Q4 2024 Earnings Summary
- AST SpaceMobile is accelerating satellite manufacturing, expecting to produce 6 satellites per month in the second half of 2025 and aiming to launch up to 60 Block 2 BlueBird satellites during 2025 and 2026, which supports their plan to achieve continuous service in the U.S., Europe, Japan, and selected markets.
- With nearly $1 billion in cash, AST SpaceMobile is well-positioned to reach free cash flow positive status with around 25 satellites, leveraging a combination of consumer communication services and government applications for revenue generation.
- AST SpaceMobile secured a $43 million revenue contract with the U.S. Space Development Agency, expected to be recognized over the next 12 months, validating their technology and providing significant near-term revenue.
- Uncertainty about long-term funding needs beyond the next 12 months may necessitate additional capital raises, potentially diluting existing shareholders.
- Rapidly increasing capital expenditures, from $26.5 million in Q3 2024 to $86 million in Q4 2024, with expected CapEx of $150 million to $175 million in Q1 2025, indicate heavy cash burn that may not be sustainable without further financing.
- Key strategic initiatives such as the Ligado deal are subject to uncertainty due to bankruptcy proceedings, which may impact the company's strategic plans and timelines.
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue | Increase to $1.918 million in Q4 2024 from little/no revenue in prior periods | Total Revenue was recognized for the first time in Q4 2024 after previous periods reported little or no revenue, reflecting the completion of performance obligations under a U.S. Government contract and marking a significant operational milestone. |
SG&A Expenses | Increased by 51% (from $10.528M in Q4 2023 to $15.889M in Q4 2024) | SG&A expenses surged due to higher stock-based compensation and greater professional service fees, indicating increased investment in administrative support compared to the previous year. |
R&D Expenses | Fell roughly 50% (from $10.765M in Q4 2023 to $5.348M in Q4 2024) | The decline in R&D expenses reflects a reduction in spending as earlier design and development programs are winding down, signaling a transition phase in the company’s development efforts. |
D&A | Decreased by 57% (from $19.592M in Q4 2023 to $8.460M in Q4 2024) | The substantial drop in D&A is attributed to the full depreciation of key assets (e.g., the BW3 test satellite), reducing ongoing depreciation charges compared to the prior period. |
Net Income | Worsened about 12% (from –$31.926M in Q4 2023 to –$35.858M in Q4 2024) | Despite the recognition of revenue, increased operating costs—especially higher SG&A and other expenses—outpaced the revenue gain, leading to a deeper net loss than in the previous period. |
Basic EPS | Improved by 51% in loss per share (from –$0.37 in Q4 2023 to –$0.18 in Q4 2024) | Basic EPS showed a significant improvement likely driven by changes in share count dynamics and per-share calculations, despite the underlying increase in net loss, reflecting a shift in the dilution and earnings allocation structure. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Capital Expenditures (CapEx) | Q1 2025 | Approximately $100 million | $150 million to $175 million | raised |
Adjusted Cash Operating Expenses | Q1 2025 | $30 million to $35 million | $40 million to $45 million | raised |
Cost Per Satellite | Q1 2025 | $19 million to $21 million | $19 million to $21 million | no change |
Satellite Production | Q1 2025 | no prior guidance | 6 satellites per month in the second half of 2025 | no prior guidance |
Free Cash Flow Positive Target | Q1 2025 | no prior guidance | 25 satellites | no prior guidance |
Launch Cadence | Q1 2025 | no prior guidance | 1 launch every 45 days later in 2025 | no prior guidance |
Cash Position | Q1 2025 | no prior guidance | $567.5 million | no prior guidance |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Satellite manufacturing and constellation expansion | In Q1 2024, the focus was on the deployment of 5 Block 1 satellites and the initial design and manufacturing plans for Block 2 satellites. In Q3 2024, the company discussed scaling production capabilities in Midland, targeting 60 satellites over 2025/2026 with detailed plans on production and leveraging existing technology for both Block 1 and Block 2 satellites. | In Q4 2024, the discussion intensified with the accelerated manufacturing of 40 Block 2 BlueBird satellites, work on long lead items for 53 satellites, expanded facilities (including a 194,000 square-foot facility in Midland plus additional sites in Florida and Barcelona), and plans to launch up to 60 Block 2 BlueBird satellites during 2025/2026. | Persistent expansion with increased production and facility investments. Sentiment has shifted toward a more aggressive and accelerated manufacturing approach while maintaining consistency with previous strategic targets. |
Technological advancements and ASIC chip development | Q1 2024 mentioned the tape‐out process and anticipated a 10x processing capacity increase using the new ASIC chip, while retaining FPGA use as an interim measure. Q3 2024 highlighted the validation of the proprietary AST5000 ASIC chip, its 10x performance improvement, and noted delays/timeline adjustments as it progressed through tape-out and testing phases. | Q4 2024 reported completion of the ASIC chip’s bring‐up and initial validation, confirmed its 10 gigahertz processing bandwidth per satellite, and announced the transition from FPGA to ASIC – resulting in cost reductions in R&D and improved scalability for Block 2 BlueBird satellites. | Continued technological improvements with a shift from interim FPGA use toward a full ASIC integration. The sentiment has grown more positive and confident with reduced delays and lower R&D costs. |
Government contracts and commercial partnerships | In Q1 2024, the company signed its first definitive agreement with AT&T (effective through 2030) and established its first government contract with modest revenue, with ongoing discussions for future government deals. In Q3 2024, discussions expanded with selection by SDA under the HALO program, additional U.S. government service contracts, and strategic commercial partnerships with AT&T, Verizon, and market rollouts supporting 2.8 billion subscribers. | In Q4 2024, AST SpaceMobile secured a $43 million revenue contract with the U.S. Space Development Agency (its fifth government deal overall) along with a series of commercial advances – including successful demonstrations with AT&T and Verizon and a major long-term commercial agreement with Vodafone through 2034. | Consistent and expanding. The company has further solidified its government and commercial relationships, moving from initial agreements to robust, multi-partner contracts that suggest strong near‐term revenue potential and future growth. |
Financial health issues | Q1 2024 focused on moderate capital expenditures of $26.7 million, a cash position of $212.4 million, and early-stage funding arrangements with an available credit facility, while cautioning about future expenditure timing. Q3 2024 reported rising CapEx (e.g., $26.5 million for the quarter) and improved liquidity with a cash balance of $518.9 million, though acknowledging potential dilution risks from public warrant exercises. | In Q4 2024, the company highlighted an increase in expected CapEx (with Q1 2025 projected between $150 million and $175 million) alongside a strong liquidity position (ending Q4 with $567.5 million in cash and nearly $1 billion pro forma with the $460 million convertible note), and measures (like capped call transactions) to minimize dilution risks. | Financial position is strengthening despite rising expenditures. Continuous funding improvements and strategic financing have minimized dilution risks, indicating prudent management and a cautiously optimistic tone compared to earlier periods. |
Regulatory challenges for beta service launches | In Q1 2024, regulatory challenges (especially FCC approvals) were mentioned as manageable given long-term engagement with regulators and supportive in-country partners. Q3 2024 detailed the filing for Special Temporary Authority (STA) with the FCC and ongoing filings for both space and ground components, showing active regulatory engagement. | Q4 2024 showed further progress, with STA approval granted by the FCC and movement toward finalizing a commercial modification of the existing license, greatly reducing the emphasis on regulatory challenges. | Diminishing regulatory concerns. The topic remains consistent, but with significant progress made in obtaining necessary approvals, sentiment has shifted from cautious regulatory navigation to near resolution of these hurdles. |
Emerging risks | Q1 and Q3 2024 earnings calls did not mention any emerging risks related to the Ligado deal or associated strategic partnership uncertainties. | In Q4 2024, emerging risks related to the Ligado deal were briefly mentioned; the deal is “tracking nicely,” although there is a note that bankruptcy proceedings must run their course. | Newly introduced. Previously absent, the Ligado deal risk is now emerging as a consideration, though the tone remains cautiously optimistic as progress is being made despite the inherent uncertainties. |
Cost control and operating expense management pressures | Q1 2024 reported non-GAAP adjusted cash operating expenses of $31.1 million (down from Q4 2023) with a focus on modular cost management and targeting $30 million per quarter, citing reductions in R&D, engineering, and G&A expenses. Q3 2024 noted an increase in expenses to $45.3 million (partly due to ASIC-related costs and one-time launch expenses) while projecting a lower run rate ($30–35 million) for Q4. | In Q4 2024, adjusted cash operating expenses were reported at $40.8 million – a decrease from Q3’s higher figure – driven primarily by a $9.3 million reduction in R&D expenses, even as engineering and G&A costs slightly increased. Full-year expenses also showed a modest improvement compared to 2023. | Continued cost management focus with improving efficiency. While operating expenses remain under pressure due to accelerated investments, the trend shows effective cost control through reductions in R&D and planned expense optimization, reflecting a gradual shift towards better margin management. |
Market expansion in key geographies | In Q1 2024, initial satellite deployments were noted to cover broad regions (U.S., Europe, Japan, and more) but without continuous service due to the limited constellation; early agreements were in place for future global service. Q3 2024 detailed deployment of the first 5 BlueBird satellites, groundwork for regional gateways in the U.S., Europe (with Vodafone), and Japan (with Rakuten) to support continuous coverage. | In Q4 2024, market expansion was emphasized with concrete milestones such as FCC-approved STA for U.S.-based beta testing with AT&T/Verizon, finalized long-term commercial agreements with Vodafone for Europe, and partnerships with Rakuten in Japan – all supporting the ambition for continuous service in these key geographies. | Increasing clarity and execution in market expansion. While the geographic ambition has been consistent, the current period shows more definitive steps and regulatory/commercial breakthroughs that strengthen continuous coverage goals, signaling a more advanced stage of deployment and partnership integration. |
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Funding and Cash Flow
Q: How much funding is needed to reach cash flow positive?
A: We're well-positioned to reach free cash flow positive with around 25 satellites. With a pro forma balance sheet of about $1 billion, we're funded for the next 12 months and can proceed with our plans without changing our cost per satellite, which remains at $19 million to $21 million. We're also pursuing $500 million in quasi-government funding as an attractive capital source. -
Satellite Launch Schedule
Q: What's the plan for satellite launches and production?
A: We have secured launches for 60 satellites and are currently manufacturing 40 satellites, with long-lead items for 53. Our production capacity is being upgraded to build up to 6 satellites per month, aiming for continuous service with 45 to 60 satellites. We expect to start increasing our launch cadence to approximately one launch every 45 days later in the year. -
$43 Million STA Contract
Q: Can you provide details on the $43 million STA contract?
A: The contract is for non-communications applications consistent with our operational frequencies. We expect to earn the $43 million over the next 12 months from the first 5 commercial satellites and the initial Block 2 satellites. Revenue recognition will be generally linear over this period, with a slight lag in the next couple of months. -
European Expansion with Vodafone
Q: How does the Vodafone joint venture expand your market?
A: Our partnership with Vodafone increases our coverage from 10 countries to about 30, significantly expanding our operator potential in Europe. This move boosts our addressable market to approximately 600 million subscribers across the continent. -
Competition with T-Mobile and Starlink
Q: How does your technology differ from competitors like T-Mobile and Starlink?
A: Unlike their intermittent messaging services, our system offers voice, text, data, internet, and video directly to existing mobile phones without any modifications. We utilize 10 gigahertz of spectrum per satellite to deliver up to 120 megabits per second data rates, enabling full-fledged connectivity for consumers. -
Chipset Requirements
Q: Do your satellites require new chipsets in phones?
A: No, our system is designed to work with the phones users already have, without any modifications. Our ASIC platform is used solely on the satellites, not within handsets. -
Operating Expenses and Cost Growth
Q: How will operating expenses progress this year?
A: Operating expenses will align mostly with Q4 levels. As we transition from R&D to full production, our ASIC costs will decrease. We're investing in manufacturing facilities in Midland, Texas; Barcelona; and soon in Southern Florida to scale up production to 6 satellites per month in the second half of the year. -
Service vs. Hardware Contracts
Q: How do you structure contracts like the STA deal?
A: We focus on service contracts rather than hardware sales, offering firm fixed-price agreements. Revenue is recognized based on milestones during technology evaluations. Our dual-use satellites position us well to meet various mission needs while ensuring a return on our network investment. -
Ligado Deal Status
Q: What's the status of the Ligado deal closing?
A: The Ligado deal is progressing well and remains within the time frame set by the parties involved. We're navigating the necessary bankruptcy proceedings and view this as a strategic initiative for our company.