Latest / AST SpaceMobile Podcast / Anpanman - Billion Dollar Bluebirds: Inside the AST SpaceMobile Inflection Point

Transcript

Anpanman - Billion Dollar Bluebirds: Inside the AST SpaceMobile Inflection Point · AST SpaceMobile Podcast

0:06
This is the AST Space Mobile podcast, just basically.
0:11
From the phone, be seamless, regardless of where you are.
0:15
We don't want the user even to know that it's connected by
0:17
satellite. Listen, the opportunity that we
0:22
have is very, very, very large. Everyone, good evening.
0:29
Thanks for joining. I figured I'd do a space after
0:34
that very bullish Q4 update. There were some obviously a few,
0:39
you know, cons or disappointments in terms of
0:42
timing, but then beyond that, it was an unbelievably bullish
0:46
call. And so I thought it would be
0:49
good to just have a, a brief space, hopefully brief, just go
0:53
through some of the highlights and then talk about, you know,
0:56
what's ahead. But I, I went through the, you
0:59
know, I listened to the call. I also went through the
1:02
transcript and quickly reviewed the 10K and just wanted to talk
1:06
about a few of the highlights 1st.
1:08
And so, and while I'm doing this, if, if folks have
1:11
questions, feel free to, to comment on the space and I'll
1:15
try to go through those at the end.
1:17
But yeah, this evening, it was a very bullish call.
1:22
This is the first time where it felt like, you know the the
1:27
company obviously is now in the revenue generating stage.
1:31
And unlike previous calls where there was always this, this idea
1:38
of a business that was being built and revenues being
1:41
delivered. But it was always something that
1:45
was on the come and you kind of had to have faith in it.
1:48
This this quarter there was significant revenues and
1:51
obviously you know for 2025 financial performance was great
1:55
and then there was the ability to discuss guidance for 2026 and
2:00
then also you know writing some color around goals for 2027
2:07
which which was great. And then beyond that even some
2:10
discussion of end of the decade, you know some color around what
2:15
revenues could be. There is also talk about margins
2:18
and you know a whole host of things which I'll go into in a
2:22
bit. But now we're at this part of
2:26
inflection where things are tangible.
2:28
You know, you you have the business that's now they're
2:32
selling products, which is, you know, the gateways consulting
2:35
services. And then on top of that, you've
2:37
got government revenue, which is not dependent on the full
2:43
deployment of the constellation, but is more coming in piece meal
2:48
as each satellite gets launched. And then and then after that,
2:51
you're going to have, you know, these government awards that if
2:55
they win, some of them could become programs of record,
2:58
which, you know, then you're talking about billions of
3:00
dollars over multiple years. And then commercial service
3:04
getting turned on when the consolation is at a point where
3:09
some type of, you know, continuous service can be
3:11
provided to to customers. And, and you know, they're the
3:14
company talked about the idea of commercial service being, you
3:19
know, dwarfing government, the government opportunity and, and
3:24
you know that it was characterized as multiples of
3:29
billions of dollars perhaps by the the end of this decade.
3:32
And so the end of this decade, you know, it seems far off, but
3:35
it actually isn't, you know, that's four years from now.
3:37
So, so yeah, I'll just go through some of the details.
3:41
You know, Q4 performance, you know, the company hit
3:44
71,000,000, which revenue, which is at the top end of the range,
3:48
50 to 75,000,000 that they provided for second-half of
3:51
2025. And so this, that 71,000,000 of
3:56
revenue, from what I understand, you know, the company was hoping
3:59
to come in above 75, but then due to timing, the government
4:03
shutdown and perhaps other, other factors that, you know,
4:07
they, they delivered great performance, but they didn't,
4:10
they weren't able to top it top 2025.
4:13
Which I think one of the key things that I thought was smart
4:16
of management is that they, I think it was Scott was
4:21
mentioning how for the next until they, they really, you
4:26
know, roll out commercial service where that, you know,
4:30
you're, you're serving consumers and you've got recurring monthly
4:34
subscription revenues where it's a lot easier to predict.
4:38
What management was saying is that the the way to look at
4:43
their business at least for the near term, which is 2026 and
4:47
perhaps part of 2027, you should be looking at their guidance for
4:51
a whole year, you know, the full year revenues versus trying to
4:56
triangulate to what each quarter with specificity is going to be.
5:01
Because they're, you know that the timing of this stuff and
5:05
when they deploy things and when they get awards and things like
5:08
that, it's kind of hard to predict.
5:09
And so I thought it was smarter than to get people off this idea
5:14
that, you know, we're going to be managing quarter to quarter.
5:17
But more so, you know, we have goals for the entire year and
5:21
this is the range and we we obviously, you know, we're to
5:24
some extent are being conservative and we expect to
5:26
hopefully outperform these these goals.
5:29
And so that was that was good color.
5:31
But yeah, so 7071 million of revenue, the way that was
5:35
characterized as that government was a significant contributor.
5:39
You know, they at at least as of 2025, they had 10 active
5:43
contracts. And then I think with the most
5:46
recent award, that's more like 11 active contracts.
5:49
And so at least for the near term, as Scott had mentioned and
5:53
he talked about this I think at UBS, how this coming 2026 was
5:58
going to be government revenue dominated.
6:00
And and he said, you know, we're talking about low hundreds of
6:03
millions. And so the fact that they guided
6:05
to 1:50 to 200 fit that very nicely.
6:09
But but yeah, so this quarter, you know, they as I said before,
6:14
they delivered 71,000,000 revenue.
6:16
They also talked about how pro forma because of the convertible
6:21
debt that they raised and they also tapped the ATM at least pro
6:24
forma, they are now at 3.9 billion of cash, which is quite
6:29
a bit. And so they explicitly said that
6:33
they didn't need to raise additional funding, although
6:36
they didn't say, you know, that was in particular for
6:39
convertible debt, which is, you know, for the company, it's been
6:43
a great tool for them to, to raise money.
6:45
And because the stock is so volatile, you're able to
6:49
monetize the volatility by, by, you know, executing a convert
6:53
and you get paid for that. And so it lowers your cost of
6:55
capital in doing so. And and so they were, you know,
7:00
Andy was very explicit about not needing to raise additional
7:02
funding for the near and medium term, although they do have as
7:07
of I don't, I don't know if it was like as of the end of 2025,
7:13
we're currently there's, there's 80 million of capacity left on
7:16
the ATM. And so they could obviously tap
7:19
that over the next few weeks or months to decide to, But that
7:24
said, they're not looking to raise any major funding for the
7:27
near to medium term. So what does that mean?
7:30
You know, my guess is at least for the next two, 3-4 months, if
7:34
not more. But but yeah, for anyone, I
7:38
guess concerned about, you know, any transactions to raise
7:42
initial funding, that's that's off the table for now.
7:46
Let's see. So with the 3.9 billion of cash
7:49
they they repeated, you know, that fully funds them for 100
7:52
satellites. But then the additional amount
7:54
of money that they raised will give them the ability to
7:57
accelerate the business, take advantage of new AI
8:01
opportunities. And they talked very specific
8:04
about deploying and monetizing the spectrum bands that they
8:07
have. And so I think my guess is that
8:10
the company, I, I know there's some theories that people think
8:13
perhaps the company might go try to acquire Rhydium or one of
8:16
these other companies. But if they're saying they don't
8:19
need to raise additional funding for the near to medium term and
8:22
then you know, they're they're potentially looking at
8:25
monetizing spectrum. I don't think that's probably
8:28
M&A. You know, I guess they could go
8:30
issue stock and some cash to go buy a company, but maybe they're
8:35
going to opportunistically add spectrum, perhaps through
8:38
partnerships or if they, because I, I think Iridium did mention
8:42
potential partnerships and I haven't gone into detail about
8:46
why doing something with Iridium it would be difficult because
8:48
they, they only have one band of spectrums.
8:50
They don't have dedicated uplink and downlink.
8:53
And so anybody using that spectrum would have to have, you
8:58
know, satellite technology that could utilize instead of full
9:04
duplex, you know, having an uplink, dedicated uplink and
9:06
dedicated downlink, you would actually have to utilize time
9:10
divided, you know, technology, which means like for a period of
9:14
time, you, you send data up and then you wait and you get data
9:17
coming down, but you basically share the same channel.
9:20
So it adds quite a bit of complication.
9:22
And so I think that's why, at least in my opinion, I don't
9:25
think Iridium is optimal, But I mean, you could still make it
9:28
work if you, I guess, if you paired that band with with
9:31
another spectrum band and made that band, you know, dedicated
9:36
uplink and another spectrum band dedicated downlink or vice
9:38
versa. But anyway, they did talk about
9:43
monetizing and monetizing their spectrum bands.
9:46
And so that to me sounds like, and you know, Scott didn't or
9:53
Adele talked about because there was a question about deploying
9:56
the mid band constellation, you know, when are you going to
9:58
start building those birds? And Abell said that the
10:02
expectation is that they would start production at the end of
10:04
this year. And so my guess is, and it
10:07
sounded like they they did spend quite a bit of CapEx on
10:10
procuring materials for many more satellites.
10:15
And so I would think that they're going to try to pull for
10:18
development of mid band Bluebird spectrums.
10:21
Yeah, mid band Bluebird satellites.
10:25
It's getting late, so I'm not having a bit of a brain fart,
10:28
but but yeah. So it sounds like the the
10:34
additional capital that they raised, you know, they, they
10:36
also talked about procuring additional square footage for
10:41
production capacity in Florida. The other thing or sorry in, in
10:45
Texas, the reason why I mentioned Florida is that in the
10:48
10K for those that are interested, they actually break
10:52
down the square footage by location.
10:56
So they talk about Israel, India, Florida, Texas, and they
11:00
talk about what exactly they're doing in Spain as well, what
11:03
what exactly they're doing at each facility.
11:05
So if you did get a chance, definitely look at the 10K.
11:08
Maybe I'll put a tweet out before I go to bed of what
11:11
exactly is going on in each of the facilities.
11:13
But that was nice that they gave that additional disclosure.
11:18
The other cool thing was that Scott disclosed that they sold
11:24
15 commercial gateways for 2025 and they were delivered to M&O
11:29
partners in across or sorry, they were delivered to 9
11:34
different M&O customers or yeah, nine different customers across
11:38
5 continents. And so that shows like, you
11:42
know, the diversity, but also the fact that services is being
11:47
geared up to be deployed across, you know, very broad geographic
11:51
ranges. And so I think that was really
11:54
nice insight because it's Scott mentioned, you know, you should
11:57
start seeing gateway sale ahead of commercial activation for
12:03
service. And so, so that was nice color
12:06
In terms of guidance, you know, the company provided 2026
12:11
expected revenue to at least double the high end of 2025 and
12:14
so they gave a range of 150 to $200 million.
12:18
And just to give you a sense, the Street had, let's see, 2026
12:23
at 233,000,000. So, so obviously 150 to 200
12:27
seems quite conservative versus 2026.
12:31
And I know there are a number of people on Twitter asking about
12:35
that, you know, doesn't that seem a bit too conservative?
12:38
And yeah, I, I agree, I think it is conservative, but but here
12:42
now that the company is revenue generating, they're, they're now
12:47
taking from good public companies where you, you provide
12:50
some level of realistic to conservative guidance and you,
12:54
you set, you know, you set people up to them beat and raise
12:59
over the coming year. And so I think by providing 150
13:02
to 200, they've they've given an achievable, you know, baseline
13:07
and hopefully they'll they'll outperform that.
13:11
Some of the color that they gave in regards to that number is
13:13
that over half of it is already contracted.
13:15
And so they feel very good about delivering that and then you
13:19
know, de risking that guidance and then they believe they can
13:24
beat that guidance depending on government, you know, milestones
13:29
and contract awards that are are going to come in over 2026.
13:33
But they did provide some color as to what they expected for
13:38
revenue, the makeup, which would be gateway, additional gateway
13:42
deliveries in anticipation of commercial service government
13:45
milestones related to you know, the 10 or I guess now 11
13:50
contracts that they've got working with the various
13:54
departments of government. You've got M&O consulting fees
13:57
and then of course commercial revenues, which I think some of
14:00
the the revenue commitments they have start to kick in beyond,
14:08
you know, in in lieu of commercial service.
14:10
But that but that revenue starts kicking in.
14:12
I believe, you know, at some point in 2026, the cool thing
14:17
they got the people that got, you know, folks interested and
14:20
you know, the stock popped. It was the fact that they did
14:22
talk about, and I know some people have tweeted like, you
14:25
know, it's a billion dollar, they got into a billion dollars
14:28
and it's, it's a base, base case.
14:30
I wouldn't go as far as saying it's base case.
14:33
They I think it was characterized as 2027.
14:37
They could see annual revenue approaching 1 billion.
14:40
So I don't think that's a base case, but that's something that
14:43
they feel really good about. And so, you know, can they get
14:47
to a billion or can they go beyond a billion?
14:50
I think they're probably, you know, and of course, this is
14:52
dependent on the the consolation being up and running and
14:56
commercial service launching and, and of course we know if
14:59
there's there's always going to be some level of delay.
15:01
So you got to bake that in. But but they feel pretty good
15:03
about a billion dollars. And and so like I said before,
15:07
this is, you know, the first time where the company is
15:10
talking about a specific in a very large number in a given
15:15
year of revenue and having, you know, when, when I listened to
15:20
Scott and and Abell, they felt really good about it.
15:24
And so, so that was quite bullish that the makeup of that
15:29
is primarily commercial and government service.
15:33
And then there potentially could be upside from government
15:37
contracts. So, so yeah, that that billion
15:40
dollars, you know, I think I wouldn't say it's a base case,
15:43
it's a goal, but then there is a potential to to beat that.
15:46
And so just for comparison, I know some somebody posted this
15:52
as well. But for, for 2027 there the
15:56
Street has projection. This is based off of 7 analysts
16:00
estimates. The Street is projecting 726
16:03
million of revenue. So you know, the company's a
16:05
little light on 2026, but then the company, if you believe
16:09
billion dollars is the right level, let's you know, reach
16:12
level, let's say maybe you can serve really 900 million.
16:17
That's significantly higher than what they have for 2027.
16:20
And so I think for the Street when they tomorrow, when they
16:24
update their models, you know, people will have to reduce 2026,
16:28
but then 2027, you know, they may need to raise that estimate.
16:33
And so let's see here. So you know, Scott did talk
16:38
about commercial in 2027 dwarfing government revenues.
16:43
And so you know in 2027 that's when they, they expect
16:47
commercial revenues to really start kicking in.
16:50
And the cool thing to you today is that they updated the total
16:54
contracted revenue commitment. So I think this is a cool KPI
16:57
that they provide. In Q3 they they said, you know,
17:02
they had reached about 1 billion of contracted revenue
17:05
commitments from partners and then this quarter they talked
17:08
about 1.2 billion. And so I guess you could kind of
17:11
look at it as bookings in some way, but obviously the timing of
17:15
when that revenue gets recognized is unclear, Although,
17:19
you know, Scott did talk about the fact that the contribution
17:23
is probably going to be anywhere between 100 to 300 million a
17:26
year. And so, you know, if you say
17:29
it's 300 million, well, let's just say $1.2 billion / 5 years,
17:34
that's kind of the way to look at it.
17:36
But contracted revenue commitments, I think for those,
17:41
you know, they're minimums, right?
17:43
And so you could, or you would, and the company alluded to this,
17:47
they think that that number is too low and that the numbers are
17:51
going to come in significantly higher.
17:52
And again, this goes back to the, the whole, you know, tone
17:57
of the call is very, very bullish.
17:59
I mean, for those that have, you know, followed the company for
18:03
five plus years, I don't think I've heard them.
18:06
Well, I, I take that back, I think it was like Q320.
18:12
No. Q yeah.
18:15
Q 3/20/24, That was a very bullish call.
18:18
But this call was, is the, the most bullish call that they've
18:22
had, right? Because they're, they're talking
18:24
about, you know, the contractor revenues, how that would be a
18:30
disappointing #1.2 billion. That should come well north of
18:33
that. And then they, they talked about
18:37
this idea, Scott talked about this where by the end of the
18:41
decade. So, you know, this is I think in
18:44
response to $1 billion. And one of the analysts said,
18:47
well, you know, if you're going to have, if you're going to get,
18:51
you know, go to multiples of that, Let's just say one point,
18:55
let's say take a range of 1.5 to $3 billion for 2028.
18:58
Like does that make sense? And then Scott pushed back and
19:01
said, well, you know, I'm not, I didn't, I'm not saying multiples
19:05
in the following year of 2028, but then, you know, we're not
19:09
putting out a 2028 number, but he was saying by the end of the
19:12
decade, we should be multiples of 1 billion.
19:17
And so, and, and by that he meant, you know, by that point,
19:21
we're going to have a lot more subscriber uptake and extension
19:25
of markets. And I I think when he meant
19:27
extension of markets, that meant, you know, turning on
19:30
additional M and OS in different regions.
19:31
And so when you turn those on, obviously there's this whole,
19:37
you know, a bunch of subscribers that that come with that.
19:40
And then, you know, revenue obviously would you turn on a
19:44
few 100,000 subscribers and maybe you get, I don't know,
19:48
1015% penetration. And and you know, you assume
19:52
whatever monthly fees those those folks are paying, that's,
19:55
that's a pretty big deal. And so, yeah, that was very
19:59
bullish, multiples of revenue upside by the end of the decade
20:02
relative to 2027, which is 1 billion.
20:06
So that sounds good. Moving on, there was some color
20:11
provided today on the margin story.
20:13
And so one of the analysts had asked, you know, for the service
20:18
revenue that you guys recognized in this quarter, you know
20:22
there's there was approximately 90% gross margin on that.
20:26
And so they were asking if this was a good indicator and Scott
20:29
was like, yes, this is this is, you know, 90% is what you would
20:33
expect for the business long term.
20:36
They get a lot of significant, you know, they get significant
20:38
operating leverage due to the highly high fixed cost base that
20:41
they have, which is obviously the majority of the fixed cost
20:46
going forward is going to be building and launching
20:49
satellites. But once they're up there, then
20:52
you, you know, it's all margin basically, right.
20:56
And so even even though the company has been on this like
21:00
hiring spree, the quarterly operating expenses aren't that
21:04
bad. Like they're, I think next
21:06
quarter they're projecting like 90 million of operating expense
21:10
and a lot of that is due to you know, additional hiring.
21:13
Now obviously like CapEx is pretty high like Q1 this coming
21:16
quarter they're they're projecting CapEx to be 350 to
21:19
425,000,000 and that's mostly tied to launch payments, which
21:24
was a majority of the CapEx spend last quarter as well.
21:28
But going forward, like once, once you've already paid for
21:32
production, you know, materials and you've put together the
21:35
Bluebirds and, and you go launch them.
21:38
Yeah, when you turn on service, whether that's to customer, you
21:42
know, consumers or government, all that revenue that comes in
21:48
basically drops to the bottom line.
21:49
It's all, it's all, you know, I, I think Scott mentioned he's
21:53
like, it's, it's hard for us to find cost of goods sold or, or
21:57
the cost of service revenue. Most of it's going to just drop
22:00
to the bottom line. And so when someone had asked
22:05
about EBITDA margins, Scott mentioned, you know, we we
22:08
should have because of the largely fixed cost base and that
22:12
we have this Rev share go to market strategy.
22:15
They expect EBITDA margins of 90% or higher over time, which
22:19
is yeah, that's like, that's music to my ears.
22:24
And I think it's, it's important to put this in context where you
22:27
know, you, you've obviously there's people out there who
22:31
don't believe in the story or, or talk about like how, you
22:34
know, they look at trailing financial results and how can
22:37
this company trade at $30 billion and they only had a few
22:41
$1,000,000 of revenue. Well, now the company on the
22:44
trailing basis has 71,000,000 of revenue, but obviously that's
22:48
still small. But but you're looking at a
22:49
company that by the end of the decade is probably going to do
22:52
what, 5, six, $7 billion? But there's a big difference
22:56
between high quality revenue and shitty revenue.
22:59
And what I mean by that is, you know, you'll have people that
23:01
try to do comps with, with other companies and say, oh, this
23:07
company's trading at like 10 times revenue or, and they have
23:10
great top line growth. And so maybe they should, you
23:12
know, it's a growth company, they should trade at 20 times
23:14
revenue. But oftentimes, like some of
23:17
these high growth companies will have shitty gross margins,
23:20
right? Like, I mean, the extreme
23:22
example, of course, is like a grocery store has one or two
23:25
percent, 3% gross margins, but they're doing a ton of volume.
23:29
You know, they have relative to what they're selling, they have
23:32
low fixed costs. And so they're eking out some
23:35
margin, but the gross dollars were big, right?
23:38
And so, so that's that's that's different than what we have here
23:43
where obviously the gross dollars are going to be big once
23:46
once the constellations deployed and services scaled up, but then
23:49
the margins are insane. And so obviously, you know,
23:54
there's a tremendous amount of upfront investment that's
23:57
required to put a constellation up.
23:58
But once it's up, it's it's literally going to be a money
24:01
printing machine. And so how do you value those
24:05
revenues? Should it be similar to, I won't
24:07
say software companies, just kidding.
24:09
What's going on with AI? But but yeah, like, like
24:13
Palantir trades at a crazy revenue multiple, right?
24:16
Let me just see what Palantir's margins are.
24:18
Let me just look at Bloomberg here.
24:22
Yeah, Palantir this year, this coming year, they're going to do
24:28
7 billion of revenue and their gross margin is 84%, right?
24:32
And so let's see here. And their EBITDA is 4.2 billion.
24:39
And so that's why they traded at a really high valuation multiple
24:42
because you know they're 2025, I think it's 4.5 billion of
24:48
revenue at 84% gross margins, that's going to like 7.2 billion
24:52
and then 2020 seven 10.3 billion.
24:55
And by the way, like that's really great growth.
24:57
But if you think about what stage AST is in and This is why
25:01
the market values it as such, you know, we're going from and I
25:05
think Kevin chanted put this in tweet, it's like 2024 or 4 point
25:10
4.4 million of revenue, 2020 5712026150 TO220271 billion and
25:18
then 2027 to 28. It's probably going to be at
25:22
least double, right, Probably 2 to 3 billion.
25:24
And then by the end of this decade, you know, you're looking
25:27
at maybe 10, right? And so or you know, you pick the
25:32
number 7 or 8, but the fact that you're looking at EBITDA margins
25:38
because obviously there's you're going to have depreciation from
25:41
the satellites and there's going to be a ton of DNA because
25:45
there's going to be these satellites that, you know, maybe
25:47
they, they survive, can operate for seven to 10 years or longer.
25:51
You'll be able to depreciate those, those assets, right.
25:54
And so that's going to give you a nice little shelter on, on
25:58
taxes. And so your EBITDA margins are
26:01
going to be, yeah, I don't know, 9293% which, you know, people
26:07
laughed at this back deck before, but that's that's what's
26:12
coming in the next few years. And so how do you value those
26:17
revenues if it's high growth and they're recurring in nature?
26:22
You know, let's see Palantir trades at that's for 202647
26:30
times revenue and then 202733 times revenue.
26:34
Yeah, that's kind of the comparable.
26:36
Like we're not. And this is not to like knock
26:39
other space companies, but for these space companies that are
26:42
doing, you know, that make satellite buses or do launch or
26:48
whatever. Like if they're their gross
26:50
margins are like 3035% and then EBITDA margins are probably, I
26:57
don't know at best and at best maybe 40 percent, 50% like
27:02
that's a very different business.
27:04
And that's not recurring in nature, right?
27:06
Like you're, you're building, you're building a rocket and
27:09
then and you launch it and then you got to go build another
27:11
rocket and launch it. And it's a one time type of
27:13
payment unless of course, like you get to reusability and then
27:17
you get you'll, you'll, you know, recover some of those
27:21
costs and get to use it over again.
27:23
But then for some of these other companies that make space
27:27
systems, whether you know, and I've seen some gross margins
27:29
that are like 10, fourteen, 15%. So EBITDA margins maybe are in
27:34
the high teens at at most. You can't really value those on
27:39
at the same revenue multiples as other companies because
27:42
obviously the margins are much lower, right.
27:44
And so even though there might be like reasonable growth, you
27:48
know, I would argue that those companies should trade at lower
27:51
valuations or they should trade it EBIT on EBITDA multiples or
27:55
if they're profitable, PE multiples, right?
27:58
But yeah, that's, that's, you know, one way to think about it.
28:00
But but today it was good because like the company for the
28:04
first time explicitly talked about gross margins and EBITDA
28:09
margins to be more than 90. So again, going back to this
28:12
idea of a bullish call, today was quite bullish.
28:18
And so Andy also talked about the, you know, they're, they're
28:22
acutely focused on achieving profitability.
28:25
And so from various growth, growth, you know, initiatives
28:28
around revenue, that's their goal.
28:30
Because that was one of the responses to do you guys need to
28:33
raise additional capital? And his response was, we want to
28:37
get this business to a level of profitability where we do not
28:41
need to raise money anymore. Now, obviously they're still
28:44
going to need to raise money for the next, you know, call it two
28:47
years. But then I think once you get to
28:50
terminal velocity or Max Q for this business where revenues are
28:57
coming in and they're scaled, the, the, the business is going
29:01
to fund itself like there's going to be no need for external
29:03
capital. And so that, and then you get
29:05
into these like these scenarios where people will start talking
29:10
about share buyback and perhaps a dividend, which I don't think
29:13
this company should do. Just given the growth
29:16
opportunities in front of them. They should be plowing money
29:19
back into building out additional, you know, additional
29:23
shells and pursuing some other opportunities as well, 'cause I,
29:26
I think as we've all seen for some of these legacy companies
29:31
that have spent all their money on dividends and share buybacks
29:34
and not have reinvested in their business, then you end up being
29:38
relegated to the dustbin of obsolescence, right?
29:41
Like you want this company to always be on the front foot
29:45
addressing new opportunities. And if you think about, you
29:47
know, what we've talked about for this coming year with US
29:51
administration focused on space superiority and how defense is
29:54
playing a much, much bigger role.
29:56
And then on top of that, you've got this big push a new market
30:00
has vertical has been created, which is AI data centers.
30:04
You want to be putting R&D dollars back, you know, any
30:09
money that you generate from the business, you want to deploy
30:11
some decent chunk of that back into R&T because I, I think
30:15
there's just tremendous opportunity in space, but let's
30:20
see. So going into tech and kind of
30:22
future opportunities. The company did report 3850
30:27
patents and patent penny claims. And so that's I guess the rate
30:31
of of patent growth has slowed down to degree because in the
30:35
previous quarter it was 3800. So they they added 50 which is
30:39
not bad. I mean, obviously they've Isabel
30:41
said in the call, they've achieved what they need to in
30:45
order to get the technology deployed and working.
30:49
And so you are going to see somewhat of a slowdown in the
30:52
Nora patents. And you know, I remember in 2021
30:56
the company was like at 700 and so that's that's pretty good
30:59
from 700 to 3850 to where we are today.
31:03
That's, that's a lot of, that's a lot of R&D and and IP.
31:10
Let's see. So as I mentioned before, they,
31:13
there was some talk about aftering commercial AI
31:16
opportunities and specifically I think it was discussed that
31:21
enabling precise geolocation, radar technologies.
31:24
These are some of the things that were mentioned, precise
31:27
geolocation to me that that definitely smells like PNT,
31:31
which is GPS alternative and then radar technologies,
31:35
obviously sensing, you know, tracking things.
31:41
And then there's probably things that that the company won't talk
31:44
about, I won't say publicly, which is like jamming and
31:47
electronic warfare, which I think, you know, it's smart,
31:53
right? Like they, they, I think there
31:55
was the, the one conference where Scott talked about 10
31:58
different use cases for the military.
32:00
He did mention some of those to a degree, but you probably don't
32:03
want to go into too much detail on those.
32:06
But the other thing that I thought was very interesting,
32:09
which I think we all need to dig into more, is this idea.
32:14
You know, Abel talked about multiplying spectrum efficiency.
32:19
And so we all know that the company with the current
32:23
technology can achieve around 3 to 4 bits per Hertz in capacity.
32:28
But then Abel talked about this idea of multiplying that, so
32:33
getting anywhere on the order of three to 10 times more capacity.
32:39
And so to me, I mean, that could be like Cohere, which is, you
32:44
know, one of the companies that we speculate they're, they're
32:46
working with, but then other things that they can do with the
32:51
Bluebirds and and AI, it seems like there is additional
32:56
optimization work they can do. But I mean, that's pretty nuts,
32:59
right? Like 3 times is a lot.
33:01
I don't, I don't, I'm not sure what he means by 10 times.
33:04
But if that is true, yeah, we're, we may not be bullish
33:11
enough. Like if you can get 120 megabits
33:15
per second peak data rates. And then of course the company
33:17
today said, hey, we can get in excess of that.
33:22
And and someone pointed out like, oh, if they are talking
33:25
about in excess of 120 megabits per second, maybe testing
33:29
already with Bluebird 6 is going quite well, which I think that's
33:33
probably a decent conclusion you can draw.
33:35
But 10 times that, I mean that seems a bit insane, right?
33:40
But then who knows. I mean, he did talk about doing
33:44
carrier aggregation and having MIMO and so maybe that plays a
33:48
hand in it. But 10 times more, I wonder what
33:52
these guys are cooking up because if you get to that level
33:57
and you're using low band spectrum and if you have enough
34:04
satellites, then you're talking about the potential to actually
34:08
replace terrestrial towers, right?
34:11
That you may not like you may not have be able to serve the
34:16
densest area of the population. But for suburban areas, forget
34:20
about dead zones, but suburban areas, then if you're looking at
34:23
orders of magnitude of 10 times spectral efficiency beyond 3,
34:27
three to four bits per Hertz, then yeah, you could replace
34:31
towers, right. So that's something that I think
34:36
maybe for, for the Q1 call, I'll, I'll submit a question or
34:41
someone will submit a question and ask like, hey, can you guys
34:44
talk about this in more detail? What, what did you mean by that?
34:47
But yeah, it was kind of cool. Like the the company did talk
34:49
about having the ability to to do 4G5G and of course they, they
34:55
dropped sig G on people. And so I think this was an
34:59
important statement because this is one of the advantages of a
35:04
bend pipe architecture where the satellite is, is basically, you
35:08
know, communicating, doing signal processing, but do it
35:11
sending all the, the hard stuff down, down to, you know, down to
35:16
the gateway, which then the E node B is there.
35:20
And so you pretty much become protocol agnostic because it's,
35:24
it's the, it's the, the, the, the processing actually happens
35:29
at the gateway. And so this was something that
35:31
when I first spoke with a Bell back in 2021, he had mentioned
35:34
he's like, you know, we're Bendpipe architecture.
35:36
And so the processing happens not on the satellite, but at the
35:40
gateway. And so we can do 4G5G6G.
35:44
And then he was joking. He's like, we can do 7G.
35:46
And so the reason why that's important is that for, and I'm,
35:51
yeah, I, I'm not sure if this is true, fully true in what I'm
35:55
saying, but for like Starlink, at least architecturally, you
35:59
know, they, they actually put the brains not at the gateway,
36:02
but up in the satellite. And so it's not a vent pipe
36:05
architecture. And so the, you know, be that's
36:07
in the satellite, once you send it up there, then you're kind of
36:11
stuck with that tech. And so if something along,
36:15
something better comes along in terms of, you know, protocol, so
36:20
let's say 6G, then theoretically you would have to, you know,
36:25
maybe there's some software updates that you can do and, and
36:27
make some changes. But then at some point in time,
36:30
a lot of those satellites that are orbiting, if you're
36:33
Starlink, you, they become obsolete and you have to wait.
36:37
I mean, maybe you don't wait. I mean, eventually they're going
36:39
to come down because they're, they're flying in very low Earth
36:41
orbit. So they're only lasting 3 years.
36:44
You would have to go launch new satellites that have, you know,
36:48
the 6G update on the E node B or a more advanced E node B that
36:53
would allow you to handle, you know, some more advanced
36:55
protocol, right? So it's if it's 6G or 7G or
36:58
whatever it is, but the Ben architecture, you're going to be
37:02
protocol agnostic because the heavy duty processing actually
37:06
happens at the ground station. The E node B sits is it is in a
37:09
rack and it sits there in this data center or the gateway,
37:14
right? And, and so if you, you know, if
37:19
the protocol changes, you actually just switch out that,
37:22
you know, be on the ground and the satellite still doing its
37:24
job. It's just sending signals back
37:26
and forth. It's processing signals, which
37:27
is really tough. And it's doing beam for me and
37:30
all that. And that's why you need the
37:31
Fpgas or ASICS. Like it's doing a lot of complex
37:34
work, but the actual processing of the protocol actually happens
37:39
down on Earth. So I've probably talked a bit
37:42
too much about that, but but I think that's the elegance of our
37:45
solution. Where as the satellites, you
37:48
know, when you think about a 7 to 10 year life, that's a true 7
37:52
to 10 year life and perhaps even beyond, because that's like, you
37:57
know, it is going to work with evolving standards.
38:00
Whereas I think for company like Starlink where they they put the
38:05
the brains into the satellite, it's, it is going to face a a
38:09
higher risk of obsolescence. But of course, again, the, the
38:13
life of that Sally, it's only expected to be 3 years just
38:16
given the orbital decay. And so maybe that's not a
38:19
problem. Let's see here.
38:22
So I talked a bit about the government contract.
38:28
So the company I believe has they, they were talked, Scott
38:32
was talking about it as of 10/10 contracts as of the end of the
38:35
year. But then of course, I got
38:36
another one. So I think it's more like 11
38:38
government contracts, some cool, some cool color as I mentioned
38:43
before, is that these contracts are not really predicated or
38:47
require a full constellation deployed, but they really are
38:51
based off of meeting milestones and, and a lot of it is per
38:54
satellite deployments. And so, so that's good because
38:58
if you think about what the company's doing, they're,
38:59
they're, they're launching more and more satellites and you're
39:02
building this base of, of satellites.
39:06
And as you do that, you're getting more and more government
39:08
revenue. So that's, that's a great
39:09
dynamic to have. Let's see, you know, the, the
39:13
company to talk about Golden Dome, the SDA $30 million award
39:17
and that they are now part of NDA Shields, which they can, you
39:21
know, they're eligible for a number of wards.
39:23
But I think it was cool where, you know, we've gone from the
39:26
company talking about the idea of Golden Dome and possibly
39:29
being relevant to now they're in it.
39:32
And so that's good and they're very explicit about it.
39:36
And as I mentioned before, you know the company has the
39:39
opportunity for these programs, the 10, there are 11 programs
39:44
that they have to grow into programs of record, which would
39:46
be multi billions of dollars in value over several years.
39:51
So that's the upside. They did provide update on
39:54
partnerships and so they talked about Verizon being signed in
39:58
Saudi telecom, you know, last year in 20 or the end of 2025
40:04
and. And how Saudi Telecom, which is
40:06
good to hear, they did make the $175,000,000 prepayment which
40:11
goes into the bank by at the OR happened at the end of 2025,
40:16
which is great. Cool thing today was that they
40:19
announced, you know, part Satco or not.
40:23
I keep calling it Satco satellite connect to Europe,
40:26
SCE, maybe I'll just call it SATCO.
40:29
I feel more comfortable saying that, but SATCO announced
40:33
partnerships today with Orange Telefonica, CK Hutchinson, which
40:38
is new and of course, you know, three different Vodafone
40:41
subsidiaries. And so as people will know, or
40:45
Orange, Telefonica and of course Vodafone were already working
40:49
with the company before. But the fact that today they
40:52
became, you know, Satco is a showing venture with Vodafone
40:56
that started, I guess it was a year ago.
41:00
But but the fact that these carriers committed to work
41:03
within the construct of, of Satco or Satellite Connect
41:07
Europe is big news, right? Because that entity is, you
41:13
know, gearing up to be a sovereign solution for Europe.
41:16
It's also going to pursue 2 gigahertz spectrum that's going
41:20
to come up for allocation in 2027.
41:24
And so the fact that you've got four of the top five European
41:27
carriers who are backing this this plan, I think they're going
41:32
to be quite well positioned to get in a spectrum allocation
41:35
from Europe. Also there's been some space law
41:40
due diligence where I think other players in rounding out
41:44
that top 10 British Telecom and then there you know, Telecom
41:49
Italia, I, I referred to that before and one other as well, I
41:53
think are probably likely to join.
41:56
And so I don't know if we'll hear about that.
41:58
This is our speculation by the way, but I don't know if we'll
42:01
hear about that this week because the company was asked,
42:06
you know, are you guys done with all your announcements for
42:08
Mobile World Congress and, and the response was no, there's
42:11
more to come. And so we might hear about some
42:15
additional partners this coming week, which wouldn't be a
42:19
surprise and of course would be great news.
42:22
The other carrier that was added today outside of Satellite
42:25
Connect is Taiwan Mobile. Taiwan has three large carriers.
42:29
Taiwan Mobile is a second largest carrier.
42:31
I think Chungwa is the largest carrier.
42:34
Chungwa used to be, I might be wrong on this, but I think they
42:38
were the state owned the equivalent of like AT&T before.
42:42
But but Taiwan Mobile became a pretty large number 2.
42:46
I think they recently did like a merger deal, but but as I
42:50
mentioned in the discussion this morning, Taiwan is a very unique
42:55
mobile market in that, you know, obviously you've got the threat
42:58
of China potentially invading. So you need, you need 100%
43:03
connectivity, broadband connectivity over all over the
43:06
country, which is very mountainous.
43:08
And then on top of that, you've got, you know, so if there
43:11
obviously is war, you want to have full connectivity, you want
43:14
to have backups. If, if things get, you know,
43:16
networks get taken down or there's jamming, you know,
43:19
imagine any scenario. But then on top of that, you
43:22
have always the specter of a, a natural disaster.
43:27
So whether that's earthquakes, typhoons, you know, there
43:32
there's, there's a whole host of reasons why you want to have
43:35
satellite connectivity. And so that was a great win to
43:38
see today. And then, you know, the company
43:40
did mention that they do expect to add more M&O partners in 2026
43:44
and then additional definitive agreements. 1 observation I will
43:48
make is that 2026 will be a year where you will see carriers
43:55
utilize Starlink and I'm not talking about fixed wireless,
43:58
but Starlink direct to sell or we'll call it actually Starlink
44:02
Mobile. Now let's let's do that.
44:04
So you also carriers use Starlink Mobile and ASD and so
44:08
they might use a specific, you know, one of the services for a
44:12
specific market and and the other service for another.
44:15
They might trial both of them. They might use both of them and
44:18
that's OK. Like that's part of this market
44:21
structure where it's going to be a duopoly and people will choose
44:25
solutions based off of their needs, right?
44:28
Like some might like the, the ability to control all their
44:32
data and they want to have, you know, they, they, they don't
44:37
want their customer roaming on someone else's network.
44:39
And so that would be AST. But then some others might be
44:42
comfortable, you know, handing the customer over to, to
44:46
Starlink and, and then, you know, they're, they might be OK
44:50
with, excuse me, the data not originating or landing in their
44:55
own country. And that would be Starlink.
44:57
And so or they, you know, the Starlink might be better
45:01
positioned for certain markets versus AST.
45:04
But I think what people should get comfortable with is that
45:08
this is not going to be a complete like 0 sum game there.
45:11
There probably there are going to be some markets where both.
45:16
Yeah, well, they're definitely going to a majority markets will
45:19
have both solutions, right? Like you'll have on one side,
45:21
they'll they'll bifurcate into two or three carriers on one
45:25
side using AST and then one or two carriers using Starlink on
45:29
the other side, right. And so today, for example,
45:32
Deutsche Telekom, which is the largest European MNO, the number
45:37
one largest MNO, they they announced A partnership with
45:41
Starlink, you know, finally. And so it's been, this has been
45:43
years of the making where back in 2022 when Elon said, hey,
45:47
we're going to go do this thing, you would have thought like, OK,
45:51
then that means that Deutsche Telecom's going to work with
45:53
them because they, they obviously kicked it off as
45:55
T-Mobile, which Deutsche Telecom still owns a pretty large
45:59
financial stake and has influence and control over it,
46:02
but they waited until 2026. And so the reason why that is,
46:07
is that as we've talked about over and over again, Starlink's
46:12
current satellites are pretty bad.
46:14
They, they put down very large cells that are not fixed.
46:19
They, they, they move. And so it's really hard to, for
46:23
them to pinpoint and provide service without disrupting, you
46:26
know, providing, you know, spilling interference into other
46:30
areas and obviously, you know, respecting borders of countries.
46:33
And so it's for, for Deutsche Telecom, it wasn't and it, you
46:37
know, it wasn't a viable solution.
46:38
Whereas if you believe what Starlink is saying about around
46:41
their second generation of, you know, Starlink mobile
46:45
satellites, they'll be able to do a bit, quite a bit more
46:48
similarly, I think what are they're going to try to do what
46:53
AST is doing. And so because of that,
46:55
deutsche.com said, hey, today we're announcing that we're
46:58
going to work with Starlink and we're going to roll out service
47:00
in 2028. And so you might ask yourself
47:03
like why, why 2028? And so that satellite, it was
47:09
revealed today that SpaceX Starship, they're planning to on
47:14
commercial cadence for, for launching rockets in mid 2027.
47:19
And so it's going to take time, right, to get that consolation
47:23
up where they're going to need thousands of satellites versus
47:25
AC that only needs 100 because these things are flying at very
47:28
low Earth orbit in the 300 kilometer range.
47:31
They have small phased arrays. I think the, the design is like
47:36
5 meters by 5 meters, whereas ours is 15 meters by 15 meters.
47:40
And so so yeah, it's going to be, it's a very different
47:44
proposition. And, and for that technology to
47:48
work, Deutsche Telekom needs for that constellation to be up and
47:52
running and at scale before they roll out service.
47:54
So, so that's 2028. But Deutsche Telekom was
47:58
strategic in announcing that because obviously Echostar,
48:02
which is the spectrum that, you know, they own spectrum that's
48:05
SpaceX is acquiring, they need to get a renewal on the European
48:10
2 gigahertz spectrum that they, they, they have the rights to.
48:13
And that's coming up for reallocation in May of 2027.
48:17
And so by having Deutsche Telecom say, hey, we're going to
48:20
use this service, we're the largest M&O, please give us that
48:23
spectrum. They're angling to get that in
48:27
2027. But obviously, you know, there's
48:29
this wild card of Elon Musk, who is not necessarily a is well
48:35
liked or a friend of your your the EU.
48:39
That will be interesting to see, you know, how that that spectrum
48:42
gets allocated. But anyway.
48:45
But yeah, that's that's. On the partnership side?
48:51
So moving on to production, let's see.
48:53
So the company gave an update. They are now they have Bluebird
48:58
8 through 29 at various stages of production and that's the
49:02
update from the Q3 call where they said they had eight to 10.
49:06
No 8, I think it was 8 to 19 Bluebirds in various states of
49:10
production. So they've added another 10 in
49:12
production and they've completed, they expect to
49:16
complete Micron assemblies enough for 40 satellites by
49:20
first half of 2026. And so this is moved.
49:23
I think they were targeting that for first quarter of 2026 and so
49:27
it's moved by 1/4. And then of course they were
49:30
supposed to ship the 1st and this is the, this is the, this
49:34
is the, the disappointment part of this quarter, quarter update.
49:38
Everything else was bullish, but this is the disappointing part,
49:40
which is, you know, things got pushed back in terms of
49:43
timeline, but let's see. So the first batch is of the new
49:49
Block 2 composite satellites, So Bluebird 8 and beyond.
49:53
They were expected to be done sometime in I think it was like
49:57
December. No, no, January.
50:00
And so that's that's no, sorry, I think it was February.
50:03
So that's been pushed off. But you know, one of the things
50:06
that we've heard from space model due diligence is that
50:10
these whenever you use new technology, like new composites,
50:14
it's it's going to take you take you more time than you think
50:18
because it's not easy. It's not easy to develop like,
50:21
you know, a composite shell which is going to encapsulate
50:24
the bus and of course the microns.
50:27
And so as we, you know, as we all know very well, space is
50:30
hard and it takes time. And, you know, this company is
50:34
focused on doing things right the first time every time.
50:37
And so now we're looking at I believe the first batch of Mike
50:44
Blue Bluebird 8 and Beyond satellites being shipped in
50:47
April. And so that's, you know, that's
50:49
basically 28 days from now, which isn't too far.
50:54
But then of course, you know, once those microns are shipped
50:56
or sorry, not microns, once those satellites are shipped,
50:59
it'll take two to three weeks to be in integrated into a launch
51:04
vehicle. And so you're probably looking
51:05
at the next big batch of satellites being launched
51:09
outside of Bluebird 7 being launched in late April or early
51:14
May. And so that might give you like
51:16
a little bit of heartburn. It's like, OK, well how are they
51:18
going to get to the number of satellites launched that they
51:22
were targeting? And I'll get that, I'll get to
51:24
that in a bit. But you know, I another thing
51:28
about production, they, they, they talked about acquiring
51:30
another site in Midland which gets them beyond 500,000 square
51:34
feet. I think they're currently at
51:36
almost 500,000. And so this new.
51:39
Space that they're getting is going to put them well over
51:41
500,000 in terms of metrics. I talked about this before, but
51:46
they let's see, they are going to get to in terms of production
51:53
cadence, they're expecting or they did achieve 6 satellites
51:56
worth of microns per month by the end of at the end of 2025.
52:02
And then they were hoping to get to 6 satellites per month fully
52:06
assembled and tested by the end of 2025.
52:09
But then it looks like that cadence is going to be achieved
52:13
by the second-half of 2026. And so they're hoping to get to
52:17
6 satellites. Excuse me?
52:21
Fully. Manufactured and tested by
52:24
second-half by June of 2026. As I mentioned before,
52:27
composites take longer. And the other thing that they
52:31
disclosed today is that what they're doing is they're
52:35
figuring out how to properly stack these things.
52:37
And So what I mean by that they I I'm assuming so the bell gave
52:44
some color where when you stack, you know, 6 microns or maybe up
52:49
to 8 or sorry, I'm not micro. I keep saying that if you stack
52:52
6 Bluebirds or 8 Bluebirds, it's like imagine stacking A5 story
52:56
building. And so these satellites, when
52:59
you put them, these tuna cans, when you put them on top of one
53:01
another, that that introduces like a whole nother level of
53:07
complexity and problems, right? So if you think about like a
53:11
blue, Blue Origin, New Glenn before you launch that thing, it
53:14
actually is sideways. And so, and on top of, you know,
53:19
the fairing has this like really solid metal piece and it's
53:22
round. And then if you look at like
53:25
Bluebird 7, it's on top of that thing.
53:27
And that's OK. It's one satellite, right?
53:28
And you, you forgot a way to attach it and, and screw it.
53:31
But imagine if you have like 6 of things, six of these things
53:36
stacked on top of each other or 8:00 and it's, it's, it's not
53:39
vertical, but it's, it's horizontal, right?
53:41
It's like when they ship the rocket to the launchpad and then
53:46
they raise the rocket, it's not vertical in the entire time.
53:49
It's actually going to be, you know, sideways.
53:51
And so you've got to really do a good job of securing that.
53:54
And of course it's got to go through vibration testing and
53:57
all this other stuff. But then if you imagine like the
54:00
bottom, you know, Bluebird, that's going to require, that's
54:04
going to have to have the strength to hold all the seven
54:07
above it. And then of course the second
54:09
one's going to have to hold all the six above it.
54:11
And so I, I would assume like that's, I'm not an engineer, but
54:15
that's probably a very difficult problem to solve.
54:18
And then, you know, on top of that, you, you're working with
54:20
like custom composites. And so maybe, I don't know,
54:24
there's like a skeleton, like a very hard end skeleton that goes
54:28
within the composite or I'm not sure how this all works.
54:30
But, but when he, when the bell talked about stacking these
54:34
things that they've solved the problem of the stacking.
54:38
I, I, I figured like that's probably, that probably took a
54:41
good decent amount of time right to figure out.
54:45
And So what was interesting is that let's see here so.
54:51
I think you know the company talked about.
54:53
They the target is to get 45 in orbit like the likely target is
54:57
45 in orbit by the end of this year, but 60 shipped by the end
55:01
of this year as well. So what that means is like they
55:06
the last two, I believe the last two shipments are going to be to
55:11
New Glenn because obviously that's like 15 satellites.
55:15
So if you assume that, you know, Falcon 9 can only take 3 to 4 at
55:22
post when you're getting into the 6 to 8 range, that's
55:24
probably New Glenn. And so, yeah, I think, I think
55:29
based off of some of the due diligence that we've done where
55:33
it looks like Blue Origin asked for an STA for New Glenn 4-5 and
55:39
six. Now I know like some of those
55:42
launches are going to be dedicated to Amazon, Leo and of
55:46
course like government missions. But there's some rumblings now
55:50
where it's it seems like we are going to get a New Glenn
55:54
dedicated launch for 68 satellites sooner than everyone
55:57
expects and maybe even before two batches of Falcon 9, you
56:03
know, 2 batches of three for Falcon 9.
56:06
And the reason why I say that is on the call, well, there's been
56:11
some like due diligence where it seems like there might be a Blue
56:14
Origin New Glen freeing up. But then beyond that, on the
56:17
call, which I thought was a bit weird, Adele talked about having
56:24
one batch. Of 6.
56:27
Ready to ship in April. And so he didn't say 2 batches
56:31
of three and or I guess he could have said two batches of 6
56:35
total. Maybe it might be like, you
56:38
know, English as a second language, but but, and you can
56:41
go back and read the transcript. But he, he talked, he talks
56:44
about this idea of, you know, we'll have 6 ready to ship 11
56:48
batch of 6 ready to ship in April.
56:50
And so to me that says that I think the next rocket
56:55
potentially. Is going to be New Glenn.
56:58
New Glenn 4 So I, I, you know, we'll find out, but that would
57:03
be one way to quickly catch up on delays in production in
57:07
production in that you, you actually start leaning earlier
57:12
and heavier on New Glenn and so that you're going to launch
57:18
that. There was a discussion of, you
57:22
know, them, but there was a reiteration them reiterating
57:26
that there's 13 launches across various vehicles, including, of
57:30
course New Glen for BB7. And the company didn't give
57:35
color about how they've overbooked for 75 launches or
57:39
sorry, launches enough for 75 satellites, but I assume that
57:42
probably still holds. But yeah, so let's see here. 1
57:47
interesting thing on the launch side is that they did sign an
57:50
additional new heavy launch provider.
57:53
They talked about adding one to the rotation.
57:56
And so they, they signed an agreement to integrate a
57:59
satellite with this new heavy launch vehicle.
58:01
That's now I think for AST they, they are now going to be a
58:06
standby customer in their manifest.
58:10
And so I, I feel pretty confident that it's probably
58:13
Mitsubishi because I think when you put 4 Sr.
58:18
BS on the the Mitsubishi Heavy launch it's going to be able to
58:22
take I don't know like I think 2 or. 3 Bluebirds.
58:26
But the other alternatives could be Falcon Heavy, Arian and Ulay.
58:30
So I, I don't think Ulay has any space.
58:34
But that said, as we all know with any of these launch
58:37
providers, sometimes the payloads don't show up when
58:40
they're supposed to. And then for all these
58:43
providers, they, they love having customers on standby who
58:47
have cargo ready to go. And so if someone doesn't show
58:49
up, which often times could happen for, let's say ula where
58:53
there's, you know, if you're relying on a traditional prime
58:58
to build satellites for the government, those things usually
59:00
come in pretty late, but they still need to launch.
59:03
Lo and behold, hey, there's some Bluebirds you can go launch.
59:06
And so. So yeah, that that that was an
59:10
interesting tidbit that was dropped.
59:12
And I I I think it's. Mitsubishi because you.
59:16
Know they've had a few successful launches recently and
59:20
there was this idea back in the day of getting import export
59:24
bank funding from the government of Japan.
59:27
And so by utilizing Mitsubishi, there probably could be some
59:30
economic incentives there. And obviously we're we're, you
59:34
know, close partners with the Bracket 10 and then a bell name
59:38
dropped Mitsubishi, I think it was like in the Q3 call.
59:41
So I assume it's probably Mitsubishi, but yeah, that was
59:46
that was a good one. So I think, you know, now we've
59:49
got Blue Origin, New Glen, we've got, you know, SpaceX Falcon 9
59:54
and then potentially Mitsubishi and of course ISRO, which I
59:58
think at most can take 2 Bluebirds, 2 composite
1:00:01
Bluebirds. But yeah, I think the ordeal of
1:00:05
of shipping satellites all the way to India probably don't want
1:00:09
to do that again. But but thanks.
1:00:11
Thanks Israel for the ride. Anyway, that's that's kind of
1:00:15
all I had. I'm going to check and see if
1:00:20
there's any questions, but now it's getting pretty late.
1:00:24
I always say that I'm going to do these very quickly and then
1:00:26
end up being an hour or more. Let me just see if there's any.
1:00:30
Questions or comments? Let's see how.
1:00:33
Confident. Are you in the latest?
1:00:35
Version of their manufacturing cadence chart going for 13
1:00:38
launches worth of Bluebirds ready to ship by end of year.
1:00:43
Let's see management response to the analyst question is arguably
1:00:47
the weakest part of the call. I don't know, I mean, I think, I
1:00:50
think they feel good. They, they specifically talked
1:00:53
about a a reason, which was the stacking issue.
1:00:58
And so that was like a real and, and I thought about the, the
1:01:02
complexity of that problem. It's like, Oh yeah, that's,
1:01:04
that's a real, and I had actually candidly thought about
1:01:07
it before, but that's that's a real problem that they had to
1:01:11
solve, right? And so I feel pretty confident,
1:01:15
like maybe I don't know, like maybe they'll get to 40 or 45 if
1:01:19
they missed by 5 satellites by the end of the year, it's not
1:01:22
that big of a deal, right? Like one thing I want to remind
1:01:25
people is that this service. And what AC?
1:01:29
Doing is inevitable. Like it it we may.
1:01:33
We may miss deadlines, may be off by a few weeks, might be off
1:01:36
by a few months. Like today.
1:01:37
SpaceX was talking about Starship going to be, you know,
1:01:42
Starship launching startling mobile satellites in mid 2027.
1:01:47
And when I saw that, I was like, OK, I'm going to tack on another
1:01:50
one to two years or maybe even three years because we all know
1:01:54
this stuff is hard. And it's not, it's not like any
1:01:57
particular company. It's like all companies, right?
1:01:59
It takes longer. I mean, like Rocket Lab,
1:02:01
Neutron, this was to launch, you know, quarters ago and now it's
1:02:05
getting delayed further because it's all it's all hard.
1:02:07
And, and this is like why I talked about how AI disruption
1:02:12
probably isn't going to impact, you know, space companies that
1:02:15
much because this stuff moving atoms and doing difficult stuff
1:02:19
in space is really difficult. And so I think that's part of
1:02:23
the bargain that you make as, as an investor in space companies
1:02:27
where on the one hand, you better have a stomach and be OK
1:02:31
with delays and overruns and, and what have you.
1:02:35
But once things happen and, and you know, they, they are highly
1:02:39
valued for a specific reason, you know, these, it's not easy,
1:02:44
then you have a very, you know, defensible mode.
1:02:48
It's not easy to try to compete, right.
1:02:51
And so I mean, if you look at launch, I mean, how many
1:02:54
companies have achieved reusability?
1:02:57
There's only two now. And perhaps there's there, there
1:03:00
will be more. I mean, of course, like the
1:03:01
space shuttle is reusable too, but economically reusable.
1:03:05
But, but yeah, I mean, I I'm going to give management the
1:03:09
benefit of the doubt and the fact that they feel, you know,
1:03:13
we, I would say a year, two years ago, when they would say,
1:03:17
hey, you know, this is what we're thinking of doing and we
1:03:19
feel pretty good about it. You would obviously discount
1:03:22
that to degree and you really, I hope these guys can pull it off.
1:03:25
But then now we're at this point where they're actually
1:03:28
generating revenues and getting contracts and, you know, getting
1:03:32
customers to sign long term agreements.
1:03:35
And so the folks who are on the inside who are doing due
1:03:39
diligence, they see the path, right?
1:03:41
And yes, it's, it's difficult and it takes time.
1:03:43
You know, Starlink talked about in 2022 launching their service
1:03:47
and having beta rolled out in 2023.
1:03:49
It took until 2025 for beta to roll out.
1:03:53
And this is a company that is for, you know, vertically
1:03:56
integrated, has the keys to space and, you know, unlimited
1:03:59
financial resources. But it took time, right?
1:04:01
And so, yeah, I think it it could take longer and and that's
1:04:05
OK. Let's see.
1:04:11
Heard a bell mentioned in Q. And A, the next batch shipment
1:04:14
is going to be 6 SAT's, Ng 4, Ng five, if I had to bet, I think
1:04:19
it's going to be Ng four. I think it's actually going to
1:04:21
be after Ng 3, New Glenn 3, which where is going to launch
1:04:25
in March and hopefully I'm going to see a bunch of you there.
1:04:30
My guess is it's probably going to be second-half of March or
1:04:32
maybe mid March, definitely not March 6th like that one tweet
1:04:36
was speculating, but I based off of like some due diligence
1:04:41
people have done. I think we have a pretty good
1:04:44
shot. It's going to be New Glenn 4.
1:04:47
And so, yeah, Mark that I think New Glenn 4IN May which for Blue
1:04:53
Origin that would be pretty quick turn around like to start
1:04:56
to to launch a new vehicle basically a.
1:05:01
Month after. New Glenn 3, I think that that's
1:05:04
like that's going to be pretty a pretty big deal.
1:05:07
Let's see. Also, I find it odd that the new
1:05:09
schedule makes note of new stackable configuration like of
1:05:13
change of plans. Although they plan on getting 8
1:05:15
and bong without stacking them, they they were going to stack
1:05:19
them. And my guess is I think Catsy
1:05:21
had drawn a configuration where they stack them in two two
1:05:26
vertical stacks or maybe even 3 vertical stacks.
1:05:29
But I don't know, maybe it is 2 vertical stacks, but it could
1:05:32
be, you know, it's one thing to design for this stuff, but then
1:05:36
when you actually put it into practice, I'm sure there were
1:05:40
some really difficult engineering problems to solve.
1:05:42
And so if you guys remember the Block 1 satellites, they had
1:05:46
this like very elegant lattice. It was like an Erector set that
1:05:52
held all 5 satellites, you know, 4 on the bottom and then one on
1:05:55
top. Whereas here, I believe in this
1:05:59
new configuration, there's not going to be all this like extra
1:06:03
stuff. These things are just literally,
1:06:05
they're built to be stackable, right?
1:06:07
Like imagine Legos, like they just stack on each other.
1:06:10
I don't know how that works, but it sounds very complex.
1:06:13
And yeah, I think, I think that I'm glad that they've.
1:06:19
Seemed to have figured that out. And they're moving forward
1:06:21
because I, I think that's, that was the term that the bell set
1:06:25
set where he's like, hey, we figured this out and now we're a
1:06:28
full steam ahead on production. Let's see, someone's asking how
1:06:33
many. Stackables fit into.
1:06:34
Neutron, Rocket Lab, Neutron, that's a good question.
1:06:37
I don't know. I think I think that's going to
1:06:39
be have answered at once. I think he said maybe 2
1:06:41
satellites fit into Neutron. But yeah, man, it would be great
1:06:45
to see Rocket Lab launch some Bluebird satellites.
1:06:50
I mean, you always want to have a diversity of launch providers.
1:06:54
I don't know if it would be economic to do that, especially
1:06:59
if Blue Origin New Glen is kind of like the the your your main
1:07:05
vehicle, although who knows, right?
1:07:07
Like we new Glen clearly or probably can take up 1
1:07:12
satellite, which is going to be FM 2.
1:07:15
Obviously it's heavier, but it'll be a very different task,
1:07:19
which is why I think, you know, you'll see six in the beginning
1:07:23
and then of course, once it's optimized 8 but even 6 like
1:07:27
that's going to be that's a big leap right from from just taking
1:07:31
out one heavy satellite to taking 6, not as heavy
1:07:35
satellites, but in, in totality much heavier.
1:07:39
But you know, I, I did some due diligence around Blue Origin and
1:07:42
just rocket development in general.
1:07:44
Like I remember the, the amount of efficiency and power gained
1:07:49
from the initial Falcon 9 to where we are today is like leaps
1:07:53
and bounds, right. And so the and Blue Origin
1:07:57
addresses to where they, you know, it's like tweaking A
1:08:01
modified car, you're going to get more horsepower, like more,
1:08:05
more thrust from the engines and all these different things you
1:08:07
can do to kind of push, push that vehicle for more
1:08:12
performance. And so, yeah, it'll be
1:08:14
interesting to see. I mean that that will be a sight
1:08:17
to see to, you know, for six Bluebirds to go up on, on Blue
1:08:21
Origin, New Glenn and then finally 8.
1:08:23
But but yeah, I, I think Neutron, my guess is too, but
1:08:27
I'm not really sure anyway that I will wrap it up there.
1:08:32
It's been over an hour now and I'm very tired.
1:08:35
So we'll see what happens tomorrow.
1:08:37
I think what to look forward to. I think obviously there's some,
1:08:41
there's going to be some disappointment around launch
1:08:44
getting delayed and and people are going to try extrapolate
1:08:46
that that as Oh my God, these guys can't do anything.
1:08:49
But I think we all know the people who are close to the
1:08:53
company that and who have followed, you know, Tesla, you
1:08:57
got to get through this like initial hump of getting a
1:09:01
production line up and trying to automate as much as you can.
1:09:04
Having all these employees. Obviously the company's been
1:09:07
hiring like crazy and solving difficult problems that that are
1:09:13
going to come up right, like stacking the satellites, working
1:09:16
with composites. And so once you kind of get
1:09:19
through this and you have the patience for it and the company
1:09:22
then starts getting into this, this cadence and they can truly
1:09:26
start building 6 satellites a month.
1:09:27
And then eventually they'll get to like 10810 twelve that that's
1:09:33
where that's where things get really fun.
1:09:36
But we're at this point where it's, you know, there, there's
1:09:39
there's going to be some research analysts tomorrow that
1:09:41
we'll talk about the puts and takes.
1:09:42
And so there's some obviously a lot of positive things, but then
1:09:46
also some things that are that have to be balanced, right?
1:09:48
And so I think overnight, for example, Cantor Fitzgerald put
1:09:52
out a report and they kept their price target.
1:09:54
They're overweight, but they kept the price target at 80,
1:09:56
which obviously is below where the stock is trading.
1:09:59
But my guess is that Colin Canfield, who's the analyst
1:10:02
there, he's probably thinking, I'm not going to, I'm not going
1:10:05
to raise the price target of the stock until I see the first
1:10:08
batch shipment go. And of course, like, I'd love to
1:10:11
see Bluebird 7 successfully launched on Blue Origin, New
1:10:16
Glenn, because, you know, we want to see the workhorse of
1:10:19
what AST is using launched successfully for a third time,
1:10:23
right? And so, but yeah, tomorrow you
1:10:26
might see some upgrades or I'm guessing that people are going
1:10:29
to probably stay, stay neutral. Not well, they're going to keep
1:10:34
their ratings, but they're going to keep the price targets
1:10:36
somewhat close, right? You know, Scotia Bank excluded,
1:10:40
screw those guys. But like UBS has a $43 price
1:10:44
target. They probably are going to raise
1:10:45
the price target but stay neutral, which is what they're
1:10:47
rating. Barclays is that underweight.
1:10:50
They're at $60.00. Maybe they'll raise their price
1:10:52
target to a degree, but stay underweight or neutral.
1:10:56
I think tomorrow is going to be somewhat neutral.
1:10:58
I mean, you've got the bulls like Deutsche Bank and Clear
1:11:01
Street at 137. They'll probably just stay
1:11:03
there. So I think I think like the
1:11:05
setup is going to be great going into April and May because then
1:11:11
you're going to have, you know, the launch of BB7 on Blue Origin
1:11:16
New Glen. And then you're going to get a
1:11:18
batch shipment. And probably a surprise of the
1:11:20
market which you've you're hearing here that the next
1:11:25
launch is not going to be Falcon 9.
1:11:26
It's going to be another Blue Origin New Glen.
1:11:28
Or who knows, maybe you'll have a New Glen launch and a Falcon 9
1:11:33
sometime in around the same time.
1:11:35
But anyway, but yeah, I, I think and I, I didn't talk about this
1:11:40
this morning, but my, my fear was that we were going to be
1:11:44
like all these other space companies like Rocket Lab and
1:11:48
and Black Sky and Red Wire. I mean, obviously like some of
1:11:52
these, some of the folks there were disappointments in the
1:11:54
call, right? But I don't think there were any
1:11:57
space companies that reacted positively to quarterly results.
1:12:00
Whereas Asti was thinking, oh man, I hope we don't have the
1:12:04
same reaction or we don't have too much disappointment.
1:12:07
I mean, they, I thought there would be bullish things, but
1:12:09
clearly today was a very bullish call aside from the delays,
1:12:13
which I think at this point the market somewhat expected.
1:12:15
And so the fact that the stock traded up a bit and tomorrow is
1:12:19
probably going to trade up to some degree or maybe stay flat.
1:12:22
But but I think kind of once that works its way through the
1:12:26
system and then people will start getting set up for the
1:12:29
next few, few months. I think the stock is, is going
1:12:33
to work quite well. And so, so I'm I'm looking
1:12:36
forward to it anyway, so I'll end it there.
1:12:40
Thanks everyone for joining and we'll catch up tomorrow.
1:12:44
Good night everyone. Thanks for listening to the.
1:12:48
AST Space. Mobile Podcast If you enjoyed
1:12:50
this episode and you'd like to help support the podcast, please
1:12:54
share it with others, post about it on social media, or leave a
1:12:57
rating and review. To catch all the latest news
1:13:00
about AST Space Mobile, make sure to subscribe.
1:13:03
Thanks again and I'll see you next time.
1:13:09
We're doing something very, very big and I think with this.
1:13:12
Technology we can really affect billion lives.
1:13:14
Safety Space Global is the only company that has good technology
1:13:19
to deliver several broadband connectivity directly through
1:13:23
faith to the everyday smartphone.
1:13:25
People will just basically turn the phone and be seamless,
1:13:29
regardless of where you are. We don't want the new technology
1:13:32
to know that it's connected by satellite.
1:13:34
Our role is to. Bring this into.
1:13:37
Reality, always in partnership with the MMO.