AST SpaceMobile(ASTS) - 2024 Q3 - Quarterly Report

Satellite Launch and Development - The company launched five first generation commercial BB satellites on September 12, 2024, with a total cost incurred of approximately $119.0 million, an increase of 3.3$115.0 million[141]. - The next generation Block 2 BB satellites are expected to support peak data rates of up to 120 Mbps and require less power, with a design featuring the largest communication array ever deployed in LEO for commercial use[144]. - The company plans to launch up to approximately 45 Block 2 BB satellites between 2025 and 2026, with the first satellite expected to be sent to the launch provider in March or April 2025[148]. - The company aims to achieve substantial service in targeted geographical areas with the launch and operation of approximately 95 BB satellites, with plans for additional satellites to enhance coverage and capacity[150]. - The company is actively engaged in planning and procurement for the Block 2 BB satellites to meet its planned launches in 2025 and 2026, leveraging expertise from the Block 1 BB satellite development[147]. Revenue Generation - The SpaceMobile Service has not yet generated any revenue, but the company plans to initiate a limited, noncontinuous service in targeted geographical areas, including the United States, and validate non-commercial government applications[142]. - Beginning in Q1 2024, the company expects to recognize revenue from a U.S. Government contract and anticipates generating revenue from the resale of gateway equipment and associated services to MNOs and other third parties throughout 2024[143]. - The company expects to continue recognizing revenue under a U.S. Government contract throughout 2024 as performance obligations are completed[160]. - Revenues for the three months ended September 30, 2024 were $1.1 million, a 100$0 in the same period of 2023[173]. - Revenues for the nine months ended September 30, 2024, were $2,500,000, representing a 100$236.9 million was recorded on the remeasurement of warrant liabilities for the three months ended September 30, 2024, compared to a gain of $7.5 million in the same period of 2023[179]. - The net loss attributable to common stockholders for the nine months ended September 30, 2024, was$264.2 million, a 375% increase compared to a loss of $55.6 million in 2023[185]. - Net loss attributable to noncontrolling interest was$131.1 million for the three months ended September 30, 2024, compared to $29.8 million in the same period of 2023[183]. Operating Expenses - Total operating expenses increased by$25.0 million, or 16%, to $186.5 million for the nine months ended September 30, 2024, driven by higher engineering services and general administrative costs[185]. - General and administrative costs rose by$4.6 million, or 41%, to $15.6 million for the three months ended September 30, 2024[176]. - General and administrative costs rose by$14.6 million, or 47%, to $45.7 million, primarily due to a$12.4 million increase in stock-based compensation[188]. - Engineering services costs increased by $2.3 million, or 12$21.8 million for the three months ended September 30, 2024[175]. - Research and development costs increased by $5.3 million, or 56$14.7 million for the three months ended September 30, 2024[177]. - Research and development costs decreased by $13.3 million, or 36$23.4 million, attributed to the completion of certain satellite subsystems and infrastructure programs[189]. - Depreciation and amortization expenses increased by $20.0 million, or 57$54.9 million, mainly due to the commencement of depreciation for the BW3 test satellite[190]. - Depreciation and amortization expense decreased by $4.5 million, or 24$14.5 million for the three months ended September 30, 2024[178]. Capital and Financing - The company has entered into a new Equity Distribution Agreement to sell shares of Class A common stock with an aggregate sales price of up to $400.0 million through an "at the market offering" program[152]. - The company sold shares of Class A Common Stock under the 2024 Sales Agreement for an aggregate sales price of up to$400.0 million[208]. - The company estimates needing to raise approximately $120.0 million to$170.0 million to meet current working capital needs and fund the launch of 20 Block 2 BB satellites[200]. - The company plans to raise additional capital through various means, including equity and debt securities, to support its operational and strategic needs[202]. - The company issued Convertible Notes for an aggregate principal amount of 110.0 million to AT&T, Google, and Vodafone, with a 5.50% annual interest rate[220]. - Public Warrants redemption resulted in the exercise of 13,358,174 warrants, generating net proceeds of 153.3 million during the three months ended September 30, 2024[155]. - During the nine months ended September 30, 2024, 13,358,174 Public Warrants were exercised, resulting in net proceeds of $153.3 million[209]. Cash Flow - Cash used in operating activities decreased to$97.7 million for the nine months ended September 30, 2024, compared to $124.0 million for the same period in 2023, a decrease of$26.3 million[226]. - Cash used in investing activities was $92.1 million for the nine months ended September 30, 2024, down from$96.5 million in the same period in 2023[227]. - Cash provided by financing activities increased significantly to $620.4 million during the nine months ended September 30, 2024, compared to$117.4 million in the same period in 2023, an increase of $503.0 million[228]. - As of September 30, 2024, the company had$518.9 million in cash and cash equivalents, including $2.5 million of restricted cash, and raised$298.2 million in net proceeds from Public Warrants exercises[196]. - As of September 30, 2024, cash, cash equivalents, and restricted cash totaled $518.9 million, compared to$135.7 million in 2023[231]. Commitments and Agreements - Contractual commitments with third parties totaled $130.7 million related to satellite components and future launch payments, with minimum commitments under launch agreements of approximately$105.0 million[205]. - The company received an initial 20.0 million commercial payment from Verizon Wireless, which will be credited against future service revenue[223]. - The AT&T Commercial Agreement includes a non-refundable commercial payment of 20.0 million due upon the launch of the Block 1 BB satellites[225]. Compliance and Reporting - The company prepared its unaudited condensed consolidated financial statements in accordance with U.S. GAAP, requiring management to make complex judgments and estimates that could materially impact reported financials[235]. - As of September 30, 2024, the company had no off-balance sheet arrangements[236]. - The company qualifies as a smaller reporting company and is not required to provide additional market risk disclosures[237].