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ASTS AST SpaceMobile

Participants
Scott Wisniewski Chief Strategy Officer
Abel Avellan Chairman and CEO
Tom Severson Chief Financial Officer
Bryan Kraft Deutsche Bank
Chris Quilty Quilty Analytics
Call transcript
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Operator

Good day, ladies and gentlemen, and welcome to the AST SpaceMobile Third Quarter 2021 Business Update call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. The instructions will follow at that time. [Operator Instructions].

conference being this reminder, a call recorded. is As today's to Scott would like Company. over turn to I with call Thank you. Please go ahead.

Scott Wisniewski

and Scott good SpaceMobile. Wisniewski, is Chief Strategy afternoon, Officer of everyone. This AST

which slide of to disclaimer. you refer Safe Harbor me the Let presentation, contains our two

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

For on section not would levels uncertainties, Tom CEO with statements the SpaceMobile Readers statements, and Officer, forward-looking Severson, with Risk filed documents and undue the more over the Commission, may risks update refer Chief please from for call well. to Abel call. to quarter are SEC that that, and the June Abel, XX-Q Exchange put third information about be this cautioned specifically other to of filed these of as you. Chairman as by to forward-looking Financial the Form and time-to-time. well the in and any Form to during introduce AST Factors With Securities and to space obligation as AST reliance Avellan disclaims SX, the Company like discussed I XXXX

Abel Avellan

progress half tech, for the new technology Scott. market opportunity, you, our the a business everywhere quarterly our who update. few for again industrialization, with I market said you minutes those are But their the on to you X.X through world spend Thank am I explain of do on really back happy I at be opportunity the There to at all to have before opportunity take wanted to and mobile are an before, market not population to the we're three, page with approximately roadmap people worldwide, Starting as phones SpaceMobile. billion similar SEA. phones. of over airline connect I huge chasing AST

Turning space-based connect stick that with more to your that they billion you to to regular directly page your the in over network one robust pocket, allow have space. similar cellphone, X, here will you

building Rakuten. alone; leading Vodafone, industry with like and American We we're building this Tower strategic are not this partners

for nearly main services from plans. as existing an on Our by cellular also all use add-on, subscribers service, designed their wireless

in time Blue money to preparing invested we're month be we're I want country time, photos I utilization we're proud on Now the targeting to Blue how in and global and you headquarter, X. our doing and Today, be on with X our production the through X. mid-XXXX. We on Midland. our very move to satellites of our by Rocker production going satellites. our with for technology. on There going to per Company our and technology Rocker present Blue to had to our lot a how of first an progress to ready lot to take a you the detailed of with Starting of for industrialization I'm you facilities our and update also are also through exciting and X take eager want of on both things Rocker of technology the we're

were facility, to our month. up able satellites facility this be of a target to of with able and engineering, placed some testing we we satellites to investment Midland, we persons where located new the month. is that With our Texas, that XX,XXX facility the we And this the space XX, six facility we have all headcount Our headquarter manufacturing in do hit to expect extension per two grow. and done, per for at have produce

the and with capability wanted facility, to turning is satellite we So have Midland, Texas, which extension process on automated satellites under facility page I for use in facility, six second manufacturer. a to produce to per contract, month seven, where new highly our this

an an entered pleased that have we to agreement announce purchase today additional to in XXX,XXX So we're into Midland. equipment facility

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assembly, maintenance final year our and satellites. year. of in nine, page you on and we satellites. next where integration finest our country next Global this run youthful a then will it's and integration, we On for testing of use photo it our BBX, Here, Midland, X, our of integration facilities delivery Currently, will the where testing see assembly, recent do BlueBird

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keeps which for the our right, to with container On means and System take Thermal satellite in a satellite Cape SDM Falcon tested into the And is SpaceX Canaveral left, the Midland, it Mechanical, launch the on the satellite being bottom SDM, on basically X. volume verified. bottom will

pro lot and learned we're a there of prepared coming of parallel together lot lessons nicely our been to -- cycles. So for pieces in production are and have

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on-hand, or The picture now to and top on purchase assembly by components manufactured Importantly, line we several page have old our all us. the components show commonly areas. micro either staging the

assembled patent This we'll costs by control significant is vertically integrated, a claims, patent able competitive very, our as also control we XXXX ourselves. very are all -- our with by significant but completely We with components and the advantage, assemble by to us. nearly being technology technology

XX, page WalkerX to Blue micro-testing. Moving

prerequisite Cape, extremely and verify the So a to connect so will testing is It's ground to to to ability our that of on the important, directly handset. us automation facilities WalkerX launch for have be Blue able BlueWalker Canaveral. X after it we that launching will passed. from a be followed would X satellite -- Falcon on Tesla. assumption followed would We be launch, be at And the then it on

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with deployment the exercised after integration testing by cameras is be Lastly, will onboard, the and network our we operators. doing network recorded

will speed. and of have It orbital we that already less XX,XXX XX verified ability it a the ground, to Africa XX that is and of timing to in data, BlueWalker to kilometers. also months. we ever. than the largest for high-speed We size deploy XXX be to connect speeds in of ability space connectivity everything handset, service on The the square-foot for degrees. from deployed speed interconnect over XG XXX a It's and The earth XG on phased at of finalization network to a test array antennas per to will tested the the X. directly U.S., one period to voice, X circles BlueWalker into to a be and transmit XG, will theirs, thing located approximate this on demonstrate of XG believe an first to the satellite minutes. and BlueWalker hours the phased X moves broadband be the Japan, calibrate interconnect array. be and only of The but array, then is the phased miles Europe, perform size, in that operators basically to Not the X inclination of our of connectivity ability to the will it our orbit directly text, ground, array R&D, our

window. these window. have us We is will SpaceX We're month We We will launch -- more on to XXXX if right the had option current a X, determined with provider from to a a launch for SpaceX April pick little exercise revoke. It costs. likely going are Xst, the revoke to the plan alternate within launch, of day we as not the and we we run through SpaceX that the yet XXXX XXXX. launch original window which launch to we have remove see BlueWalker If December and March of an using our launch target notice give determined by country

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genius before completed to make to partner get we let's progress significant about have WalkerX talk with invested point. that on test launch who we for will have program we our want We WalkerX to our made effort satellites. we and team fully to go launch and Blue sure the our had this Blue Then, to site. And

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our Before I approach those about talk to Scott, to I especially difference space. other for I any that between the want new to business. remind and approach want basically everybody, pass SpaceMobile, to to the are it

satellites. the first The and one way we launch, is use build,

regular for if, connect and We handset large cell that is to phones. are directly the satellite that -- to opportunity. Connectivity a only very system

to As of connectivity. that a that their do it's half billion another have and have Earth's phone people the XX% connectivity. whatsoever. population the quarter before, Earth's a approximately In any the moving people five billion is there world do is into I XX% surface, broadband surface of cellular explained not not There access that have of access that don't on of

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about want packages little that with we're more of So conjunction I we differentiations will in in some product the it expecting our -- and talk network operators. to a this, to pass of Scott. He partners detail and bit to to the offer our

Scott Wisniewski

Starting few Thank Great. I'm Abel. cover everyone you, to on really today. excited topics with XX, Page a

applicable of is jointly We're activity, First, phones And hundreds to going it's have subscribers, is are related are very addressable AST market, market. but repeating, X in importantly, tech in leading only public network as and mobile industry year, giants. billion These in steady the you, SpaceMobile we're over we we a highlighted, LEO mobile past have competing the market and X trillion and investment them. like with with with and over watched with the a pure-play that of millions broadband. Abel space the in playing large to many not increase backdrop, of this operators worth solution a who investors attention, for

page we how With designed million satellite. models a to that operations available on our see the have of mix, are friction with up moment We country for are a business to a to XX. plan on Recall, monetize provide message, be options users a production make you simple the Based have share spend network this business customers subscribers discussing under mobile service. The fund services share of of some who basis, our mobile limit model. lot of will a sign on text revenue how and to subscriber phase first packages revenue let's network in our adoption. operators our their on have framework go-to-market we in hand approximately flexibility to the and valuable designed to allow only service but also cash on and to with Page highly on subscribers, a of operators, the business will we're not $XXX their we

when plan. receive subscriber's When may our lost like in packages very stream customer illustrated This have this may power corporate that's precisely immediate will moment your of abroad, of when revenue it's our the low see they their And on the option from And and and when something to most, have marketing. create also add-on that great basis. adoption monthly subscribers to connectivity friction linked our on data's phone. at drive a interest also a experienced service, need a or it's First, would monthly see add-on markets. it would very process current their you Over page. expect you is have from side to that time, service and operator a lot way recurring as on users an useful phone to a payment, travel acquisition text they've some coverage, you we right a want the this of of as efficient for out many can a enterprise

We Lastly, disasters given areas of standalone connectivity of coverage SpaceMobile when as but we can lot be natural real overwhelmed. think cases use the other sense, there that services networks opportunities, see where particularly the the emergency there's today. built around these a plan no a brown our in technology, including biggest are cellular can are flexibility network, during makes

before Now, updates. XX, other handful you a hand Page on I to off it to of take through I business want Tom,

additional are side, in happy to three this On including Somcable in the and we the MTN quarter, announce Somaliland. commercial signing YTL of Group, Malaysia, MOUs

of a position operators including infrastructure a For over XXX with the connection our those of of XX of network you air mobile million. we're is configure focused with use With million network to other country network. who nearly top Group mobile don't BlueWalker population partners, a XXX X, know, one many with grid Nigeria, subscribers, globally, commercial X operator in their on MTN cusp our plan for to Number

center, satellite a updates of network a and for our took few We've an and offices has site future Abel you the side, On home further be square center. organizational engineering operation This in signed expand in also feet will on technology building Midland, through to our Maryland. center lease the XX,XXX what operations

as XX quarter. people, scaled network to total the to SpaceMobile our in operations, as grow, employees well other new XXX includes This and providers. of employees, over continued XXX plans service production terms engineering employee as hiring full-time the and added third-party brings full-time sport people. and team contractors third we full-time In This AST

This XXXX. technology around to Lastly, patent remain as and tech. active increasing our our advantage, safeguarding represents over patent mentioned, pending mode competitive our claims we Abel the

my pleasure hand to Tom. Now with that, it is to off it

Tom Severson

Thank you, Scott.

Third like Business welcome to First, Update everyone call. to I would also our Quarter

$XXX.X in raised of currently new is the -transaction Tower, pre Vodafone, As including from million this a investors, the quarter and and Company with investors American Cisneros. we became million April Rakuten, Company and cash We debt-free. a public and ended Xth reminder, $XXX on year our

the for Now financial to the turn to third highlights quarter.

may recall, quarter-over-quarter it better and As you trends compare when on provide current results to future a sequential baseline a us basis, we for our discuss operating trends. allows

prior million, decreased which million primarily a third and decrease expenses operating prior to to cash million, This quarter. G&A, was decreased $X.X R&D compared expenses, $X.X $XX.X quarter. to to due compared the During quarter, including R&D, engineering the services, the decrease of our

primarily with technology our milestones to costs will achieved. as Our R&D partners, are fluctuate quarter-to-quarter and agreements relate third-party

to to average future the through on range, our in million quarterly R&D end $XX expect We $X of costs be XXXX. the

costs remained During to million G&A $X.X the flat our quarter. the quarter, and were compared third relatively prior

continue headcount We AIT facilities by at R&D our grew preparation quarterly we cost in to for the full-time of quarter, expect our from prepare remain Texas. The we XXX the of XXX QX, increase end Midland, XXXX and team production the of to as to consultants testing engineering during will G&A phase our full-scale in we manufacturing we and by and quarterly for of grow end assembly costs increased to QX, that integration satellites. our services $X.X expect Engineering full-scale XXX range approximately end to this as manufacturing million expect of third and and completion end in the the at of the up the our through ramp engineering XXXX. this our employees see and at near of the

the And report comprised of in nonrecurring facility equipment $XX.X through in build-out we're is end AIT componentry investments the our Texas quarter. X Midland, terms of incur our A to X $XX.X to $XX of to to we date, additional is BlueWalker of to construction cost we've project of completion. significant development, complete. satellite that launch and the the the in costs. Total lesser bring CapEx, In and million satellite happy to were to total invested our largely property $XX third portion a the an of and expect engineering of the million extent, BlueWalker million

production-ready utilizing the and Midland, clean satellite. with assemble, our we're BlueWalker test facility Texas to XX,XXX integrate, currently Now, X square-feet room, X ISO of

and facility few to assembly existing an a just purchase an into an XX,XXX from entered to and manufacturing new production to half footprint in purchase additional have this we will production additional This integration first square we October, will the in million expect $X-X QX. the plan complete Midland. miles an that we feet has of in our feet space We square facility provide satellites thousand the estimate to the agreement to month, million be Midland, ideal located production clean We additional in ready, will to is the XXX a in we completed, to six and room we Once facility addition, capacity. In of The new of build $X goal complete accommodate during satellites manufacturing mid-XX'. our believe our facilities out ISO ISO purchase sufficient facility X support on close clean by room XXXX. invest facility and of total of get will these per Texas.

we up for to production X ramp procurement our Finally, the continue process BlueBird satellites.

progress satellites in we build $XX.X currently reaffirm in procurement our in $XX and an As per launch cost our million $XX XX million per range to the the with the the to expected estimates process, average full satellites, be $XX satellite to XXX cost average of and satellite, constellation first to we is cost the per for satellite. range

we of with amazing you. our Operator, and the quarters, our Thank And next deliver remain we open that, Company the full-scale questions. our ability for team to As in confident to technology. manufacturing execute few call over let's the the prepare ever plan

Operator

we [Operator Q&A stand Instructions] roster. you. compile while by Please Thank the

Deutsche of the open. from Bryan is Kraft line your line Bank comes question from first Your now

Bryan Kraft

the for Bryan, for thanks Hey has question. been guys, this taking on

Just for you got you the quarter follow-up. that Thanks. anything on a about how provide build-out just curious wondering And then your this a I've little X, changed if BlueWalker launch? for timing and there's And that expectations. around and the process bit to relative development think more could if color eventual construction

Abel Avellan

How per progressing you? Bryan. Hey, basically We expectations. as are

of assembling, We and are BlueWalker final stage in X. the building, testing

all parts in had have on the We revoke to We December. hand. an ability launch

have made do the We not that. we determination if will

very with the if to time testing however, the months confident a option, the we But to amount be the or think deployment deployment. at we satellite. point particularly agreement with time. very working spend And However, hard an within few mechanism coordination SpaceX the had date, to significant have more SpaceX. original this exercise of contingent satellite, We're that or we satellite, will is to be on that we're to very, on and a for do

performing launch, the passed have test, in passed modules, That be is, -- been if don't satisfaction full However, handset, thermal? would we have be which it will know -- followed we we will which micros. that are we'll connect go if your We Do as they directly not will all I have up we speak. confident tests. are satellite with to main we want made yet to

Bryan Kraft

receive bit need give it. do and around place you when results more commercial just them, Got you And then us satellites then finalizing test and a tests around and how timing the will and detail guys for those receiving testing. when Can little Thanks. between the then those much take cushion them? we'll the launching

Abel Avellan

to general? you you Are talking referring X in BlueWalker or

Bryan Kraft

tests, saying building tweak certain updates when the I'm that the from for that. I get for and satellites, the assume test you commercial BlueWalker And build when to BlueWalker the you're need in there's expect can X test results results time from a then, on the amount Well, that? X to in of we to

Abel Avellan

weeks thing will the the will verify that that to satellite referring we launch. within is the the first you're deploys, will launch, deployment, we if happen happen when Well, Sure. basically of so

that after also approximate network that but satellite, process our of are of spacecraft. of we're kind only We when integrating that's have the Europe, be functionality After we and but testing to the network a Africa, very operators process the at time testing the X and the But to we a our where architecture determine launch very and And we the cameras. recorded that take we with will we with satellite in we the Americas, to will initiate their capability deployment, not do networks, fine, follow will Japan, for quick satellite integrate deployment, point, be and our test appropriate start campaign months. that the operators. in that, the that that is the

Bryan Kraft

Thanks, guys.

Operator

line the Chris from comes question next of Quilty from Quilty Analytics. Your

Your open. line is now

Chris Quilty

think follow-up using the Hi, testing I'm that ASIC, which believe into BlueWalker Abel. eventually development schedule. assuming, is testing and FPGAs fed I on wanted test come, of that of the the the would I I to gets end X data is at an X-month can then, that? be for volume, And I issues, how your it given ASICs take of expectations guess, in your sure manufacturing verify what you current if chain? are how would or chain long to supply you would and begin assured and campaign, supply those

Abel Avellan

Yes. Hey Chris.

So, the incorporate we That us X will contain satellites. of FPGA. based of BlueWalker operation on our allowed to into the subsequent learning's

initial are also the be and first FPGA. FPGA Our with programs, parallel run will Even based though satellites to subsequent the program, ASIC going two on an in program. that

We the be advanced the the we're with able is Obviously, reason satellites. you do to something even FPGA however, ASIC, And flying. the it on reprogram the dependent on on ASIC. that not for the initial technology to cannot satellites basically are very are when

the we on of are ASIC. our of that architecture taking But are the The will particular FP on time also initially we component cost the or that with based power. obviously very we operating architecture similar to the using will gain using X. FPGA BlueWalker we're architecture a the So ASIC be be and

Chris Quilty

curve in cost to And addition would why presumably satellites. the learning that Got it. satellites latter more, for early for account

Abel Avellan

Absolutely.

the will in equivalent. functionality business costs but more be satellite So satellite you than see part the plan, of by initial our latter the

Chris Quilty

facility, the the into equipment specialized equipment? your chain or primarily or need the there that the with setup ability standardized slow would issues tools machine of new any sticking bring are and for you are you that supply with facility dealing operation it to And might

Abel Avellan

standardized Primarily equipment.

the line. a We are production automating lot

is first assembly experimental well, automated. satellite. fully-automated. see of since our way with subsequent you the but steps testing of and So step, BlueWalker are X, fully-automated all main manual, assembly The And the the are satellites very not every

the in We closed those the in just of we facility, on process process are equipment. we're -- basically sourcing the

BBX with be see of the but able problem BlueWalker I hand the as to chain, long at process first we launching don't the will have for already next the for we're major -- two, said satellites. the quarter in those purchasing the report regarding lead all or parts X, on that. And this we point items of before, any and and We supply part production on

Chris Quilty

I And Great. population to And confirm sense last new to think you just a guess hold of licenses for that's and up MOUs covered. I I is time mentioned think as of Scott, population well that, also by what three I covered you how many now gave sort you wanted XX? and as

Scott Wisniewski

million way but work in MNOs is number continue pop now Adding to these by with, agreements have M&A of with and that approvals, continue regulatory billion. And that's approvals update, that but the we $XXX when area. globally X $X.X terms general depends --giving as covered. Sure, it's fully approved we're not grow exact number as number, the we new does of subscriber to our ounce with

Chris Quilty

you Thank MNOs? are you. of out process new activity what or potential And of number of How what that you look like terms to actual are those or pipeline growing to like? sort to doing operation the you have to and the staff reach further you Great. people wait until in does does look the path? do that How reaching do get and demonstration internally aggressively out do you customers down

Abel Avellan

Yes. XX% have. agreements we operational of is subscribers MOUs market, through that X.X of million the represent addressed which Great. approximately

it's service another. of So engineers a other -- one to a numbers differentiate the from as something has greatly to is mostly This MNO not people one satellites, MNO get that that we it, continue battalion building it, it's are our the in sales country increase of we a need when MNOs. scientists to and need MNO

it in partner when to with with friction packages. get committed establish approached packages it is low important. text our used you that is them about test the of service integrated the service had basically services that through The end-users. the they and to when we will the cautions be of and appropriate to message, to way the each We believe So in people advertise of regions, the service very ones our part service, the to promote access make get our out our over service them something that to MNO, to getting for last a

why more that's in a cycle. of in we're early life than part taken significant on believe very quality rather on market concentrating our So that the quantity. we We have

Chris Quilty

the update. Thanks Great. for

Operator

call There at Instructions]. I further [Operator no turn the over now would like are the this to time. Company. to questions

Abel Avellan

Thank Operator. you,

beyond cellular everyone you use I with Bye. to what Our designed week. want is space-based joining hope broadband phone of cellular today, ever possible. for and thank pocket the today, have great a your Company extending building network the coverage for in a rest was thought

Operator

This call. concludes today's conference

disconnect. all may You