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AST SpaceMobile Advances Technology While Reporting No Q1 Revenue

By Doug Messier
Parabolic Arc
May 19, 2023
Filed under , ,
AST SpaceMobile Advances Technology While Reporting No Q1 Revenue
AST SpaceMobile employees pose with deployed antenna of the BlueWalker 3 satellite.
Image credit: AST SpaceMobile.

AST SpaceMobile (NAS: ASTS) reported significant technical progress on its satellite-to-smartphone service while reporting zero revenue during the first quarter of 2023. Revenue was $2.4 million during the same period last year.

The company reported a $45.2 million net loss, an increase from $37.9 million during the first quarter of 2022. The net loss attributable to noncontrolling interest was $28.9 million, and the net loss attributed to common shareholders was $16.3 million. Net loss per share attributed to Class A common stockholders was $0.23, an increase from $0.21 during the same period last year.

AST SpaceMobile First Quarter 2023 Key Statistics
(In thousands of dollars except net loss per share)

First Quarter 2023First Quarter 2022
Revenue$0$2,394
Cost of sales$0$1,986
Gross loss$0$408
Net loss before allocation to noncontrolling interest$45,216$37,903
Net loss attributable to noncontrolling interest$28,898$27,182
Net loss attributable to common stockholders$16,318$10,721
Net loss per share attributable to holders of Class A common stock basic and diluted$0.23$0.21

AST SpaceMobile had $185 million in cash and cash equivalents on March 31. The amount represented a $53.5 million decrease from the $238.6 million the company had on Dec. 31, 2022.

The company reported last month that it had made two-way calls from Texas to Rakuten in Japan using an unmodified Samsung Galaxy S22 smartphone via AT&T spectrum through the company’s BlueWalker 3 (BW3) test satellite.

“The initial test calls have validated the AST SpaceMobile patented system and architecture, and were completed using unmodified smartphones,” reads a company press release. “The calls demonstrated the power of AST SpaceMobile’s BW3 satellite, the largest-ever commercial communications array deployed in low Earth orbit and is an important step to providing space-based 2G, 3G, 4G LTE and 5G cellular broadband globally. Engineers from Vodafone, Rakuten and AT&T participated in the preparation and testing of the first voice calls with BW3.”

AST SpaceMobile is planning to launch 243 satellites to provide communications services across the globe.

The company said manufacturing of the first BlueBird Block 1 satellites is underway at its headquarters in Midland, Texas. The satellites are on track for launch in the first quarter of 2024.

AST SpaceMobile has also signed a lease agreement with AT&T, which is the first step to offering service to the company’s customers in the United States. The agreement is contingent on regulatory approval and the execution of a definitive commercial agreement.

“AST SpaceMobile is making history,” said CEO and Chairman Abel Avellan. “Completing the first-ever direct voice connection from our BlueWalker 3 test satellite in space to everyday cellular devices in April was hailed by our partners and leaders in the wireless ecosystem as the latest ‘first’ that changed the way people connect. This accomplishment validated our technology in orbit, and confirmed we have the ability to connect with everyday smartphones from all major handset manufacturers in a market with over five billion mobile devices in use today.”

AST SpaceMobile’s Financials

AST SpaceMobile’s first-quarter financials, as well as excerpted disclaimers from the company’s press release, are below.

AST SPACEMOBILE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(dollars in thousands, except share data)

March 31, 2023December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents$185,043$238,588
Restricted cash653668
Prepaid expenses3,2284,100
Other current assets38,18524,954
Total current assets227,109268,310
Property and equipment:
BlueWalker 3 satellite – construction in progress92,46492,077
Property and equipment, net66,45253,912
Total property and equipment, net158,916145,989
Other non-current assets:
Operating lease right-of-use assets, net12,9557,671
Other non-current assets1,74416,402
Total other non-current assets14,69924,073
TOTAL ASSETS$400,724$438,372
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable11,34813,929
Accrued expenses and other current liabilities23,24613,145
Current operating lease liabilities952722
Total current liabilities35,54627,796
Warrant liabilities31,44838,946
Non-current operating lease liabilities12,1057,046
Long-term debt4,6964,758
Total liabilities83,79578,546
Commitments and contingencies
Stockholders’ Equity:
Class A Common Stock, $.0001 par value; 800,000,000 shares authorized; 71,877,559 and 71,819,926 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively.77
Class B Common Stock, $.0001 par value; 200,000,000 shares authorized; 50,041,757 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively.55
Class C Common Stock, $.0001 par value; 125,000,000 shares authorized; 78,163,078 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively.88
Additional paid-in capital236,886235,384
Accumulated other comprehensive income (loss)183229
Accumulated deficit(118,419)(102,101)
Noncontrolling interest198,259226,294
Total stockholders’ equity316,929359,826
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$400,724$438,372

AST SPACEMOBILE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(dollars in thousands, except share and per share data)

Three Months ended March 31, 2023Three Months ended March 31, 2022
Revenues$–$2,394
Cost of sales (exclusive of items shown separately below)–1,986
Gross profit–408
Operating expenses:
Engineering services16,48311,740
General and administrative costs9,85711,619
Research and development costs16,3818,281
Depreciation and amortization1,7331,100
Total operating expenses44,45432,740
Other income (expense):
Gain (loss) on remeasurement of warrant liabilities7,498(5,482)
Other income (expense), net(8,144)15
Total other income (expense), net(646)(5,467)
Loss before income tax expense(45,100)(37,799)
Income tax expense(116)(104)
Net loss before allocation to noncontrolling interest(45,216)(37,903)
Net loss attributable to noncontrolling interest(28,898)(27,182)
Net loss attributable to common stockholders$(16,318)$(10,721)
Net loss per share attributable to holders of Class A Common Stock
Basic and diluted$(0.23)$(0.21)
Weighted average shares of Class A Common Stock outstanding
Basic and diluted71,845,20651,760,520

AST SPACEMOBILE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)
(dollars in thousands)

Three Months ended March 31, 2023Three Months ended March 31, 2022
Net loss before allocation to noncontrolling interest$(45,216)$(37,903)
Other comprehensive loss
Foreign currency translation adjustments(128)(432)
Total other comprehensive loss(128)(432)
Total comprehensive loss before allocation to noncontrolling interest(45,344)(38,335)
Comprehensive loss attributable to noncontrolling interest(28,980)(27,542)
Comprehensive loss attributable to common stockholders$(16,364)$(10,793)

AST SPACEMOBILE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(dollars in thousands)

Three Months ended March 31, 2023Three Months ended March 31, 2022
Cash flows from operating activities:
Net loss before allocation to noncontrolling interest$(45,216)$(37,903)
Adjustments to reconcile net loss before noncontrolling interest to cash
used in operating activities:
Depreciation and amortization1,7331,100
(Gain) loss on remeasurement of warrant liabilities(7,498)5,482
Non-cash lease expense306170
Stock-based compensation2,4742,254
Changes in operating assets and liabilities:
Accounts receivable–(470)
Prepaid expenses and other current assets(12,168)(6,838)
Inventory–(457)
Accounts payable and accrued expenses5,5532,684
Operating lease liabilities(300)(112)
Deferred revenue–1,333
Other assets and liabilities17,383(14,751)
Net cash used in operating activities(37,733)(47,508)
Cash flows from investing activities:
Purchase of property and equipment(15,228)(4,660)
BlueWalker 3 satellite – construction in process(160)(16,907)
Net cash used in investing activities(15,388)(21,567)
Cash flows from financing activities:
Issuance of incentive equity units under employee stock plan9631
Proceeds from warrant exercise–2
(Repayments of) proceeds from debt(60)97
Net cash provided by financing activities36130
Effect of exchange rate changes on cash, cash equivalents and restricted cash(475)(482)
Net decrease in cash, cash equivalents and restricted cash(53,560)(69,427)
Cash, cash equivalents and restricted cash, beginning of period239,256324,537
Cash, cash equivalents and restricted cash, end of period$185,696$255,110
Supplemental disclosure of cash flow information:
Non-cash transactions:
Purchases of construction in process in accounts payable and accrued expenses$3,651$1,483
Purchases of property and equipment in accounts payable and accrued expenses4261,661
Right-of-use assets obtained in exchange for operating lease liabilities5,507191
Doug Messier

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