AST SpaceMobile, Inc. (ASTS) Earnings

Management highlights

### Company Transition & Strategic Positioning - AST SpaceMobile is transitioning from R&D to full-scale commercial deployment, building the first global space-based cellular broadband network that works directly with unmodified consumer smartphones. - Holds an extensive IP portfolio of approximately 3,900 patents and patent-pending claims, and maintains a fortress balance sheet with $3.5 billion in cash, cash equivalents and restricted cash as of Q1 end 2026. ### Manufacturing & Technology Progress - Operates over 0.5 million square feet of global manufacturing space, with a 95% vertically integrated production strategy that is a long-term competitive advantage. - BlueBird satellites 11 through 33 are in advanced assembly, with phased arrays completed through BlueBird 28, on track to reach a production cadence of 6 fully assembled satellites per month. - Achieved a peak download speed of 98.9 Mbps directly to an unmodified off-the-shelf smartphone over international waters using existing in-orbit Block 1 satellites, a new technical milestone for the industry. - Custom AST 5000 ASIC chips are complete and integrated into the production line, enabling 10 gigahertz of processing bandwidth per satellite, enough to nearly double current peak speeds. AI edge computing and AI spectrum management features will be added to next-generation satellites entering production by end of 2026 to dynamically allocate spectrum and power, increasing network efficiency. ### Launch & Ground Network Progress - Follows a multi-provider launch strategy with contracts with Blue Origin, SpaceX, and other heavy launch providers, targeting approximately 45 BlueBird satellites in orbit by the end of 2026. - The next launch is scheduled for mid-June 2026 on Blue Origin's New Glen, carrying BlueBird satellites 8, 9 and 10. - Active ground network integration is ongoing across 24 countries covering a combined population of 2.9 billion people, with hundreds of fixed cells deployed per week to prepare for commercial service activation. Achieved uninterrupted satellite-to-satellite connectivity handoff, a key operational milestone. ### Commercial & Regulatory Progress - Has nearly 60 global Mobile Network Operator (MNO) partners covering over 3 billion subscribers, including major partners AT&T, Verizon, Vodafone, Rakuten, STC, Bell Canada and Telus. Secured $1.2 billion in total contracted revenue commitments to date. - New partner additions in Q1 2026 include TELUS (Canada, which also made an equity investment) and Axiom Telecom (pan-African, covering 11 countries). Management expects additional MNO agreements to accelerate through 2026. - Received FCC commercial operating authorization for the BlueBird constellation in the U.S. on premium low-band spectrum, validating the company's technology and ability to coexist with existing terrestrial networks. Holds spectrum rights to 105 MHz of unused low/mid-band spectrum globally, providing significant long-term capacity for growth. ### U.S. Government Business Progress - Secured 3 new U.S. government awards via prime contractors in Q1 2026 for communications and non-communications defense capabilities, including work related to the Golden Dome missile defense program. - Established a dedicated wholly owned government and defense subsidiary to expand organizational capabilities and better serve U.S. government customers. The company sees long-term potential for billions in annual aggregate revenue from government programs of record over the medium term.

Guidance

- Full year 2026 revenue guidance is maintained at $150 million to $200 million, with approximately half of the 2026 revenue opportunity already contracted. Revenue is expected to grow sequentially quarter-over-quarter through 2026, with upside from new unannounced government awards. - 2027 revenue is expected to approach $1 billion, driven by scaled commercial cellular broadband service in major global markets and expanded U.S. government contract revenue. - Q2 2026 adjusted operating expenses (excluding adjusted cost of revenues) are guided to a range of $85 million to $95 million, reflecting expanded workforce and growth-related costs. - Q2 2026 capital expenditures are guided to a range of $575 million to $650 million, primarily due to the shift of previously planned Q1 launch contract payments into Q2; excluding this timing shift, capital expenditure levels would have remained consistent with Q1. - The average capital cost per Block 2 BlueBird satellite (excluding early prototype validation satellites) is maintained at a range of $21 million to $23 million, including direct materials and launch costs. - Management maintains the target of launching approximately 45 BlueBird satellites into orbit by the end of 2026, and confirms sufficient contracted launch capacity to hit this target. - No plans for additional convertible debt financing in 2026.

Segment performance

AST Space Mobile reported total Q1 2026 revenue of $14.7 million, split between two core operating segments: 1) Commercial Segment: Revenue is generated from commercial gateway hardware deliveries, MNO partner consulting and integration services, and future commercial SpaceMobile service revenue. This segment contributed revenue from 4 distinct customers in Q1 2026, accounting for a majority of the $14.7 million total quarterly revenue. 2) U.S. Government Segment: Revenue is generated from contract milestones for secure communications, non-communications on-orbit testing, and defense capability development. This segment contributed revenue across 5 existing contracts in Q1 2026, with the remaining share of the total $14.7 million quarterly revenue. No formal revenue contribution percentage breakdown was provided for the two segments in the quarter. Non-GAAP adjusted operating expenses for Q1 2026 totaled $91.2 million, a $4.5 million decrease from Q4 2025. Capital expenditures for Q1 2026 were $257 million, below the prior guidance range of $350 million to $425 million due to delayed timing of launch contract payments.

Risks & headwinds

- Satellite launch schedule and production can be impacted by launch vehicle anomalies, such as the recent Blue Bird 7 loss due to a Blue Origin New Glen upper stage anomaly. Launch investigations can delay return-to-flight timelines, and any prolonged delays to Blue Origin launches could impact the 2026 launch target, though the company's multi-provider launch strategy mitigates this risk to some degree. - Satellite production costs are subject to fluctuations from dynamic geopolitical factors that could increase per-unit costs above current guidance. - Achievement of 2026 revenue guidance is contingent on multiple key milestones, including successful launch and deployment of Block 2 BlueBird satellites, completion of contracted U.S. government milestones, delivery of critical gateway equipment to MNO partners, and successful activation of initial commercial service. Any delays to these milestones could impact full-year revenue results. - Quarterly revenue is inherently variable due to the timing of contract signings, equipment deliveries, and milestone achievements, so quarterly results may not align with full-year expectations.

Analyst Q&A

• Q: What was the issue with Bluebird 7, what mitigates repeat risk, and what is the status of integration with other heavy launch providers like ULA? /

  A: Bluebird 7 was lost due to an upper stage anomaly on Blue Origin's New Glen, which is not uncommon for new launch programs. AST is working closely with Blue Origin on the investigation and is optimistic Blue Origin will return to launch soon. AST has a launch-agnostic strategy with multiple contracted providers, and is progressing integration with ULA and other providers for future capacity. No publicly disclosed timeline for the FAA investigation conclusion has been shared.

• Q: What performance differences are expected between FPGA (FM1) and ASIC-enabled Bluebird satellites, and what is the role of AI in improving performance? /

  A: Current in-orbit FPGA satellites have already achieved 98.9 Mbps peak speeds; upcoming Bluebird 8, 9 and 10 (also FPGA-based) are expected to nearly double that to ~200 Mbps without requiring ASIC or AI. The new ASIC increases total manageable spectrum per satellite from 1 gigahertz to 10 gigahertz, enabling more simultaneous connections. AI spectrum management dynamically allocates that spectrum and power based on predicted user location and traffic, greatly increasing overall network efficiency.

• Q: What is AST's view on Amazon's acquisition of Globalstar, and does it change the competitive landscape? /

  A: AST views Globalstar's current capability as limited to emergency SOS service only, since it only has a very small amount of spectrum, not enough to deliver full broadband. AST's proposition combines MNO partner spectrum with its own 50 to 100 MHz of L-band spectrum, enabling full broadband delivery that is fundamentally different. AST does not expect the acquisition to meaningfully change the competitive landscape for the foreseeable future.

• Q: Is AST's contracted launch capacity sufficient to hit the 45-satellite 2026 target, and how is the launch stacking cadence ramping? /

  A: AST confirms it has sufficient contracted launch capacity from a mix of Blue Origin and SpaceX launches to reach the 45-satellite target by end of 2026. While Blue Origin's anomaly has delayed one launch, AST is optimistic for their quick return to flight and has flexibility across its multi-provider portfolio to adjust. The next New Glen launch will carry 4 satellites to ramp up stacking capability gradually, before moving to the maximum 8-satellite capacity in later launches. ULA is part of AST's long-term multi-provider strategy, with no near-term launches planned in 2026.