andy, congrats on the Verizon and STC definitive contracts. Thanks a lot. Really appreciate it. Do you think that the number that Andy cited, having 25 satellites in orbit, is a good estimate for the number to support beta trials in North America in 2026? Yeah, no, that's right, Louis. You know, each operator thinks about these things a little bit differently, but yeah, we think that that's a fair proxy, plus or minus. Great.

Also, thanks for the color on the $1 billion in contracted revenue commitments. Is that for the three definitive commercial agreements? Are you able to disclose the average duration of the revenue commitments? I think the STC deal was for 10 years. Is it appropriate to assume that the others were of similar duration? We're not going to give up, you know, an average duration, but I would say it does vary. When you look at the contracts we've signed, they've been as long as five, six, ten years, right? Each of the contracts is a little different. The revenue commitment number that we disclosed, it is primarily with the definitive agreements, but there is, you know, some others in other binding agreements as well. That's how to think about it.

It's going to vary, but it's a decent mix of short-term, medium-term, and long-term, and structured well for the company. Thanks, Scott. In the past, you have discussed how your satellite processing tech can, like, recombine the disparate spectrum holdings from AT&T and Verizon to create a cohesive near nationwide footprint for approximately 5 megahertz. How is that technology working in trials? It is working very well. We are, you know, planning to be ready for nationwide service early in the year on an intermittent basis. The level of intermittency will reduce drastically as we keep adding satellites. You are correct. Our satellites have enough flexibility that we were able to take a spectrum from AT&T, a spectrum from Verizon, combine it up, and make a nationwide service or near nationwide service. That will be combined with our 50 megahertz.

Our technology has the ability to pick and choose terrestrial spectrum, combine it with satellite spectrum, and offer that as a package to the end user. Excellent. Your technology can combine the mobile satellite spectrum in addition to the AT&T and Verizon spectrum? Correct. Great. Thanks, Bell, and thanks, Scott and Andy. Thank you. Our next question comes from the line of Greg Pendy with Clear Street. Please proceed with your question. Hey, guys, thanks for taking my question. Just a real quick one. Given the MNO momentum that you've seen with STC and Verizon, I guess your 50 MNOs represent roughly 3 billion subs. If I'm not mistaken, the market or the TAM is probably 5.6 billion. Just can you talk about, given your partnership model, about how many large MNO opportunities are left out there in the market? Thanks. Sure. Hey, Greg.

The interesting thing about how we've approached the market and how we've built the company is that we're very favorable to MNOs. We've structured our technology, our network, our go-to-market strategy, even our cap stack, right? Even the investors, it's very favorable intentionally towards our customer, the operators. As we've built the ecosystem over the last five to ten years, it's really been around who's most aligned, who's most forward-thinking. As we get closer to service, there's less forward-thinking, and it's more that everybody feels that they need this capability. We have this fascinating dynamic where we're not really constrained by historical relationships or, you know, operators that, you know, want to work with us. We find pretty much nearly all the operators in the world, if not all, you know, want to work with us and want to learn more and want to participate.

We're going to continue to harvest that base for good contracts for the company, for the initial markets that we deploy, and then grow that base into the medium tail and the long tail as we grow. I think in terms of big, big MNO opportunities, we've chosen not to do business in China or Russia and other, you know, smaller restricted countries. Other than that, you know, most operators are good candidates and have some level of dialogue with us, and we're going to continue to pursue those opportunities. That's very helpful. Thanks. Thank you. Our next question comes from the line of Chris Quilty with Quilty Space. Please proceed with your question. Thanks, guys. Maybe a more nuanced question than, Louis, about the billion-dollar commitments. Is that all commercial, or is that a combination of commercial and government? That's all commercial. Great.

Maybe to follow on, I mean, you're capitalized now for 100 satellites. Again, I'm assuming that that's all for the commercial side. Obviously, Secretary Department of War or Hegseth speech Friday indicating that contractors are going to have to, you know, commit their own capital to getting things done. Is it fair to assume that most of the programs you're working on will be more in the sort of SpaceX Starshield model of vendor-built and operated government-owned? Yeah, I mean, we have been a big proponent for a long time for the government for the dual-use concept. Basically, we believe that to maintain competitiveness for the United States, the ability to combine commercial usage with government usage is paramount. We basically, our funnel with the government, which is very substantial, it calls for that model.

We do not discard that there will be occasions that we will manufacture certain assets tailor-made to the government, but we are prioritizing the dual-use in every opportunity that we have. Great. Final question just on the launch. When will you give us some visibility on specific launch vehicles, you know, as we approach the launch dates? Obviously, the heavy lift market is extremely constrained. I watched in the last week both, you know, Blue Origin and ULA, delay and delay. SpaceX is really the only, you know, operator out there that is launching on a regular cadence. You know, it is a tight market at the current time. Are you expecting other launch vehicles to become available? We are expecting other launch vehicles to become available. Our current existing and immediate launch campaign, it is using the regular suspects: SpaceX, New Glenn, Israel.

There are new capacities coming up from other operations like NHI that are available to us. The immediate launches are around American launches here in the U.S. Gotcha. Are you still aiming for the same sort of, you know, three to four Bluebird satellites per Falcon 9, I think eight per New Glenn? Are there things that you're doing or can do in order to increase the number of satellites per launch vehicle, either in mass or dispenser design or other tricks? Yeah, no, that is correct. I mean, we basically can go at a double-use speed in terms of number of satellites per launch with the New Glenn platform that we can with the SpaceX platform. Yes, it's at full capacities, eight in the New Glenn and around three in the Falcon 9. Very good. Looking forward to the next one. Thank you.

Thank you. Our next question comes from the line of Scott Searle with ROTH Capital Partners. Please proceed with your question. Hey, good afternoon. Thanks for taking the questions. Maybe just a couple of quick follow-ups and clarifications. Now that you're funded up to 100 satellites and the initial phase of the constellation of 45-60 gets you to commercialization in the key developed markets, should we expect that you're just going to continue to roll through to build up to the 90-100-plus satellites in terms of what I'll call phase two of the constellation as we go into 2027? Or are there some other milestones to be thinking about in terms of customer contracts or otherwise that'll be a precursor to that happening? Also, as part of that, from a spectrum standpoint, you had a very astute buy of the Elgato spectrum in North America.

I know you have access in international markets, but there are some other costs that come along with that. I'm wondering if you could just frame for us kind of how you're conceptually thinking about incremental spectrum costs going forward, particularly in international markets. Thanks. Yeah, I mean, the architecture is basically designed to basically mix and match our own spectrum with operator spectrum and tune all across the low-band and mid-band spectrum. So basically, our cost of incremental spectrum is marginal. It doesn't cost us more on the platform to activate additional spectrum. That would make it very attractive. We can partner with the 700 in certain jurisdictions, and in another one, we are in the mid-band in combination with their own spectrum. Our incremental cost for additional spectrum is marginal to none. As long as 3GPP spectrum and as long as in devices.

Our strategy is always starting broadband services with a spectrum that is available in devices. Great. Just a clarification in terms of your continued launch cadence, if you will, once we get to 60 satellites. Are there milestones that you're thinking about or any sort of color you could add in terms of the continued expansion of the global constellation? Thanks. Sure. Our strategy on satellite deployment has not really changed either, right? You know, our strategy has been, as we have capital access and as we see positive NPV growth, we're going to commit to it. That was the driver behind how we announced and have thought about the 45-60 satellite target that we put in place a year or so ago.

With further access to capital and, frankly, further traction faster and more attractively on the operator side and potentially the government side as well, we've recalibrated those expectations. That is part of what is behind the capital we've raised. Where do we go from here? How do we continue to build those out? We pride ourselves on being very nimble. Remember, we're vertically integrated. We can, you know, put incremental improvements into our constellation as we go, like with the ASIC to come in Q1. We are going to continue to move that way. We are not making multi-year planning decisions. You know, we're pivoting and moving quickly. As we see things move and we see opportunities, we're going to pivot quickly. For us, at this point, we see nothing but opportunity. We see nothing but growth. We are racing towards more satellites fast.

And so that's how we're thinking about it, Scott, is, you know, there's no real hold-up on us for continuing to build. But we're going to evaluate growth opportunities on a rolling basis. And that's what you've seen us do the last couple of years. Great. Thanks so much. Thank you. We have reached the end of the question-and-answer session. I'll now turn the call back over to Scott Wisniewski for closing remarks. Thank you, Operator. We want to thank all of our shareholders and the analysts for joining the call. We look forward to providing more updates soon. Please stay tuned. Thank you. Bye. Ladies and gentlemen, this concludes today's conference, and you may disconnect your lines at this time. We thank you for your participation.