Latest / AST SpaceMobile Podcast / Anpanman - Key Takeaways from Q3 Update - $1 BILLION CONTRACTED REVENUE COMMITMENTS

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Anpanman - Key Takeaways from Q3 Update - $1 BILLION CONTRACTED REVENUE COMMITMENTS · AST SpaceMobile Podcast

0:06
This. Is the AST Space mobile podcast
0:10
where we just basically come your phone be seamless
0:14
regardless of where you are. We don't want the user even to
0:16
know that it's connected by satellite.
0:21
Listen, the opportunity that we have is very, very, very large.
0:28
Good morning everyone. I feel much better.
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I guess for those people who missed it, I did a space last
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night, but then I actually deleted it because I was so
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tired that that, I don't know, I felt like I didn't do the space
0:46
justice. So I've decided to do it again
0:49
before the market opened today. But yeah, so just wanted to
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briefly review Q3. Just like the key highlights
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that stood out to me. I did tweet a post of just all
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the different Nuggets of information that came out from
1:05
the Q3 update. But you know, the, the key
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things that really jumped out for me were first, the company
1:13
disclosed today, yesterday that they have over $1 billion in
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aggregate contracted revenue commitments and that's solely
1:21
from commercial partners. So that does not include any
1:24
government, you know, first net or military, you know,
1:28
Department of War, SDA, DIU, that's just solely on the
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commercial side. And I know there were some
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research analysts that had asked if they could disclose any
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details around who makes up that 1 billion.
1:43
And I would assume that a big chunk of that is the most recent
1:47
Saudi Telecom definitive commercial agreement where, you
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know, Saudi Telecom put forward $175 million of prepaid revenue.
1:57
So that's, that's, that's clearly, you know, 175 to 1
2:02
billion. And then they also made minimum
2:05
revenue commitment, which was not disclosed, but that's over
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10 years. And so, you know, you could
2:11
assume any different numbers for that, but it's not just Saudi
2:15
telephone. So I think you could also
2:18
include into that bucket Google, which has a commercial agreement
2:22
with the company that they signed, I think it was back in
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2024, that was a three-year agreement.
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So I'm assuming those revenues are included as well.
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And then and then it could be AT&T, Verizon, Vodafone, you
2:39
know, some, some combination of of those as well as Rakuten.
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And then finally, I think there is a possibility that perhaps
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Bell Canada, there is an agreement there.
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I, I don't think it's a definitive commercial agreement.
2:54
Maybe there's a few conditions precedent that have to be met in
2:58
order for that thing to go live. But for all intents and
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purposes, you know, in the presentation, they should have
3:03
coverage map. In the last quarter it was just
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AT&T, Vodafone and Verizon and I believe Rakatan.
3:12
And then this quarter they updated that map that shows
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logos of Bell Canada and STC. So, so I assume Bell Canada has
3:21
something maybe it's just not at a point yet where it can be
3:25
announced. But given that they are a
3:28
critical initial commercial launch partner and you know they
3:34
last night the company reiterated that Canada is one of
3:37
the initial countries that will get service.
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And then couple that with the fact that Legato, the the
3:46
spectrum that we purchased also covers Canada, that's going to
3:49
be an important market. And so, yeah, $1 billion, that's
3:53
huge. I think for anyone who, you
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know, if you were, if you're a bear or someone who doesn't
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believe in in ASD space mobile, the fact that there is $1
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billion in contracted revenue commitments, I mean, that's,
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that's huge, right? And so, you know, we've talked
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about this idea of inevitability, inevitability,
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inevitability. I can't say that, but yeah.
4:18
There's that that's revenue that's going to be coming
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through the door. Obviously it's going to be based
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off of some types of milestones or obviously service, but that's
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that's huge. And so I think that that's
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probably the biggest disclosure yesterday that that I I took.
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I mean, obviously over the past quarter, there's been a lot of
4:43
announcements and so whether it's Verizon definitive
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agreement, STC, the closing of Legato, the acquisition of S
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Band spectrum rights, I mean there's a whole host of things
4:54
that happened this quarter. But the company putting forward
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that $1 billion number is is massive, right?
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And so I think that just gives the market a sense of scale of
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what the company is doing. And and you know, that's that's
5:14
that's business that is going to be coming in the future.
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And yeah, it's something I think that's good for the equity
5:21
markets and also critically for that markets.
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And so if you do have contracted revenue from commercial partners
5:30
of $1 billion, then that's something that credit investors
5:34
can underwrite against. And so you could raise that
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against that just like you would if you got, you know, long term
5:42
contraction with government, you know, lenders would be willing
5:45
to give you money against that. And so that's just opens up
5:49
another half of fundraising. And and so yeah, that that's a
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huge piece of information that came out yesterday.
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Another thing is that we've got our 9th contract award from the
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US government. And it was pointed out that that
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award was given even during the government shutdown.
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However, there's still details to be heard about which those
6:13
from what management was saying that those details will be
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earned out once the government reopens, which I think as we've
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all seen in the press is going to happen most likely by this
6:23
coming Friday. So that's that's positive.
6:26
Just showing additional traction in winds at the government,
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especially on the defense side. I think is, is is important to
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the story and you know, it's something that when the company
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was asked on the in Q&A and I think it's important, an
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important point at least the initial first consolation is
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going to be dual use and the company would like to keep going
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down that path where every satellite that's put into the
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consolation will have dual use ability.
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So there won't be a dedicated military, you know, consolation.
7:02
It will be one that serves a commercial purpose, but then
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also has military uses as well, whether that's communications or
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non communications applications. But that 9th contract out of
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what was already 8 contracts, as important as we've discussed in
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the past that these contracts initially start out with small
7:21
payments. And then once you've proved,
7:26
proved out the technology and the military is comfortable with
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it, the use of that technology, that's when the numbers balloon
7:34
into the hundreds of millions of dollars in size over, you know,
7:36
multi year. So, so that's good.
7:40
Another interesting data point yesterday was that Saudi
7:43
Telecom, the $175,000,000 prepayment is going to be made
7:49
by year end this year. And so that will be coming
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through the door. That's important for funding.
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It's not going to be booked as revenue immediately.
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It's it's even though the cash is coming through the door, that
8:00
will be recognized over time once the service launched, is
8:02
launched. And you know, maybe there's
8:04
certain milestones that were hit, but but yeah, that's
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$155,000,000, which is good. And it's just also shows the,
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the idea that as we get closer to commercial launch and as low
8:18
services launched, you know, the company has talked about this
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idea of extracting higher economic economic rents from M
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and OS as, as you add on additional commercial
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agreements, they will require prepayments.
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And, and depending on what bells and whistles are within that
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commercial agreement, the amount of prepayments likely goes up
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over time. And so I think that that's, you
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know, the last night the company emphasized that even though they
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did raise quite a bit of a bit of money from the capital
8:55
markets recently, that the, their entire focus right now is
9:02
is going to additional M and OS and signing commercial
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agreements that come with prepayments.
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And and so going forward, repayments are going to be which
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are, you know, non dilutive in nature.
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They are going to be a critical piece of the funding, you know,
9:20
plans for the company. Another big thing that came out
9:24
yesterday was that it seems to me that the control sat or the
9:28
control bus, you know, the manufacturing of that is a
9:30
critical path item right now. And So what we saw from the
9:35
disclosures last night is that the company has built enough
9:39
microns, the, the, the, the, you know, building blocks, which has
9:44
the solar panel one side and the antenna array elements on the
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other and the, and the processors in in between, you
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know, sandwiched in between. But it has enough microns.
9:55
I believe it was for, let me just look at my notes here.
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I think they've built enough for like 19 satellites already.
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And I think that's right. But, but they're looking to
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target finishing forty for up to 40 satellites in the early 2026.
10:14
And so when you look at the the deployment plan that the company
10:20
has laid out, they're actually on target for the amount of
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microns that they've completed. And that's for up to at this
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point, it's for up to six planned launches.
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Now we don't know what the combination of launches are.
10:34
Obviously, there's going to be two initial launches that are
10:36
for one satellite each. And then and then there's going
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to be I think 2 for three satellites.
10:42
And then then at some point in early next year, then that's
10:49
when Blue Origin, New Glen kind of kicks in.
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And that's going to be probably somewhere between 6:00 to 8:00
10:53
satellites per launch. But but yeah, from the
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deployment plan, you can see relative to August to where it
11:01
was updated in November, the amount of microns that they've
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completed is actually on schedule.
11:07
What has fallen behind initial for now is the control set or
11:13
the, the, the bus. And so you know why that why is
11:16
that? You know that this is a new form
11:19
factor, the entire satellite's new form factor building the
11:21
microns is actually, I mean, it's, it's not trade for, but
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they're getting much better at it.
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And, and we've talked about this whole idea of production hell.
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And so the company is in the middle of that and it's just
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part of it's part of the dues that you have to pay to be
11:35
vertically integrated. And so, you know, whether that's
11:37
Tesla or or other companies that have taken production.
11:40
And I think we all know how critical it is to be vertically
11:44
integrated, especially for these programs where you're
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developing, you know, satellites for let me just mute my
11:54
Bloomberg here. But but yeah, it's it's
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important to be vertically integrated.
11:59
You know, we've seen some of these other satellite, you know,
12:02
consolation companies like Fiasat where their first
12:05
satellite, you know was produced and then and then the next one
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was five years late. And so especially in an evolving
12:13
landscape and this is played to other consolation companies,
12:17
whether it's Global Store, Iridium or others who rely on
12:20
primes here AST is developing everything in house.
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And so as Scott mentioned last night, as they continue to
12:29
produce satellites, they will refine them and they'll add
12:31
features as needed depending on customer requirements.
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And so that's the beauty of being vertically integrated
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because you have control over everything.
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On the flip side, there is a significant upfront cost in
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terms of dollars, but also you know learnings that have to
12:48
happen. And so we're just seeing that
12:50
today, you know, yesterday and and obviously the last few
12:54
quarters where this is a completely new spacecraft that
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they've, they've built. And so FM one was completed and,
13:02
and shipped basically, I think it's 2, two months late relative
13:09
to the August timeline or maybe it was three months late.
13:11
But then it looks like FM 2 or what we call BB7 is going to be
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shipped and can be reiterated this in, you know, this month.
13:20
And so whether that's in a week or two or by the end of
13:25
November, that's going to happen.
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And so if you look at the timeline, everything has slipped
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in terms of the expected satellites, you know, when
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they're ready to ship, everything is slipped by at
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least for BB7 for two months. And then for BB8 through BB8
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through, let's see, the next 6 satellites, it looks like that
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timeline has slipped by just one month.
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So the company is looking to catch up.
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And So what was originally for Launch three and Launch 4
13:55
satellites really ready to ship in November for both of those,
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now that's December and then and so on and so forth.
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And so that keeps going until Launch 7.
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So everything's basically delayed by one month.
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And then by Launch 7, the company expects to have caught
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up to its original August timeline and then everything
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from that point on, you know, from February on is going to be
14:21
in line with what they expected. So the company reiterated 5
14:25
orbital launches by the end of Q1.
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And so, you know, as of now, they feel confident that they
14:30
can catch up. And it's interesting because we
14:32
saw in a disclosure today or sorry, yesterday, the
14:36
presentation, they did show a little more detail.
14:40
Of course it was still blurry of the BV7, you know, metal bus
14:47
that encapsulates the satellite or you know, we call it A, you
14:51
know, cat food can or whatever you want to call it.
14:54
But they showed that and then they showed for the first time
14:58
the composite buses. And so I think they were
15:00
pictures of three or maybe it was the same one.
15:02
But what's interesting about that is the composite bus, I
15:07
think is made of carbon fiber. And from what we've been able to
15:14
learn, they've, they've been able to bring that production
15:18
capacity in house. And so, you know, usually I'm
15:23
not an engineer or aerospace expert, but you know, you, you
15:27
have some type of skeletal frame and then you start wrapping
15:30
carbon fiber around it and you wrap many, many layers.
15:33
And I, I don't know, use glue and heat and some other things,
15:36
but they actually have all that capacity in house.
15:39
And so they don't go to, you know, Boeing or, or Spirit or
15:43
one of these other companies. They actually do all that stuff
15:46
in house. And so the initial learning
15:48
curve and, and process around that, it takes time, but once
15:51
you get it going and you get better and better at it, then
15:55
production can speed up. And so that's kind of what we're
15:57
seeing and it sounds like they've got a good handle on it.
16:02
The the interesting thing that a Bell said yesterday is that they
16:05
are on target still to get to 6 satellites per month production
16:10
by the end of this year. And so that actually fits quite
16:14
well with the deployment timeline that they updated.
16:17
And so yeah, it, it looks like they're getting through some of
16:23
these issues is taking a little longer.
16:25
But as I've talked about in the past, it's, you know, it's, it's
16:29
inevitable. And I think when your competitor
16:34
is Starlink, who has a dearth of MNO relationships and and
16:39
obviously they're going to have to get through some production
16:43
ramp in order to get the B3 satellites out there, which you
16:47
know, I've talked about this in the past, but it sounds like
16:50
they're putting a ton of bells and whistles on V3 satellite.
16:53
I mean, so it's going to be it's going to provide fixed wireless
16:56
service. They're going to they're going
16:58
to slap on a directed device Gray on there with its own
17:04
processing. And I guess it's going to
17:06
leverage the same solar panel. And then and then Elon Musk said
17:10
last week that they're going to put a data center capability on
17:13
it. And so when you start putting
17:16
all those things on there, you know, we talked about first
17:18
principles, engineering, you have to make compromises and
17:21
sacrifices, right? If the satellites are doing 3
17:23
different things, is it, is it a, is it a Jack of all trades
17:28
but master of none type of situation?
17:31
You know, it's meant to be seen. And so as you add more things on
17:35
there, it comes more complicated, you know, managing
17:38
and, you know, there's there's this whole idea around data
17:41
security and, you know, is all this stuff going to be
17:43
intermixed? And yeah, there's just a lot of
17:46
things to consider. And so I think it's important,
17:51
you know, there's there's like a few St. analysts out there that
17:53
talked about how Starlink has ambitions to increase their, you
17:58
know, throughput capacity and the next direct to device
18:02
satellite's going to be great. It's going to be, you know, all
18:05
these things, but just remember like they're, they're spinning
18:08
up an ASIC. It's going to take a year to two
18:10
years to do that. And they're going to have to
18:12
build this entirely new satellite that has to go on an
18:14
entirely new launch vehicle Starship.
18:18
And so as we all know, space is hard and it's going to take time
18:22
out. It's going to take longer than
18:23
you think. And that's just part of that's
18:25
just the nature of the beast, right?
18:26
And so being a, an ASD space mobile shareholder or if you're
18:31
a Rocket Lab shareholder, you know, Neutron I think is now
18:33
going to be launched in the first quarter or first half of
18:36
that year. This stuff happens.
18:38
And that's just that's just part of, of being in space like this.
18:43
This stuff takes time. But but yeah, so while in, in,
18:48
you know, the market is already priced in the BB7 being delayed.
18:52
I mean, it hasn't, it hasn't shipped yet.
18:54
So, but it, but at least I think importantly there have been a
19:00
number of folks have asked about launch timeline and, and we did
19:03
get it. I mean yesterday they talked
19:05
about BB6 going up in the first half of December out of India
19:11
and then they talked about BB7 being shipped to the Cape in the
19:17
coming weeks and then it's going to launch shortly thereafter.
19:21
And then beyond that, if you look at this deployment schedule
19:26
timeline, it looks like, let's see, it looks like launch three
19:31
and launch for the satellites related to those which I assume
19:34
are the next 6 are going to be ready to ship in December.
19:37
And so, so you're looking at a January that's going to have two
19:41
launches and then and then you're going to have one launch
19:44
in February and then two launches in March possibly.
19:48
So pretty, pretty chock full schedule anyway.
19:54
So, so yeah, I did mention this before.
19:57
They're, they still are targeting the production of 6
19:59
satellites per month by the end of this year, which is which is
20:02
great. And then?
20:06
Yeah, one, one thing that was disclosed today and the company
20:09
has hinted about it for quite some time and and someone dug up
20:12
the patent which was filed in 2022.
20:16
But today was the first time that Adele talked about their AI
20:20
engine and how it will manage satellite capacity.
20:24
And this is important because you know, obviously when
20:26
satellites going overhead and it's projecting several 1000
20:29
beams, it can, it should be able to notice that there are certain
20:34
areas, for example, if there's a disaster in a specific city and,
20:37
and all terrestrial networks are down, that it should be more
20:41
capacity to a certain cell and maybe shut off capacity or
20:45
reduce it in other, other cells. And so this AI engine that
20:49
they've developed, which I think runs on top of their ASIC, that
20:54
was an interesting new disclosure today.
20:56
And so, you know, there there is this ability to dynamically
21:01
shift capacity in a smart way. And then also you utilize
21:05
spectrum more efficient, more efficiently.
21:07
And so I'm not exactly, you know, I'm not an engineer, but I
21:11
think one of the things that that the company talked about
21:15
yesterday was the ability and the in in my discussions with
21:19
management, there is this ability to basically take pieces
21:23
of spectrum at different frequencies.
21:26
And, and if you think of like an analogy of a zipper, this the
21:32
satellite is the middle part of the zipper that's able to join
21:35
all these pieces of spectrum and provide, you know, contiguous
21:40
coverage. And so I think this AI engine is
21:45
going to be important for that. And you know, when you think
21:48
about AT&T and Verizon and spectrum that they're
21:52
contributing some, there's like the 850 spectrum and there's
21:56
some areas where it's, it's wider and then in other areas
22:00
it's going to be more narrow. And so it's going to be smart
22:03
enough to actually piece that together to provide, you know,
22:06
100% nationwide coverage. The other thing that's part of
22:10
that is the fact that the company disclosed that in the US
22:14
they're going to have 80 megahertz of deployable
22:17
spectrum, which is nuts, right? And there's actually some things
22:20
to kind of read into that. And so with Legato, they get you
22:24
know, call it 40 to 45 megahertz of spectrum and then you throw
22:27
on first Met, which is, you know, I think it's maybe and I
22:33
actually need to dig into this, but I think it's maybe 5 by 5 or
22:36
so. But then if you add on the 850
22:40
megahertz that the two parties are contributing, the 8080
22:45
megahertz is actually more than all those things added up.
22:47
And so I think the company just disclosed or hinted that 18 gig
22:52
Verizon are looking to contribute more spectrum than
22:55
what they had originally planned in the leasing agreements.
22:58
And so that's something to look out for.
23:01
It either means that or the alternative is, and I just
23:06
thought of this, yet the alternative is the company is
23:10
close to either acquiring or leasing additional L or S bin
23:14
spectrum in the US. And so I guess interestingly
23:19
that the whole global star story could fit that a little bit
23:22
because they've got 15% of capacity to lease out somebody.
23:27
And so maybe that's it, I don't know.
23:30
But 80 megahertz, that's more than what we know on paper AST
23:35
has through it's Legato ownership and and then what it's
23:39
been disclosed with 18 to Verizon.
23:41
So that additional spectrum is coming from somewhere and maybe
23:47
that's like a nugget that they've given us and we have to
23:49
go figure it out, which we will. But but yeah, I guess my point
23:54
is like 80 megahertz is a lot. I mean it's huge.
23:56
That's if it's paired, it's 40 by 40 megahertz.
23:59
You can run a ton of data services on that and serve and
24:04
serve use yours, you know, depending on how how much you
24:07
densify the constellation. But that's going to be a very
24:10
robust service in dead spots that that would be terrestrial
24:14
spectrum, but then be overlapping threshold spectrum,
24:19
just the entire thing you've got legato spectrum, satellite
24:22
spectrum. And so that's going to be a very
24:24
robust services or robust service, whether that's for
24:28
users. But then you know, we've talked
24:30
about this idea of IoT devices and that includes robots,
24:34
autonomous vehicles, drones, all those things.
24:36
And so that's going to be very powerful Going back to the AI
24:40
engine. The the other thing that we
24:41
speculated is that maybe Cohere Technologies is going to be a
24:44
part of that. And if you go look at the
24:47
company's website and do some, some decent amount of research,
24:52
this is exactly the type of stuff they're doing, which is
24:55
driving for greater spectral efficiency through different,
25:01
you know, algorithms and, and utilizing different wavelengths.
25:05
And I'm, I'm butchering exactly what they do.
25:07
But Cohere is a company that is very well connected to AST.
25:13
Cohere is doing tests with Bell Canada.
25:17
I believe they're doing it with Vodafone, just happens that
25:20
we're with partners with them. They're also Johann Weiberg, who
25:24
was the former Ctr. of Vodafone. He sits on the board of Bell
25:27
Canada and Cohere and ASD Space Mobile.
25:30
And so there's never been a public acknowledgement that the
25:35
companies are working together, but the connections are very
25:37
clear. And given this disclosure around
25:40
this AI engine, I think that's probably the biggest tell that
25:44
the companies are working together.
25:46
So so yeah, I think that's that was an interesting take away as
25:50
well, funny enough yesterday. So, you know, I haven't talked
25:56
about the SAT Co JV, which I have another, you know, podcast
26:00
covering that. But SAT Co JV company to talk
26:03
about it briefly, it's clear that they're going after the two
26:07
gigahertz MSS spectrum that's coming up for reallocation in
26:11
May of 2027. And as we've discussed like that
26:15
Sacco JV is going to be very well positioned.
26:17
They've got 21 of 27 EU member states, you know M and OS that
26:23
are operating in this country signed up.
26:25
And yeah, they're, they're going to be very well positioned in
26:29
order to get that 2 gigahertz and also get some level of
26:32
funding from government, obviously from M&O partners that
26:36
are going to invest in that JV or the constellation or, you
26:40
know, provide revenue prepayments.
26:43
But Scott was asked in in particular.
26:46
And I don't know if the sell side getting lost, it sounds
26:49
like they're definitely getting smarter at this stuff.
26:51
But they were talking about this rumor that perhaps the EU Iris 2
26:55
award was given to AC Space Mobile.
26:58
And for those, those I don't know, it's a 10 half billion
27:02
euro contract that was awarded. And yeah, that's, that's past
27:05
sense. It was awarded, I think it was
27:09
like back in October of 2024. This is a 12 year concession
27:13
contract that was given to Space rise, this consortium that's
27:17
that's for that's includes SES, Yudelsat and Ispasat to develop
27:23
and deploy this multi orbit satellite system.
27:27
And so, you know, this idea of us potentially getting part of
27:33
it, you know, some people have said, well, it wasn't that
27:35
already worded like how is that possible?
27:38
Well, IRIS 2 has a few different components to it and I think the
27:44
key component is that it's doing fixed wireless service.
27:47
So if you could imagine the core business of what Starlink does
27:50
today or what Kuiper's doing, it's high speed broadband to fix
27:54
terminals. And so I think that's the main
27:57
thrust. The program, however, that
28:01
program is supposed to also have a directed device capability.
28:05
It's, you know, there's no standalone award for it, but
28:09
it's treated as something separate.
28:11
And so where I think there is this possibility that ASD space
28:16
mobile does have a role to play. And I think, you know, Scott was
28:21
kind of cagey in his response. And his response was almost like
28:24
the acknowledgement that that that they are part of it or
28:26
they're going to win it is. And you know, dug in a little
28:32
more as to why that be the case. The EU material that discusses
28:39
directed device, it actually talks about how that's going to
28:44
be led by M&O partnerships. And so rather than, you know, a,
28:51
a something that's that's I guess directly awarded, they are
28:56
going to let that evolve and M and OS are going to kind of lead
29:00
the evolution of that. And so whether that those Irish
29:06
partners are able to get M and OS on board and, you know,
29:10
develop their own director device service.
29:13
If I was a better man, I would bet you know, every, every
29:16
dollar that I have against that happening, just given that you
29:18
have like 3-3 partners, you know, trying to figure this
29:23
stuff out. And then they've got, you know,
29:25
countries to answer to. And and you know, we all know
29:27
about European bureaucracies, like that's going to be tough,
29:30
whereas Vodafone and AC Space mobile, you know, in this in
29:35
enables conversation. Yesterday people asked about mid
29:37
band Bluebirds when they were going to be deployed.
29:39
And he said they're targeting to start having, you know, whether
29:44
it's completing the first one or or launching the first one by
29:49
the end of 2026. And so, and I think that's
29:53
important because they'll want to have, they're, they're going
29:56
to need to launch midday and Bluebirds anyhow because they
29:59
want to leverage the Legato spectrum.
30:01
But by having those satellites in space and already testing and
30:06
and operational, that's going to look super attractive to the EU
30:12
when, when that two gigahertz of spectrum comes up for renewal.
30:15
And as I mentioned before, Echostar, I think they had that
30:19
concession for what was it 18 years and they basically did
30:22
nothing with it. I mean, it was like narrow band
30:24
IoT. There was a few thousand devices
30:27
on it, but it was basically wasted.
30:29
And then I think the I think vice that has the other, the
30:34
other allocation of two gigahertz and that was used for
30:38
airline, you know, wireless Internet service.
30:42
However, it looks like Starlink is pretty much taken most of the
30:48
European carriers interconnectivity business and
30:52
so, and that's for fixed wireless.
30:53
And so I'm not even sure what Weisat's going to do.
30:57
And by the way, like Weisat in the earnings call, they talked
30:59
about and yeah, they, they talked about how they have
31:03
valuable spectrum rights and they're hoping someone else will
31:05
come in and, and lease it from them or monetize it.
31:08
And so, yeah, of course you want that to happen before it comes
31:12
up for renewal because when it comes up for renewal, there's a,
31:16
there's a pretty good chance like they're not going to get
31:17
it. And Global Star on their
31:19
earnings call alluded to Echostar are basically not doing
31:24
anything with that two gigahertz spectrum.
31:26
So Globalstar is going to try to get that, that allocation, which
31:31
by the way, like ASTC mobile going going to E regulators with
31:35
Vodafone as a partner and all these M and OS, you know, you
31:38
can imagine Telefonica, Arange, I'll tease whoever with it
31:44
representing 21 and 27 EU member states, they're going to go to
31:47
the regulators and say, hey, we'd like an allocation.
31:49
We can you give us 10 by 10, 15 by 15 if you're generous.
31:54
I think they're going to win it, right.
31:55
And so, but going back to this whole Iris thing, there are
32:01
there are ways where AST and Vodafone can insert themselves
32:05
into that process specifically because it looks like the
32:09
directive device piece is going to be M&O partnership LED.
32:13
And you know, if, if that consolation doesn't have any M&O
32:16
partners, then then that's pretty much DOA, right?
32:20
And so I think those concessions have to be reviewed over time
32:27
and they can be changed. And so if, if regulators see
32:31
that the company had AST with Vodafone has a ton of traction,
32:34
then maybe they split up that contract.
32:36
And so I'm guessing that's probably what the company the,
32:40
the approach is. But yeah, we're really well
32:43
positioned for it. Let's see, I'm doing going
32:47
through the the list here. What have I not covered?
32:53
Yeah, so as you know, initial intermittent service is going to
32:56
be rolled out in the US, Canada, Japan, Saudi Arabia and the UK.
33:02
When Canada is mentioned, that means that Bell Canada, there
33:05
has to be a definitive agreement for, you know put in place
33:08
before that happens. So let's see here, as I
33:18
mentioned before, Bluebird 6 is going to launch in the first
33:21
half of December. Bluebird 7 is going to launch
33:24
sometime mid to late December. And what was great to hear is
33:29
that the company is planning to have, you know, retail investors
33:34
invited for for those events which I think are great.
33:37
I'm planning to attend. And so hopefully some of you out
33:40
there will also attend. They reiterated targeting 45 to
33:46
60 satellites deployed by the end of 2026.
33:51
Another question was asked about the recent funding.
33:55
What does that mean for the deployed consolation?
33:59
It's the company did say that with the recent funding they can
34:04
now deploy over 100 satellites. So, so that's, that's positive.
34:07
And we've always talked about the company wanting to have the
34:11
desk their their, you know, they want to have their destiny in
34:14
their control, which they do. Let's see, they also what was
34:20
disclosed is that we were eight through 19 or in construction.
34:23
And So what that means is to me is that, you know, the, the
34:28
company already disclosed that all the microns are completed.
34:31
Now it's just a matter of finishing those composite buses
34:36
control sets and then mating them and and then obviously
34:40
testing them. And so, so that, that's a good,
34:45
you know, that's a good data point.
34:47
And I think it's important to highlight that there was a
34:52
question, I think it was like William Blair where they
34:54
discussed this, this whole idea of 25 satellites being deployed.
34:59
And they asked, you know, is that, is that number related to
35:02
or is it what you will need for beta service, initial beta
35:06
service? And, and Scott did acknowledge
35:09
that 25 is the right number. And so you know that we've
35:12
talked about this idea of those 25 satellites generating enough
35:16
revenue that will, that will cover a decent amount of
35:19
operating expense spend. And so it sounds like that's,
35:24
you know, beta service having enough satellites for beta
35:27
service. That's going to be something
35:29
that depending on how you, you do the math is going to be
35:33
available sometime in I think Q2.
35:37
So that's something to to look out for.
35:40
Let's see here. So the ASIC is going to be
35:44
integrated into new satellites starting in the first quarter of
35:46
2026, which is good news. The other thing is, you know the
35:49
company reported 15,000,000 of revenue.
35:51
And so if you just back out what they reiterated, which is 50 to
35:54
75 in the second-half of this year, that means that Q4 will be
35:59
anywhere between 35 to 60 million of revenue.
36:02
And that's all related to gateway sales, which they said
36:05
is going to average about 10 million a quarter.
36:09
And so, so the 25 to 50 million of revenue in Q4 that's going to
36:14
be government contract related. And so I think in the fourth
36:20
quarter they're going to, you know, depending on how much they
36:23
they have to disclose, but they're probably going to talk
36:26
about or we'll have to talk about some of that government
36:30
work on the defense side. And so that will be interesting.
36:35
Two other data points, you know, 3800 patents and patent pending
36:38
claims, that's up from 3700 in the second quarter.
36:42
They also did boost square footage of manufacturing.
36:45
And so over the summer they talked about 400,000 square feet
36:50
of manufacturing, but now they are at 500,000 square feet of
36:54
manufacturing. And so that's that's a big jump
36:57
up. And now I'm not seeing, I guess
37:00
I didn't include it in this post, but but yeah, that that
37:05
manufacturing space, you know, as as a company is looking to
37:08
ramp up production. They have talked about this idea
37:12
of going from six satellites to actually 11:50.
37:17
And so my guess is what that means is that they are at some
37:22
point over 2026, they'll probably look to increase that
37:25
number from six satellites to maybe 8 to then maybe 10 to then
37:29
maybe 12. And the reason why they would do
37:32
that is 1, you might want to accelerate the Block 2
37:38
deployment. But then also my guess is
37:40
they're going to start production on Block 3, which is
37:42
the mid band Bluebirds, which can serve L&S band spectrum.
37:47
The point that I that I left out here is that they also disclose
37:51
that they have 1800 workers globally.
37:55
When I was posting this last night, I had some errors and I
37:59
had to edit it, but I guess some things got dropped.
38:02
So I'm wondering what, what I may have dropped out of here.
38:04
But but yeah, so they're at 1800 employees, which is nuts because
38:07
yeah, I guess a few years ago it was just a few 100.
38:09
But but but they are ramping up. There are a few more people
38:13
through the door. And as some space model members
38:16
have tweeted, there's some really impressive people they've
38:20
been able to bring into the fold, which is great.
38:24
Let's see here. And then my last, I guess my
38:27
last nugget here for the third quarter is, you know, Bill was
38:32
asked about launch capacity and if you know how they're they're
38:37
seeing that and, and obviously the company has put forward
38:40
payments on launch providers for this coming year and they feel
38:45
good with the, the stable that they have.
38:47
Obviously they're using Israel, LVM three, their SpaceX Falcon 9
38:52
and then Blue Origin New Glenn, which by the way is going to
38:55
have its second flight on Wednesday.
38:58
So that'll be exciting, but this is the first time.
39:02
So when I, when I've talked with the company, they've, they've
39:05
always looked at launch as being, you know, something
39:07
that's constrained near term. So call it 20252026.
39:11
But then 2027 they've talked about this idea of there being a
39:15
lot more options on the table. And what that means I think is,
39:19
you know, obviously New Glenn, by that time, hopefully we'll
39:21
have more steady cadence and we'll be more, you know, we'll,
39:27
we'll be more reliable at that point, which remains to be seen.
39:30
But then by that time you will have, you know, Rocket Lab
39:35
Neutron will hopefully knock on wood, be, you know, be a
39:40
reliable and stable platform or or close to getting there.
39:44
And then a bell called out Mitsu MHI yesterday, which is
39:48
Mitsubishi Heavy Industries, which back in October, they did
39:53
launch their H3 rocket. And let me just look at my post
39:59
here. So they launched their H3, which
40:04
in their heaviest configuration, which has four solid rocket
40:07
boosters, it can carry 16,000 kilograms to Leo, which, you
40:13
know, I had looked up different sources and it was estimated at
40:15
$50 million per launch, which is pretty affordable actually, when
40:20
you compare it to SpaceX Falcon 9.
40:22
But yeah, they had a successful launch back in October and when
40:28
compared to the economics, I think Falcon 9 and my post is a
40:30
bit wrong here, but Falcon 9 is 60 for $67,000,000 in reuse mode
40:37
can only take 16 to 17,000 kilograms to Leo.
40:42
And so that H3 it seems like it's somewhat comparable at my
40:46
price. Such a minute is probably off.
40:48
But anyway, how it, it is something that for the first
40:51
time, first I heard it, the company, you know, disclose that
40:55
and it seems to make a ton of sense because, you know, Rakatun
40:59
is an important partner and Rakatun is Japanese and you
41:04
know, the, the Japanese are looking to grow their space
41:06
program. And so having two or three
41:11
Bluebirds go up on a Mitsubishi H3 would be pretty damn cool.
41:16
That, that rocket, by the way, like I did some research on it
41:19
and they're, when they, when they first released it there,
41:23
you know, there's, there's configuration for two Sr.
41:25
BS and then 4SR VS, which is what happened in October.
41:30
And then there were, there were plans for six Sr.
41:32
VS 6 solid rocket boosters, which then could increase the
41:36
capacity beyond 16,000 kilograms.
41:38
But then from what I read, like they scrapped that.
41:41
But who knows, maybe they'll bring it back.
41:43
But anyway, I guess my point is that there is going to be more
41:46
launch capacity by, you know, the end of 2026 and then 2027.
41:52
And so hopefully by then, you know, the company has 2 lines
41:57
going of low band Bluebirds and mid band Bluebirds and then
42:01
they're just chunky up these satellites.
42:03
You know, we, yeah, they all talked about this idea still
42:07
3030 to 45 days. But maybe, I don't know, you
42:11
might get into the situation where it's like Starling where
42:14
you're launching these satellites every two weeks.
42:18
And so yeah, that, that will be exciting.
42:20
But anyhow, those were some of my initial thoughts.
42:25
And then this morning, I guess just for people's edification,
42:30
you did have a number of research upgrades.
42:31
So Deutsche Bank raised their price target to 81.
42:36
They were at, just look here, they were at $59 and then Rock
42:43
Capital moved up to 8250. They were at 56.
42:49
And then you know, I think B Riley reiterated their $95 price
42:53
target. Cantor yesterday reiterated
42:55
their $80 price target. Our Scotia bank, which is I
43:01
don't know what these guys are doing.
43:03
They, they still have their sector underperformed rating.
43:07
You know, they got turned by bears somehow.
43:09
But they, this is how silly they are.
43:12
They, they went, they raised their price target from 4290 to
43:17
then 4560. So I don't know how you explain
43:20
that, but anyway, But yeah, I think there's going to be some
43:24
additional upgrades. We've got Barclays, Clear St.
43:29
and then I think I haven't confirmed this yet, but I think
43:32
UBS and Bank of America may have just reiterated what they had
43:35
before. But yeah, I do think we'll get
43:39
maybe two or three more upgrades later today.
43:41
Let me just see if there are some questions, which I see a
43:47
few comments. Let me see, there's no care.
44:00
Scott Powell, can you do the math on how we get to a number
44:03
of Sats we committed to in 2026, how many F9 and B&B OS?
44:10
Actually, someone's done that math before and I can pull it
44:13
back up at some point, which maybe I'll try to find it and
44:16
retweet it. But I mean, the key thing is, is
44:19
Blue Origin coming online? And if not, then, then we'll
44:24
have to just go buy more Falcon 9 launches.
44:27
Let's see here. But yeah, I'll try to find that
44:30
tweet and put it back out. Let's see.
44:35
Randy Hoffer found it interesting that the bell kept
44:37
emphasizing that we are an American company after you asked
44:40
about EU and Iris. Yeah.
44:44
So we are an American company and that is our focus.
44:48
But then Satco JV is going to be a European company and where we
44:53
are a junior partner, we're we're going to be a minority
44:55
partner. Maybe we I'm just making numbers
44:57
up, but you know, we'll have 50% or 49% economics.
45:01
But then in terms of, you know, voting, voting rights, maybe
45:06
we'll be depending on whether MN OS join that.
45:11
You know, we, we will be probably much lower down the
45:14
totem pole. And the way that that thing is
45:16
going to be structured is it's going to look European, feel
45:19
European to regulators. It's it's going to be European,
45:22
right. And so they're going to have a
45:24
kill switch. They're going to have these
45:26
these different abilities to the data is going to originate there
45:30
and land there. I mean, any number of things
45:32
that it's going to be Control Center.
45:36
Oh, the other, I guess interesting data point yesterday
45:39
is that the company did someone asked if, if indeed Sacco JV
45:44
that consolation is going to be entirely separate, like a
45:46
distinctly separate consolation. And the answer was no.
45:50
And so I think the way that the company is doing this is that
45:55
the satellites when they do go overhead in Europe, the European
45:58
operators have Sacco JV walls cake over and they'll have a
46:02
kill switch. They'll you know as I mentioned
46:04
before, the data will rigidate and land in Europe.
46:08
And so for all intensive purposes, when the satellites
46:12
are overhead in Europe, they are going to be European assets run
46:15
by Europeans. And so, yeah, I, I think there's
46:21
different technological ways to do that.
46:23
But from an economic standpoint, it makes sense to just leverage
46:26
the same assets. You want to amortize those over
46:30
as many countries as possible. But yeah, I and I think about
46:35
emphasizing that we are an American company that as this
46:38
person points out, that is important for our government
46:42
work and potential funding as well from the US.
46:44
Let's see. So can you talk about how much
46:50
lag there is in cash flow once revenue starts rolling in?
46:54
Is they still getting their money upfront day one services
46:56
being turned on or perhaps 60 day lag?
46:59
I'm not sure. I mean, I think this is going to
47:02
be something, you know, for the consumer, it's going to be
47:06
probably a lag, right? Like there's going to be a
47:09
subscription where the M and OS get get paid for service by 30
47:13
day lag. And then they'll they'll
47:15
disperse some payment to the company, but then some time
47:17
frame, that's my guess. I don't know what lie that would
47:21
be. You know, if it's 45 days or, or
47:24
whatever. But once you know, you have this
47:28
revenue prepayment and then once the service eats through that,
47:31
then then the company starts getting additional cash flow
47:34
based off of service. And yeah, there, there will be
47:36
some, some lag from when consumer pays their bill and it
47:41
goes in which is 30 days behind when they have a service and
47:44
then the M&O will then disperse that payment to the company.
47:50
You know, is that a week? Is it 2 weeks or nose?
47:53
Let's see. Why so vague on launches slash
47:56
carriers? Why so vague?
47:57
Because that's the nature of the space industry.
48:00
It's you, you know, for the company, they you don't want to
48:08
commit to dates until the satellites you you basically
48:11
want to wait till the last possible minute because you
48:14
never know what kind of hiccups there are in production and
48:18
because once you get a date for launch, it actually cost money
48:23
to then change it. And so you want to have as much
48:26
flexibility as you can. And I think with Blue Origin, by
48:29
the way, I think they do have a lot of flexibility, obviously,
48:32
because Blue Origin as well as like not a not yet a stable
48:36
platform. But you want to be vague about
48:40
who you're doing that with too, because for the company, they
48:44
want to have competitive attention, right?
48:46
Like on the by, by if they were beholden to just one launch
48:51
provider, then that launch provider, you know, that's a
48:53
pretty risky strategy because then if there are any issues of
48:58
that particular launch provider, then that impacts you if there's
49:02
delays or if there's an incident and if FAA has an investigation,
49:07
you cannot have to wait for that.
49:08
But then by diversifying your launch providers, you reduce
49:13
that risk, but then also you create a competitive attention
49:16
where we've discussed this before, HD series mobile is the
49:21
biggest commercial satellite customer besides Starlink and
49:26
Kuyper. And so that that's a lot of
49:29
heft. And that's when I say
49:31
commercial, that doesn't include like military, but and so that's
49:35
a lot of dollars that are going to the launch market.
49:39
And So what you want to do is you want to have a jump ball
49:41
situation where you put these things up for RFP and and you
49:46
want ISRO, SpaceX, Blue Origin, Mitsubishi Heavy Rocket Lab, you
49:53
want all these companies competing for your contracts,
49:55
you want the best prices and execution.
49:58
And obviously there's like a balance to all that.
50:01
If you go with SpaceX, like it's tried intrude and you know it's
50:04
going to happen on the time frame, it's going to happen and
50:08
you're going to pay a green. But then with it some of these
50:10
other providers, you're going to pay potentially a discount to a
50:14
degree for the uncertainty. But as they become more robust
50:19
and have regular cadence, then then those options become more
50:23
attractive. But that's why you kind of have
50:26
it vague and and you kind of figure it out as you go.
50:30
Let's see. Let's see if there's any other
50:34
questions here. Just looking through, oh, we got
50:46
some research reports, so I'm going to post some of these
50:48
reports. Thank you to the people who
50:51
share them with me. But yeah, so big take away, I
50:54
think yesterday is a little bit of a, a weigh station update
50:58
where there's a lot of good news that happened over the quarter
51:02
and and then the company can review that.
51:05
The big, the big drop, you know, mic drop for me was the $1
51:08
billion and contracted committed revenue because that's, that's
51:13
massive. You know that, that's, that's
51:16
something tangible that you can get your arms around and, and
51:19
that's, that's basically on the way.
51:21
And so the key is obviously getting these Bluebirds
51:24
launched. We are a few weeks away from BB6
51:28
going up and then maybe a week to two away from BB7 going up.
51:31
And I'm, I'm hoping to be there in Florida for that in December.
51:35
And then I think as I said before, I think we have two
51:38
launches in January, which will be a total of 6 satellites.
51:42
And so that's going to be very exciting.
51:44
And so, yeah, the company has a lot going on.
51:48
I think the critical path item, the bottleneck is this control
51:51
sat the bus. And so once they kind of figure
51:54
that out, these things are going to be popping out like hotcakes
51:56
and they're going to be a lot of launches to attend.
51:59
And so I think that's, that's kind of the update that I have
52:03
for now. Yeah, it's an exciting time and
52:07
we'll see how things go. I think I think the market in
52:11
terms of sentiment, you know, you've seen a number of upgrades
52:14
and, and now it's it's, I think we're all kind of waiting for
52:17
the events to happen. And as we've seen in the past,
52:21
you know, stock typically ramps up into these launches.
52:23
And what's different this time is, you know, the stock is
52:27
ramped up into launches and then after the launch happens, it's
52:30
kind of a sell the news event. But here the market's not going
52:33
to get a break because you're going to have launch after
52:37
launch after launch after launch.
52:38
And so under that environment, yeah, who knows how the stock
52:43
will perform. So, so it'll be a lot.
52:46
And I think I forgot to mention this too, I guess in closing, I
52:50
think the, the company yesterday talked about the Saudi telecom
52:55
deal, how, how there's more in the pipeline and that is a good
53:01
template to look at. And so as we've seen these
53:05
revenue prepayments going back from AT&T and Vodafone to then
53:11
Verizon and then Saudi Telecom, those free revenue prepayments
53:14
have continued to ramp up higher.
53:16
And so from what I understand, I think Scott is a pretty busy
53:19
guy. He's traveling the world.
53:21
There's more M&O agreements to come.
53:24
And it sounds like those are, you know, now's the time where
53:28
the company's going to be striking these things.
53:30
And so I think as we mentioned before, Bell Canada is probably
53:34
next. The other candidate that I have
53:37
in my mind is Atulsat Etisalat, which is based on Abu Dhabi.
53:43
There's some interesting connections between the company
53:46
and Abu Dhabi. And so I think that could be
53:49
another big one that comes that's going to surprise people,
53:51
although I guess it won't surprise people since I
53:53
mentioned it here, but there are some good linkages there.
53:56
And I think given the ambitions of of these countries in the
54:03
Middle East, they're all, they're all looking to, you
54:06
know, really roll out these connection services.
54:08
And one, one other point, sorry, before I close, I forgot to
54:11
mention is that the Saudi Arabia, you know, PIFF, their
54:15
sovereign wealth fund is actually a very large
54:19
shareholder in Saudi telecom. And as we all know, they also
54:24
own SpaceX. And so just as a point of
54:29
validation, you know Sally Telecom was at MOMOU, it was a
54:35
partnership signed in 2023. And since since that point they
54:39
had been evaluating Starlink and AC space Mobile and then they
54:44
just basically hitched their wagon to AC by committing to a
54:48
10 year minimum revenue contract $175,000,000 prepaid.
54:53
And so that, that's just another validation point of market where
54:57
you have a sophisticated party with unlimited financial means.
55:02
And if I say they just like Verizon, they instead of going
55:08
with Starlink, they went with AST Space Mobile.
55:11
So I'll leave the, I'll leave this this space with that, that
55:15
note. And yeah, we'll, we'll look to
55:18
catch up again in the coming days.
55:20
And yeah, great quarter and looking forward to the launches.
55:24
So I'll end it there and we'll talk again soon.
55:27
Thanks everyone. Listening to the AST space
55:32
mobile Podcast if you enjoyed this episode and you'd like to
55:35
help support the podcast, please share it with others, post about
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it on social media, or leave a rating and review to catch all
55:43
the. Latest news about.
55:44
AST Space Mobile make sure to subscribe.
55:47
Thanks again and I'll see. You next time.
55:53
We're doing something very, very big, and I think with this
55:55
technology we can really affect billion lives.
55:58
AFT Space Global is the only company that has good technology
56:03
to deliver cellular broadband connectivity directly from
56:06
space. To be everyday smartphone people
56:09
will just basically turn the phone and be seamless,
56:13
regardless of where you are. We don't want the user even to
56:15
know that it's connected by satellite.
56:18
Our role is to bring this into reality, always in partnership
56:22
with the MMO.