AST SpaceMobile Inc - Ordinary Shares - Class A Stock

Good day, and thank you for standing by. Welcome to the AST SpaceMobile Second Quarter 2026 Business Update. Please be advised that today's call is being recorded.

I will now turn the conference over to Max Colbert, Investor Relations Manager of AST SpaceMobile. Thank you. You may begin.

Thank you, and good afternoon, everyone. Today, I'm also joined by Chairman and CEO, Abel Avellan; President, Scott Wisniewski; and CFO and Chief Legal Officer, Andy Johnson.

Let me refer you to Slide 2 of the presentation, which contains our safe harbor disclaimer. During today's call, we may make certain forward-looking statements. These statements are based on current expectations and assumptions, and as a result, are subject to risks and uncertainties. Many factors could cause actual events to differ materially from the forward-looking statements on this call. For more information about these risks and uncertainties, please refer to the Risk Factors section of AST SpaceMobile's annual report on Form 10-K for the year ending December 31, 2025 with the Securities and Exchange Commission and other documents filed by AST SpaceMobile with the SEC from time to time.

Also, after our initial remarks, we'll be starting our Q&A session with questions submitted in advance by our shareholders. For those of you who may be new to our company and mission, there are nearly 6 billion mobile phones today around the world, but many of us still experience gaps in coverage as we live, work and travel. Additionally, there are billions of people without cellular broadband and who remain unconnected to the global economy. The markets we are pursuing in AST SpaceMobile are massive, and the problem we are solving is important and touches nearly all of us. In this backdrop, AST SpaceMobile is building the first and only global cellular broadband network in space to operate directly with everyday unmodified mobile phones, supported by our extensive IP and patent portfolio.

It is now my pleasure to pass this over to Chairman and CEO, Abel Avellan, who will go through our activities since our last public update.

Thank you, Max. Our execution in 2026 continue to reinforce what we have [ in lip ] since we created AST SpaceMobile and invented the space-based cellular broadband market: that combining differentiated technology, deep partnership with leading mobile network operators and a scale vertical integration position us to define the future of direct-to-device cellular broadband. Our space-based direct-to-device network will be the first of its kind to leverage low-band and mid-band spectrum with broadband speeds and native cellular application, combining a feature set and technology stack that put us in a category of 1.

From the beginning, we designed our network architecture alongside existing mobile network operators, not as a replacement of them. Rather than requiring operators to rebuild their infrastructure, our architecture and technology stands and complement their existing terrestrial network into space, allowing us to integrate efficiently while evolving alongside future 3GPP standards. To put these concepts simply, we're building the direct-to-device network of the future today, in partnership with knowing competition with mobile network operators. This new [ ledger of ] connectivity that we are creating is not just for addressing gaps in terrestrial networks, but it's to create a seamless connectivity experience wherever you live, work and travel anywhere on the planet.

Spectrum is another area where we believe we have significant competitive advantage. Through a combination of low-band spectrum contributed by our MNO partners and the spectrum we directly control, we are building access to the broader spectrum portfolio in the industry with satellite technology capable of tuning approximately 1,150 megahertz for low-band and mid-band, and in the future, C-band universal spectrum globally. In the United States alone, we are on the path to approximately 100 megahertz of spectrum from a combination of MNO partner provided spectrum and our own access spectrum, which will be a lead that is difficult for others to match.

In particular, we're combining our over 3,900 patents and patent-pending claims intellectual property and a very large phase arrays with our spectrum access. This provide greater network capacity, better coverage and significant flexibility as demands grow. We are confident that our comprehensive spectrum strategy is the winning one, giving us the tech needed to increase subscriber capacity and bring services to target markets with our partner MNOs.

Direct-to-device cellular broadband is establishing itself as a new additional connectivity layer. Our differentiated in-orbit technology and scale direct-to-device cellular broadband network serve as a resilient and reliable source of an additional and new connectivity [ lasers ] serving commercial MNO partners and government agencies alike. Incremental to delivering direct-to-device cellular broadband connectivity, our total addressable market is rapidly expanding. We see several growth opportunities across government communications and noncommunications opportunities, including [ RADAR ], emergency response Internet of Things, AI, edge compute and other advanced connectivity solutions. We see these markets as beneficiaries of our space-based direct-to-device network.

We recently received an award pending government approvals and final agreements with long-time partner Rakuten regarding it's selection for participation in the low-Earth orbit satellite infrastructure development project or J-LEO in Japan designed to address the Japanese and Asian markets, with a total expected value of up to approximately USD 1 billion in nondilutive, non-debt government capital. This follow continued work with FirstNet emergency and fire responder networks in the United States with partner AT&T and recent announcement with multiple government through partners like Vodafone and Rakuten.

Our partner-first strategy position us as the partner of choice for direct-to-device cellular broadband among mobile network operators. Our commercial ecosystem is growing with over 60 MNO partners who cover over 3 billion subscribers globally, including key partners like AT&T, Verizon, Vodafone, Rakuten, STC Group, Bell Canada and Telus. We are on the cusp of commercial deployment, and we prepare to scale our space mobile service to everyday unmodified smartphones with certain spacecraft in orbit and approximately 20,000 square feet of combined aperture hardware and approximately 50 gateways globally that are in various stages of completion, installation and planning, and we prepare for better service with key MNO partners in selected markets globally.

In the United States, we have deployed over 3,000 low-band cellular cells. We expect to deploy the remaining cells this year to light up the roughly 5,600 cellular cells that cover the United States. On network deployment, BlueBird 14 to 16 are undergoing final testing as their manufacturing assembly is nearly completed. The recent launch of BlueBird 11 to 13 demonstrate our ability to rapidly and repeatedly build, launch and deploy the largest phase array in low Earth orbit using advanced composite material for lighter and even bigger satellites.

Our largest newest fully composite BlueBird satellites are operating as expected as we prepare them for their communication and noncommunication nations for government and MNO applications. Our ASIC chip is now in full production, and we are expecting to nearly double the peak data speed of 98.9 megabits per second achieved using our own orbit Block 1 BlueBird satellites. As a reminder, our ASIC is designed to support up to 10 gigahertz of processing bandwidth per satellite, which is nearly 10x improvement from our in-orbit Block 1 BlueBird satellites. Over time, we expect further gains of up to additional 10x improvement in user experience through AI enabled spectrum management.

Turning to manufacturing. While in various stages of production and assembly through BlueBird 46, which is in line with the number of spacecraft required for continuous coverage in key markets. A detailed cadence of our deployment plan is shown in the accompanying quarterly presentation found on our IR website.

We continue to leverage our 95% vertically integrated manufacturing strategy to move at the pace and precision needed to scale a constellation of the largest satellites in LEO at a scale unprecedented in [ low Earth orbits ]. We currently have over 500,000 square feet of manufacturing and operations space globally, including our dedicated macro production facility to help accelerate satellite production as we ramp up into our target cadence of 6 fully assembled satellites per month.

We recently unveiled plans for an additional 400,000 square feet of manufacturing and production space in Midland, Texas. We prepare to further scale production for United States government and our extended TAM of commercial applications. With that, our global manufacturing and operations footprint will exceed 1 million square feet of manufacturing capability with over 900,000 square feet residing in the United States once completed. We are proud to be manufacturing the largest satellites in LEO here in the United States and in Texas, where bigger is better.

In summary, AST SpaceMobile is executing across every critical dimension of our business. We had expanded our commercial partner ecosystem now with over 60 MNOs, partners globally who collectively cover over 3 billion subscribers. Our comprehensive spectrum starts continue to strengthen across our satellite technology capable of tuning to approximately 1,150 megahertz of tunable spectrum, with share MNO spectrum and control M&A spectrum totally totaling approximately 100 megahertz access in the U.S. and over 60 megahertz access globally.

As an early indicator of success from our expanding total addressable market of opportunities, we increased our revenue backlog to approximately $1.3 billion in aggregated contracted revenue. Agreement with partners and contract award with U.S. government. These opportunities are supported by our robust balance sheet of more than $3.7 billion, making us well positioned to lead the commercialization of space-based cellular broadband and create a significant long-term value for our shareholders.

And with that, I will hand it over to Scott.

Thank you, Abel. Since our last investor update call, AST SpaceMobile has continued to make great progress in our commercialization efforts. I would like to take you through some of that progress across our MNO and government customers and put in context the business opportunity ahead of us, which only continues to increase at breathtaking speed.

In the commercial ecosystem, we are viewed as the partner of choice for direct-to-device with mobile network operators, as evidenced by the ecosystem we have built with now over 60 MNO partners globally who collectively cover over 3 billion subscribers. Network deployment in key markets with strategic partners is well underway, and our challenge is how to balance deployment of our cellular broadband service into the next set of markets beyond the U.S., Canada, Europe, Japan, Saudi Arabia and the U.S. government.

We are balancing this today with active engagement with more than 20 mobile network operators across over 50 country markets. We are developing these markets together with our partners with an increasingly scaled and programmatic effort with services that are designed to be turned on as BlueBirds come online. These efforts are going to manifest themselves not only in more market announcements with our partners, but also importantly, progress in the delivery and setup of about 50 gateways across 20 markets.

In fact, in Europe, you're already starting to see this infrastructure in action as we recently announced network integration and testing activities across several European countries with Vodafone, Orange, Telefonica, Vodafone Ukraine and Deutsche Telekom. Meanwhile, the regulatory backdrop also continues to support our commercialization efforts and provide a window into how we expect the business to develop. While the U.S. was an early leader on the regulatory front with full commercial service approvals delivered earlier this year, we are seeing good progress internationally in the U.K., Japan, Brazil and other countries.

Meanwhile, we have seen multiple countries provide commercial authorization to use our MSS spectrum assets, specifically in the S-band outside the United States. Altogether, these are strong signs of scaling our global cellular broadband network. More spectrum lanes of traffic for our network means more subscribers and better services when paired with our unique technology.

Meanwhile, the U.S. government customer has been a major focus for us, and we see great progress this quarter, both in terms of revenue capture and building the backlog. We drove revenue against several existing contracts and received 3 new contract awards. Our U.S. government partners view our in-orbit technology as unique, strategic, innovative and flexible with communications and noncommunications capabilities. We have foreshadowed the trend of small development contracts becoming larger contracts ahead of still larger operationalization of the capabilities through programs of record.

Today, you can see that trend as we are announcing 3 new contract awards with funded near-term value of over $100 million in total expected during 2026 and 2027. We plan to talk more about these awards publicly soon, but they represent near-term capabilities that have been in development with the U.S. Department of War for years and leverage our unique in-orbit technology to solve large strategic needs. In general, the backdrop and size of the Golden Dome opportunity, coupled with the Arsenal of Freedom initiative remains very strong for companies that have unique capabilities that can be deployed in the near term and can move fast.

Now taking a step back, I want to take a moment to discuss the large addressable markets for the company beyond direct-to-device. We see the opportunity to leverage our unique platform that we have created to dramatically expand the company's total addressable market, leveraging our differentiated technology, deep intellectual property portfolio, vertically integrated manufacturing and, of course, the comprehensive spectrum strategy. In part, this is now possible because of the maturity of the business and our fortified balance sheet, utilizing the same spacecraft design and ground-based gateways that we're already scaling today. We believe each of these new additional end markets could ultimately become multibillion dollar annual plus revenue opportunities for AST SpaceMobile.

In the government and defense market, firstly, we've seen early traction around noncommunications, including RADAR. Our spacecraft are uniquely positioned to provide some of these services given the size of the array aperture, the frequencies we serve and our ability to deploy quickly a global capability for an order of magnitude lower cost than historically possible. This application is the majority of our U.S. government revenue to date.

Secondly -- and this will sound familiar -- we have the ability to provide secure communications directly to low profile, low-power devices. This means regular 3GPP devices, but also custom designed handsets, existing radios, headsets, wearables and drones. This will be with a technology that is already showing broadband speeds over 100 megabits per second to extremely low profile and sized devices. These applications will be new to the warfighter and greatly simplify and improve communications for them in the years to come.

Each of these capabilities can be served with the same in-orbit network of AST SpaceMobile spacecraft, a combined capability that addresses the strategic needs of the U.S. government customer for decades to come. And apart from defense, we also see a few more funded comms opportunities. First, we are seeing a trend with large countries or regional bodies looking to replicate owned in-orbit resilient communications. This is born from a desire to have increased operational control of communications over their territory. Given the AST SpaceMobile architecture of landing traffic in country, we are uniquely positioned to serve this need and to add additional layers for this demand, with the Japan J-LEO preliminary award falling into this category.

Second, federal emergency and backup is another market taking shape, which you can see from our announcement with Vodafone Ireland, but it has been long planned both in the U.S. with FirstNet and in Japan. The 700 megahertz band, in particular, is viewed as a federal resiliency frequency, and thus is an attractive match for our network. This capability could be used broadly for first responders and also as a large-scale backup during periods of network outage, with Spain and Australia offering some notable recent outages that are driving political need for action.

Thirdly, IoT, or Internet of Things, is an attractive market for cellular and satellite operators, which positions us well to provide a unified service across both broadband and narrowband applications. With our controlled MSS frequencies, combined with extremely low-cost devices, this is another attractive use of our existing in-orbit network.

One final network I wanted to highlight today is space-based AI edge compute. As companies are starting to think about how to service this market in a big way, one of the key elements is the ability to deploy and control large structures in space, which is what we do. This is significant power to orbit at meaningful scale and with competitive costs. This provides clear cost and scale advantages for supplying power and compute in space.

What you will see from us in the near term is stretching from a bent pipe network and building additional edge computing capabilities valuable to those networks. In total, all of these markets represent an expansion of our incredibly strong core direct-to-device total addressable market into new large markets, primarily on a funded basis, leveraging the incredible platform we have built.

Closing out with a quick discussion on Q2 revenue, we achieved over $30 million in revenue during the quarter, more than doubling our Q1 revenue. This was driven by a combination of milestone achievements under our U.S. government contracts and commercial infrastructure for our mobile network operator partners. Our commercial and government efforts to date serve as important milestones in our road map to much larger opportunities, each with potentially billions of dollars in revenue per year as we scale our business.

In Q2 specifically, we delivered against 13 gateways to 7 customers across 5 continents. And we remain confident in our ability to achieve our full year 2026 revenue goals and are reiterating our guidance of $150 million to $200 million, supported by contracted programs already underway, together with our existing commercial and government pipeline.

Altogether, we're very pleased with the progress we've made across the business. Commercial readiness continues to advance, government demand continues to expand, our deployment road map remains on track, and our operational capabilities continue to scale. These milestones reinforce our confidence as we prepare for commercial service and position AST SpaceMobile for meaningful long-term growth.

I'm now happy to pass the call over to Andy to walk through our financial update.

Thanks, Scott, and good afternoon, everyone. During the second quarter of 2026, we maintained focus by further fortifying our capital position, executing on our commercial objectives accelerating our manufacturing cadence leveraging our growing footprint in Texas and beyond and expanding our total addressable market, or TAM, for additional applications, including U.S. government secure communications and noncommunication, RADAR, emergency response, Internet of Things, AI, edge compute and other advanced connectivity applications.

Revenue in Q2 came in consistent with our internal plans. As I've previously noted, we expect revenue to build sequentially each quarter during 2026 with contributions from both commercial revenue, primarily gateway sales revenue, and U.S. government contracts. I am pleased to confirm that we remain on track to meet our full year 2026 revenue guidance of $150 million to $200 million.

With respect to manufacturing, BlueBirds 14 to 16 are ready to ship shortly, while BlueBird 17 through BlueBird 46 are in various stages of production and assembly as we continue scaling our production capabilities, building the largest phase arrays in low earth orbit. Our manufacturing progress positions us well to support our current network deployment plan, targeting approximately 45 BlueBird satellites in orbit by early 2027.

The strength of our balance sheet, further bolstered with last month's convertible debt offering, positions us not only to complete the full buildout and launch of a constellation of over 100 BlueBird satellites to provide worldwide SpaceMobile service and deploy our controlled spectrum bands on a global basis, but also to pursue an expanding universe of growth initiatives and secure additional access to orbit for our space-based cellular broadband network, including partnerships, and/or acquisitions to further vertically integrate our business and mitigate risks associated with third-party launch providers. Our intentional focus on investing in the growth of our operations led to higher adjusted operating expenses in Q2 2026 as compared to Q1, consistent with our expectations as previously communicated during our first quarter 2026 earnings call in May.

Now moving to the operating and capital metrics slide, let's review the key metrics for the second quarter in a bit more detail. On the first chart, for the second quarter of 2026, we incurred non-GAAP adjusted operating expenses of $119.1 million versus $91.2 million in the first quarter. Non-GAAP adjusted operating expenses exclude noncash operating costs and insurance proceeds in connection with our BlueBird 7 loss. The quarter-over-quarter increase of $27.9 million resulted primarily from an $11.9 million increase in adjusted cost of revenues due to higher revenue in the quarter. Together with a $12.3 million increase in adjusted engineering service costs, a $3.1 million increase in adjusted general and administrative costs and a $600,000 increase in R&D costs.

Our Q2 2026 adjusted operating expenses, excluding adjusted cost of revenues, were $95.9 million compared to $79.8 million in Q1 of 2026. This amount was near the high end of the $85 million to $95 million guidance for Q2 adjusted operating expenses that I previously provided. The primary drivers of the increase versus the prior quarter were growth in our workforce, including contractors and consultants, our expanded production facilities, other professional fees and critical investments relating to artificial intelligence.

Turning towards the second chart on this slide. Our capital expenditures for the second quarter of 2026 were approximately $610 million versus approximately $257 million for the first quarter. This figure was made up primarily of payments made in connection with multiple launch contracts, capitalized direct materials and labor for our BlueBird satellites, with the balance relating to facility and production equipment expenditures. This amount for the quarter was just below the midpoint of the guidance of $575 million to $650 million that I provided during our last earnings call, which assumed a significant launch payment in Q2 that was originally scheduled to be paid in the first quarter.

For the third quarter of 2026, we estimate that our adjusted operating expenses, excluding adjusted cost of revenues, will increase to the range of approximately $105 million to $115 million as we continue to absorb the full quarter of cost of our expanded workforce and continue growing talent across our organization to scale our efforts to address our expanding TAM as well as pursue the monetization of our L- and S-band spectrum usage rights. For the full year of 2026, we expect adjusted OpEx, excluding adjusted cost of revenues, to average approximately $100 million per quarter or $400 million total for the year.

Consistent with average quarterly CapEx spend during the first half of 2026, we expect our capital expenditures in Q3 of 2026 to be in the range of approximately $350 million to $425 million, primarily driven by the timing of launch payments, which, as I previously explained and evidenced by the first half of this year, do vary from quarter-to-quarter. Importantly, our continued spend on growth-related CapEx reflects our increasing satellite production in our active orbital launch plans.

We continue to estimate that the average capital costs, including direct materials and launch costs for our constellation of over 90 BlueBird satellites, will fall in the range of approximately $21 million to $23 million per satellite, excluding certain initial satellites that are used to validate performance and operations. Our cost per satellite estimates are subject to fluctuations based on dynamic geopolitical factors that could impact our costs. And as a reminder, changes in our adjusted operating expenses and capital expenditures, as I've just described, could be delayed or may not be realized due to a variety of factors.

Turning to revenue. In the second quarter, we recognized revenue of $31.5 million, primarily driven by commercial gateway deliveries and various U.S. government service milestone achievements. Our revenue increased sequentially and year-over-year in the second quarter as we expected due to the timing of gateway deployment to our commercial customers and the timing of completion of certain government contract milestones.

With respect to commercial revenue generation, we believe we can enable continuous SpaceMobile service across key markets such as the United States, Europe, Japan and other strategic markets with the launch and operation of approximately 45 to 60 BlueBird satellites and additional strategic worldwide markets with the launch and operation of approximately 9 BlueBird satellites. Further, as we continue to launch and deploy our constellation, we will continue to support U.S. government applications currently ongoing and accelerating as our constellation grows.

As we reiterated in our Q1 2026 earnings call, we expect to generate full year 2026 revenue in the range of $150 million to $200 million. We manage the top line with a focus on full year performance given the quarterly variability inherent to our business, including the timing of contract signings, equipment sales and milestone achievements. As a way to be helpful and for the avoidance of doubt, we expect revenue in each quarter to continue to grow sequentially, but will likely be weighted towards the fourth quarter. As a result, we believe our revenue performance is best evaluated on a full year basis.

We expect revenue to continue to be driven by gateway deliveries, achievement of contracted milestones for the U.S. government, MNO consulting services, with potential upside related to the recognition of initial commercial service revenue. The achievement of our revenue plan remains subject to several contingencies, including the successful launch and deployment of our BlueBird satellites related to U.S. government applications and those contractual milestone achievements, critical gateway equipment sales to our MNO partners in support of their anticipated commercialization efforts of SpaceMobile service and service revenues in connection with the activation of our commercial service provided by our existing and planned deployed and operational satellites.

Now turning to the balance sheet. With this backdrop, in July, we executed a convertible debt transaction for $1.15 billion aggregate principal amount of 1.625% convertible senior notes due in 2034. As part of the transaction, we purchased a capped call hedge to increase the effective conversion price to $149.20 per share, a price well above our all-time high trading price. This financing allows us to pursue an expanding universe of growth opportunities, further continue vertical integration efforts and secure additional access to orbit for our space-based cellular network. The notes have our lowest coupon ever at 1.625%, providing cost-efficient capital with effective dilution of less than 2%.

Finally, on the final chart on this slide, on a pro forma basis, inclusive of that $1.15 billion in gross proceeds from the convertible notes offering, our cash, cash equivalents and restricted cash as of June 30, 2026, was over $3.7 billion. In closing, we are making progress on all fronts and accomplishing our near-term objectives. The hard work across the organization continues with revenue building on plan for 2026, satellite manufacturing increasing to support our orbital launch campaign and increasing applications within our rapidly expanding TAM. We look forward to sharing additional achievements with you during Q3 and throughout the second half of 2026. Thank you for your continued support as we continue the hard work of connecting the unconnected at AST SpaceMobile.

And with that, this completes the presentation component of our business update call, and I'll pass it back to Scott.

Thank you, Andy. Before we go to the queue of analyst questions, we would like to address a few of the questions submitted by our investors. Operator, could you please start us off with the first question?

David from New Jersey asks, how should investors think about the expected timing of meaningful government revenue? And could you expand some more on the RADAR capabilities of the constellation?

Thank you, David. As we said in our remarks, we're making good progress on these contracts, including over $100 million of contract awards in the last couple of months. So consistent with how we've always talked about it, these are kind of initial phases as we scale up the opportunity, and the government wants to see it perform against that. And of course, we're really uniquely able to perform given the size of our satellite, our technology, the fact that we're in orbit, the fact we're vertically integrated. And what we're seeing is that this opportunity is going to start scaling up into a recurring multibillion-dollar a year opportunity starting in 2027.

[ Leiden ] from New Zealand asks, how does ASTS' ownership of spectrum assets affect the company?

Thank you, Leiden, for the question. Well, a spectrum is like fuel for our business. But of course, also how efficient is the machine to utilize that fuel is super important. So it's the combination of the very large phase array, supported by over 3,600 patent and patent pending claims, a very large phase array, the power of that phase array and access to MNO partner spectrum and our own spectrum, is what makes that fuel really be very efficient in terms of creating additional lines of revenue to our government.

I just got presented in the -- in our brief today. I mean this is allowing us to actually scale up into a multitude of new applications that create a multiplication of our TAM, our current TAM, indeed, to the to 7 more new applications that really multiply the addressable TAM that we have today. So ownership for spectrum is super strategic for us. We were the first company in direct-to-device that start this trend of direct-to-device operators to own spectrum. But we had the largest combined spectrum access when you combine our MNO partners' spectrum plus our own spectrum in addition to a very large phase array with a lot of power that create that fuel the great multiple lines for -- lines of capabilities for our company.

Kevin from Vancouver asked, what kind of demand drivers are you seeing to trigger the massive 400,000 square feet of manufacturing expansion in Texas? How many BlueBirds per month are you aiming to produce?

Well, we're currently getting to 6 per month. We want to expand that in order to be able to supply enough capacity for our government and non-government applications. And so with the addition of 400,000 square feet of manufacturing, we would be close to 1 million square feet of manufacturing facility. We want to continue expanding our capability of producing them to even larger satellites that allow us to support communications, RADAR, GPS, AI, cloud computing, IoT and other very strategic applications that we have. And that's why we are investing very efficiently in extending our capability of manufacturing in Texas to close to 1 million square feet of manufacturing.

[ Leiden ] from New Zealand asked, does AST believe other countries will come forward with their own FirstNet or J-LEO programs that ASTS can support?

Thank you, Leiden. Yes, we see the J-LEO project as a real proof point for how countries, large countries are thinking about their own infrastructure. This is infrastructure they can control and get access to. And we think that -- and we see others thinking about it. So this is a trend that's going to play out, we think, multiple times in the coming years. And this is really a new layer of communications that gives governments and nations access to capabilities that they access and can control.

And in particular, the 700 megahertz band is one that we've put on the satellite in order to be able to address opportunities like this, both in the U.S. and Europe and in other places like Latin America as well.

And with that, I'd like to thank our shareholders for submitting those questions. Operator, let's open up the call to analyst questions now.

[Operator Instructions] Our first question comes from the line of Greg Pendy with Clear Street.

Can you kind of share with us on the [ recon 9 ] JV? I know it's in advanced discussions. But what stood out to get you guys to this stage given it was pretty competitive with some other bidders out there? What do you think you offer to the table that really kind of moved you guys along in that process?

Thank you, Greg, for the question. Well, we have the only platform that has demonstrated and is delivering today, broadband capability. That's -- that is one key factor.

The other one is the architecture that we offer allowed nations and regulatory bodies to basically keep all the data and all the management of the infrastructure on the ground. And third, the partnership with Rakuten over many years that we have with them as a leading Japanese company that have been partnered with us for many years.

So -- but fundamentally, we have the only platform that can deliver broadband that is in operations and that have demonstrated the ability to basically deliver seamless connectivity within terrestrial and space on a scalable basis.

Great. That's very helpful. And is there any way you can kind of give us an idea? I know you don't break it out, so if you don't want to do that. But the backlog, growing nicely to $1.3 billion. How much of that it might be government?

I would say it's a minority of it is government. The adds were we're primarily government, but the overall backlog, a minority of it is government. But I would say that we expect that one to scale in the near term, most significantly.

Our next question comes from the line of Mike Crawford with B. Riley Securities.

Of these first 46 BlueBirds that you have under partial states of construction now, how many of these are already have or are targeted to have L-band or S-band connectivity installed on the microns? And then how should we think of the spectrum [ X of the full 90 ] satellite consolation?

Mike, I mean we are producing roughly at a rate of 6 per month in terms of microns. We are on micron 46. We're starting the production of the mid-band capability later this year for start launching very early in '27, there capabilities. So the current microns are low-band systems.

And then for my second question is, how does this potential U.S. MNO joint venture affect your discrete agreements with AT&T and Verizon, and as well as with T-Mobile that you don't have an agreement with?

Thanks, Mike. Well, our existing agreements are not affected. And frankly, as we said when this was announced, the joint venture frankly frees up a third and fourth customer for us in the United States. So we were happy and supportive of it. Ultimately, we are carrier-agnostic, right? Our network is good for all operators. We have strong partners, and those partners are important to us. But as markets grow and mature, we expect to be available to all operators.

So this is really consistent with the strategy we put forward 2 years ago when Verizon joined with AT&T to support us. And going forward with the joint venture, we look forward to partnering with them as well. But existing agreements and the lead we have in the market for delivering cellular broadband, that's unaffected.

Our next question comes from the line of Colin Canfield with Cantor Fitzgerald.

Thanks for the question. As you put up of the building blocks on revenue for '27, just rough numbers here, it seems like there's probably $100 million to $200 million of gateway support, $100 million to $200 million of government -- U.S. government support and maybe $100 million of international government support. As we think about the upside to that framework, can you just maybe refresh investors on how to think about rev rec for commercial service? And essentially, what are you hearing from commercial operators about pushing revenue or allowing AST to recognize revenue with a partial deployment of constellation?

So I mean, first of all, we're hearing from operators that they want the service now. And so we are pushing extremely hard. You've seen our comments on beta getting that out the door to demonstrate skilled capabilities and then start rolling out commercial service with as little as 45 satellites in orbit. So we're racing towards that with our strategic partners, really as many partners as we can simultaneously race towards that with.

And then rev rec will begin -- I don't want to commit to anything, but generally speaking, revenue recognition should begin for commercial service when commercial service begins, right? So when that happens next year, that will start being recognized. And the other components of revenue, I would say you're generally accurate. That gateway is in excess of $100 million. As we continue to grow that government revenue, we hope will greatly exceed your number, but that's still being played out now, and we'll have more announcements in the near term on that. And commercial services revenue, of course, is what we're all playing for, and we're very excited and expect that to ramp quickly once we get going.

Got it. Got it. And then for the international government opportunities, if you can just maybe talk about the market structure that you expect in Germany as well as the rest of Europe? Maybe, how do you think about kind of customer appetite to multi-source supply chains? And if they're not multi-sourcing, what sort of milestones do you think it takes for them to kind of secure their supply chain? And specifically, we're talking about [ Iris ].

Well, I think, Colin, there's a lot there, of course, because there's a lot of different markets. But what we can do in the defense market, which is comms and noncommunication services with a very unique technology in orbit, is attractive to a lot of parties. And we see the trend playing out in other sectors that are perhaps less strategic capabilities where international governments are placing bets around services. And we think over time, those governments will turn their attention to larger scaled services like what we can do because having that capability is a very powerful thing.

And you see that obviously with the J-LEO preliminary award. So I would say this is a trend to watch for us over time. I won't speak to individual markets, but certainly, Europe and NATO, and you can see how it's playing out through the MSS process in Europe with them prioritizing certain types of providers who have European operations, et cetera.

So those are all trends we're positioning ourselves around. And it starts with our tech, but also it's very important, as Abel said, that we have good partners like with Rakuten in Japan and Vodafone in Europe. And that really facilitates our access to the opportunities in a way you don't see elsewhere.

Our next question comes from the line of Michael Funk with Bank of America.

So first, ex Blue Origin, how many launches do you have contracted for the remainder of 2026 and 2027? And what is the stackability of those vehicles?

We have 10 launches booked with 2 different providers, and we're targeting a cadence of every month and 2 on average. Beyond that, we've been providing disclosure about 2 months in advance as we get launched down selected.

I think with Blue Origin, I think we're all watching that. We were sad to see what happened in May, but they've made tremendous progress to date in both turning around the pad and getting resolution recently on the root cause for the anomaly. And so they're targeting this year. We're not betting on that necessarily. We'll be happy if they do it, but we're not betting on that in our numbers. And with the mix of launches, we think we can get to early 2027 for our initial 45 satellites.

That was great. And then on build cost per satellite, can you tell me where you are today and where you see that trending over the next 12 months?

Yes. The cost per satellite, Michael is the question?

Yes.

We've been consistent now for several quarters that we are falling between $21 million and $23 million per satellite. And that includes launch, that includes our direct labor and so forth. And we track that each quarter and roll it up. So that's consistent.

I think that, that is over the life of the constellation. So some of the initial satellites may exceed. But over time, in our planning and so forth, that range holds up for the first constellation. And then we continue to look at ways to take cost out as we continue to engage with launch providers and acquire more launches, the economics scale better in that way. So over time, we hope to bring that cost down, but that's been consistent in that 21 to 23 range currently. And over the life of the 90 satellites, we feel good with that number.

Our next question comes from the line of Chris Schoell with UBS.

You mentioned the expanding TAM, and you cited AI edge computing, federal emergency and IoT. Can you just help us better understand what needs to be done operationally to tap into some of these markets? And any rough sense on the time line there? And as you think about targeting these areas, how should we think about funding needs? Will you continue to be opportunistic? Or do you have much of what you need for the foreseeable future?

Yes, Chris, I mean, all these opportunities are basically on the back of the architecture we have, which is basically fundamentally the largest capacity to generate power in space and the largest gain -- antenna gain per space graph. So basically, we are piggybacking in the space architecture we have and also on the gateway architecture we have.

In AI compute, we are starting to add that capability into our satellites. We mentioned that we're on satellite 46 in production now. We're starting to add the compute capability on satellite 47, 48, so later in the year, we integrate it to our system. IoT, greater emergency and dedicated constellations or specialized constellations like the one in Japan, they're already part of the architecture, we have it. So these are incremental opportunities basically taking advantage of what we have built and our intellectual property.

Great. And if I can just fit in one more. You mentioned the path to 100 megahertz of spectrum in the U.S. and 60 megahertz globally. Can you just clarify how much you have access to today? And what are the alternatives you have for securing those additional airwaves to reach these levels?

Yes. I mean, we can tune our -- between low-band and mid-band, we had around close to 1,200 megahertz of capacity that we can tune our satellites. We can do this per country. And in addition to that, also, we can tune our owned and controlled MSS spectrum. So the 100 megahertz of spectrum is roughly what you see from our acquisition of spectrum through Ligado, plus access to spectrum of our MNO partners here in the United States.

Overseas is on a country-by-country basis. You know we had a joint venture in Europe with Vodafone. 21 of the top 25 operators in Europe have indicated they want to partner with us in accessing that capacity. So when we talk about spectrum, we're talking about the collection of our own spectrum and the spectrum the MNOs make available to our satellites.

Our next question comes from the line of Louie DiPalma with William Blair.

Good evening, Abel, Scott and Andy. On prior calls, you discussed the target for 2027 revenue to approach $1 billion. And given the different puts and takes and the backlog of $1.3 billion now, how should we think of modeling next year's revenue and beyond?

So the principles there were based on a full year -- the first full year of commercial service. So we still -- nothing's changed on our expectation and our goal of reaching -- approaching $1 billion of revenue in our first year of commercial service. So next year, the way to think about it is still really strong opportunity in government that could contribute to probably as much as half of that, still good infrastructure revenue like we have this year. And then as commercial service comes online, ramping into the balance of that. So we still feel really good about that number. It's just a question of when we kick it off and when we hit to run rate.

And you discussed the beta trials. What is the timing in terms of when consumers will be able to trial your network? I know that you don't want to speak on behalf of your carrier partners. But have they given any sense on when the generic AT&T and Verizon customers will be able to test out the service? And related to that, if there are like 25 satellites in orbit, from a general location in the United States, what percentage of the day will a satellite be overhead such that consumers will be able to connect to your network?

Thanks, Louie. So getting the capability ready for consumers is something that we're targeting for later in 2026. How we go to market with that, how we use that, of course, like you said, we're going to defer to our partners, and will be announcements on that in the right way. But we're very focused on enabling that, and there's a lot that you can do separate and apart from the space. So those two are kind of separate.

And so while we've historically said 25 satellites is the right way to think about it, we have great flexibility there on how we do beta. So for us, it's all about racing for -- towards putting satellites in the air and then racing towards getting a scale beta available because, of course, the steps from a scale beta to commercial services is pretty quick. It's just a function of satellites in orbit. And in terms of our -- about 25 satellites, like you said, that's -- there's a lot of variance there, but think about it as about half a day coverage.

Our next question comes from the line of Bryan Kraft with Deutsche Bank.

I guess I wanted to ask you just on the JV. How do you expect to work with the JV in the U.S.? Do you expect the 50-50 revenue share model to still be the revenue model for you with the JV? And separately, are you in talks with T-Mobile or Deutsche Telekom over partnerships, given that you're conducting integration and testing with Deutsche Telekom and obviously, they're the parent company of T-Mobile? Anything you could share on that would be great.

Bryan, listen, we expect to be working with all operators in the United States and all major operators in Europe. We did announce 60 mobile operators around the globe with access to around 3 billion devices on a global basis.

So as it relates specifically to the United States, we -- as Scott explained it, we plan to keep the contracts that we have with our current partners the way they are and expanding the relationship into all of them, both through the JV and directly with each one of them.

Our next question comes from the line of Chris Quilty with Quilty Analytics.

We just finally got visibility on the upper C-band, and I was wondering, is that upper C-band kind of a reference design in your current ASIC? Or is that going to have to be [ ReV2 ] when that spectrum becomes available at the end of the decade?

No, we are working -- that C-band is already built into our ASIC architecture, and we're working on a third generation that will include both the L-band MSS, mid-band and C-band.

So a question on -- the chip will be a single chip, but does it still -- do you still need to have different satellite designs because of the antenna requirements in order to support the multiple bands? Or is there a way to collapse that in the future?

No, no, we're keeping different phase arrays per block of spectrum. So you have the low-band, the mid-band. And in the future, the C-band has been also been incorporated to the satellites.

Got it. And a follow-up, you didn't answer David's question from earlier about the government RADAR applications. And maybe I'll just ask, is that -- are we talking active or passive applications? And is this using your spectrum or government spectrum?

The RADAR application in the United States is using government spectrum. And that takes advantage of our very large phase array and the sensitivity of the satellites, which is a capability that is already built and in orbit for the government.

And with that L-band spectrum already designed in?

Our major application is -- for RADAR is in the lower bands.

Our next question comes from the line of Scott Searle with ROTH Capital.

I want to follow up on the dedicated constellation front. The J-LEO opportunity seems very exciting. I'm wondering if you could address a little bit the architectural approach in terms of how much commonality and you can leverage existing infrastructure from gateways and otherwise as you build out that constellation? And as part of that, I think Japan has committed $1 billion in capital. What is the capital requirement from the AST standpoint?

And then you hinted at other opportunities globally. I'm wondering if you could provide some color in terms of other opportunities that are percolating either from a regional perspective or maybe the number of opportunities?

Scott, the satellite flag Japanese are basically identical than the rest of the constellation. And the way that this is planned is as they are flag of Japanese satellites, they can be used anywhere in the world, using the same architecture of gateways and the rest of the American constellation, the vast majority of these satellites. So this represents roughly half of the investment on those satellites in capital that is nondilutive and non-debt for global usage of these satellites, but with a flag and Japanese satellite for that subset of satellites.

Great. And any other opportunities that are percolating that you can address in terms of number of opportunities or potential time line for other similar types of dedicated sovereign constellations?

Scott, yes, we don't want to comment on that, but there are other discussions with other parties. And frankly, if you think about it, having communications capabilities that are resilient and in your control, I don't know why a G20 country wouldn't want this kind of capability given the price. So I think that we see this as an attractive place for us to continue to build out our network and partner in the way that we've been very good at it.

And you see this playing out a little bit, I think, in the Earth observation arena. But as it relates to comms and our other capabilities, which is a much bigger opportunity and much more strategic, I think you're going to see a lot of this over time because I just don't understand why a major country wouldn't want this capability.

And we have reached the end of the question-and-answer session. I would now like to turn the floor back over to Max Colbert for closing remarks.

Thank you, operator. We want to thank all of our shareholders and research analysts for joining the call. We really appreciate it, and have a great rest of your week.

Thank you. And this concludes today's conference, and you may disconnect your lines at this time. We thank you for your participation.

Good afternoon, everyone. I'm Sebastiano Petti, and I cover the telecom, cable and satellite space here at JPMorgan. I'd like to welcome Scott Wisniewski, President and Chief Strategy Officer of AST SpaceMobile. Scott, thanks for joining us.

Thank you for having me.

You're live.

Can you hear me?

Thank you for having me.

Great. So Scott, just to start, let's zoom out. As we sit here in mid-2026, with BlueBird launching, commercial service activation approaching and the government pipeline accelerating, where are you spending most of your time as President and Chief Strategy Officer?

And more broadly, what are your 2 to 3 highest priority objectives over the next 18 months as you transition from what has primarily been an R&D and manufacturing story into a scaled revenue-generating operating company?

Thank you. And for those who don't know us that well, we were founded about a decade ago around the direct-to-device opportunity. That's what we do. That's our entire strategy. It's from space, of course, and we build our own satellites, and we'll be operating them and selling capacity on them. But at its core, we are a direct-to-device pure play. And over the years, I met our founder in January 2019, but over the years telling our equity story, people always ask 3 questions.

It was, does it work? Can you fund it? And how big will the market be? Or will there be a market? And that's a traditional private company questions that we still got even as a public company for a while, and we really retired those risks in 2023, 2024 and 2025. And so this year, yes, you're exactly right. Traditional growth stuff, scaling stuff is where we are. And for us, if I were to say 2 simple things.

One is network deployment. The vast majority of the folks in the company are focused on exactly that, network deployment now for revenue in 2026 and 2027 and beyond. And then the second one is, I think, building the market out in the right way. This is a brand-new service. It's a service that is at the very heart of connectivity. Remember, we all know the trends in connectivity. When I started my career in connectivity, there was a question post dot-com bubble.

What inning are we in? When is the expansion going to end? And then, of course, AI comes along. And there's always something every couple of years. So for us, we're at the heart of connectivity. We can do coverage better than any terrestrial footprint by its very nature and making connectivity work for our partners, the mobile network operators and ultimately for the consumer mass market, among other markets. is our focus. So building out that market in the right way, I think, is our second priority.

Great. And let's address the news from last week. AT&T, Verizon and T-Mobile announced a proposed joint venture to extend mobile connectivity using satellite-based D2D technologies. You guys put out a statement commending the announcement.

Unpack this for us. What does this mean for ASTS in practice? Does it change your commercial positioning with the carriers? Does it accelerate or maybe even complicate your path to service?

So we really value the carrier relationship. We've organized the business, the technology, the go-to-market strategy. Everything we do really is about making connectivity better for the mobile network operators. And so you see that in where we've prioritized the company over the years.

You see that in how we've built out the tech and even the network stack is organized with the RAN on the ground so the operators control it. So that's really been our focus. We share their spectrum, although we also have our own spectrum now. And that's always been the approach, and that's what's led us to have partnerships with nearly 60 operators globally, approximately 3 billion subscribers amongst them. We count many of them as investors, 15% of our cap table is strategic investors like including AT&T, Verizon, Vodafone, Google, American Tower, Bell Canada, TELUS in Canada, Rakuten of Japan.

So we've prided ourselves on being the partner of choice for this market as they develop it and develop it as a growth area for them, not a vendor-style cost center, but a growth area. And so it was 2 years ago that we were able to bring Verizon into our network in the United States, putting them together with our historical partner, AT&T. And we see this new announcement this week very much in the same vein.

It's how do the operators get organized in the United States around what is a very important strategic and growth opportunity and innovation opportunity for them and for us and for the citizens of the United States. And so we see it in that vein. And so yes, we're supportive. It's a way to expand the market even further in the U.S., and we're going to continue to push for that in a very meaningful way.

I mean, does it -- maybe think about the other side of the coin. Does it validate the market? And does it bring you closer? And maybe help us think about -- I mean, does it diminish the moat around your controlled spectrum?

Yes. So our strategy has always been to be carrier neutral. We did develop some exclusivities over the years who are early investors in us, and that was helpful. But for us, in the long run, we were always going to be carrier neutral. It's a great strategy. You see it across the telecom sector, right? And so that's always been our approach. It's just happening a little sooner here in the U.S. than expected, which is a good thing.

In terms of our moat, I mean, we have -- when you think about LEO network deployment, LEO satellites, LEO constellations, we're going to be the second one to get to the finish line without going bankrupt first. This is an impossible task. We have developed over the last decade, the plan, the technology. These are the largest satellites ever deployed in low earth orbit. We have the spectrum that backs it up. We have the model. We have the first-mover advantage. We have the partnerships. And so making ourselves relevant to our customer with great tech and a great service and a solution is always what we had to do when we got out of bed in the morning.

So there's really no difference there. We always -- we're ready for the competition. And so I think there'll be a healthy market over time. But in the near and medium term and maybe even in the 5- to 10-year term, this is going to be a very growth market-oriented situation where we're going to have a leadership role.

Okay. I think Chairman Carr of the FCC just put out something today about 3, right, scaled D2D providers. Obviously, with Amazon's announced agreement to purchase Globalstar, has anything changed in terms of -- we'll get into some of the commercial agreements in a moment, but the tone of conversations changed at all since that announcement?

No, not really. I don't think there's a network operator globally that doesn't want to work with us in some way. Those conversations have increased with depth and breadth every month since I've been around the company as we've derisked the approach.

So we are -- we partnered with many operators around the world. Really very few are missing other than outside of China and Russia. And that's the same question. The same question they have is how soon can I offer service to my subscribers. And so no, we haven't seen the tone of the conversation change really. And again, I just want to highlight, this isn't a very challenging problem to solve.

It will take a long time for folks to ramp up. I'm sure if big players with big scale want to go after the opportunity, they can, and they probably will as you do see with big opportunities. But importantly, we have a -- we feel like we're the partner of choice for operators. We're extremely well capitalized to get after our initial opportunity here.

It's happening now. And we have a great tech solution that is -- again, these are the largest phase arrays ever deployed in low earth orbit. This is not a trivial thing, and we've been at it for years, and that moat is -- feels good to us.

Good. So that's a great segue. And I want to turn to the deployment. So you're targeting approximately 45 satellites in orbit by the end -- by year-end through a combination of Blue Origin, SpaceX with your next launch BlueBird 8, 9 and 10 on Falcon 9 expected in mid-June. So with the New Glenn still grounded following the BlueBird 7 upper stage anomaly, -- maybe how many launches do you need now -- from now through December to hit that 45? And I guess, what's the margin of error if Blue Origins return to the pad slips?

Yes. And so to remind everybody, our 45-plus guidance on satellites and orbit basically gets us to a full commercial service in the initial markets that matter, U.S. and a few others. And that's always been our strategy. We set our target for this year to do that. We reiterated that target even after the loss of our satellite, the satellite on the prior launch, but we feel really good about that.

And really, as we think about business risk, the value in LEO is its resiliency and the fact that we have production through Satellite 33 at our factory right now. We just shipped 2 more satellites yesterday to the Cape. And so there's a lot of resiliency in it. And so yes, we lost a satellite last month. We'll be back at the pad next month in a 60-day turnaround. So it's a tribute to our launch provider-agnostic strategy. We have built these things so they can go on any launch vehicle. We, 2 years ago, set up a pretty resilient plan between Blue Origin, SpaceX and Israel to get those 13 launches up.

And in order to meet our target this year, it's pretty simple math. We get about 2 to 3x more satellites on Blue Origin rocket. That's one of the reasons why we signed them up as our biggest partner. And we need about a handful of Blue Origin rockets and a handful of Falcon 9 or equivalents. And so we feel really good about that time line. And frankly, if it slips a month or 2 or 3, that doesn't really impact the NPV of the company.

Importantly, it's very important to our customers, and it's very important to us. and time is money. But for us, this is happening, there's an inevitability to it and being vertically integrated with a couple of good launch partners gives us that confidence.

And then I think we spent a little bit of time, you just touched on it being launch vehicle agnostic, right? You kind of talked about it on the call. I mean how much of flexibility do you necessarily have with Vulcan? I mean, can they absorb more of that capacity? Is that something that will take time?

Well, we have relationships with all the heavy launch providers globally. We've signed big contracts with Blue Origin and SpaceX. We had a launch recently on Israel as well. And we have referenced on our public analyst calls that we've signed other agreements as well, not with firm launch dates yet, but other agreements are in the works.

So I think for us, -- it's important to have the flexibility, and it helps derisk the plan a little bit. But we think the launches that we have contracted and ones that we'll get for later in 2027 on top of what we've already contracted, we feel really good about that. And we feel good about our partners. Like I said, we're going to be back at the launch pad in 30 days with SpaceX. And with Blue Origin, we're very optimistic about the return of the pad soon.

Okay. And then moving to the manufacturing side. You've disclosed phased arrays through BlueBird 28 and advanced assembly through BlueBird 33. So at 6 fully assembled satellites per month roughly, is the factory now the easy part of the equation? Or is there still yield testing composite structure challenges that could create variability in the output quarter-to-quarter?

So one of the great things about being based in Texas is we didn't need a 5-year plan. We just started building and you get the consents later. So that's kind of what we've done is we've had success raising capital in the last 3 years. We've built and built and built. And most recently, we just opened another 100,000 square foot dedicated payload facility.

So this is in Midland. It's about a mile down the road, and it just makes microns, which are the active payload on our satellite. And that's great. There's a video of it online. It's got a great energy to it. It's very professional. The yield has improved. There's still some improvements to be had on production yield, but that's just time and money. So I'd say our manufacturing has really grown up a lot in the last 18 months, and that's exciting to see. And there's still some things to work out as we scale and in particular, as we try to jam as many satellites as possible onto our launch partners' rockets.

But we're in great shape. And it's really a question of you get one additional satellite here, one additional site there, it's not a threshold question. So getting to what we need for the network, we're there and the manufacturing supports it. I don't know that I'd say it's easy. It's still where a lot of the company is focused, but we're getting it right. And you see that with the satellites we've deployed over the last couple of years. We had 7 satellites deployed successfully in low earth orbit and deployed means opening up.

And these are the largest satellites ever deployed in low earth orbit for commercial use. So it's a big accomplishment. We're 7 for 7, and we hope to be continued success. But I'd say manufacturing is one of those things that's in our 4 walls and in good shape.

Going back to something you touched on earlier, but with, I think, New Glenn, the next New Glenn launch will carry 4 satellites and then ramping towards 8. And so I guess Help us think about as you stack these [ tunicans ] in there, I think we've talked about in the past. Are there -- is there engineering or regulatory gating factors? I guess help us think about the time line to get to the "fully stacked capacity?

Yes. We expect to do that over the course of 2026. So for us, part of our strategy for being launch vehicle agnostic was having a flexible design. So essentially, what we do is we stack [ tunican ]. So you attach the bottom [ tunicnan ] to the second stage of the rocket, you stack them. And if you start to get too tall, you have to reinforce the ones on the bottom.

But otherwise, it's meant to be pretty simple. You can put 3 in a Falcon 9. You can put 4 growing to 8 with a New Glenn, you can put 5 on our [Vulcan], you can put 2 on Israel, 3 in Mitsubishi Heavy Industries and on and on down the list 5 on an Ariane 6. So there's a lot of different options we have, and that's similar to how others have pursued launch vehicle agnostic strategies. And so how does that play out over time? There's a little bit of a matching game with Blue as they're growing into their performance plan.

They've successfully now landed 2 boosters, which is an incredible feat being 2 for 3 on their 3 New Glenn launches, the 2 -- the last ones being successfully landed, and that will support a pretty rapid cadence going into the end of 2026 and into 2027, which is fantastic. And beyond that, it's about doing normal vehicle upgrades and for us, tightening our belt where necessary in order to maximize the yield and performance on the expense of rockets. Great.

Now let's shift back to the commercial ecosystem. You mentioned you have nearly 60 MNO partners covering 3 billion subscribers with definitive agreements announced AT&T, Verizon, STC, others. As you sit across the table from operators today, I guess, any -- has the tenor of conversations changed now that you have FCC authorizations, a fully funded balance sheet and demonstrating 100 megabits from orbit?

Yes. So I'd say we've always had this great relationship, and it was starting on the technology side, frankly, which is a really great place to start because at the end of the day, we're a great mousetrap for them. We can deploy a digital tower anywhere in their network in any frequency and up to 4 of them simultaneously. You don't want to treat it like a trading floor, but you can do network planning.

And if they have frequencies that they're not using in certain regions, you can deploy them and it's what a great mousetrap, right? And we translated that similar closeness through the business side on the go-to-market strategy to help them -- have them -- bring them in the tent to be investors with us to help us build this. And so that's been a successful dynamic. And we're -- I'd say we've got good relationships, both in the middle of these organizations and at the top.

And you need that CEO and C-suite alignment for really strategic stuff that's long dated, right? That doesn't have a quarterly payoff. And so that's been really important to our strategy. And yes, derisking with capital, derisking with spectrum, derisking with the technology, the speeds, the partner-first approach. Those are all great. And regulatory, too. We are flagged.

We took the decision a couple of years ago to flag our network in the U.S., which it hadn't previously been done, but based on steps the FCC took to warm up to space and direct-to-device, in particular, we reflagged. And that's played out really well for us. And even Chairman Carr was speaking on CNBC today pretty favorably about us. So we've had a good relationship with the U.S. regulatory environment.

It's only gotten better and better. We just received our full commercial authorization from the FCC a couple of weeks ago, which is fantastic. And yes, that has all kinds of good follow-through network effects for the rest of our partners, and we're trying to get them service as soon as we can.

I think you mentioned expecting -- on the call, you mentioned expecting additional MNO agreements with [indiscernible] increasing velocity through 2026. I guess you probably -- some of the similar things you kind of just touched on, but what's driving the acceleration in the partner signings?

And as you think about this next wave of definitive agreements, -- is this from conversations primarily from conversations with existing MOUs within your 50-plus partners? Or is this new -- entirely new relationships that were outside your ecosystem previously?

Right. So we're very proud of the partnerships we have and the ecosystem we've built. And even if we just develop that, that will be an enormous win for the company, right? So there are still some companies that we don't have formal partnerships with that we hope to bring to the fore in the coming months and quarters. But in general, we have this huge funnel of opportunities to develop.

And I sometimes joke that I'm ruined for any sales job in the future because we really just have an incredible vibe with the operators. We have something that's really good for them. It's set up. for them to succeed. And it's innovative and it's new tech and it's better for their customers, and we even bring spectrum to the table now. So I think the challenge is just getting going. We're scaling. We're a growth company.

We've really invested in our commercial and telecom operations teams over the last 12 to 18 months on top of our space organization. We're kind of like a manufacturer and a telecom operator in 1, 2 different companies almost. So we've been scaling that. We've been continuing to develop our relationships. And every day we get closer to commercial service drives a different dynamic as MNOs are planning their budget cycles. They're thinking about what 2027 is going to look like. And of course, this is a very topical piece in the telecom industry and the wireless industry in particular.

So I'd say just continued momentum, continued drumbeat, commercial service on the horizon and broadband because, of course, we've seen some initial commercial plays in direct-to-device, and they've been emergency or text-based. So the idea of bringing broadband, which has always been our strategy, broadband first broadband only, to be able to bring 100 megabits per second to a phone is an incredible thing. So it's really -- I joke sometimes that texting versus broadband, it's not apples and oranges. It's apples and aircraft carriers. These are very, very, very different things, not even a little close. So it's really exciting. And it's a big thing to bring forward, and we just got to execute.

So turning to the revenue trajectory. You reiterated 2026 guidance of $150 million to $200 million with first quarter coming in at just shy of $15 million. And you described the 2027 opportunity as approaching $1 billion. So a pretty significant ramp. bridge that gap for us, how much of the 2027 target is underpinned by existing contracts and minimum commitments versus -- or more dependent on commercial service activation and subscriber uptake?

All right. So there's a lot there. We were built as a commercial service for the commercial market, for the consumer market. And that was our story for a long time. About 3, 4 years ago, we started talking about the U.S. government opportunity and being able to deploy the largest architecture in space today amidst the spending on the government side and the Golden Dome project is just perfect timing, I don't want to say. And it's a great backdrop. And so for us, we now have a commercial story.

We have a U.S. government story. Both are great stories. Both are going to feed into our revenue opportunity in the near term. I'd say, in the next one to 3 years. We don't have better guidance than we expect it to be about half and half, but either one could dramatically outperform. And so those are both great opportunities for us to pursue.

So what you've seen from us last year, hitting the high end of our revenue guidance and then this year, putting new revenue guidance in place, it's kind of like practice, I would say. It's not our service revenue. It's getting going with 10 different use cases on the U.S. government side, really only 3 contracts of some size so far. And on the commercial side, we're deploying network. We're getting them to build the ground infrastructure that will feed their service and allow them to control this in their market.

And so it's kind of practice revenue, but it's good practice. And we did hit the high end of our guidance last year. We expect to do well and are confident in our guidance this year. I would say we kind of expect to grow quarterly sequentially into that $150 million to $200 million guidance during 2026, and that's all pre-commercial service revenue.

And then in 2027, yes, I think, again, another big kind of 50-50 opportunity across government and commercial with opportunities for upside against both. And you mentioned how is this underpinned by existing contracts. So our guidance for this year, more than half of what's left is already contracted in the backlog. And the rest is spoken for several times over by our pipeline.

And then next year, we have signed up a couple of take-or-pay style long-term minimum revenue commitments. So we have a total of $1.2 billion of cumulative minimum revenue commitments that will likely form the vast -- a very small portion of our overall revenue opportunity over the next couple of years, but still nonetheless shows that operators are putting their contractual commitments behind us. And as long as the network gets in orbit, that revenue comes in as a minimum.

Yes. And so on that, you talked about, again, the potential upside from the commercial service revenue. And I mean, does that contribute meaningfully in 2026? Or should we think about that more as upside case in 2027?

In terms of that backlog I quoted? Yes. Well, that's over the life of our contracts. So we've signed 2-year agreements, 5-year agreements, 6-year agreements, and it's 10-year agreement. So it's not back-end loaded or anything like that. It's kind of pro rata across those various terms and tenors. But you can think of over $100 million contribution in each year is out of the gate for sure.

Got it. And then on the government side, yes, again, definitely a bigger part of the narrative than a few years ago. But -- and you've described use cases spanning from tactical communications, noncommunications capabilities, Golden Domes, you have Halo Europa with billions of annual revenue potential in aggregate.

So I guess frame for this audience, I guess, where are you in the contracting cycle? Are you still primarily in the development and testing phase? Or are you approaching the inflection into programs of record with multiyear recurring revenue?

So we are doing testing in orbit today with the satellites in orbit for multiple government opportunities, revenue-producing opportunities with the U.S. government. The way to think about U.S. government opportunities, they kind of go through a cycle where they have a Phase I, Phase II, Phase III contract and then ultimately, the pot of gold is usually a program of record that's a 5-, 10-year thing with a pretty sizable revenue opportunity per year.

And so that is what we're chasing across what was said about 10 different use cases between comms and noncommunications. Noncommunications for satellites like ours mean a lot of things, but one of the things we mentioned on our call was radar. And these are -- we can do things with a big satellite that you can't do with a small satellite. That's the core of it. And these are the biggest phased arrays ever deployed in low earth orbit. And so if you put up 100 or 200 of them, you can do a lot of incredible things.

And so our network is dual use, which means -- our commercial satellites can also support government applications. We also have the ability to build modified satellites that have government use only, of course, that's the way the U.S. government wants to go. So we see a lot of opportunity. And of course, the backdrop here is the biggest spending on space since the '60s. The backdrop is incredible. The Space Force budget just doubled to about $70 billion is what's in front of Congress now.

There's a number of opportunities related to what we do that are very sizable. And for Golden Dome, there's a lot of pressure on how to get something out in this administration that's of value for our country. And to do that on any short time line like that, you had to start 5 years ago. And fortunately, we did.

And so let's pivot to spectrum, which is foundational to the long-term value of the business. You have 45 megahertz of L-band in North America, 60 megahertz of S-band priority rights outside of North America, layered on top of 1,100 megahertz of MNO shared spectrum globally. So I guess walk us through the activation time line for your controlled bands, -- what regulatory approvals remain outstanding? What's the capital required to bring these live commercially?

Spectrum is a real fascinating investment asset because that's scarce on the one hand. And on the other hand, once you buy it, you have to pay money to get bring it into use, right? And that's the trouble a lot of people run into is building a network is very expensive. If you want to activate a new band in the United States, for instance, that could be $5 billion to $10 billion of ground equipment to put in place.

So for us, -- the key to our strategy, both picking up the L-band about 1.5 years ago and then also pursuing the S-band is that we were building the satellites anyways. So the marginal cost for us was relatively low on the build-out side. And so that allowed us to move fast with L-band before the direct-to-device market got eager to buy those bands for direct-to-device, and we moved and we now have a long-term agreement, 80-year lease to 45 megahertz in the United States, which is the majority of the L-band, which is one of the 2 frequencies you can use for direct-to-device, and we have it in the most valuable market in the world.

So that's a huge anchor position for us, very similar to the one that SpaceX went and acquired from EchoStar. And so for us, it's about, one, getting the deal done, which we did; two, our last thing is really regulatory approval with the FCC. And on CNBC today, Chairman Carr said in AT&T, AST already has their spectrum. So he referenced the L-band that we have acquired, and that's in his hands for approval. And so we have to build satellites for it, of course, and that's our core strategy, what our company can do.

And then we need to get into phones. So these bands are in phones a little bit right now, but 2027 is when it starts getting into most phones in a big way, new phones, and then it's got to work itself into the market. So that's a couple of year life cycle. So we'll be deploying network in 2027 and beyond. That will be in phones starting in 2027 and beyond. And we'll have the ability to pair that new spectrum band and new spectrum access with the spectrum that we have from the operators.

And so our core strategy from the beginning of the company was to partner with the operators and have a revenue share on their spectrum because we definitely couldn't afford it when we started. So that's how we do it. And so today, we have -- you mentioned 1,100 megahertz. That's low band and mid-band. We have most of those frequencies on our satellite network.

We'll be able to use those with operators' permission, of course, our partners through a revenue share. And then we'll be able to bring to bear our owned and controlled frequencies over time to bring more spectrum to bear, better services, more subscribers and really increase the value of the direct-to-device service opportunity.

So a quick follow-up. Do you think the JV announced by the big 3 carriers in the U.S. helps the proliferation of devices in the ecosystem in the U.S.

I think we're already on that track. That is what the device manufacturers want to enable the frequencies that their MNO partners want to enable that will sell more phones.

So I think there's a lot of momentum there. But the JV is doing enables a lot of the things that we were already help in enabling like device availability, spectrum pooling, which was a key rationale for how we brought AT&T and Verizon together 2 years ago. So I think on the margin, but I think we're already in a good place there.

And do you -- should we -- should investors expect ASTS to remain opportunistic about acquiring additional spectrum assets, whether it be L-band, S-band, otherwise?

So we really like our spectrum position. We are very fortunate to get our MSS spectrum when we did. And we're going to continue to pursue S-band opportunistically around the world with various countries where it makes sense.

L-band is pretty heavily utilized around the world. That's why it was so great to get the piece of it that's unused in the United States and Canada. In terms of S-band, it's not really used around the world. Europe has allocated it the license is coming up. It hasn't been well used. Our partner in Saudi Arabia actually purchased it themselves, and we hope to enable that in the near future. And so it's a country-by-country thing.

It's a regulatory thing. We're going to make our case market by market. But for us, we love our position in spectrum, but more spectrum is better, right? And so we want to bring the best amount of services we can. And we'll be opportunistic, but our approach is primarily to partner. You're not going to see any expensive acquisitions by us.

So you talked about European S-band. You have a partnership with Vodafone, a joint venture, Satellite Connect Europe. I mean update us, I mean, where are we in that process? Any update?

Sure. So we -- Vodafone is one of our biggest partners, early investors. They've invested 3x. They hold over $1 billion of stock in us now. And we have a 5-year mutual exclusivity with them in Europe and Africa. And we formed a joint venture in Europe to help us build out the ground infrastructure in a pooled way that brings access to more operators, manages the close borders, which is a unique thing in Europe versus the U.S. or other markets and also make ourselves available for spectrum allocations.

And so we formed the joint venture about a year ago. It's been staffed up to about 20 folks. It's very much European operated, European run. That's a Europe team. And I sit on the board as does 2 of us from AST and 2 of us -- 2 from Vodafone. And it's a really good story. It's a European-operated solution for getting direct-to-device, and they've had great success just at Mobile World Congress 2 months ago, they signed up about 10 partners that they're developing. So I think it's been a good strategy for us, and we've got a good team there.

Let's close with the balance sheet and path to profitability. You ended the first quarter with approximately $3.5 billion in cash. You said that you're fully funded for over 100 satellites and no plans for additional convertible debt. At the current spend rate, how should investors think about the glide path to free cash flow breakeven?

And does that require you to get to the $1 billion in revenue in 2027 to be substantially achieved? Or can you get there maybe on a little different revenue trajectory?

So we haven't talked much about our operating model, but it's a really nice operating model, the financial model. So the idea of building a constellation has been a dream really since the '90s. It's a dream that's only been successfully executed on once. But if you get to scale with a product that's desired and the model is quite attractive. So you build your network, you can continue to invest in it and refresh it over 7 to 10 years, it becomes a maintenance CapEx stream.

It's very high margin because all the money is upfront in CapEx. So the satellite industry, when it's been functioning well and had growth, you see margins in excess of 80% on the EBITDA line for wholesale stuff like what we do. And that's how we expect this to play out. We've got a fixed cost base of, call it, $300 million to $400 million of OpEx a year. And on top of that, you bring in the revenue and you support your maintenance CapEx.

So that billion dollar number is in no way tied to a need for free cash flow breakeven or anything like that. We'll be operating free cash flow positive well before that. And it's all about building the structure of the market in the right way so that you're capturing the value that you're delivering to the consumer or the U.S. government, whoever the customer is. And ultimately, managing CapEx on a growth basis.

So this is NPV positive growth CapEx decisions that we can make in the future, and we'll make those with better insight when we get there. But at the moment, we see a really attractive financial model informed by how we've built the business, and we're on the cusp of bringing in that revenue, and we'll be operating free cash flow positive well before we reach $1 billion in revenue.

Great. I think that's right on time. So great place to end it. Thanks, Scott, for joining us.

Thank you, Sebastien.

Good day, and thank you for standing by. Welcome to AST Space Mobile's First Quarter 2026 Business Update. Please be advised that today's call is being recorded. I will now turn the conference over to Max Colbert, Investor Relations Manager of AST Space Mobile. Thank you. You may begin.

Thank you, and good afternoon, everyone. Today, I'm also joined by Chairman and CEO of Abel Avellan, President, Scott Wisniewski and CFO and Chief Legal Officer, Andy Johnson. Let me refer you to Slide 2 of the presentation, which contains our safe harbor disclaimer. .

During today's call, we may make certain forward-looking statements. These statements are based on current expectations and assumptions, and as a result, are subject to risks and uncertainties. Many factors could cause actual events to differ materially from the forward-looking statements on this call. For more information about these risks and uncertainties, please refer to the Risk Factors section of AST Space Mobile's annual report on Form 10-K for the year-end December 31, 2025, with the Securities and Exchange Commission and other documents filed by AST Space Mobile with the SEC from time to time.

Also, after our initial remarks, we will be starting our Q&A section with questions submitted in advance by our shareholders. For those of you who may be new to our company and mission, there are nearly 6 billion mobile phones today around the world, but many of us still experience gaps in coverage as we live, work and travel.

Additionally, there are billions of people without cellular broadband and who remain unconnected to the global economy. The markets we are pursuing at AST Space Mobile are massive, and the problem we are solving is important and touches nearly all of us. In this backdrop, AST Space Mobile is building the first and only global cellular broadband network in space to operate directly with everyday unmodified mobile devices, supported by our extensive IP and patent portfolio.

It is now my pleasure to pass this over to Chairman and CEO, Abel Avellan, who will go through our activities since our last public update.

Thank you, Max. At Space Mobile start to 2026 reflect our progress in scaling manufacturing and production, mobile network operator partner expansion, grand network integration, multi-partner launch and a fortress capital position. This advancement across nearly all initiatives help solidify why AST SpaceMobile is the only company whose technology is positioned to capture the direct-to-device seller of [indiscernible] opportunity in full.

We continue to execute on key business objectives at the company transitioning from R&D stage to fully scale operational deployment. On the manufacturing front, we have over 0.5 million square feet of manufacturing and operations space globally, as we continue to scale our manufacturing efforts. We're in advanced stages of producing an assembly through Blue Bird 33, we faced a race completed through Bluebird 28.

A detailed cadence of our '25 and '26 deployment plan is shown in the accompanied quarterly presentation found on our IR website. Our 95% vertically integrated manufacturing strategy is significant long-term advantage with our manufacturing team ramping up significantly over the past several quarters.

I am thrilled to report that the leadership we have in place is now producing microns, face a race stackable sale composite structure at an accelerating pace to support our target cadence of 6 fully assembly satellites per month. Our custom ASIC is designed to support up to 10 gigahertz of processing bandwidth per satellite and is expected to nearly double the peak data speed recently achieved using our on-orbit Block 1 Bluebird satellites, helping unlock true space-based cellular functionality and enabling native cellular capabilities that consumers now expect everywhere all the time.

As a reminder, we're building the largest phase array in low earth orbit. We possess the ability to deploy significant power to orbit at a meaningful scale and competitive costs. They give us an ample opportunity to scale our space-based cellular broadband constellation based on demand signals from our growing lease of partners.

That is a unique important concept for the direct-to-device industry with even broader implications as the space becomes an energy reach and data native industrial environment. We continue to leverage these advantages by driving innovation into every aspect of our sale capabilities. We are deploying a specific AI edge computing and AI spectrum management features for on-orbit capabilities to incorporate into novel AI platforms and maximize user experience.

We currently expect to integrate these features into our next-generation bluebird satellite targeting blue birds in production by year-end. Our multi provider orbital launch strategy feature Orbital launch about Blue Origin, SpaceX and others.

As a reflection of our multiport launch strategy, while returning to the launch pad at the [indiscernible] in mid-June with Bluebirds 8, 9 and 10, [ abora59 ] launch vehicle. We are excited to get back to the launch pad very soon and are targeting approximately 45 satellites in Norway by year-end through a combination of our launch providers.

Our ground-based gateway architecture act as a native attention of our network operator partners, interfacing directly with Nokia Innovis and MNO course over standard 3GPP protocols. This means our gateway architecture and/or satellite network scales natively with 4G, 5G and future city standards, reducing network integration complexity.

We're actively scaling our ground network integration efforts around the world, including in the United States, Canada, United Kingdom, India, Brazil, Spain, Germany, France, Romania, Saudi Arabia, Japan, New Zealand, the Philippines, Co d'Ivoire, Kenya, Nigeria and Senegal, targeting a combined population of 2.9 billion people.

It is an incredible fit to scale our business outside of the United States, an effort which requires significant scale and commitment from our company, our partners and global regulators. We continue to make progress on partner and ecosystem network integration as we move closer to service activation in key partner markets.

We're actively deploying hundreds of fixed cells per week as part of this effort, we achieved satellite-to-satellite cellular broadband connectivity handoff without disrupting to the connectivity experience on the map. Additionally, we recently achieved big data speed of an incredible 98.9 megabits per second using our in-orbit blog 1 satellites.

This latest record was conducted over international waters directly to modify off-the-shelf smartphones. This achievement is significant for several reasons. In other [indiscernible] that our satellite technology is the only 1 specifically designed for space-based direct-to-device cellular broadband.

Achieving these speeds that our partners expect for the customer no matter where they are located everywhere in the planet and we're just getting started. We expect our on-orbit Block II Bluebird satellite to nearly double the peak data speed recently achieved using our on-orbit blown Bluebird satellites when enabled with an of spectrum on a region-by-region basis. AST SpaceMobile network operator partner of choice.

For space-based cellular broadband because our [indiscernible] system integration solution worked actively with existing terrestrial infrastructure and is designed to support a space-based serenity. Our ecosystem includes nearly 60 global MNO partners covering over 3 billion subscribers, including key partners like AT&T, Verizon, Vodafone, Rakuten, STC, Bell Canada and Telus.

Our commercial advancements have enabled us to secure over $1.2 billion in contracted revenue commitment from our commercial partners and we plan to accelerate this as we further deploy our network. On the regulatory front, we are granted FCC authorization to operate our bluebird satellite constellation commercially in the United States enabling direct-to-device connectivity in the U.S. on premium low-band spectrum in coordination with our partners, Verizon, AT&T and FirstNet.

The grant also reflects the FCC recognition of our ability to deliver direct device sell robot connectivity from space and operate alongside the retiral communication network, further validating our unique technology and network design. We think the current administration the FCC and Commissioner Car for his leadership in bringing new technologies online to advise United States leadership in space.

Our comprehensive spectrum strategy leverage our satellite technology, which is capable of tuning within approximately 1,100 megahertz of low band and mid-band tuna MNO spectrum globally including 45 megahertz of MS lower mid-band spectrum and 60 megahertz of licensed S-band spectrum priority rights outside of North America.

In particular, the 45 megahertz of L-band spectrum is currently unused. Providing us with an ample opportunity to drive business against the use of that spectrum. Additionally, the lower mid-band L-band spectrum feature higher quality propagation characteristics when compared to other MSS frequencies.

This means more opportunities to grow subscriber capacity and bring additional service to targeted markets around the world alongside our MNO partners. We expect the combination of our satellite technology, featuring the largest face orbits and access to MNO share spectrum, MSS spectrum and AI spectrum management features will enable us to effectively multiply spectrum efficiencies and develop a completely new layer of connectivity on a global scale.

The combination of building a native space-based cellular broadband network with our partner, first integration design is second to none.

Were supported by our extensive IP and patent portfolio of approximately 3,900 patents and patent-pending claims we successfully advanced from early-stage R&D to scale deployment of satellites and ground-based gateways. In closing, our company has key assets, including IP, manufacturing, partnerships, spectrum and balance sheet cash with approximately $3.5 billion to build and launch over 100 Bluebird satellites to enable global coverage of space mobile service.

Our team is focused, disciplined and executing against our deployment plan. We are encouraged by the progress we are making and the momentum we see across our commercial, regulatory and government initiatives.

And with that, I will turn the call back to Scott.

Thank you, Abel. Since our last business update 10 weeks ago, we have continued to execute against the broader commercialization priorities we laid out at the start of the year. Our key task leading the business is to leverage our revolutionary technology deployment and best-in-class partnerships to achieve our 2026 and 2027 revenue objectives as we build out the revenue platform for the company to maximize long-term shareholder value.

The market pull for our network, the one we're deploying today a global, resilient, space-based cellular broadband network with dual-use capabilities. It remains extremely strong. Against this backdrop, we have recently signed additional mobile network operator contracts and received additional U.S. government awards.

First, we announced an agreement with TELUS as our second partner in Canada, who also made an equity investment in ASTS, Telus and Bell will be our commercial partner in Canada. And in Africa, we are pleased to be partnering with Axiom Telecom, a pan-African operator in 11 different countries, joining our existing agreements with Vodacom, Orange and MTN.

Our dialogue globally with mobile network operators has increased in both volume and depth, and we've been building out the broad organizational capabilities to support the rollout of commercial services in these markets. Looking ahead, we expect additional MNO agreements to be signed with increasing velocity throughout 2026.

On the U.S. government side, we continue to grow the pipeline with 3 additional awards through prime contractors. These awards address 3 unique use cases across secure communications and noncommunications capabilities, reflecting strong proof points ahead of larger contracts. Alongside further developing these important national security capabilities, including those related to Golden Dome, these awards are expected to contribute significantly to 2026 revenue objectives.

As a reminder, our goal across all our contract is to develop capabilities that could grow into programs of record with billions of annual revenue potential in aggregate over the medium and long term for missions important to U.S. national security.

As a commitment to these efforts, we've made significant progress expanding our organizational capabilities through AST SpaceMobile's wholly owned government and defense subsidiary. This alignment enables us to better allocate resources and expand our organizational capabilities to best serve the U.S. government customer.

Transitioning to revenue we achieved nearly $15 million in reported revenue during Q1, again, driven by milestone achievements under our U.S. government contracts and commercial gateway deliveries to MNOs. On the commercial side, we saw execution with 4 different customers that contributed to revenue in the quarter.

With the hardware to deliver initial commercial services now in their respective regions across 5 continents, the ground readiness initiatives that Abel referenced are firmly underway. This is an important step to have started during 2025 because it gives the teams on the ground time to prepare, deploy real hardware solutions for backhaul and integrate with customer network cores.

This is a very significant operational effort that is an important leading indicator ahead of commercial service activation. 2026 revenue will benefit from this commercial deployment effort as we deliver against existing contractual orders and signed new contract wins. Both of which show a deep pipeline.

Turning to revenue from our U.S. government business. We executed across 5 existing contracts during the quarter, further demonstrating the in-orbit capabilities of our bluebird satellites. To give you some additional color, we advanced the milestones under our prime contract with the Space Development Agency as part of the Europa Track 2 Commercial Solutions Program under Halo.

This work is focused on delivering operationally relevant tactical communications capabilities directly to government and devices. We also advanced our communications efforts with milestones against contracts where Fairwinds is the prime contractor, some of which is a follow-on related to our previously demonstrated NTN tactical SATCOM capabilities.

That field test showcased real-time connectivity to a tactical salt kit over a VPN with multimedia streaming via the tactical salt kit and secure multiparty video calls, all executed on standard unmodified smartphones with active participation from U.S. Indoco Paycom including representation from multiple branches of the United States Armed Services.

Lastly, we also continue to execute against our contract with the Space Development Agency through a prime contractor for noncommunications on-orbit testing and capability development. The progress we are seeing across both commercial and government activities supports our confidence in reiterating our 2026 revenue guidance of $150 million to $200 million.

This outlook is supported by our existing contracted pipeline with additional upside potential from new government awards. What we are seeing in the first half of 2026 is continued progress in building out the revenue base ahead of a large jump in 2027.

As I described on the last call, we see the 2027 revenue opportunity approaching $1 billion. Comprised of revenue both long-term contracted or highly recurring in nature. We expect this growth to be driven from, one, our scaled network in Orbit for cellular broadband service as it becomes available in some of the largest markets worldwide; and two, providing one or more increasingly scaled use cases for the U.S. government.

Taken together, we are steadily executing across our key priorities, remaining focused on the critical near-term objectives like revenue generation, partner ecosystem and scaled network deployment. I'm now happy to pass the call over to Andy to walk through our financial update.

Thanks, Scott, and good afternoon, everyone. During the first quarter of 2026, we began executing against our annual revenue plan we continued our manufacturing expansion across our growing facilities in Texas and beyond. And importantly, as discussed on our 2025 year-end call in March, we took significant steps to raise critical capital to enable funding our constellation in support of our bold objectives in the months ahead.

Revenue in Q1 came in consistent with our internal plans. We expect revenue to build sequentially each quarter during 2026 with contributions from both commercial gateway revenue and U.S. government contracts, which I will discuss further in just a moment. Importantly, we remain on track to meet our full year 2026 revenue guidance of $150 million to $200 million.

With respect to manufacturing, we continue to progress toward the achievement of our goals to support our active escalating launch schedule through the end of this year and beyond. We currently have Bluebird 11 to Bluebird 33 in advanced stages of assembly with phased arrays completed through Bluebird 28. Our manufacturing progress positions us well to support our launch target of approximately 45 Bluebird satellites in orbit by the end of 2026.

The strength of our balance sheet positions us to complete the full buildout and launch of a constellation of over 100 Bluebird satellites to provide worldwide space mobile service while also funding the deployment of our controlled spectrum bands on a global basis monetizing the capabilities of our proprietary technology to capture the evolving commercial opportunities related to artificial intelligence, enhancing investment in government space opportunities in the United States reducing our higher interest debt and pursuing opportunistic investments to accelerate our space mobile services and capabilities.

AST SpaceMobile is proud to be the creator and leader in the direct-to-device industry, and we continue making investments to move quickly and responsibly to bring space-based cellular broadband connectivity and directly to unmodified smartphones. Our intentional focus on investing in operational growth led to higher adjusted operating expenses in Q1 of 2026 consistent with our expectations previously communicated during our fourth quarter and full year 2025 earnings call.

Moving to the operating and capital metrics slide, let's review the key metrics for the first quarter in more detail. On the first chart, for the first quarter of 2026, we incurred non-GAAP adjusted operating expenses of $91.2 million versus $95.7 million in the fourth quarter of 2025.

As a reminder, non-GAAP adjusted operating expenses exclude noncash operating costs, including depreciation and amortization and stock-based compensation. The quarter-over-quarter decrease of $4.5 million resulted primarily from a $17.6 million decrease in adjusted cost of revenues due to lower revenue in the quarter together with a $1.9 million decrease in R&D costs, partially offset by a $9.2 million increase in adjusted engineering services costs and a $5.8 million increase in adjusted general and administrative costs.

Our Q1 2026 adjusted operating expenses, excluding adjusted cost of revenues were $79.8 million compared to $66.8 million in Q4 of 2025, which is within the $70 million to $80 million guidance for adjusted operating expenses previously provided. The primary drivers of the increase versus the prior quarter were growth in our workforce, including contractors and consultants, our expanded production facilities and other professional fees including legal fees related to our spectrum usage rights transactions and regulatory initiatives.

Turning towards the second chart on this slide. Our capital expenditures for the first quarter of 2026 were approximately $257 million versus approximately $407 million for the fourth quarter of 2025. This figure was made up primarily of capitalized direct materials and labor for our Block II bluebird satellites with the balance relating to facility and production equipment expenditures.

This amount was below the quarterly guidance of $350 million to $425 million that I provided during our last earnings call due to a change in the timing of launch contract payments, which will now be reflected in our Q2 guidance.

For the second quarter of 2026, we estimate that our adjusted operating expenses, excluding adjusted cost of revenues will increase to the range of approximately $85 million to $95 million as we further absorbed the full quarter cost of our recently expanded workforce and continued growing talent across our organization to scale our efforts to design, manufacture launch and operate our growing satellite constellation as well as pursue the monetization of our L and S-band spectrum usage rights.

We expect our capital expenditures to increase in Q2 of 2026 to a range of $575 million to $650 million, primarily driven by the timing of launch payments related to our near-term launches which, as I previously explained, vary from quarter-to-quarter. To put this quarterly increase in capital expenditures into context, had the launch payments been made in Q1 like we originally planned instead of making them in Q2, our guidance for Q2 capital expenditures would have remained in the same general range as Q1.

Importantly, our continued spend on growth-related CapEx reflects our increasing satellite production in active orbital launch plans. We continue to estimate that the average capital costs, including direct materials and launch costs for our constellation of over 90 Block 2 Bluebird satellites will fall in the range of $21 million to $23 million per satellite, excluding certain initial satellites that are used to validate performance and operations.

Our cost per satellite estimates are subject to fluctuations based on dynamic geopolitical factors that could impact our costs. As a reminder, the timing of the changes in our adjusted operating expenses and capital expenditures, as I have just described, could be delayed or may not be realized due to a variety of factors.

In the first quarter, we recognized revenue of $14.7 million, primarily driven by commercial gateway deliveries and various U.S. government service milestone achievements. Our revenue declined during the first quarter as we expected due to the timing of gateway deployment to our commercial customers and the timing of completion of certain government contract milestones.

With respect to revenue generation, we believe we can enable continuous SpaceMobile service across key markets such as the United States, Europe, Japan and other strategic markets with the launch and operation of approximately 45 to 60 bluebird satellites and additional strategic worldwide markets with the launch and operation of approximately 90 bluebird satellites.

Further, as we continue to launch and deploy our constellation, we will continue to support U.S. government applications currently ongoing and accelerating as our constellation grows. As we discussed in our Q4 2025 earnings call, we expect to generate full year 2026 revenue in the range of $150 million to $200 million.

We managed the top line with a focus on full year performance given the quarterly variability inherent in our business including the timing of contract signings, equipment sales and milestone achievements. As a result, we believe our revenue performance is best evaluated on a full year basis. As we continue advancing our launch and network activation initiatives, we expect revenue to grow meaningfully each subsequent quarter this year.

We expect revenue to continue to be driven by gateway deliveries, achievement of contracted milestones for the U.S. government, MNO consulting services with potential upside related to the recognition of initial commercial service revenue. Quarterly revenue will likely vary significantly depending on achievement of milestones and the timing of customer activities.

I'd like to remind you that we believe that approximately half of the revenue opportunity within our commercial pipeline this year, is already booked or contracted. The remaining portion consists of a combination of advanced stage opportunities that have not yet been signed as well as net new business we expect to secure over the course of this year.

The achievement of our revenue plan remains subject to several contingencies, including the successful launch and deployment of Block II bluebird satellites related to U.S. government applications contractual milestone achievements. Critical gateway equipment sales to our MNO partners in support of their anticipated commercialization efforts of Space Mobile Service and service revenues in connection with the activation of our commercial service provided by our existing and planned deployed and operational satellites.

Finally, on the final chart on the slide, our cash, cash equivalents and restricted cash as of March 31, 2026, and was approximately $3.5 billion, inclusive of cash raised in February via the convertible notes offering with a 2.25% 10-year coupon at an effective strike price of $116.30 per share.

Our balance sheet continues to provide us with financial flexibility to make further investments to expedite the timing of and augment the capabilities of our space mobile service. Consistent with our last update, we do not have any plans to pursue additional convertible debt in 2026.

In closing, we're off to a solid start to the year at AST Space Mobile and critically, our 2026 objectives fully remain in place. With full recognition of a significant amount of hard work ahead of us, revenue is in a plan and satellite manufacturing is increasing to support our orbital launch campaign.

We look forward to sharing successful launch milestones with you in Q2 and throughout the second half of 2026. Thank you for your continued support as we continue the hard work of connecting the unconnected at AST Space Mobile.

And with that, this completes the presentation component of our business update call, and I'll pass it back to Scott.

Thank you, Andy. Before we go to the queue of analyst questions, I would like to address a few of the questions submitted by our investors. Operator, could you please start us off with the first question? .

Scott from Indiana asked. Historically, guidance for Block 2 Bluebird has targeted peak download speeds of 120 megabits for a second, presumably requiring your proprietary basic chips. In the last quarterly update, it was stated that FMI, which does not have this ASIC chip is expected to greatly exceed 120 megabits peak download speeds. Can you clarify current expectations on how FM1 versus ASIC enabled bluebirds are expected to perform.

Thank you, Scott, for the question. Well, this morning, we did announce that from the middle of nowhere in the middle of the ocean. On international water, we did achieve big data rates, very close to 100 megabits per second. As we into standard device without any modification to the device.

Neither require any firmware or software upgrade to the device. This device as is today. With the BB6, which is already in orbit and BB8, 9 and 10, we expect to nearly double that capacity. We think that this, in addition to AI features that we will implement into the satellites, large block of spectrum that we'll be adding to the network, particularly the L-band and the S-band MSS spectrum that -- we plan to add into the constellation.

And AI spectrum management features that help us to multiply deeper set performance of the network make this a complete change of what is possible, far, far ahead of any other technology that is attempted to enter the market.

Andrew is from New York S. You have repeatedly emphasized that you are in a race against yourself in the field of D2C broadband technology, given the increasing attempts by other companies to enter the market, is this still true? And what leads do you currently see over your competitors? What role do your patents play in keeping the competition at bay.

Thank you, Andrew. That's a great question. What we always from the very, very beginning, have focused on delivering cellular broadband and for which you need a very large array you need spectrum and you need the ability to integrate that to partners MNOs.

On that end, we have a very unique position we had access through our MNO partners to around 3 billion subscribers. We are delivering broadband capacity provided, obviously, there is enough spectrum attached to the satellites today with in orbit satellites. As I said earlier, we are on the hundreds of megabits already.

We plan to nearly double that we continue to activate 8, 9 and 10, and we launch them in the next few weeks. And then when you put in perspective that -- when you combine a very, very large satellite array with significant block of spectrum, there are a combination between IMT, MNO partner provider spectrum with our own MSS.

We have access to more spectrum than anybody else also. So we believe that -- as of today, we are the only technology that have a space-based cellular broadband capability, given the size and our architecture on the 3,900 patent and patent pending claims that we have around our technology.

Ben from Virginia. Can you update us on your composite readiness specifically? Are you now manufacturing all structural carbon fiber reinforced polymer components and reflector is entirely in-house? And if not, is the plan to?

Thank you, Ben, for the question. Listen, the way that we stack the satellites is think about to accounts where you put 3 of them one on top of another on the Falcon 9 up to 8 of them on the Blue Origin and New gland rocket or up to 5 of them in the Balkan ULA rocket. So that structure is our design.

It was a very, very difficult design to achieve because everything that you have in terms of mask and multiplied by the of the rocket. So you have an extraordinary amount of forces that get applied to the bolt-on satellites in the stack. But the answer is yes.

We are now producing the rate. We own all the IP or how this is done. We are extending -- we did grow -- we have over 1,000 people dedicated to build these composite structures all across our satellites. And we are now also extending and automating and robotizing how we do these structures in Midland.

All of this to achieve and keep our 6 satellite per month fully assembled every month, where the composite structure, it is a very, very important aspect of what we needed to do. So we are fully vertically integrated. We own the IP, we control the manufacturing of everything on our satellites around 95% of the bill of material from the composite structures, the new composite structures.

How you see that the -- in the pictures of the manufacturing, they turn from aluminum structures to composite than what they look back. And then but we also own and control everything down to our ASIC in the supply chain of how we build and produce our satellites.

Scott from Indiana also asked, any perspective you can share on progress made related to Golden Dome, Halo Europa or other government contracts?

I'll take that one. So as I said in my remarks, the backdrop for U.S. government contracts is -- continues to be really strong. We most recently saw budget request for the space force of over $70 billion, which was by far the largest, and there was a heavy emphasis on space activities.

So it's a good environment for our capability to be maturing. And we've been doing a lot of both communications and noncommunications with the agencies who are the big buyers right now of space capabilities. So this is the right backdrop. We have the right capability.

Remember, we're currently deploying the largest ever phased raise in low earth orbit, and that gives us really an unprecedented capability to go to regular, small, low-profile handsets as well as do RADAR capabilities. And when you look at the backdrop of awards and budgets over the last 3 to 6 months, there's been a real strong uptick as expected in the space force budget and in allocations related to golden dome.

And specifically, we're in a stage now where RFPs are being issued, awards are being made for key elements of Golden Dome that will relate to us, things that you see that are space-based rate are and others. So this is a really big moment for us. You're going to see some revenue coming in through U.S. government that's going to be a big contributor to our 2026 revenue.

And for 2027 those awards that we'll receive or expect to receive over the next 6 months are going to be very significant to that effort. And with that, I'd like to thank our shareholders for submitting those questions. Operator, let's open up the call to analyst questions now.

[Operator Instructions] Our first question comes from the line of Chris Schoell with UBS.

Great. Now that you've had a few weeks to digest, can you just walk us through what happened with Bluebird 7 and what gives you comfort this will not repeat going forward and that New Glen can scale accordingly? And last quarter, you mentioned you began to integrate your satellites with another heavy launch vehicle.

And I believe I heard you say ULA earlier. Where does the integration process stand? And could we see you rely upon them this year is this more a consideration for '27 and beyond?

Chris, I'll dive in. So we were pretty open on bluebird 7, the day of. We knew what happened immediately and we were very open on what it is. And at the end of the day, remember, we have 3033 satellites in advanced stage of production at the factory. So it was a loss, we're on to the next. So yes, I would say that we're working closely with blue.

They're working through the investigation in upper stage anomaly like this is not uncommon early in programs and we feel optimistic about them getting back to the pad soon. And when you look at their cadence for the year, we all know that they landed the booster, which was a great milestone for the cadence and now they have 2 boosters sitting in their integration facility ready to get into the cycle. So we think the outlook there looks good. And like I said, we're optimistic.

And on the second part of the question, we mentioned that we have contracts with SpaceX and Blue Origin and others. We're also doing some integration activities in there with others to get ready for potential launches.

And so listen, we've designed the rocket, as you know, in our business strategy to be launched vehicle agnostic, and we're buyers of launch across the entire heavy launcher. Footprint. So we were prepared for this years ago with our strategy. We think we selected the right partners, and we've got good partners on top of that we're working with.

Our next question comes from the line of Scott Searle Capital Partners.

Maybe just a quick follow-up. Is there a time line associated with the FAA investigation on when you would expect that to be concluded? And then looking to the expected commercial launch of services at the end of this year, how many MNOs are you expecting to be live at launch? And what are you guys thinking about in terms of the ground station number that we should be expecting by the end of calendar '26?

So Scott, to the first part of the question on blue, no, there hasn't been a publicly disclosed time line. But like I said, these sorts of investigations are pretty commonplace. And there's been some good track record recently. So with other launches we've had similar issues.

So listen, we think -- we're really focused on our next launch, obviously, with Falcon 9 and the next 3 bluebirds. But like I said, we're optimistic with Blue Origin and I think we'll be in a good position there. But as you know, we have a multi launcher strategy. That's been the strategy from the get-go.

And in terms of -- what was the second question again, Scott? Scott just in terms of the number of MNOs you would expect to be live with provided you got 45 satellites up in the sky in the fourth quarter. How many carriers -- how many covered subs should we be thinking about in terms of -- that are addressable from day one of launch.

Well, it's a global network, as you know. So we put a lot more disclosure in our remarks today about the regions we're focused on and the countries we're focused on. So all in all, where we are currently doing ground integration efforts, some of which are quite advanced like in the United States and other countries in Europe.

Some others that are getting started. It's a pipeline. There's a lot of countries to focus on. But just on the countries listed in our deck, you see a population coverage of about $2.9 billion. So in terms of how we prioritize amongst that, you've heard from us before, key markets like the U.S., Canada, U.K., Japan, Saudi.

So we're looking at that list, and it's growing every day, but we want to give a little bit more incremental detail today with that in our deck and in our remarks on the other countries we're focused on.

Our next question comes from the line of Michael Funk with Bank of America.

Yes. Great. Thank you for the question. So I want to go back to sort of launch target. I think you talked last quarter about stacking up to 8 satellites per launch. And so just wondering about the hurdles authorizations required to get to the -- and then Abel, earlier in the call, you mentioned deploying AI edge computing features, I think, the next generation of satellite. And I want to get a better understanding of how that's going to improve the efficiency or performance of next-generation satellites?

Yes. Let me answer for the first question. As I explained earlier in the call, we do have now the technology that we are manufacturing that at rate. which is basically the technology to be able to stack multiple launches, multiple satellite in a single launch.

The way that we do it is basically -- on New gland, we can stack up to 8. In Balkan, we can stack up to 5. And in Falcon, we can stack up to 3. And this is self-contained structurally full composite.

It is manufactured under on IP. We are also growing. We have over 1,000 people yet dedicated to build these structures where they are very, very difficult to build and test. But we are now very close to getting 6 of them every month and being able to stack it with each of the different launch partners.

To your second question about AI, we are not in the play of hyperscaler systems in space. But what we are incorporating to our satellites, which you will start seeing in the production batches towards the end of the year is the ability to edge compute and load AI capabilities on board that can be very efficiently integrated also to the US for a variety of users around AI.

And is it related to AI spectrum management, basically a Hu-fly,you have resources to do to administrate dynamically basically power and spectrum. As you know, we can tuned within 1,100 megahertz of spectrum, and then we have blocks of spectrum with our MNO partners that's called IMT spectrum that we can tune country by country, location by location. And also, we had our MSS.

And the AI spectrum management is a system behind all of that basically predict traffic, [indiscernible] predict location, predict where people are and then allocate that very, very intelligently. Remember, on a satellite, you have 200 square kilometers of view of what's going on, on the need AI basically has the ability to predict where the traffic will be as the satellites move and dynamically allocate resources into this outlet.

That's typically the power or spectrum. And the end result of that is that we perceived user perception of what amount of spectrum it is use of how efficient it is. It is a multiple because you basically can't play with the whole field of view in how you allocate dynamically the spectrum a square kilometer by square kilometer.

Our next question comes from the line of Mike Crawford with B. Riley Securities.

To clarify, with the AST 5000 ASIC, has been expected to enable 120 megabit per second peak data speeds, but is it the AI spectrum management that gets you up closer to 200 megabits per second by year-end? And then also on the noncommunications capabilities that you're developing in conjunction with the FDA.

Would I be -- would we be correct in assuming we're talking about mid-band military radars. So that's something that we're not going to see with the initial blue birds that are launching now, but once you incorporate L-band and into the satellites?

Yes. Let me talk with the defense capability. I will not be able to describe it on this forum, but basically, is a noncommunication capability that use the same hardware that we use on our commercial satellites. And that's been in use today. And as Scott mentioned, the use today, they plan to extend drastically how they use it, and that is a noncommunication application for defense purposes.

And before we leave that topic, Mike, it's important to note that, that does not require mid-band spectrum. That's something we can do with low-band spectrum, which we've deployed today, right.

Correct. Then as you relate to the ASIC, the ACE is complete. It's been incorporated into the production line. The ASIC basically allowed us to upgrade the amount of bandwidth, we can manage with the for each satellite. So on the FPGA satellites, we had around 1 gigahertz of spectrum with the ASIC that we have 10 gigahertz of spectrum.

So it's a factor increase on number of gigahertz that can be constantly used per satellite. The big data rates are actually not dependent on the or ASIC. That's how many of those connections you can have simultaneously and do not rely on the in order to get to the 100 megabits per second that we have satellites that are actually the smaller initial satellites, and we expect to double the 98 megabit per second that we have.

If we are using the BB, which is an already orbit and the 9 and 10 that we will launch here very quickly. That do not require the ASIC or the AI [indiscernible] pure big data rate per cell. The AI management is basically when you -- is a way to intelligently distribute that big pipe of 10 gigahertz or 1 gigahertz depending on the version of the satellite intelligently where the users are and predicting where the users are going to be in order to allocate a slide of that 10 gigahertz where the traffic is needed and do it dynamically and proactively using an AI agent of our own.

Our next question comes from the line of Brian Kraft with Deutsche Bank.

Apologies for the multipart kind of long question, but I really had a few questions I wanted to ask you around launch. I guess first, do you have contracted launch capacity to do an average of basically one longer month from June through December because I think that's what you need to do in order to get close to that 45% number, and then how diversified is the launch mix?

And what if you can only do, say, one more New Glen launch this year? Could you still get close to that [indiscernible] 5 million I don't know, this is the first time I think you've mentioned Vulcan. So I was wondering how much launch you were able to secure there. And if that could fill that gap in.

And then it sounds like you've made great progress on the manufacturing side. With 11 through 33 in production, is the next batch of satellites going to be ready to ship per se, a July launch -- and then the last thing I wanted to ask you about is on the stacking, do you sort of need to work your way up to the max of those ranges? In other words, on the next new Glen, can you go right to 8%?

Or do you have to -- or would you prefer to say, do 3 or 4 to make sure it goes moly and then 5 to 6 and then go to 7% to 8%? Or are you just going to kind of fill these things up going forward?

Brian. So yes, we do have contracted launch capacity to meet our target for 2026. And the way to think about it is basically a handful of login launches and a handful of SpaceX or equivalent launches, and that's what gets us to the approximately $45 million we know that Blue Origin just suffered an anomaly, right, but we're optimistic about the return of the pad.

And the fact that they land -- they have 2 boosters is a massive support for the cadence that we have always expected and then we have contracted. So that's how we think about the mix and how we get to that $45 million number.

On the manufacturing side, we definitely we have capacity to keep knocking out launches one after another. absolutely. You can see that on the page in the deck. So given where we are, we expect to have more satellites each month to be ready for launch.

And we'll, of course, as we have update the public 30 to 60, 90 days ahead of launch as those are down selected and confirmed. And then on stacking, I think you pretty much captured it, Bryan.

I mean we expect on the next New Glen, we'll launch 4 satellites. Part of that is kind of ramping into the stacking capability and also, of course, managing where they are in the program. But we're very mature now in the 3 stack, and we're going to be doing that very shortly and the 4 stack likely shortly thereafter.

And then that's how we get to our constellation size, right? That's why we've selected the vehicles we have and plan to make use of as much of the capacity of each of the rockets. As we have available.

That's very helpful, Scott. If I could just ask one follow-up. Where does ULA fit into that? You mentioned a handful of large and handful of SpaceX is Vulcan sort of the backup or are you going to use them as well? Just curious why that came into the conversation today.

Well, our strategy has always been to have many launch providers, right? And so I put that in that category. We've been developing other heavy launch providers for some time, and we'll have more updates as appropriate. But right now, we plan to use Blue Origin and SpaceX and equivalents to the MAX.

Our next question comes from the line of Louis DiPalma with William Blair.

Abel, Scott and Andy, what do you view as the impact of Amazon's acquisition of Globalstar. And do you view any potential partnership opportunities with Amazon as they seem to be very much in the early stages of entering this industry.

Listen, we do a complicated transaction in the sense that capacity and the capability, it is already on the phones through the iPhones. And basically, we see that capability as an SOS emergency system. Our -- and we also see that here really at the end of the day to provide broadband, you need to have hundreds of megahertz of spectrum allocated.

So we're obviously here talking about, in the case of Globalstar on a very small fraction of that. So we don't see that changing dramatically in the foreseeable future of what the capability is today. And we don't see any real change of the landscape at least for the next 7 years.

When you think about some of our partners, and you combine their spectrum, IMT-3GPP already on the phone spectrum that they are allocated to us, plus our 50 megahertz of spectrum either on the L-band and the brand you're talking about, in some cases, with some partners all the way up to 100 megahertz of allocated spectrum. So our focus is broadband.

Our focus is -- of course, the broadband will come as we enable spectrum in a combination of our partner spectrum in L-band and then later, our mid-band low-band spectrum in the L-band, we see that as a complete different proposition and different and quite frankly, nobody is nowhere close into the capability that we have technically to deliver hundreds of megabits directly to a phone from something that is flying at 70 per hour 500 kilometers above you. And that competitive advantage of the capability is unique, and that's we make available to our MNO partners.

Great. And another question, I'm following up on the trial that was announced this morning that generated the peak downlink of 99 megabits per second, do you have a sense of what the average downlink would look like for Block 2 satellites when you -- and your partners launch the trials later this year?

Yes. I think the -- talk about peak and average is tricky because also it depends on what is transiting through the applications on the phone. So that's what we tend to focus about peak. But the big data rate for our larger B6, which is in orbit and 9 and 10, it is approximately double of what we disclosed this morning.

So you're talking about closer to the 200-megawatt per second. And that peak. And on average, it depends what you're transiting the small packages or larger packages and how you interact. But in term of network capacity is pretty most global of what we disclosed this morning around double of what we called this morning.

Our next question comes from the line of Chris Quilty with Quilty Space.

I just wanted to do a quick follow-up on the -- excuse me, the noncommunication satellite effort on the defense side, since your satellites were specifically designed as a communication platform -- does that imply that you're going to have to do large redesign of satellites and adding things like optical cross-links and onboard processing and pointing mechanisms or -- and if so, is that something that would be customer and refunded or something that you're putting the capital for?

Chris, I mean, we are -- we didn't start working with our department award this year, not even last year. This has been many, many years in the coming -- so all the capabilities that they require are already built in, in what we are producing on the line.

There will be additions after the request and are not permitted to discuss. But basically, the core capability of what they're using, it was incorporated many years back.

Great. And speaking of government defense budgets, assuming the administration gets through this reconciliation package, there's a huge generational budget increase, can you name the specific programs where you think ASP has an opportunity to target? Or are you expecting that most of your opportunities are going to be on the classified side.

It is a combination, and a lot have to allow related as the government has made a public by themselves around the golden done. But we are basically in all aspects of government usage were present from FirstNet from the classified to all the way to the golden dog.

So for communications and for communication and no communication capabilities. We see ourselves as a very important asset. To our government, [indiscernible And as I said, this is -- have been years developing for them. They're using it today and we expect a very significant growth in revenue and opportunity in all aspects of worm and usage of our technology.

Our next question comes from the line of Greg Pendy with Clear Street.

Just a real quick one. When you do hit 45 satellites on the launch side, what is the commissioning time period we should be thinking about until sort of the activation with service with MNOs?

Yes. Currently, we do it on the first satellite. I mean, these sales are the largest satellites, phase and rates apres ever deploy. So it took longer than it will take on the coming satellite. So the target is 45 days that's what we are planning with the MNOs. Every time that we launch in 45 days, we should be using either 5G or 4G connectivity through them. But as we keep launching, we plan to reduce that time frame for 45. All the way down to 2 weeks, we don't want to promise that in the early batches of satellites.

Great. And then just one more. As you're looking at this multi-launch strategy plan and adding new launch partners, any thoughts if Neutron from Roget Labs is available in 2027 on what type of capacity and if that would be a potential other partner in the launch strategy?

We're not going to comment on other launch providers, but you've heard our commentary today about who we're looking at. But we're -- we like launch providers. We like to launch with them satellites are designed to fit in all the standard 5-meter faring and larger ones as well.

So we -- I think that's what we'll say at this time.

Thank you. And we have reached the end of the question-and-answer session. I would now like to turn the floor back over to Scott Wisniewski for closing remarks.

Thank you, operator. We want to thank all of our shareholders and research analysts for joining the call. Really appreciate it. Have a great week.

Thank you. And this concludes today's conference, and you may disconnect your lines at this time. We thank you for your participation.

Good day, and thank you for standing by. Welcome to AST SpaceMobile's Fourth Quarter 2025 Business Update. Please be advised that today's call is being recorded.

I will now turn the conference over to Max Colbert, Investor Relations Manager of AST SpaceMobile. Thank you. You may begin.

Thank you, and good afternoon, everyone. Today, I'm also joined by Chairman and CEO, Abel Avellan; President, Scott Wisniewski; and CFO and Chief Legal Officer, Andy Johnson.

Let me refer you to Slide 2 of the presentation, which contains our safe harbor disclaimer. During today's call, we may make certain forward-looking statements. These statements are based on current expectations and assumptions, and as a result, are subject to risks and uncertainties. Many factors could cause actual events to differ materially from the forward-looking statements on this call. For more information about these risks and uncertainties, please refer to the Risk Factors section of AST SpaceMobile's annual report on Form 10-K for the year ended December 31, 2025, with the Securities and Exchange Commission and other documents filed by AST SpaceMobile with the SEC from time to time. Also, after our initial remarks, we will be starting our Q&A section with questions submitted in advance by our shareholders.

For those of you who may be new to our company and mission, there are nearly 6 billion mobile phone venues today around the world, but many of us still experience gaps in coverage as we live, work and travel. Additionally, there are billions of people without cellular broadband and who remain unconnected to the global economy. The markets we are pursuing at AST SpaceMobile are massive, and the problem we are solving is important and touches nearly all of us. In this backdrop, AST SpaceMobile is building the first and only global cellular broadband network in space to operate directly with everyday unmodified mobile devices, supported by our extensive IP and patent portfolio.

It is now my pleasure to pass this over to Chairman and CEO, Abel Avellan, who will go through our activities since our last public update.

Thank you, Scott. For the first time in 2025, AST SpaceMobile became a revenue-generating business as we significantly advanced all key aspects of our operations, including commercial, government, manufacturing, spectrum rights, IP portfolio and capital position. The combination of these efforts resulted in the successful launch and unfolding of our next-generation BlueBird satellite, BlueBird 6, the largest ever commercial communication array deploying load at orbit to enable the first and only global space cellular broadband network for government and commercial customers.

On the financial front, during 2025, we raised over $3.5 billion in capital and reported revenue of over $70 million for the full year and signed over $1 billion of minimum committed revenue. Operationally, we plan to ramp our satellite manufacturing efforts and launch cadence this year, while we're rapidly accelerating our government and commercial businesses.

We entered 2026 with a strong momentum and clear vision as we led the space-based cellular broadband industry, a market that we invented. 2026 will be the year we scale our space-based direct-to-device constellation from initial commercial activation to start of commercial service with mobile network operator partners in key markets like United States, Europe, Japan, Saudi Arabia and other key strategic markets like the U.S. government.

In just over one year since the orbital launch of our first five Block 1 BlueBird satellites, we developed our Block 2 BlueBird program, which is roughly 3.5x larger and 10x the capacity of BlueBird 1 to 5, breaking our previous record on both size and capabilities and then scale, test, launch and successfully unfolded BlueBird 6, our next-generation satellite of approximately 2,400 square feet. BlueBird 7, identical to BlueBird 6 is encapsulated and ready to launch within the next New Glenn launch vehicle at Cape Canaveral and is awaiting orbital launch, which is expected in March.

Our upcoming launch advances, our deployment goals of New Glenn will feature a 7-meter faring, enabling twice the payload volume of the 5-meter class commercial launch vehicles to support up to eight of our largest ever Block 2 BlueBird satellites. We expect to fully utilize New Glenn faring capacity as we progress through our orbital launch plans. We are especially excited to share this milestone with many of you who we hope will join us in Florida during our next launch.

Looking ahead, we're expecting 2026 to be a very active year, particularly as we progress into second half. We remain on track to achieve our target of deploying 45 to 60 satellites into loaded orbit by the end of this year, with current expectations closer to 60 satellites ready to ship and 45 satellites in orbit. We continue to expect launches planned every one to two months on average, starting with our first New Glenn launch expected in March.

The New Glenn launch vehicle is completing final readiness for our fully encapsulated satellite, which was handed off on February 18. Importantly, this launch will be the first New Glenn launch to use a previously flown first stage, we support our launch cadence during 2026. As we expect the New Glenn boosted to be reused every 30 days or less after our upcoming launch. Our launch plans include a total of 12 additional contracted launches across several launch vehicles. Lastly, we also recently signed an additional agreement to integrate our satellites with a new heavy launch vehicle to be on a standby in their manifest.

We are laser-focused and working tirelessly on delivering our micron phased arrays and full satellite production goals. On the manufacturing front, we continue to ramp our operations. We exited 2025 having reached a production capacity to support up to six satellites worth of micron and phase array per month, and we expect to achieve a testing assembly and integration cadence of six satellites per month in the first half of 2026. BlueBird 8 to 29 are in various stages of production, and we are scheduled to complete assembly of 40 satellites equivalent of micron by the first half of 2026, bringing us to BlueBird 46. A detailed cadence of our '25 and '26 deployment plan is shown in the accompanying quarterly presentation found on our IR website.

After BlueBird 7, our satellite will support a stackable configuration of , six, four, eight satellite per launch, which allow us to meet our 2026 deployment goals. Additionally, we anticipate our novel ASIC chip will be integrated into our Block 2 BlueBird satellite during the first half of 2026 to support 10 gigahertz of processing bandwidth per satellite, which enable us to exceed the capabilities of up to 120 megabits per second on our in-orbit Block 1 BlueBird satellites. These data rates are high enough to achieve the native cellular capability that consumers now expect everywhere from areas not served or not served good enough by terrestrial connectivity.

Another key enabler of producing the largest ever commercial communications array at scale is our 95% vertically integrated manufacturing strategy. Over the past several months, we have expanded our manufacturing site, both in Midland, Texas and Homestead, Florida, including acquiring a fourth site in Midland for dedicated micron production, the building block of our satellites. We will soon be over 0.5 million square feet of manufacturing and operational space globally, providing us with greater manufacturing and work capabilities with a tighter control over the manufacturing process from end to end. This rigorous effort strength by our skilled workforce enable us to proactively manage nearly every step in the process, including securing long lead materials well in advance of satellite assembly while keeping our materials and component costs low.

Simply put, we are the first company in history of commercial satellite manufacturing to produce satellites of our site and power at a scale. Together, our key technology differentiation in the size of our satellite, spectrum availability and custom ASIC that support today's capability of cellular broadband from space supported by our extensive portfolio of over 3,100 patents and patent pending claims. 2026 is a year of we scale commercial operations. We are the only company capable of delivering 4G and 5G and in the future 6G broadband speed sufficient for voice calls, voice over LTE, live video calls, streaming and full Internet access directly to modified devices. Our technology is anchored by our ability to manufacture the largest commercial communications array ever placed into loaded orbits.

Creating a durable technology advantage. Our satellites enable digital beam forming and are capable of multi-carrier aggregation in multiple frequencies, supporting simultaneous users per beam, behaving like a terrestrial cell tower from space. When combined with our integrated ground space gateway architecture and growing commercial ecosystem with over 50 leading global mobile network operator partners who collectively cover nearly 3 billion subscribers.

As Scott will discuss in more detail, we continue to expand our commercial ecosystem. In the fourth quarter of 2025, we announced definitive commercial agreement with Verizon in the United States and stc Group in Saudi Arabia and other key markets across the Middle East and Africa. As part of our 10-year agreement with stc Group, we received a prepayment of $175 million in 2025 indicative of the ambition we both share in bringing connectivity gaps and deliver cellular broadband directly to devices.

Recently, we announced partnership with Orange, Telefonica, CK Hutchison, Taiwan Mobile and progressing initiative with Vodafone to bring our direct-to-device cellular broadband service to their markets, who are now part of our commercial ecosystem with over 50 leading global mobile network operator partners who collectively recovered nearly 3 billion subscribers. To the date, our commercial advancements have positioned us to secure over $1 billion in total contracted revenue commitment from our commercial partners.

As a reminder, our comprehensive spectrum strategy is defined by our access to approximately 1,150 megahertz of low-band and mid-band tunable MNO spectrum globally. which include 45 megahertz of MSS lower mid-band spectrum access in North America and 60 megahertz of licensed S-band spectrum priority rights outside North America. Our low-band spectrum strategy is centered around the use of premium multi-operator 850 megahertz cellular spectrum. We have important characteristics like longer reach, better penetration and compatibility with existing 3GPP standards and devices. We have further strengthened this advantage through strategic MSS and cellular spectrum, including both premium, lower band, mid-band, L-band and S-band spectrum priority rights, positioning us to reliably deliver cellular broadband service at a global scale.

We also made significant progress in our government business as our satellite technology continue to be used by the United States government for dual use and dedicated applications. National security is a key priority for the United States, and we continue to see willingness to rapidly adopt innovate forward-looking technologies like ours. Taking together this accomplishment and the competitive advantages we have built give us a significant momentum as we progress to 2026 as the partner of choice for the global mobile network operators and unique noncommunication capability for the U.S. government.

And with that, I will turn the call back to Scott.

Thank you, Abel. I want to take this time to reflect on our business accomplishments in 2025 and how we see the business evolving over 2026 and 2027. Last year, 2025 was the year we activated our revenue engine with record revenue of over $70 million, achieving the upper end of our revenue guidance. We are no longer a pre-revenue company. During the year, revenue was primarily driven by commercial gateway deliveries and milestones completed from our government contracts. We delivered 15 commercial gateways to MNO partners in the second half of 2025. Importantly, these sales are a leading indicator that our MNO partners are preparing for SpaceMobile commercial service and making investments ahead of that rollout. This was also a well-diversified set of initial gateway deliveries across nine different customers across five continents, which starts to paint the picture of our initial commercial markets in the U.S., Canada, Europe, Japan, the Middle East and Africa.

In terms of signing contracts, the major customer deals for 2025 were definitive commercial agreements with Verizon and stc Group joining AT&T and Vodafone. We continue to see heavy engagement from MNOs, resulting in good progress deepening and growing our partner ecosystem, taking advantage of our base of over 50 global MNOs with nearly 3 billion subscribers.

We and our mobile network partners also recently announced additional specific initiatives with Vodafone, Orange, Telefonica, CK Hutchison, Taiwan Mobile, among others, while formally unveiling Satellite Connect Europe and its leadership team as our European distribution joint venture with Vodafone. In 2026, we expect more MNOs to join the AST Space Mobile network, and we expect to harvest our pipeline for many additional definitive commercial agreements as the contractual relationships mature with our existing partners beyond the investor MNOs.

The U.S. government was also a significant contributor to 2025 revenue. During the year, we executed against our existing 10 contracts across an expanding list of interested agencies, developing and testing additional capabilities using our in-orbit infrastructure, capabilities critical to U.S. national security, including the Golden Dome project. The revenue derived from U.S. government is not dependent on full constellation deployment, but is more scalable by satellite count, which makes it an early reliable contributor to revenue. As a reminder, the goal of these contracts is to develop capabilities that could grow into programs of record with billions of annual revenue potential in aggregate for missions incredibly important to U.S. national security.

We also recently announced our status as a prime contractor to the U.S. government and received a $30 million contract award from the United States Space Development Agency for the Europa Track 2 commercial solutions program. This contract focuses on developing immediate, resilient and low-latency tactical satellite communications directly between government and devices. The award demonstrates how commercial space innovation can be rapidly integrated into national security missions. The award further validates the dual-use nature of our technology for both commercial and national security applications.

Regarding the Golden Dome project, we continue to execute against our current contract with the Space Development Agency, and we were recently awarded an IDIQ contract under the United States Missile Defense Agency's SHIELD program. These awards position us to compete for a wide range of future activities to support one of the largest and most significant United States defense programs in history.

As we turn the page into 2026, we see this year as an inflection point as we enter commercial service with our initial MNO partners while also continuing to generate revenue from the commercial gateway and government strategies. Before the impact of commercial service revenue later in the year, we expect revenue to at least double versus 2025. In fact, our 2026 expectations are further derisked given our contracted pipeline, which provides upside with additional government contract wins. 2027 will be the first full year impact of commercial service revenue as the AST SpaceMobile cellular broadband service becomes available in some of the best markets worldwide to hundreds of millions of subscribers via a low-friction service offering provided when the subscriber needs it most.

We also expect government revenue to continue to multiply in 2027 with significant upside depending on certain contract outcomes. We see the opportunity in 2027 approaching $1 billion in annual revenue, importantly comprised of revenue both long-term contracted or highly recurring in nature, subject to achievement of commercial and government service objectives. Going into the end of the decade, we see further multiples of revenue upside, driven by greater subscriber uptake and market extension.

All told, we are confident that our business strategy has strong competitive differentiation and is supported by a growing list of industry tailwinds. We enter 2026 with the assurance and conviction needed to win in an ever-expanding TAM.

I'm now happy to pass the call over to Andy to walk through our financial update.

Thanks, Scott, and good afternoon, everyone. During the fourth quarter of 2025, we continued to execute on our commercial objectives while expanding manufacturing and importantly, significantly strengthening our financial position to support our core objectives in 2026. 2025 was best described as the year of scaling at AST SpaceMobile. We began the year focused on building out manufacturing to support our targeted launch schedule through 2026, and we ended the year with the launch of our first Block II BlueBird satellite, BB 6, a seminal moment in the history of our company. As we speak with you today, we have 29 Block 2 BlueBird satellites in various states of production and are on target to complete the assembly of 40 satellites equivalent of microns during the first half of 2026.

For 2026, AST SpaceMobile's global workforce is intensely focused on completing our Block 2 BlueBird satellites to support the orbital launch of 45 to 60 total satellites during the year as we work towards commercial service activation in the second half. As Scott described, our focus on launch cadence and commercial service activation in 2026 is complemented by our increasing revenue opportunities, both from commercial and U.S. government partners. We are now a revenue-generating company, and we will work hard to achieve profitability from our growing revenue initiatives that are intrinsically linked to the increasing number of Block 2 BlueBird satellites that we put into low earth orbit.

Our rapid growth is supported by a fortified balance sheet. Not only do we now have the cash to support the full build-out and launch of a constellation of over 100 satellites to provide worldwide space mobile service, our most recent financing activities position us to accelerate the deployment of our controlled spectrum bands on a global basis, monetize the capabilities of our proprietary technology to capture the evolving commercial opportunities related to artificial intelligence, enhance investment in government space opportunities in the United States, reduce our higher interest debt and pursue opportunistic investments to accelerate our space mobile services and capabilities.

All the while, we continue to balance a prudent approach to our spending while moving quickly to protect and capitalize on our first-mover advantage of bringing space-based broadband connectivity direct to unmodified smartphones in the rapidly growing direct-to-device market. Our intentional focus on investing in operational growth led to higher adjusted operating expenses and capital expenditures in Q4 of 2025, both consistent with our expectations and previously communicated during our Q3 2025 earnings call. Importantly, our revenue ramp continued in Q4 with significant revenue growth from commercial gateway deliveries, services and contracted milestones completed for the U.S. government, resulting in 2025 revenue near the top of our guidance range.

Moving to the operating and capital metrics slide. Let's review the key metrics for the fourth quarter and full year of 2025 in more detail. On the first chart, for the fourth quarter, we incurred non-GAAP adjusted operating expenses of $95.7 million versus $67.7 million in the third quarter. As a reminder, non-GAAP adjusted operating expenses exclude noncash operating costs, including depreciation and amortization and stock-based compensation. The quarter-over-quarter increase of $28.0 million resulted primarily from a $23.4 million increase in adjusted cost of revenues related to gateway deliveries, the first revenue from our MNO partners together with a slight $3.5 million increase in adjusted R&D costs, a $3.0 million increase in adjusted engineering services costs, this partially offset by a $1.9 million decrease in adjusted general and administrative costs. Our Q4 adjusted operating expenses, excluding those adjusted costs of revenue, would be $66.8 million compared to $62.2 million in Q3 of 2025, which is in line with the mid-$60s million guidance that I previously provided. For the full year of 2025, non-GAAP adjusted operating expenses less adjusted cost of revenue totaled $224.8 million compared to $151.8 million for the full year of 2024. The primary drivers of the increase were growth in our workforce, including contractors and consultants, our expanded production facilities and other professional fees, including legal fees related to our spectrum and financing transactions.

Turning now to the second chart on the slide. Our capital expenditures for the fourth quarter of 2025 were approximately $407 million versus approximately $259 million for the third quarter of 2025. This figure was made up primarily of capitalized direct materials, labor for our Block 2 BlueBird satellites and payments made in connection with multiple launch contracts with the balance relating to facility and production equipment expenditures. This amount was above the quarterly guidance of $275 million to $325 million that I provided during our last earnings call, mainly due to intentional growth investments to accelerate satellite material purchases and the timing of launch contract payments.

For the first quarter of 2026, we estimate that our adjusted operating expenses, excluding cost of revenues, will be in the range of approximately $70 million to $80 million as we add to our workforce and continue to design, manufacture, launch and operate our growing satellite constellation as well as pursue the monetization of our L and S-band spectrum usage rights. We expect our capital expenditures to remain flat in Q1 2026 with the fourth quarter of 2025, and it will come in at a range of somewhere between $350 million to $425 million, primarily driven by the timing of launch payments related to our near-term launches, which, as I've previously explained, vary from quarter-to-quarter.

We continue to estimate that the average capital cost, including direct materials and launch costs for our constellation of over 90 Block 2 BlueBird satellites will fall in the range of $21 million to $23 million per satellite. Our cost per satellite estimates are subject to fluctuations based on dynamic geopolitical factors, which could impact our costs. As a reminder, the timing of the changes in our adjusted operating expenses and capital expenditures, as I've just described, could be delayed or may not be realized due to a variety of factors.

Our planned revenue ramp continued during the fourth quarter, and we expect to continue to grow in 2026 holistically. With respect to revenue generation, we believe we can enable continuous space mobile service across key markets such as the United States, Europe, Japan and other strategic markets with the launch and operation of approximately 45 to 60 BlueBird satellites and additional strategic worldwide markets with the launch and operation of approximately 90 BlueBird satellites. Further, as we continue to launch and deploy our constellation, we will continue to support U.S. government applications, currently ongoing and accelerating as our constellation grows.

In the fourth quarter, we recognized revenue of $54.3 million, primarily driven by gateway hardware sales and various U.S. government service milestone achievements. Additionally, in Q4, we recognized revenue in connection with the provision of critical consulting services for an MNO partner. For the full year of 2025, we achieved revenue of $70.9 million, representing the top end of our 2025 revenue guidance range of $50 million to $75 million.

Now turning to our revenue expectations in 2026. We manage the top line with a focus on full year performance given the quarterly variability inherent to our business, including the timing of contract signings, equipment sales and milestone achievements. As a result, we believe our revenue performance is best evaluated on a full year basis. As we continue advancing our launch and network activation initiatives, we expect revenue to grow meaningfully relative to our 2025 financial performance. Specifically, we expect to generate full year 2026 revenue in the range of $150 million to $200 million. We expect revenue to continue to be driven by gateway deliveries, achievement of contracted milestones for the U.S. government, MNO consulting services with potential upside related to the recognition of initial commercial service revenue. Quarterly revenue will likely vary significantly depending on achievement of milestones and the timing of customer activities.

We believe that approximately half of the revenue opportunity within our commercial pipeline this year is already booked or contracted. The remaining portion consists of a combination of advanced stage opportunities that have not yet been signed as well as net new business we expect to secure over the course of the year. As previously noted, we anticipate government-related revenue growth to be driven by the factors outlined earlier in Scott's remarks. The achievement of our revenue plan remains subject to several contingencies, including the successful launch and deployment of Block 2 BlueBird satellites related to U.S. government applications, contractual milestone achievements, critical gateway equipment sales to our MNO partners in support of their anticipated commercialization efforts of SpaceMobile service and service revenues in connection with the activation of our commercial service provided by our existing and planned deployed and operational satellites.

Finally, on the last chart on the slide, on a pro forma basis, inclusive of cash raised in February via the convertible notes offering with a 2.25% 10-year coupon at an effective strike price of $116.30 per share and the available liquidity under the at-the-market or ATM facility. Our cash, cash equivalents and restricted cash as of December 31, 2025, was approximately $3.9 billion. Primary drivers for this cash increase include the execution of the two convertible notes offerings in October of 2025 and February of 2026 for a total of approximately $2.2 billion of net proceeds and approximately $706 million of net proceeds raised from the 2025 ATM facilities during Q4, leaving approximately $80 million available under that facility. In addition to capital raised via the recent 2.25% 10-year convertible notes, we also took action since our last earnings call by further reducing our outstanding debt related to the January 2025 and July 2025 convertible notes each due in 2032.

Following the February equitization transactions, we have now converted approximately $457 million of the outstanding $460 million of the January convertible notes into 19.2 million Class A shares and $250 million of the outstanding $575 million of the July notes into 4.5 million Class A shares. We will continue to look at attractive debt reduction efforts, including convertible notes as the year progresses.

Given the current strength of our balance sheet that now includes cash, cash equivalents and restricted cash and available liquidity under the ATM facility of over $3.9 billion on a pro forma basis as of December 31, we are now not only fully funded to manufacture and launch a constellation of over 100 satellites to provide worldwide space mobile service, but we have increased our financial flexibility to make further investments to expedite the timing of and augment the capabilities of our SpaceMobile service. At this time, we do not have any plans to pursue additional convertible debt.

The combination of increasing commercial and government opportunities rapidly scaling manufacturing and satellite launch operations and a fortified balance sheet firmly positions AST SpaceMobile to achieve our objectives on behalf of all of our stakeholders in 2026 and beyond. I am incredibly proud of the significant progress our company made in 2025, backed by the intense focus and tireless efforts of our worldwide workforce. It's now time to further execute on our launch cadence to bring SpaceMobile service to connect the unconnected in the coming periods.

And with that, this completes the presentation component of our business update call, and I'll pass it back to Scott. Scott?

Thank you, Andy. Before we go to the queue of analyst questions, I would like to address a few of the questions submitted by our investors.

Operator, could you please start us off with the first question?

Justin from Georgia asks, any interesting learnings from BB 6 and 7? Is the production of composite satellites going to be vastly different? Any unforeseen delays?

Thank you, Justin, for the question. Yes, BB 6, it is the largest phase array ever deployed in space. It's 3.5x bigger than our previous deployments, which were also the world record on size. And going through that first deployment of 2,400 square feet successfully, learn how to capture, control and manage the satellite at that size will allow us to actually do it much more faster and we do 7, 8, 9, 10, 11, 12, 14 satellites sit that are common. So that -- yes, that was a very, very important milestone in learning how to operate, deploy and fly something of this size, which will help us to do it faster in the next deployments.

The other thing that will happen going forward passing 6 and 7 is that we're stacking the satellites. So we're not relaunching individual satellites anymore. They will be packed in group of either three, four, six, or eight in a single launch. That is what will allow us to meet our launch cadence of this year, which is -- which we're expecting 45 satellites in orbit and 60 satellites ready to ship during 2026.

Justin also asks, is there an updated time line for the mid-band constellation for using L and S-band spectrum?

Yes, there is. We're planning to start launching the mid-band constellation by the end of the year. The mid-band constellation has the advantage of combining 3GPP standard operator own frequencies and also our L and S-bands, which combined give a great flexibility to the offering and also allow us to continue to increase the data rate capacity that we have in our system going way above our 120 megabit per second that we already have in Block 1. So that allows a combination of IMT spectrum, which we see it like a extension to extend capability in places where there is not spectrum, there is no spectrum light up to overlay spectrum in our LNS in order to cover all locations as a supplement and an augmentation of the terrestrial network with data rate that far exceeds our 120, our current 120 megabit per second in the low-band block and satellites.

With the largest satellites and with access to combine in certain regions to over 100 megahertz of spectrum combining the spectrum of our network partners and our own, this will give a true broadband experience on a global basis.

Liden from New Zealand asks, with the larger designs complete and being produced, do you anticipate future R&D or new product lines? This may be data centers, exclusive military constellations, collecting data on usage, providing aircraft and ship traffic, radar, et cetera.

Thank you, Liden. Listen, the most difficult aspect of the R&D with the launch deployment and usage of our BB 6, the core aspect of it is complete. So the ability to produce a lot of power, the ability to have a very large aperture with very sensitive aperture, the ability to have many, many gigahertz of processing power with our own ASIC the ability to do it cost effectively with our own power generation technology. All of that R&D have been completed and it's integral part of what we have and where we're operating, and as you said, being completed.

Now we do see many other opportunities for the technology that we're starting to see usage of them. One is radar. Another is power generation. Another one is multiplying the spectrum usage. So we believe in combining our large aperture with our AI capability will create a multiplier for the spectrum. So the 50 megahertz that we have, it will feel a multiple of that. It could be 3x that, it could be 10x that. So we see a lot of opportunity to combine in all this capability, including very precise geolocation, radar communications, all that wrap up with an AI infrastructure. We think there is a significant additional value that we can create with our infrastructure and the already invested R&D.

Kevin from Vancouver asks, can you share more color on the most recent $1 billion convertible note offering? Many investors are confused as your current liquidity was already approximately $3 billion in sufficient for around 100 satellites. Were there any specific opportunities in mind when you issued the offering? Or is it really "just in case something pops up?

Thanks for that question, Kevin. This is Andy. It's absolutely the case that in Q4, when we finished the convertible in October, we were in a position to fully fund the worldwide constellation at 100-plus satellites. Nothing has changed on that front. And the convertible deal that we did at just over $1 billion in February provides us essentially extra flexibility to look at investments that go beyond that first 100 constellation.

And what I mean by that is, number one, we can accelerate the deployment of our control global spectrum with this added fund. We also have the opportunity to monetize our technology to capture commercial opportunities related to AI, which are increasingly coming our way. We will look to deploy funds to enhance our investment in government space opportunities in the United States. We've talked about our debt profile. These funds provide us flexibility to look at reducing higher interest debt that we currently have. And finally, opportunistically, any investments that help us accelerate the time to bring space mobile service and capabilities will be a good use of these funds as well. And I would just close by noting that we've confirmed that we have no current plans to look at an additional convertible deal. We feel that the balance sheet is where it needs to be to provide us the opportunity to execute our objectives in the near and midterm.

And with that, I'd like to thank our shareholders for submitting those questions. Operator, let's open up the call to analyst questions now.

[Operator Instructions] Our first question comes from the line of Griffin Boss with B. Riley Securities.

So, first, I just want to talk about this expanding TAM that you've talked about with the dual-use capabilities and government contracts. Do you see any scenario where you build and launch future block Bird satellites with different payloads that might be exclusively for government customers or applications?

Listen, the satellites are really designed to manage all these applications in a single platform. So we do not need multiple satellites for multiple payloads. The core applications for our government contracts for our partnership with the MNOs are all possible through the same platform, which are, in fact, already being used in combination of the two. So we want to maximize and take advantage of a platform that can be used simultaneously for the two TAMs.

Got it. Okay. Understood. And then just second one for me. You always mentioned your thousands of patents, and you talked about on this call, your expertise in building and deploying massive structures in low earth orbit that could be used for myriad opportunities and you specifically call out these burgeoning opportunities in AI. You called that out with the convertible raise too. But you have this one specific patent that's been of interest to us for a while for thermal management systems for structure in space. And that's a patent that describes a process for satellites wherein heat is dissipated locally at each antenna and heat could be directed to each antenna assembly during periods of extreme cold.

So just curious if you could maybe elaborate on that specifically as well as your other capabilities and how that could potentially be used for opportunities in data centers in the space or why that makes AST satellites attractive for those types of capabilities?

Yes. No, absolutely. I mean there are many key enablers that needed to be designed by us and deploying patent in order to solve probably the most difficult problem, which is connecting broadband regular handsets. So, for that, we needed to develop and vertically integrate 95% of our technology, had the technology to produce a low-cost power. That's a very significant satellite our size. We are on a factor of 10 lower per square meter power production of what historically manufacturers had been using, the size of the satellite. And then the ability to generate power at a low cost per square meter and then being able to dissipate and effectively run a lot of wattage per square meter within the power constraints of space.

So we have -- that's why we have built up a significant portfolio of IP. That is a particular -- I think you hit it right, that's a particular technology that enable a lot of things. Then when we talk about the ability to manage the spectrum using AI capabilities, we call it spectrum AI spectrum management, the ability to use these satellites, not only for communications, but other applications like radar. And when you combine that with the ability to store, manage data, in a way that uses the spectrum very, very efficiently is -- it opened a lot of other opportunities on the TAM that we have.

We believe the largest TAM is in broadband through broadband directly to the handset where you will be basically becoming what I call the third leg of communications. You have Wi-Fi, you have cellular and now you have space. And our belief is to participate at scale in a way that is meaningful for our global operators, the broadband capability is essential. And it's not -- and it's something that we have now. I mean that's what we have with the satellites that we're deploying right now. And we're extremely happy of the performance that we see on our BB 6 in the new 2,400 square feet platform that we just launched.

Our next question comes from the line of Colin Canfield with Cantor Fitzgerald.

As we parse out the comments that you talked about on 2028 revenue potential, just kind of thinking like the ball bear of what you said, so multiple versus $1 billion of potential in '27, which suggests, let's call it, $1.5 billion to $3 billion for '28. How does the team kind of think about the mix of opportunities between government and B2B customers? And then kind of within B2B, how do you think about tech discussions between communications, intelligent and then intelligence and on-orbit compute?

Thanks, Colin. I'll take that. So, we put forward our expectations for revenue in 2026, building on the high end of our guidance that we achieved in 2025. And then we stated a goal for 2027. So we did not state anything for 2028. So I'll keep my comments to '27.

But I think what we see is as we get this platform on a full year run rate, and we're able to put the consumer business, the D2D communications business in place in some of the most favorable markets globally. And then you put that alongside our government applications, giving some time to mature and some potential contract wins we're chasing. That's how we got to that 2027 goal number.

And we think that that's probably more weighted towards commercial based on that framework. But of course, upside, I think, if government does better. And as you go out into 2028 and later in the decade, ultimately, we do think that our commercial business is going to be bigger. That's always been the premise. So, commercial, I think, at scale should be bigger than government. We think that market is really attractive. We think all the demand drivers we've tracked for seven, eight years of the company are intact and growing stronger by the day. But the government business is also very attractive. And as we said, with all the various use cases we're tracking, there's potential for multiple billions of annual revenue through those use cases as well.

So we see a really bright picture. I'd say it's largely consistent with how we've always seen it, although government has trended up over the last year or two. But that's how we see the mix playing out. And -- and I think that's -- as we're deploying and as you saw, we put out a number of customer announcements today, we see the strength of that demand as strong as ever.

Got it. I appreciate it. And then as we think of the progression of growth, is it fair to use the 4Q performance as a baseline for 2026 and then growing from there? Or is the commentary in terms of growth for '26 more aligned with just growing from the 2025 annual number?

The way I'd think about it is before we initiate commercial service here, we're doing revenue that's kind of earlier stage, right? So the commercial revenue is not as consistent and the government revenue is building nicely, but much lower than where it can be. So, quarter-to-quarter, I wouldn't say we're planning on building quarter-to-quarter. I think about it annually like Andy put it in his speech. It's really about an annual target.

And so I think at least doubling where we hit in 2025 is the right way to think about it with, of course, upside as we launch commercial service. But quarter-to-quarter, at least in the next few quarters before commercial service comes into play in the second half of 2026, that's how to think about it is we're going to be -- we're putting commercial infrastructure in place, and we're performing against our government pipeline.

Our next question comes from the line of Bryan Kraft with Deutsche Bank.

I'm just trying to understand the manufacturing side a little bit better. Would you mind providing just some color on how many satellites beyond BB 7 are built and ready to ship today and maybe how many you expect to be built and ready to ship by midyear? I know you talked about the microns and those are the hardest part, but I think there is some assembly that takes some time beyond the microns themselves.

And then just related to that, I mean, I think clearly, the manufacturing pace is somewhat behind where you had expected it to be. Perhaps you could maybe just give us some appreciation for the kinds of things that maybe took longer than you had expected and whether you think you've now worked through all those issues and you're kind of accelerated or accelerating the pace up to where you had expected it to get to?

Yes. I think we are at a point where you see that acceleration. We certainly see that in the manufacturing of the key building block, which is the Micron, so which we were on satellite 30. We are on target to at least be ready to ship this year 60 satellites with a minimum of 45 into orbit. So we went through a phase and just a year ago, the satellites were 3.5x smaller. They were already very big. They were the biggest ever launch. These ones are 3.5x bigger. And that's BB 6 and 7. Past that, basically, what is something that help us to accelerate our cadence of satellites in orbit is we are able to stack them. And that stack is difficult. You need to be able to stack either three, four, six, or eight satellites. And that is near completion. So that you will -- you see batches of six in the -- getting out of the factory very soon here.

And -- okay. So on the stacking, if I may, just in layman's terms, are you saying that there are specific engineering things that you had to figure out in order to get the stacking right? Or are you just saying that getting that many done at once so that you could stack them and getting ready for a combined launch took some time? Just if you don't mind clarifying.

Getting them ready for a combined launch is the ability -- I mean, you're talking about something like a 5-story building worth of satellites, stacking them in either blocks of three of them, four, six, or eight. And -- but that process is completed. And the next batch of six, you see the pictures in the deck that we put in the IR deck. And that -- we passed that phase and we get ready to resume the shipments to the Cape.

Okay. If I may sneak one more in. I know you said that BB 7 is expected to go up this month and then launches every one to two months. Could we expect possibly a launch with multiple satellites in April? Or is it likely to be two months post the March launch?

Yes. I mean the -- all further launches are in stack configuration. We're not -- we don't have any more single launches like we did on BB 6 and BB 7. This next coming launch is super important for us as basically allows to reduce the first stage of the New Glenn, which is the only platform commercial that exists that can actually stack eight of our satellites. There are other platforms that stack six or three. But with the New Glenn, we get the maximum amount of satellites per launch. And that ability is becoming available with the new satellites.

And Bryan, I'd just add, we expect to ship that next batch in April. So depending on timing and of course, under ideal conditions, it's about three weeks or so to launch from there. So we're not going to speculate on launch timing for that, but we are -- we look like we're going to be in a position to ship those in April, and you can see that on Page 10 in our deck.

Our next question comes from the line of Louie DiPalma with William Blair.

Abel, Scott and Andy, congrats on all of the partnership announcements and the progress with your constellation. First, I was wondering, are you in Barcelona for the conference? And will there be more announcements this week besides what you've already announced? Are you holding back certain announcements?

It's Scott here. Yes, we are in a conference room in Barcelona. So it's great to do the call this quarter on the road. But yes, we did -- we had a flurry of announcements today. And yes, you can expect more for the rest of the week as well.

Excellent. And my second question is, what service level will your network support when you launch the different beta offerings in the summer, will there be different phases in terms of the service capabilities as more satellites come online? Or like should like the initial beta that launches whenever that takes place, will that have like close to a true 5G experience?

Yes. The way to think about this is peak data rate. So what peak data rate you can expect on the phone will be directionally proportional to the amount of spectrum that we get allocated. And with some partners we have between our spectrum and their spectrum and off to around 100 megahertz. And you can think -- you can put a multiple of that number of megahertz to think about what is the big data rate. Today, we're managing between 3 and 4 bits per hertz. So that multiple is in that order.

So the initial launch of commercial services is with the lower end of that as the allocated spectrum, it will be less. But as we enable more spectrum, which the satellite support them now, they have great flexibility to keep adding spectrum and keep adding and later even combining low-band spectrum with mid-band spectrum. Then you see the peak data rates keep enhancing. So that's the way to think about the key performance metrics as we launch services.

That makes sense. And one financial question for the $1 billion revenue goal for 2027, how much of that is customer or subscriber usage based versus being like minimum revenue commitments that are contractually obligated with your MNO partners such that like if you actually are able to get like between the 45 and 50 satellites online by the end of the year, how much of that $1 billion is then like already in the bag, so to speak?

Sure. So, remember, we're at $1.2 billion contracted backlog right now, which we're very proud of and is a testament to how we've built the ecosystem with our partners and how confident our partners are in the business that we're building, right? But that is still very, very low number compared to what our expectations are for the revenue potential of the business.

So while it's a good indicator that backlog, which again is over $1.2 billion at this point, but in terms of its contribution to each individual year, it will be a minority for sure. So if we're -- in terms of a goal of $1 billion, you can think of that in the low hundreds of millions, somewhere in $100 million to $300 million range depending on the year.

Our next question comes from the line of Chris Schoell with UBS.

Looking at your new disclosure, it appears your services gross margins are around 90%. Is this a good way to think about the business longer term? And as revenue generation starts to kick in, can you just remind us how you're thinking about operating leverage and where you believe steady-state EBITDA margins can reach for the business?

Yes. We've been pretty consistent about this over time. And when you look at the history of the satellite industry, when it's been performing well, has margins in the 80-plus percent range. And even today, if you look across the market, there are businesses with 90-plus percent flow-through margins in certain segments of their business, they just might not report it that way. So this has just tremendous operating leverage in it, and we've always known that off of a fixed cost base.

So, as we've built the business, nothing has really changed. I mean we struggle to find true variable cost in a meaningful way. And this is compounded by the fact that remember, our go-to-market strategy is with the revenue share. So that is a big way that we even get greater leverage in the business and make it not just wholesale, but super wholesale. So, at this point, our flow-through margins and our operating leverage, we think, over time, could contribute to an EBITDA margin in the 90% area or higher.

Great. If I can just fit in one more. I recognize that the 10-K talks about 90 satellites supporting your longer-term business goals. But does your ability to raise capital maybe incentivize you to perhaps go beyond what is contemplated in the original business plans?

I'll pass it over to Andy.

I think having that flexibility, I mean, the market -- the capital markets have been wonderful for us over the past year. So that's absolutely the case. But the reality is when we get our constellation built, we're going to get leverage in the P&L to actually be cash flow from -- cash flow positive from operations. So we don't feel like at this point, we need to look beyond what we've raised right now. It provides us the flexibility to make additional investments, opportunistic and some of the other things that we're doing on our spectrum strategy.

But the real goal is to generate revenue and profit from the constellation as we get to launch. So that's kind of how we're thinking about it right now, but it's certainly nice to have the balance sheet fortified the way it is.

Our next question comes from the line of Greg Pendy with Clear Street.

Just a real quick one. On the operating expenses that you outlined, could you just remind us what you said? And does that include what will likely be spectrum licensing fees, maybe around $20 million a quarter or lease -- I'm sorry, spectrum lease payments?

Yes, this is Andy. So it's a bit of a walk here. You've got sort of the GAAP OpEx, which includes the normal noncash items, which we adjust out, which we've talked about. And then from there, we also have the cost of revenues, which when we get to service, we'll be moving into a more traditional COGS P&L that you'd be more used to there. But then when you net that out, my commentary was that we were just slightly over where we were in Q3 of '25 and right in that guidance that I gave for Q4 in the mid-60s.

It does not include spectrum costs, as you described for licensing, given that those are capitalized until we actually start monetizing that asset. And of course, we're at the point where we're awaiting FCC approval. So we will speak to that as a specific item when it comes time to kind of build that into the operating expense. But right now, apples-to-apples, that's been out during the course of '25.

And we have reached the end of the question-and-answer session. And therefore, I'll now turn the call back over to Scott Wisniewski for closing remarks.

Thank you, operator. And we want to thank all of our shareholders and research analysts for joining the call. We hope to see many of you down in Florida at our upcoming launch. Thank you. Bye.

And this concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

Hi, everyone. I think we'll get started. My name is Chris Schoell, and I'm with the Communications & Media Research team here at UBS.

Today, we're pleased to have President and Chief Strategy Officer, Scott Wisniewski from AST SpaceMobile.

Just before I get started, I need to quickly read as a research analyst, I'm required to provide certain disclosures relating to the nature of my own relationship and that of UBS with any company on which I express a view today. These disclosures are available at www.ubs.com/disclosures. Alternatively, please reach out to me, and I can provide them to you after the presentation.

So maybe starting off, Scott, it's been another very eventful year for the company. Maybe just kind of recap over the key milestones for AST in 2025? And what are your priorities as you look out into 2026?

Sure. And thank you very much for having us. So 2025 has been a fantastic year. It's very much built on 2023, which was about technical demonstration; 2024, which was about partners, and 2025 has been about scaling the business. We've done that with a lot of capital raised, $2 billion to $3 billion raised over the course of the year. We've got our manufacturing plan almost up to rate as well. That's very important because we're a vertically integrated story and which means we control the input of production and can move fast and innovate that low cost.

And we've also added additional partners, put a couple of definitive commercial agreements in place, including with Verizon and Saudi Telecom Group. And for the first time, as we exit the year, we're having revenue guidance in place second half of the year. And we've guided to over $1 billion of committed revenue as of our last earnings call.

So it's been a real exciting year to scale the business across commercial, strategic capital and manufacturing. And on top of that, we were able to kick off a lot of excitement this year around MSS spectrum with our long-term Rights Access Agreement that we put in place last January. And that really secured for us additional spectrum within our 4 walls, a real strategic asset that we didn't have before to complement our cellular strategy.

Maybe we can just start with the launch calendar. Can you just give us an update, where does the launch cadence look for BlueBird 6 and 7 here in the coming weeks?

So we're at a fantastic moment where we're deploying network. I think we've spent the last decade building an incredible new vertical within satellite and cellular industry and doing it from scratch in the face of folks not believing it could happen to suddenly being something that everybody talks about. And that was a long journey, but where we find ourselves today is that we're not talking about the tech or even capital or even the customers. We're talking about network deployment and services. And so that's what it's all about now.

As we're deploying network over the course of 2026, a launch every month or 2 on average. Each launch will have up to 6 or 8 satellites on it, and that will get us to our goal of 45 to 60 satellites in order to offer commercial grade service continuously in the United States, Europe and other markets that matter around the world. So that's the vision. That's been the plan for about a year now. We're executing on that vision. And that is about to kick off with our first next-generation satellite launch out of India in the next 2 weeks, 1 to follow shortly thereafter and then up to 13 launches total through the end of 2026.

And I think last earnings call, you reiterated you expected 5 launches by the end of 1Q. Can you just remind us through the different rocket providers, how many satellites can fit on each of the different rockets and what that might imply for a number of satellites in orbit by the end of 1Q?

Getting to orbit is a strategic topic for us. We have the technology within our 4 walls and an ecosystem that we've created with the operators to make cellular service on a broadband basis available to the 6 billion phones in circulation today. It's a very powerful tool that we're deploying. And to do that, we need to get to orbit. And so our strategy there has been to make our satellites compatible with all the major heavy and medium launch providers out there. And we've signed up launch contracts with 3 big players; SpaceX, Blue Origin and ISRO out of India.

There are other launch providers and more launch coming online, and we're compatible with all of them. So for us, managing that ride to orbit with multiple different providers and buying in excess of launch under contract, more than we need to get to that 45 to 60 number has been our strategy all along. And you'll see us on each of those operators. We're going to have 1 satellite on our first rocket with ISRO here in the coming weeks. We'll have 3 or 4 satellites over time with SpaceX and we'll have 6 or 8 satellites over time with the Blue Origin New Glenn Rocket.

And you mentioned the different launch providers. Can you just talk a little bit about the flexibility you have as you try to work towards that 45, 60 satellites by the end of next year? Do you have the ability to pivot between the different providers? Any color there would be great.

The short answer is yes. I joke with my friends in the launch industry that they have a tough time with their customers because they're basically a venture capitalist. It's hard to know when people will be ready to go to orbit. And the great thing about us is we plan to launch more tonnage to space in the next couple of years than pretty much anyone on planet with the exception of 2 or 3 players.

So being able to do that and do that with a vertically integrated strategy means we're not waiting for some prime to give us a notice quarterly. We're not waiting when the satellite is up in orbit to see if it's going to unfold properly or not. Our founder, who has 80 million shares and folks works on this 24/7 is there with the satellite soup to nuts along with an entire very big team that's done this multiple times before. So for us, getting that right is incredibly important, being in a position to have multiple stacked options with multiple different providers so that we can hit our cadence with a lot of extra cushion in the system is our strategy, and we'll continue to push on that strategy over the course of 2026 and 2027.

And I think the Block 2 satellites have a little bit later than maybe first envisioned. Can you just talk about what drove the shift? And is this just natural growing pains? And once you get past the first Block 2 being launched, you have confidence that there's not going to be any sort of neck that materialize here over the next 12 months?

Yes, we've been very fortunate that, for a lot of reasons, some are making, some not, we're not really exposed the supply chain issues that you see across strategic industries. On our last launch a year ago, we did have some slowdowns based on 2 different component systems, but we're able to bring those in-house. So those are now resolved. And so in terms of rolling out our next satellite, which is the largest ever communications array put into Low Earth Orbit commercially. And 3x larger than our prior, which was the largest in itself, being able to do that is something that we could uniquely do because, one, we're vertically integrated, and two, we actually use many of the same components from the first program.

So by not changing each program, we've been able to move fast and basically updating a program with a 3x larger satellite in about 12 months' time is pretty unprecedented in the satellite industry. So the factory is now nearly at pace. The staffing and floor space we need for that is in place. And we've already started to think ahead, including acquiring a fourth site in Midland, Texas, where we're based, that will be focused exclusively on our microns which is our solar panels and components, which are applicable for any satellites we build and many other applications.

You mentioned the new ASIC chip will be incorporated into the satellite starting in 1Q. Can you just remind us what that does for the total processing power and capacity on Block 2 satellites?

So there's a number of challenges in deploying this architecture in orbit that we've overcome. The principal ones are making the phone wait. Phones are keyed for a tower that's a couple of miles away. So the speed of light is just too slow in space. So we solved that problem a number of years ago. Another is managing the narrow airwaves in the cellular industry. This is not satellite band, we have 100 megahertz and 20 megahertz guard bands. You've got 5 megahertz back to back to back, and by having our large satellite, we can manage that interference so that we don't hurt AT&T's network. We don't hurt Verizon's network. We don't hurt anyone else's network. And being able to put that together is really important. And I'm sorry, what was the question?

So just remind us with the ASIC chip, what it does for total capacity and the total process...

So the ASIC doesn't solve those problems. It solves the next problem, which is how do you continue to scale and grow the business to hundreds of millions of subscribers. And so the ASIC chip -- well, just to give you a progression, our test satellite in 2022 gave us 100 megahertz of processing power. Our satellites that are in orbit now since late last year give us a 1,000 -- 1 gigahertz of processing power. Our 3x satellite basically gives us 3x that. And now with the ASIC, we'll be able to get to our full promise of up to 10 gigahertz of processing power per satellite. So it basically tripled the capability of the satellite apples-to-apples.

And then you mentioned the manufacturing milestone of reaching 6 satellites per month by the end of the year. It seems like you're close. So is it fair to say that these new facilities in Florida and Texas, they're fully operational? And it also feels like that pace is maybe a bit faster than what you're launching now. Do you need to be at 6 satellites per month? Or eventually, do you anticipate that on an annual basis, you will be launching that many satellites going forward?

So one of the keys to our success is that we've run a lot of parallel processes. So we're not waiting for anything. If at some point, some of the program slows us down, that will be true. But at the moment, no, we are getting to 6 satellites per month, and we're pushing on that very hard. And the additional manufacturing locations that you mentioned are 2 of several that we brought online in the last 6 months. Those 2 are still ramping, so they're not actively contributing. But what they're going to do is give us more resiliency in the system and allow us to continue to produce and pull efficiencies out of it as well.

So a lot of what we do is we've thrown labor at things to make them move faster to meet our time lines and use the fact that there's very rigorous testing on the ground to manage yield. So even if something doesn't work, we find out through the testing process and we swap it out. Going forward, what you're going to see is a highly automated, very efficient set of organized manufacturing that allows us to not only hit that 6 satellite per month target, but also have flexibility to go beyond it and also flexibility to grow with new growth opportunities ahead of us.

Maybe just shifting over to the commercial momentum that you cited earlier. So over $1 billion of revenue commitments with your carrier partners, over how many years do these contracts typically run? And how will these revenues ultimately be recognized?

So we've been very fortunate from the beginning to have a really good following with the operators. I think it's because we solve a very real problem they have on the network deployment side, which is how you cover all of population globally with terrestrial towers. It's an almost impossible task and space is so well suited to it. So from the beginning, they've been in the room with us as part of the conspiracy building the technology, helping us on regulatory, contributing capital on a group basis so that everyone is contributing a little bit.

And this is very much a network for the operators. We're the partner of choice in the direct-to-device build-out. They own 20% of our equity and sit on our Board. So the operators collectively, we have over 50 agreements that cover nearly 3 billion subscribers. So our ecosystem is profound, and we're very excited about that. And what was the last part of your question?

Just how do the revenues get recognized and how long are these contracts typically?

Yes. So as we've started monetizing, putting into contract with definitive commercial agreements, these relationships, we've -- I think our strategy is pretty much to sign longer-term contracts rather than short term. I think our customers view this as infrastructure, even though it's very growthy at the moment and a new offering, it's very much infrastructure, right? So you've seen that theme across the Board. So we've signed agreements for 5 years, 6 years, 10 years and one for 2 years. And those commitments, you can think about as kind of we're not going to give weighted averages, but based on that layout, pretty weighted towards the front, I would say, on average. But you're going to see more of those from us and they're going to build up over time. So -- but they're not back-end weighted at all. Those are definitely heavily weighted towards the front.

And I think it was September when you announced the new definitive agreement with Verizon, can you just help us understand how did that agreement expand upon the initial partnership you announced back in May of 2024? And how did this definitive agreement stack up to prior definitive agreements in terms of the revenue share elements or even just the go-to-market appropriate you're thinking?

Sure. So as we've built out the ecosystem, the sacrosanct North Star has been a 50-50 revenue share for add-on revenue. We want to be a growth engine for the operators, which typically operate in a more mature industries, very valuable industries, but mature ones. And so being a growth engine and a revenue source as opposed to a cost center has always been our strategy. So that 50-50 rev share has worked great for us. We're dedicated to it, and that's very important. So all of our contracts lay out that revenue share.

As we've expanded the relationships with the operators, these definitive commercial agreements, they cover everything. I mean this is not a tack-on texting service. This is 100-plus pages bringing in 20 different cross-functional groups across the company, led by senior management to drive a new product offering that we think is going to be worth hundreds of millions of dollars by customers. So this is something that requires a lot of new thinking. It pulls on historical roaming agreements, but it's new thinking. And in that way, it's very sticky, it's complicated and we view that now having been on the other side of a lot of these as a good thing for us.

And so we're going to continue to push through our customer sheet and build out the initial markets that matter, and those will have service in '26 and then from there. And that's how we're going to structure and prioritize those relationships. These agreements, they're not only legally binding and provide minimum revenue commitments and even significant prepayments in some instances, they basically provide the vehicle through which we will build the business together and really transform connectivity for their users.

And now that you have a few definitive agreements in hand, are you finding that with your other commercial partners that conversations are progressing more quickly towards a definitive agreement?

Yes. There's not an operator around the world who doesn't want to meet with us and think about how we can work together. The constraint has largely been on us. We want to build out with our partners, those who have been aligned with us, those who have brought equity investment, minimum commitments, alignment around spectrum strategies and prepayments. And so that is our strategy. We're continuing to grow the team and scale. You see that in Europe with our joint venture with Vodafone that's going to allow us to move into that medium and long tail faster than we otherwise would have. But for us, 2025 was very important to build out these initial agreements and build consensus around what that market is going to look like. And yes, I expect a lot of these to come in 2026.

And then you also recently announced the Saudi Telecom deal in October. Can you just talk a little bit about the opportunity you see in that region? And again, how those terms might compare to some of your other relationships that you have to date?

Yes. Same type of contract, very much built on the same principles of revenue share and add-on services, minimum commitments and prepayments. And we're very aligned. They are the leading operator in Saudi Arabia, which is the largest cellular market and the largest market in general in the Gulf. They have a broad view on businesses, having made an investment in Telefonica, growing a towers business, and they're very forward-thinking in how they look at Telecom and how they can support it with their connectivity.

And I think they think of us in the same way. So we -- this agreement is built around their core market of Saudi Arabia, but it's across various markets in the Middle East and North Africa region. And this is something that from the Board on down, they feel very strongly about, and we're really excited to have them as our partner in the region.

And then maybe shifting over to the government side. I think there's been a lot more headlines around the government opportunity for your business here in the past year. Can you just remind us how you're thinking about the TAM and the types of use cases that AST might be well positioned to target?

So when we first went public, government wasn't really part of our story, but if we had a story that didn't have the U.S. government, it would be the first space story ever. So it's not surprising how things went out and over the last 3 years, they've kind of gradually integrated into our story and our revenue stream and today are a majority of our initial revenue.

So at the end of the day, what we can do is deploy more power to orbit faster and cheaper with larger arrays than anyone in the history of civilization. So that is a very valuable tool for connecting 6 billion people who go in and out of coverage as well as doing all the normal communication stuff that the U.S. government does, whether it's upgrading legacy services from the last millennia or it's moving towards more programmatic buys of standards-based services so that the troops always have connectivity or have redundant connectivity all the way to enabling new devices, headsets, wearables that are low profile that look and feel like a cell phone, but can enable next-generation capabilities or drones. And so there's a lot of communications capabilities that we're going to enable.

And then there's the noncommunications stability. So because these are the largest arrays, flood commercially and very close to the largest arrays ever deployed and definitely the largest ever deployed at this cost level. We can do other things with our frequencies, including RADAR, that support a lot of very strategic capabilities for the U.S. government and its allies. So that is what's brought us into the Golden Dome conversation as it's evolved over the past year, where we see -- we had a very positive U.S. government investment space backdrop over the last 5 to 10 years. But with this year, it's really accelerated.

There's currently a $150 billion RFP open for a lot of the stuff that's involved and will be involved with Golden Dome over time. These are really big use cases that are really relevant where the government is looking for dual-use capabilities, which means government services, free riding or riding on commercial investment, which is what we are, as well as avoiding vendor lock, which means you're not stuck in a contract with 1 prime for a decade because you've made some investment. You want to dual source it.

So managing dual-use technologies and deploying dual-use technologies and avoiding vendor lock, our key strategies that AST Space Mobile is in a perfect place to provide in addition to a capability that we can offer that's never been offered before and can be offered on the time line of this administration.

And I think within the government sector, the end goal is usually transitioning these initial use cases into programs of record. What gives you confidence that some of these initial use cases you're supporting for the government will turn in to programs of record? And what does the typical time line look for something like that?

Yes. We've talked about programs of record before because it's a good way for folks that don't traffic in the government industry to understand how companies like us get big contracts and support the U.S. government. And so I think about a program of record as over $100 million of revenue opportunity a year and multiple use cases that we can support, we've set up to 10 different use cases that we can compete for over time.

The way to think about this cycle is usually a 2- to 5-year cycle depending on how ingrained you are as a supplier generally. And so some of these capabilities we've been working on for multiple years and others are much more fledgling in early stage. But we think that once we're deployed at scale the -- one thing to note is there's only been one LEO constellation in the history of the world that's gotten to the finish line without going bankrupt first. And so -- but the promise of getting there has always been very strong, if you could get over the initial capital time line and technical difficulties, which we believe we have at this point.

And so once you're built, the add-on opportunities and the marginal economics and barriers to entry associated with those add-on opportunities are profound. And so we think that once we're at this baseline service offering and low band globally that we'll be able to have a number of these opportunities available to us, and we're developing those in parallel to be ready.

Maybe if we shift over to the spectrum conversation. So it seems like your thinking has evolved a bit here since when we first started speaking. And so maybe just kind of talk about why you think it's important for you to own your own spectrum now as opposed to relying just on the carriers for your capacity?

So our strategy from the get-go, consistent with the partner ecosystem strategy I talked about in developing the operators and developing the system with them was using their spectrum because we wanted to make their phones work better. We wanted to stand on the shoulders of their investment in spectrum and building out their customer base. And so naturally, we had to solve the problems. And the idea of putting new spectrum on phone seems like an insurmountable hurdle as well as the cost associated with buying spectrum. So our service and our capability and our technology is pretty uniquely set up to capture the 1,000-plus megahertz of low and mid-band spectrum that our operator partners own and deploy around the world today.

We can use it where they're not using it, and we can use it in an efficient way that gets more value to them, more value to the regulator, more value to the end user, the consumer, those of us who want our phone to work. And so that is a really great strategy and having a lot of power in orbit with a big satellite helps us do that even on highly trafficed takeaways.

So then you fast forward and there's 2 big bands available in the world for mobile satellite services, the L-band and the S-band. And what we did earlier this year was we signed a long-term lease agreement for over 80 years to use 20 plus 20 megahertz, which is the majority of L-band in the United States and in Canada, the United States being the most valuable wireless market in the world. So we secured a very valuable spectrum position that we can deploy in the years to come and enhance the services for our customer, the MNO, which more spectrum means more traffic, more subscribers, better services and doing it in a strategic market.

We've also taken steps to enhance that around the world in different bands. But for us, taking 1 of the 2 in the most valuable market in the world has very profound implications for how direct-to-device will evolve over the decades to come and it is basically how we, with the technology advantage today, has secured ourselves in the decades to come when that advantage may erode and the industry becomes more mature.

So the simple thing is we've got this nice baseline of cellular spectrum. And on top of that, we've added an own spectrum strategy that increases the amount of services we can offer, the more subscribers we can serve.

Maybe just a follow-up on the S-band deal you announced earlier this year. You now have a seat at the table to try to secure these licenses on a country-by-country basis. Where does that process stand? And outside of the U.S. and Canada, do you feel that you have everything you need from a spectrum standpoint? Or could we see you be opportunistic to secure other airways as well?

We like our spectrum strategy. The cellular strategy is a pretty strong one. It gives us a lot of flexibility. And outside the U.S. and Europe, there's more spectrum, more available than you typically find in our markets. So it's a good strategy. It's one where partnering with operators is key. For instance, FTC has S-band rights in Saudi Arabia themselves. It's not owned by a satellite company. So that is a strategy that's a market-by-market dependent. It's classic regulatory stuff where you go and you bring your filing and you say, listen, I can -- I have network already deployed. There's no build-out requirement in terms of time or money, and I'd like to offer services to your citizens and help them with work, travel, convenience and life and death situations.

And so that's a compelling argument, and one that we plan to take to regulators around the world. In the U.S. and Canada, we have our L-band strategy. In Europe, we've formed a joint venture with Vodafone in order to participate in spectrum opportunities in Europe. And then around the world, we expect other opportunities over time to supplement our cellular strategy.

A frequent question we get talking to investors about competition in this space. Maybe can you just talk about what you believe are the advantages your technology offers versus what other players like a StarLink might be bringing into the market?

So we're standing up a new market that could be worth tens of billions of dollars. It's basically making the 6 billion phones around the world work when they don't otherwise work well. And it's basically providing connectivity, which is the lifeblood of society today to people when their phone works a little, doesn't work much, can't afford it. There's no towers. There's a lot of gaps and cracks in these evolving and imperfect networks. So that is a strategy that we think works really well. What was the last part of the question?

Just how the technology you have compares to what someone like Starlink is offering and what advantages do you have that maybe investors don't appreciate?

Yes. Well, we think this is going to be a big market. So first of all, we're in a race against ourselves to deploy this as fast as we can because the operators that we're partnered with over 50 globally, nearly 3 billion subs amongst them. If we do a good job with that group, we're going to have a fantastic business, and we're very excited about it. We're partnered with 2 of the 3 players in the United States. We're partnered with Vodafone, who is the largest owner of spectrum in the world. Bell Canada is an investor, American Tower is an investor, Google is an investor, Rakuten is an investor. So we like our playing field very well, and we believe that we are the partner of choice for the direct-to-device industry.

We play very well with partners. We always have. It's very symbiotic. And so the way we've built out the capability we're about to start launching is we think we've done the right balance of good for the consumer, good for government and regulatory, good for the operators and good for AST SpaceMobile.

Our technology is broadband, which we think is the right solution. It's hard to compare broadband with even voice, let alone text. We're not talking about apples and oranges. We're talking about apples and aircraft carriers. These are really different. And yes, we could have started with text 3 years ago, but we went big out of the gate with broadband because we think that's the killer app for direct-to-devices, cellular broadband. So that's what you're going to see from us launching next year, and that's what differentiates us. But even still, we think it's a big, beautiful new market that's going to have a lot of demand and the operators need a solution, and we think we're a fantastic solution for them.

And we saw the EchoStar and Starlink announcement back in September where they purchased a large amount of spectrum. What implications, if any, does this have for your business? And what was your reaction to those headlines?

Well, it closely mirrored the transaction that we did in January. There's basically 2 bands of spectrum for this globally that are big. One is L, one is S. We made one move in L and they made a similar move in S. So these are the 2 big bands that are available for direct-to-device and these transactions cover the most valuable market in the world, which is the U.S. So I think our view of that transaction was that, one, it validated that we had an important asset on our books, and we made a good transaction. Two, that the market is very healthy, and it's going to be big in expectation because otherwise, the purchase price that was paid for that spectrum would not make sense.

And third, it more closely aligned us with the operators who we plan to go to market with exclusively through the business model that we described. So we're very -- we think it brought us closer to the operators. It enhanced the value of the asset we already had, and it showed the value of the market we're creating.

I appreciate this question. It's a little early, but can you just help us think about once this constellation gets and you start to see the monetization flow through to the financials, how are you thinking about the operating leverage of this business and maybe compare those -- that margin potential to what you see from other satellite players that are publictoday?

So when you look through the history of satellite companies the last 20 years, when the businesses have been doing well and growing, you see 85% margins for wholesale businesses. And when you dig into those companies, even today, where there's attractive segments, there can be 90% plus marginal economics, EBITDA margin flow-through margin. So for us, there's a big CapEx upfront. We all know that. That's why we funded the business the way we have.

Once it's in orbit, very little cost to maintain. There'll be a small maintenance CapEx line item over time as the 7- to 10-year cycle of the asset is recycled. But our OpEx, which is in the $60 million per quarter today, might trend up a little bit with growth. The opportunities we're seeing are phenomenal. But if you're looking at that plus some lease expense, you still have a pretty fixed margin business. We have some revenue shares, including with the operators, but those will all come out of the -- before we get the gross revenue on our income statement. So the flow-through margin here and the operating leverage is pretty special, and we expect that to be in excess of 90% over time.

And you've made a lot of funding progress over the past year. I think on the earnings call, you said you now have funding in place to launch over 100 satellites. As you look out into 2026, is it fair that we could still continue to see you be opportunistic as you fund the future business? Or is it going to be a little bit of a digestion period there?

So we've tried to be on our front foot with funding since the beginning of the company and be opportunistic and flexible and access different diverse capital markets and funding sources. We've said since early 2024 that we really want to develop our operator partnerships around prepayments and minimum revenue commitments that could also support financing efficiently. We've been doing that. You see that accelerating, including with a prepayment this year of $175 million as well as support from other operators over the course of the year.

And so we've been successful in using the capital markets. We think that the convert market, in particular, was very supportive of us as a growth scaling company this year with really unique and differentiated tech. As we go into next year, with over $3.2 billion of pro forma cash and liquidity on the balance sheet, we feel really well positioned for the opportunity.

And like we said, have capital for over $100 million satellite deployment, which is well in excess of our $45 million to $60 million target for next year. And so we're going to be reactive and efficient, but management is very aligned with primarily equity compensation, our founder and controlling shareholder and 24/7 support team. He's got 80 million shares and doesn't take a salary. So we are organized around maximizing the terminal value of the BCF. And I think we're at a period now where you've pretty much seen the major capital structure move that we'll make and everything else will be tidying up.

And I think when we've talked about the long-term business model, we used to talk about continuous coverage, I think like 90 or 100 satellites to meet your business goals. But is it fair based on the demand drivers you're seeing today that your plans can go well beyond 100 satellites over time?

I think so. So we're building out a low-band constellation now. There's other frequencies that are relevant. There's potential government constellations. And once you've built out these shells, especially over time, as space gets more constellations, we think that we'll have a really attractive position as an operator of a couple of these very valuable shells. And what you see in speculation in the market is what do you do when you have a lot of power delivered to orbit in a very low-cost fashion and big markets and demand to support that and strategic interest of governments to support that.

The add-on opportunities are really impressive, and you see that with all the data center conversations in the last week or so, whether it's communication services, noncommunication services to the U.S. government or the next generation of commercialization of space, we'll be in a great position to build that out being vertically integrated and having this fantastic ecosystem and then having an orbit architecture.

I think that's a good place to leave it. Thank you for being here today, Scott. Appreciate it.

Thank you very much.

Good day, and thank you for standing by. Welcome to the AST SpaceMobile Third Quarter 2025 Business Update Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your host today, Scott Wisniewski, President of AST SpaceMobile. Please go ahead.

Thank you, and good afternoon, everyone. Today, I'm also joined by Chairman and CEO, Abel Avellan; and CFO and Chief Legal Officer, Andy Johnson.

Let me refer you to Slide 2 of the presentation, which contains our safe harbor disclaimer. During today's call, we may make certain forward-looking statements. These statements are based on current expectations and assumptions and as a result, are subject to risks and uncertainties. Many factors could cause actual events to differ materially from the forward-looking statements on this call. For more information about these risks and uncertainties, please refer to the Risk Factors section of AST SpaceMobile's annual report on Form 10-K for the year that ended December 31, 2024, Form 10-Q filed with the SEC on May 12, 2025, Form 10-Q filed with the SEC on August 11, 2025, and the Form 10-Q filed with the SEC today as well as other documents filed by AST SpaceMobile from time to time.

Also, after our initial remarks, we'll be starting our Q&A section with questions submitted by our shareholders. For those of you who may be new to our company and mission, there are nearly 6 billion mobile phones in use today around the world, but many of us still experience gaps in coverage as we live, work and travel. Additionally, there are billions of people without cellular broadband and who remain unconnected from the global economy.

The markets we are pursuing here are massive, and the problem we are solving is important and touches nearly all of us. In this backdrop, AST SpaceMobile is building the first and only global cellular broadband network in space to operate directly with everyday unmodified mobile devices and supported by our extensive IP and patent portfolio.

It is now my pleasure to pass the conversation over to Chairman and CEO, Abel Avellan, who will go through our activities since our last public update.

Thank you, Scott. AST SpaceMobile delivered standout progress in the third quarter as we continue seizing the advantages of our leadership position in the space-based direct-to-device industry. We're executing against all of our key initiatives in this rapidly developing market and especially on deepening our commercial ecosystem with customers, partners over the past few months. We continue to build commercial momentum more recently highlighted by our definitive agreement with Verizon on Saudi Telecom Group. Scott will discuss our business progress in more detail, but I want to highlight the traction we are achieving with our commercial initiatives. We signed a definitive commercial agreement with Verizon in the United States and FTC in Saudi Arabia and other key markets across the Middle East and North Africa. These definitive commercial agreements demonstrate the meaningful progress in our commercial ecosystem, which include agreements with over 50 MNO partners with nearly 3 billion subscribers globally. These agreements are the product of our trusted, longstanding relationship with both partners, and they're confidence in our ability to deliver space-based cellular broadband connectivity to their subscribers.

Our definitive commercial agreement with Verizon is an extension of our transformational partnership, which has been cultivated over several years, including the $100 million commitment in May of last year. The agreement also provides us with a formal commercial pathway to provide direct-to-device sell or broadband services to their customers starting in 2026. Our opportunity to bridge the digital divide and target 100% coverage of the Continental United States has never been stronger. Together, we partnered AT&T in premium 850 megahertz low band spectrum.

Our definitive agreement with STC provides us with a long-term partner in a key region with a large geographical area, significant population growth and a strong need for broadband connectivity. More broadly, our 10-year loan term agreement is a promising look into how AST SpaceMobile display mobile can collaboratively shape the future of direct-to-device mobile connectivity, and we continue to grow our mobile network operator partner ecosystem.

Our direct-to-device satellite technology enables native cellular broadband capabilities directly to modify mobile devices, including voice, text, data, video and full Internet access to native cellular apps. As an example of our native cellular capability, we recently completed a Blue Bird satellite-enabled technology milestone with Verizon, completing direct voice and video calls as well as 2-way RCS messaging between standard and modified smartphones. This follow additional milestone with Bet Canada in anticipation for a broader commercial rollout. Specifically, we showcased Canada's first successful space-based direct-to-sell, voice-over-LTE video call and other broadband data and video streaming activations. We believe Canada will represent another attractive market for our direct-to-device seller broadband service. Space-based cellular broadband connectivity is an industry that we invented. And a recent technology milestone with Verizon and Bell follows several breakthroughs using our direct-to-device technology, including the first-ever 4G and 5G voice calls, voice over LTE calls, live video calls, streaming, full Internet access and tactical nonterrestrial network connectivity for military and deferred purposes from a space to modified smartphones.

Our direct-to-device seller broadband network will help our partners deliver on one of their highest priorities, which is extending connectivity for the customers as part of our effort to deliver on those priorities. We are advancing partners and ecosystem network integration, and we progress towards service activation in key partner markets. Specifically, we have already begun activation in fixed network locations. We expect to continue a scale deployment efforts early next year as we progress activation of an intermittent nationwide service by early 2026 and prepare for continued service later in 2026.

Taking a step back, AST SpaceMobile have now built the largest and most diverse commercial partner ecosystem in the industry. Our network include agreements and understanding with over 50 MNO partners with nearly 3 billion subscribers globally. We have access to some of the most important markets cover and exposure to billions of subscribers as well as long-term access to valuable spectrum. A key strategy during 2025 has been to deepen this partner ecosystem through definitive commercial agreements.

Today, we're happy to disclose for our first time that we have secured over $1 billion in total contracted revenue commitment from our commercial partners. This represent an incredible snapshot into how our business is developing and not only to the commitments of our partners have to AST SpaceMobile but also the way they are starting to think about financial impact of this massive opportunity.

Turning to manufacturing and launch. Our manufacturing efforts are on track with our goal and expectations. Bluebird [ 8 to 19 ] are in various stages of production, and we are on schedule to complete 40 satellites equivalent of micro by early 2026, bringing us to Bluebird 46. Leveraging our 95% vertically integrated manufacturing, we continue to accelerate and improve our manufacturing process and expect to exit calendar 2025 at a manufacturing cadence of 6 satellites per month. A detailed cadence of our 2025 and 2026 deployment plan is shown in the accompanying quarterly presentation found on our IR website. This effort is supported by our steady expanding manufacturing footprint soon to be over 0.5 million square feet of manufacturing and operations space supported by a global workforce of nearly 1,800 people.

We had [indiscernible] Bluebird 6 to his launch site in India with launch expected to occur in the first half of December. We also expect to ship Bluebird 7 to Cape Canaveral later this month with launch anticipated shortly thereafter. Additionally, we continue to spend 5 Orbital launches by the end of Q1 2026, with launches every 1 to 2 months on average to reach our goal of 45 to 60 satellites launched by the end of 2026.

Additionally, we anticipate our novel ASIC chip will be integrated into our Block II Bluebird sale during Q1 2026, enabling peak data transmission speed of up to 120 [ megawatts ] per second, which is a throughput larger enough to achieve in native several capabilities that customers used to having, even when they are in areas when connected by terrestrial networks.

On our comprehensive global spectrum strategy, since our last earnings call, we closed our deal to acquire Global S Band Global priority rights and our deal to acquire long-term access to premium lower mid-band, L-band spectrum in the U.S. that has been approved by the court. AST SpaceMobile owned and share spectrum profiles, including access to 1,150 megahertz low-band and mid-band tunable MNO spectrum globally, 45 megahertz of AST SpaceMobile licensed MSS lower, mid-band spectrum, 60 megahertz of AST SpaceMobile license S band spectrum priority right and low-band spectrum located by our MNO partners. Between our own and mobile network operator partner spectrum, we had right to access over 80 megahertz of pair and high-quality spectrum in United States alone, more than any other direct-to-device provider today and in the future.

We have developed our comprehensive spectrum strategy by balancing costs and a disciplined capital allocation. By making a smart and cost-effective investment in spectrum, we are able to preserve the value of our spectrum assets while protecting the long-term viability of our business. This robust portfolio is expected to create a durable competitive advantage for AST SpaceMobile. Spectrum enable us to provide more lanes for direct-to-device sale of broadband services at a faster speed and a greater capacity.

And lastly, we strengthened our financial footing significantly in the last few months, reaching over $3.2 billion in cash and liquidity as of quarter end, pro forma for our recent financial transaction and available liquidity under the ATM facility. We continue to fortify our capital base in a responsible way while building long-term shareholder value. As a result of our funding effort, we are now funded from cash on hand to enable continued service in a worldwide key strategic markets.

In summary, our manufacturing and launch activity are on plan and our commercial activities are accelerating. We anticipate an active manufacturing and launch cadence for the remaining of 2025 through 2026 as we progress towards our stated goal of [ 45 to 60 ] satellites for continued service coverage in key markets like the United States, Europe, Japan, Saudi Arabia and other key strategic markets like the U.S. government.

We're advancing our commercial activities on the growth -- on the ground, installing gateways, integrating them into partner networks and completing key technology demonstrations around the world as we scale our constellation. We have built moats around multiple assets of our business, including our extensive IP portfolio with approximately 3,800 patented pending claims, satellite technology, partner ecosystem, comprehensive global spectrum strategy and a strong capital base. I could not be more excited for what's come as we continue to run commercial activity going into 2026.

Let me now turn the call over to Scott to provide more detail on our progress and initiatives.

Thank you, Abel. We have been making rapid and continuous progress against our key business initiatives. Specifically, the third quarter was marked by milestone achievements as we develop our commercial ecosystem, delivering on our previously stated goals of definitive commercial agreements, nondilutive service prepayments and long-term revenue commitments.

Most significantly, we are thrilled to announce today for the first time that we have now secured over $1 billion in aggregate contracted revenue commitments from our commercial partners. These revenue commitments have always been integral to our comprehensive capital raising strategy but also provide a powerful validation of our ecosystem partner strategy, our business model and the massive size of the direct-to-device market we are creating.

For some context, AST SpaceMobile has incredible strategic assets, including our breakthrough technology, vertically integrated manufacturing capabilities, long-term spectrum access and an ecosystem partner strategy that has set the stage for our commercialization strategy, which is really taking shape. Since our last public update, we signed 2 additional definitive commercial agreements with Verizon and Saudi Telecom Group. These agreements represent years of relationship building and organizational alignment and are the business and legal frameworks through which future services and revenue will flow.

These agreements represent a key step in our commercialization journey as we significantly expand our relationship with 2 additional incredible operators, hold from our ecosystem of over 50 leading global mobile network operator partners who collectively cover nearly 3 billion subscribers. This adds to previous definitive commercial agreements signed with AT&T and Vodafone.

Our strategy is to continue to sign similar agreements with more of our top partners on a rolling basis as we prioritize initial global services on the AST SpaceMobile network.

As you know, Verizon is a very important partner as we develop the U.S. market and target full geographic coverage of the continental United States. This agreement, of course, builds on the strategic partnership with Verizon announced last year with a $100 million commitment. Together with AT&T, we plan to deploy services next year with 2 of the major U.S. mobile network operators.

Moving to Saudi Telecom Group or STC. This is an innovative, leading mobile network operator partner in the Gulf region, who we first signed an MOU with in early 2023. This agreement signed just last month provides a framework for direct-to-device services across the Middle East and North Africa. Importantly, this agreement also included a prepayment of $175 million to be made by the end of 2025 and a significant long-term commercial revenue commitment

Lastly, we announced our intention to further deepen our ties in Europe through the SAT Co joint venture with Vodafone, announcing a constellation of mid-band satellites dedicated for the EU. These satellites will provide a scalable European satellite mobile broadband service for use by mobile network operators and for the benefit of all European citizens, businesses and public sector organizations. This step represents further accretive organic growth opportunities available to the AST SpaceMobile platform facilitated by our first-mover advantages in space-based cellular broadband, our development of the commercial ecosystem as well as our recent strong capital markets access to growth capital.

Satco based in Luxembourg is continuing to scale with key leadership and employee hires, accelerating our commercialization efforts in Europe, with MOUs signed in 21 of 27 member states to date.

Linking our strategies back to third quarter performance, we grew to double-digit revenue with approximately $15 million of recognized revenue on the back of milestones in our U.S. government contracts and delivery and installation of gateway equipment versus approximately $2 million in the prior quarter. This represents continued progress with our U.S. government work and the acceleration of gateway deliveries and installations with our mobile network operator customers in the U.S. and globally.

With this progress and our expectations going into year-end, we continue to expect second half 2025 revenue in the range of $50 million to $75 million. We also replenished the pipeline of Gateway bookings with approximately $14 million in new gateway equipment sales during Q3 and we continue to believe we will book over $10 million of new gateway equipment sales per quarter on average.

For a little more detail on our U.S. government business, our breakthrough technology continues to garner interest from many U.S. defense and government entities for both dedicated and dual-use applications. Our differentiated technology and growing list of capabilities across communications and noncommunications use cases fits nicely within the framework of the current administration's space and on-orbit plans.

This is the most positive backdrop for U.S. government investment in space since the space race of the 1960s. We see no change to this massive trend over the past few months despite the government shutdown. In fact, we recently received an award as a prime contractor with the U.S. government, subject to final contract negotiations when the government reopens.

In summary, we continue to ramp our U.S. government efforts as we plan for large contracts going forward. Overall, we are encouraged with our commercialization progress to date and believe our recent achievements across both commercial and government initiatives serve as important signals of our continued positive momentum.

I'm now happy to pass the call over to Andy to walk through our financial update.

Thanks, Scott, and good afternoon, everyone. The progress on commercial objectives, service activation, scaled manufacturing and launch of our Block 2 Bluebird satellites described by Abel and Scott was complemented by the continued strength and flexibility of our financial position during the third quarter of 2025. This year has been characterized by rapid growth at AST SpaceMobile, the transition from an emerging R&D-focused start-up to an operating company on the path to optimizing our manufacturing and launch cadence has been hard yet invigorating and gratifying work for our now nearly 1,800 person worldwide workforce.

The speed at which we are moving across all operational fronts to manufacture and launch a Constellation 45 to 60 Block 2 Bluebird satellites creates a dynamic financial backdrop that I am pleased to share with you in more detail today. We continue to balance a prudent approach to our spending while moving quickly to protect and capitalize on our first-mover advantage of bringing space-based broadband connectivity, direct unmodified smartphones in the rapidly growing direct device market.

This intentional focus on investing in our operational growth led to increased operating expenses in Q3, while capital expenditures decreased from the prior quarter as capital commitments ebb and flow as expected from quarter-to-quarter. Importantly, this quarter marked the start of our revenue ramp with revenue from commercial hardware sales, services and contract awards from our U.S. government milestone achievements.

Moving to the operating and capital metrics slide. Let's review the key operating metrics for the third quarter of 2025. On the first chart, for the third quarter, we incurred non-GAAP adjusted operating expenses of $67.7 million versus $51.7 million in the second quarter. As a reminder, non-GAAP adjusted operating expenses exclude some noncash operating costs, including depreciation and amortization and stock-based compensation.

This quarter-over-quarter increase of $16.0 million resulted from a $7.6 million increase in adjusted engineering service costs, a $5.5 million increase in the cost of goods sold and a $3.8 million increase in adjusted general and administrative costs, which were partially offset by an approximately $900,000 reduction in R&D costs. This variance in adjusted OpEx in Q3 was above the quarterly guidance I provided after the second quarter due in part to the approximately $7.1 million of nonrecurring transaction-related expenses, including our L-band and S-band spectrum transactions, the nonrecourse senior secured delayed draw term loan facility and now completed pre-regulatory approval bridge loan in addition to the continued work of standing up our joint venture with Vodafone, which we launched in the second quarter.

The Q3 adjusted operating expenses guidance I gave in our last earnings call did not include any cost of goods sold related to gateway sales. If you compare our Q3 operating expenses on that same basis by excluding the $5.5 million in cost of goods sold, our run rate operating expense would be $55.1 million, which is approximately $5 million more than the run rate guidance for adjusted OpEx previously provided.

Turning towards the second chart on this slide. Our capital expenditures for the third quarter of 2025 were approximately $259 million versus $323 million for the second quarter of 2025. This figure was made up of approximately $231 million of capitalized direct materials, labor for our Block II Bluebird satellites and payments made in connection with multiple launch contracts with the balance relating to facility and production equipment expenditures. This amount was just below the midpoint of the quarterly guidance of $225 million to $300 million that I provided during our last earnings call.

For the fourth quarter of 2025, we estimate that our adjusted operating expenses, excluding cost of goods sold, will come in at a similar range in the mid-$60 million. as we continue to design, manufacture, launch and operate our growing satellites constellation as well as pursue the monetization of our L and S-band spectrum usage rights. We expect our capital expenditures to increase slightly in Q4 of 2025 as compared to the third quarter to a range of $275 million to $325 million, primarily driven by the timing of launch payments related to our near-term launches, which, as I've previously explained, do vary from quarter to quarter.

We continue to estimate that the average capital costs, including direct materials and launch costs for our constellation of over 90 Block 2 bluebird satellites will fall in the range of $21 million to $23 million per satellite. This is the same range of per satellite cost that I've provided since our Q1 2025 earnings.

Our cost per satellite estimates are subject to fluctuations based on dynamic geopolitical factors, which could impact our costs. Within our go-forward OpEx profile, we continue to believe that the operation of a constellation of 25 Bluebird satellites will allow us to enable noncontinuous space mobile service in selected targeted geographical markets and should enable us to potentially generate cash flows from operating activities from both commercial and U.S. government opportunities to further support the buildup of the remaining constellation.

As a reminder, the timing of the changes in our adjusted operating expenses and capital expenditures, as I have just described, could be delayed or may not be realized due to a variety of factors.

Our revenue ramp began in earnest during the third quarter, and we expect it to continue to grow in Q4. With respect to revenue generation, we believe we can enable continuous space mobile service across key markets such as the United States, Europe, Japan and other strategic markets with the launch and operation of approximately 45 to 60 Bluebird satellites and additional strategic worldwide markets with the launch and operation of approximately 90 Bluebird satellites. Further, as we continue to launch and deploy our constellation, we will continue to support U.S. government applications currently ongoing and accelerating as our constellation grows.

In the third quarter, we recognized GAAP revenue of $14.7 million, primarily driven by gateway hardware sales and various commercial and U.S. government service milestone achievements. Additionally, in Q3, we completed initial technical trials with an MNO partner, which revenue will be accounted for as we provide future services.

We are reiterating our belief that we have a revenue opportunity for 2025 in the range of $50 million to $75 million and expect revenue in Q4 will continue to be driven by gateway equipment sales, achievement of U.S. government milestones and recognition of initial commercial service revenue. The achievement of our revenue plan remains subject to several contingencies, including, one, the successful launch and deployment of Block 2 bluebird satellites related to U.S. government applications contractual milestone achievements; two, critical gateway equipment sales to our MNO partners in support of their anticipated commercialization efforts of space mobile service; and three, service revenues in connection with the activation of our commercial service provided by our existing and planned deployed and operational satellites. There can be no assurances that we will achieve any or all of these objectives and our actual revenue results will vary based on a multitude of factors.

Finally, on the final chart on the slide, on a pro forma basis, inclusive of cash raised in October via the convertible notes offering with a 2.00% 10-year coupon and an effective strike price of $96.30 per share, and the currently available liquidity under the at-the-market or ATM facility, our cash, cash equivalents and restricted cash as of September 30, 2025, was approximately $3.2 billion. Primary drivers for this cash increase include execution of 2 convertible notes offerings in July and October for a total of approximately $1.6 billion of net proceeds, approximately $389 million net proceeds raised from the 2025 ATM facilities during Q3 and through October and the unwinding of the CAP call that we purchased earlier this year in connection with the January 2025 convertible note offering for $74.5 million of proceeds to the company.

addition to the work we did raising additional capital via the recent 2% 10-year convertible notes, we also took action since our last earnings call by further reducing our outstanding debt related to the January 2025 convertible notes due in 2032. Among 3 equitization transactions, including another $50 million equitized in October, we have now converted $410 million of the outstanding $460 million of the 4.25% convertible notes due in 2032 into 17.3 million Class A shares. We now have just $50 million of outstanding notes related to our January 2025 convertible notes due in 2032.

I should also mention that, subsequent to Q3, in October, we put in place a bridge facility to manage onetime payments related to the Ligado L-band usage rights transaction ahead of planned funding by the SPV delayed draw term loan upon receiving FCC approval.

Given the current strength of our balance sheet that now includes cash, cash equivalents and restricted cash and available liquidity under the ATM facility of over $3.2 billion on a pro forma basis as of September 30, we are fully funded to manufacture and launch a constellation of over 100 satellites to provide worldwide space mobile service. The combination of increasing commercial and government opportunities, rapidly scaling manufacturing and satellite launch operations and a fortified balance sheet position AST SpaceMobile for an exciting end to 2025.

Through the third quarter of 2025, we remain on target to execute against our plans to bring space mobile service to market in the coming periods as we begin to launch our Block 2 BlueBird satellites beginning in December.

And with that, this completes the presentation component of our business update call, and I'll pass it back to Scott. Thank you.

Thank you, Andy. Before we go to the queue of analyst questions, I would like to address a few of the questions submitted by our investors. Operator, could you please start us off with the first question?

Kevin from Vancouver asks, what is the difference in processing capacity between Block 2 FPGA satellites and Block 2 ASICs?

Kevin, that's a great question. Listen, we have been improving, on a ten-fold steps, our processing capacity for the satellites. We started with 100 megahertz on Bluewalker 3, which, by the way, is still working on functioning, then to upgrade it to 1 gigahertz, which is the current -- so a tenfold increase with the current satellite or current orbit in operations. And then the 1 that we're starting to launch immediately here have another increased factor of 10 gigahertz -- going up to 10 gigahertz for 9 gigahertz so another [ 10x ] factors.

When you combine the processing capacity that we have on the satellites with the AI engine that we're developing to basically managing very efficiently the spectrum allocation of both power and bandwidth, this is a very -- this is the way that we do the -- through broadband connectivity from the space. And that -- for that, we developed our own chip. We call it the [ AST 5000 ] that had a processing capacity to 10 gigahertz with enhanced features to take the most of the 10 gigahertz using our AI engines.

Alvin from Massachusetts asks, as a forward-looking investor, I would like to know if the company is weighing the benefits of AI for its spectrum management.

We are more than waiting the benefit. We're working on it. We are implementing our AI engine or managing and administrating the spectrum. Each satellite had a capacity of 10 gigahertz processing bandwidth, but we feel that, effectively, we multiply that by several factors by effectively managing the allocation of spectrum and resources dynamically across the network using AI. And that's all that we've been working for a while. Thus, the system the sale have already been designed to have all the hooks and all the management capability, trading maximum benefit of AI on spectrum management.

When you think about that, in average, terrestrial operators have per market in countries like United States, maybe around 250 megahertz to deploy spectrum between our own spectrum and spectrum provided by the operators, we -- yes, in the United States alone, we have access to around 80 megahertz. We will have access to around 80 megahertz of spectrum, 50 to be our own. And then you add an AI -- our AI engine to basically multiply that spectrum and make them much more efficient. This is a very significant new leg of the telco stack. So we see a world where you have WiFi, terrestrial. And now with the amount of capacity and spectrum that we can manage with our satellites and our AI engine to basically effectively use that spectrum, we believe that the usage of satellite become more and more and more relevant as we add satellites and then we add spectrum to the system.

Kevin from Oregon asks, with the next series of launches starting possibly next month at Cape Canaveral, I have been wondering if or how AST SpaceMobile will structure a future launch event for retail shareholders.

Thanks, Kevin, for the question. As you can tell from the topics on this call, we're very, very much in a commercial mindset at this point and moving towards service delivery. But nonetheless, the launch campaign is very exciting, and we're very excited as well. We just shipped BlueBird 6. We're getting ready to ship BlueBird 7 and the rest of the BlueBirds are starting to come out of the factory. So we're very excited about the launch campaign. It's going to be a fantastic stretch of launches. And just like with our last launch where we had about 1,000 retail investors, we plan to invite as many as we can to the launch, and it's -- in each of the launches. So it's going to be a great campaign. We're super thrilled and 5 launches before the end of Q1 2026 and our 45 to 60 satellites during 2026. There's going to be a lot of opportunities for retail to come see, and we hope everybody comes along to participate on this journey with us.

Roper from Zurich asks, despite confirming fully funded for a full constellation through balance sheet cash and future revenue, why was additional capital raised.

I'll take that. This is Andy. Rupert, thank you for the question. It's clear that 2025 has been a fantastic opportunity for AST to access the capital markets. It's been a great climate for that. And as you point out, we recently completed our third convertible note deal of the year, the first in January, the second in July and the third one just recently last month. This was an incredible transaction for us and strengthening the balance sheet. As a reminder, we were able to raise net proceeds of a little over $1 billion at a 2% coupon with a 10-year term, a convertible note deal that hasn't been done in many, many years. So we're very happy with that result. The opportunity was there.

And importantly, you point out, Rupert, that it is true, and we talked about it at the last earnings call, that we were previously fully funded for a constellation of 45 to 60 satellites. What this additional financing does is it provides us the ability to move faster with more flexibility on the balance sheet to go beyond those initial markets of the U.S., Europe, Japan and others that we talked about at 45 to 60 and to look worldwide in our coverage at a constellation of now being fully funded at 100-plus satellites.

So consistent with our STC announcement, we are looking and working hard on commercial opportunities in other strategic markets across the world, and our balance sheet is now fortified to provide a runway to manufacture and launch satellites to support that worldwide constellation base. Thank you.

And with that, I'd like to thank our shareholders for submitting those questions. Operator, let's open the call to analyst questions now.

[Operator Instructions] Our first question comes from the line of Michael Funk with Bank of America.

Congratulations on the funding activity during the quarter and the fully funded status. So I wanted to tie that back to the comments on the prepayments and the $1 billion contract to date. So what is your appetite or thoughts on future prepayment deals with customers, the commercial financial benefits to signing these now that you are fully funded. And then maybe part B to the question, if I could, any more broad detail around those prepayment contracts, whether they are for capacity subscribers. Any details on the broad terms would be helpful.

Michael, it's Scott here. So -- can you hear me okay?

I can.

Great. So our strategy for about 2 years now has been to pursue our very long funnel of agreements, right? We have 50-plus agreements with operators globally and we have nearly 3 billion subscribers. So the strategy has been started with our best partners who are most aligned, build out those relationships, build out those agreements and bring in prepayments and long-term capital -- long-term revenue commitments.

And so that strategy is unchanged. I think clearly, we have demonstrated access to the capital markets, but signing up these agreements with prepayments and commitments is still very much our strategy, and we'll balance all those factors appropriately. The way to think about them is relatively simple. Prepayments are for commercial services in the near term and the commitments can be near term, medium term, long term. And we balance each of those on each relationship and each situation is appropriate. But the strategy is really unchanged. We think it's playing out well, and we're going to continue it.

Our next question comes from the line of Mike Crawford with B. Riley Securities.

When you start manufacturing L-band satellites, do you intend to put L-band in S-band the same satellites? And also will you await formal FCC approval before starting to make those?

We plan to have a -- well, first of all, when we launch these satellites, they have all the 3 [ GPP ] frequencies, either in the low band or the mid-band, including all the MS S Band, the L and the S that we had acquired. Our plan is to interleave them between the low band and the mid-band. Now we're fully funded for doing that. And our plan is to start launching mid-band satellites by the end of next year. We want that to be in line with the road map that we have for -- in the U.S., Europe and Japan and now Saudi Arabia. And as we said, we're going to use this capital to basically more globally in both operator spectrum and our own spectrum and be able to combine in the network, both in order to facilitate 120 megabit per second basically everywhere that we deploy both our bands and the operator bands.

Okay. And just a follow-up to that is your Saudi Telecom agreement, you anticipate to launch commercial services in the fourth quarter '26. So -- but I don't think you specified over what spectrum. And then the other part to that is if there were -- if I heard that there's additional service revenue commitments on top of the $175 million prepaid.

I'll explain the -- how the agreement with STC works. But we are always starting with operator spectrum available in every device. So we focus on using spectrum that is 3GPP that is already on devices and how we're starting with STC and all our partners here in the U.S., in Europe, in Japan, will be no different in the Middle East region, led by Saudi Arabia.

And on the commitment, so we put forward this new disclosure, Mike, this quarter of over $1 billion of commitments. And those are not soft commitments. Those are designed to be very valuable to us and very indicative of future expectations and very valuable, both in the debt context and also as guidance to the equity market.

So when we say we have over $1 billion of revenue commitments, those are very hard commitments. And so we purposely put that out and we're not going to identify that with individual customers or individual contracts. But I would point you to the STC press release. We did mention that there was a prepayment and then also a long-term revenue commitment. So we're not going to map that to individual contracts going forward, but it is our strategy, and we'll provide updates from time to time as appropriate. But very importantly, we're now over $1 billion in total, which is a good outcome for us in line with our strategy, and we think consistent with the customer excitement about us and the customer excitement about putting this product into their customer hands.

Our next question comes from the line of Bryan Kraft with Deutsche Bank.

I had a few if I could. First, I know that you reiterated your launch timing guidance in terms of the number of launches you're targeting by the end of 1Q and the end of next year. It seems like the launch time line now has become a bit more compressed with some delays at the front end of the summer and into the fall. Just with that in mind, I wanted to ask you about your confidence in achieving the 5 launches by the end of 1Q and the 60 satellites by the end of next year. Is there any more risk now in that time line from your perspective?

And then separately, I wanted to ask you about the EU satellite constellation announcement. Are these satellites incremental to the plan? Or are they part of the existing 60 satellites by the end of next year. And if they are incremental, can you talk about the timing for launching them and what the CapEx and funding implications are?

And then lastly, related to that, there's been some talk in the market about AST winning part of the Iris Square mandate in Europe. Is that something that is happening? Is that real? Or is that just noise in the market?

Okay. Bryan, I would try to set the question in 3 parts. Let me start with the launch, and I want to start with where are we with manufacturing. So by early 2026, Q1, first part of Q2, we will have 40 satellites built. So we are at 19, satellite 19 at the moment, and we are at a pace of 6 satellites a month starting in December. And that match very well with the launches that we had already financially committed and we are in the manifest of our partners -- our launch partners to take them starting the 1 in India, mid-December and then following the launches from the Cape to add up to the 5 launches by the end of Q1.

So we feel very confident on our long campaign. This is been the culmination of our road map where we now have the ability to start launching by Q1, also our 10 gigahertz satellites that we plan to take the maximum out of them in the way that we manage that 10 gigahertz processing bandwidth satellites. So we feel very comfortable there.

As it relates to your question in Europe, I mean, we are an American company that operates globally. And as such, we were that market by market. Our go to market is exclusively through the partners and telcos that we operate with, I mean, including European markets. As you see the reception of what we're doing in Europe, jointly with Vodafone have been incredible. 21 of the 25 top operators in Europe have basically committed or expected to be part of the network and the constellation that we are building as part of our constellation but with certain features for European MNOs.

And then that's really -- that add up to the 50-plus agreement that we had globally, reaching us over 3 billion subscribers that we can reach through the agreement that we have globally.

So Abel, just to clarify then, so you're saying that the satellites for this constellation are part of the existing plan. They're not incremental. Is that correct?

That's correct.

Okay. And then can you comment at all on the -- just the talk about Iris Squared and whether AST might be part of that. It seems like you could be well positioned for it given this announcement today or over the weekend.

Yes, we don't want to comment on new contract awards or anything like that. But given that we are already building a constellation with multiple capabilities, we think we're very well positioned for any country or any customer that's looking to get this capability, right? The incremental ability for us and the marginal economics for us to build out additional capabilities in orbit is very high, given our tech, given our manufacturing, given our existing ecosystem was created. So I think we're very well positioned for opportunities like that. But Bryan, we don't -- we're not going to comment on any new contracts right now.

Our next question comes from the line of Colin Canfield with Cantor Fitzgerald.

I appreciate the sensitivity in terms of kind of Iris commentary, but maybe just talking about kind of your supply chain versus the European supply chain. I think when investors kind of saw the 2030 targets around Iris and sort of the recent headlines in terms of kind of antitrust and mergers between kind of the, we'll say, the existing supply chain folks for that domain, it's pretty obvious that's sort of like back and forth is going to limit their capabilities. So maybe without mentioning Iris, if you could maybe talk about kind of how you think about your aperture for additional bands and leveraging the economies of scale that you have to do more than just S, L and C band.

Yes. I mean -- well, first of all, our platform, it is designed to basically capture over 1,000 megahertz of spectrum that can be tuned across all 3 GPP bands in the low band and the mid-band. So we basically design our network where we can take any band in any country as long as 3GPP, as long it's in devices, we can tune into it. So -- and our incremental cost for that is practically 0 because that is all software defined.

In term of, we will manufacture on how -- who we are. We are an American company. We manufacture in the United States. We are based in Midland, Texas, and -- but we operate globally. So -- and we're in the business of partnering with the MNOs, which are local, are in the local jurisdictions. We partner with them. They provide the spectrum. Sometimes we bring our own spectrum and complement that in order to deliver the best experience possible in the future for the end user device that basically, no matter what phones they're using and they get [ 120 ] megabit per second from space.

So that's really who we are. That's our strategy. We're Americans. We're based here. We announced we had over 1,800 people working on our system. But yes, we -- obviously, we're going to look very aggressively all around the globe. Two are spectrum that is in local jurisdictions that is managed by local regulators and partner with local MNOs to offer the best of our services to each of the customers.

So -- but I wanted to make it clear, we're -- our focus is -- we're an American company that operates in America.

Got it. Got it. And as we think about kind of the sizing of the war chest that AST has put together, that tracks kind of roughly in terms of cash on hand to some of the legacy satellite communications debt levels, how do you think about kind of going out, acquiring either future spectrum or even something that might kind of get you closer to free cash flow positive sooner? And how do you think about kind of that potential takeout versus investing organically and essentially kind of taking business away to your own investment in IP?

Yes. I mean, add the court of our strategies partnering with the MNOs. The MNOs in the United States, we had access to around 80 megahertz of spectrum, call it 50 of our own and another 30 in combination of low band and mid-band spectrum available for us. So that, we believe, is a significant amount, especially when you start applying AI techniques to maximize it and make it more efficient. If you take into consideration roughly by market and roughly each market in the United States have around 250 megahertz of terrestrial deploy spectrum and we had access to around 80 for satellite, you can see that that's a very significant portion.

So we feel that we are very equipped to globally compete. So that's why we acquired the 50 megahertz in the United States. We have a priority right for another 60 in the United States. We're partnering with the global MNO ecosystem in Europe for Europe. So our focus is launching -- building satellites, which we are not at a rate that we feel proud and meet our business needs, which is around 6 per month of the largest satellites ever launched into LEO. We're doing that. We're breaking a world record every time that we take a satellite out of the factory, is the largest ever launch. So that's our primary focus, manufacturing. Second to that is launching them. And third to them is bring this service globally with a combination of local spectrum from the MNO and our own to basically offer the broadband experience as close as possible to terrestrial by using space.

Our next question comes from the line of Chris Schoell with UBS.

I just want to follow up on the funding progress. I recognize that you are saying you're fully funded, I believe, for 90 satellites in your queue. But will you continue to be opportunistic? And how should we think about additional capital raises as we go into 2026?

And then thank you for the color on the 4Q OpEx and CapEx. Just given the ramp in Block 2 production into '26, should we view 4Q as a good run rate when modeling out next year? Or will the timing of the launch payments cause spending to fluctuate?

Chris, I'll take the first part and then Andy can take the second part. So in terms of fund flows, I guess, is the best way to think about it, I would look to the model on the commercial side and the comments we've made earlier in the call, where we're laser-focused on bringing in commercial prepayments, commercial commitments and ultimately, commercial revenue as soon as possible. We've reiterated our expectations on revenue in Q4. And going into 2026, we certainly expect continued growth. So we are very, very focused on the commercial side, which is why you saw the big announcements in the last month or so and the new disclosure on commitments for this call. And so that's definitely our focus.

We thought the moment was right to continue to build the cash balance and accelerate the time lines and run towards the growth opportunity, but in terms of our focus and our energy and where we're going to spend our time, it's 100% with customers. And the prepayments and commitment strategy is the right one. And on launch?

Yes. I would just add that, as Scott said, the focus is commercial. I mean we're always going to be opportunistic and open-minded about good capital markets, of course. But given where we are now, we have the flexibility to perhaps pull launch forward as opportunity allows. And we'll be prudent about that, continue to kind of weigh opportunities on the equity side. We also look at attractive things on the debt side. We believe that market will open up a little bit as we progress. So it's -- our priority is the commercial aspects of the business now, and we'll continue to give good thought. But I spend my time thinking about how to prudently deploy that capital that we've now raised on the balance sheet.

Great. And I can just follow up on the 4Q OpEx and CapEx, is that a good run rate when we start thinking about next year? Or can that be a little volatile?

Will be a little volatile. I think on OpEx, it's pretty darn close because we've been growing so dynamically as the years progressed. And we're at a stage now, as Abel and I've said it, close to 1,800 employees and workforce. And that OpEx feels pretty good and consistent.

On the CapEx side, it's going to ebb and flow. We've been roughly in that close range the last couple quarters. But as we get closer to launch and clearly '26 is closer to consistent cadence over every 30, 45 days, we'll have some spikes and some lulls and when launch payments are due. I think what our plan is on that, though, is we've told you how we feel in Q4, and we're halfway through that quarter. So we have good visibility, and then we'll come out after the year and give you an outlook on '26 holistically, both on OpEx and CapEx when we talk again toward the end of February, early March.

Our next question comes from the line of Louie DiPalma with William Blair.

Well, Scott and Andy, congrats on the Verizon and STC definitive contracts.

thanks a lot. Really appreciate it.

Do you think that the number that Andy cited having 25 satellites in orbit is a good estimate for the number to support beta trials in North America in 2026?

Yes. No, that's right, Louie. Each operator thinks about these things a little bit differently. But yes, we think that that's a fair proxy, plus or minus.

Great. And also thanks for the color on the $1 billion in contracted revenue commitments. Is that for the 3 definitive commercial agreements? And are you able to disclose the average duration of the revenue commitments? I think the STC deal was for 10 years. Is it appropriate to assume that the others were of similar duration?

So we're not going to give up an average duration, but I would say, it does vary. When you look at the contracts we've signed, they've been as long as 5, 6, 10 years, right? So each of the contracts is a little different. And the revenue commitment number that we disclosed, it is primarily with the definitive agreements, but there is some others in other binding agreements as well. So that's how to think about it.

It's going to vary, but it's a decent mix of short term, medium term and long term and structured well for the company.

And in the past, you've discussed how your satellite processing tech can like recombine the disparate spectrum holdings from AT&T and Verizon to create a cohesive near nationwide footprint for approximately 5 megahertz. How is that technology working in trials?

No, it is working very well. We are planning to be ready for nationwide service early in the year on an intermittent basis. The level of intermittency will reduce drastically, and we keep adding satellites. But you are correct. Our satellites have no flexibility that we were able to take a spectrum from AT&T, spectrum from Verizon, combine it up and make a nationwide service or near nationwide service. That is -- that will be combined with our 50 megahertz. And our technology has the ability to pick and choose terrestrial spectrum, combining with satellite spectrum and offer that as a package to the end user.

Excellent. So your technology can combine the mobile satellite spectrum in addition to the AT&T and Verizon spectrum?

Correct.

Our next question comes from the line of [ Greg Pendy ] with [ Clear Street ].

Just a real quick one. Given the MNO momentum that you've seen with SEC and Verizon, I guess your 50 MNOs represent roughly 3 billion subs. If I'm not mistaken, the market or the TAM is probably $5.6 billion. Just can you talk about, given your partnership model, about how many large MNO opportunities are left out there in the market.

Sure. So we -- the interesting thing about how we've approached the market and how we built the company is that we're very favorable to MNOs. We've structured our technology, our network, our go-to-market strategy, even our cap stack, right, even the investors, it's very favorable intentionally towards our customer, the operator.

So as we've built the ecosystem over the last 5 to 10 years, it's really been around who's most aligned, who can -- who's most forward thinking. And as we get closer to service, there's less forward thinking, and that's more effect everybody feels that they need this capability.

So we have this fastening dynamic where we're not really constrained by historical relationships or operators that want to work with us. We find pretty much nearly all the operators in the world, if not all, want to work with us and want to learn more and want to participate. So we're going to continue to harvest that base for good contracts for the company for the initial markets that we deploy and then grow that base into the medium tail and the long tail as we grow.

So I think in terms of big, big MNO opportunities, it's -- we've chosen not to do business in China or Russia but -- and other smaller restricted countries. But other than that, most operators are good candidates and have some level of dialogue with us, and we're going to continue to pursue those opportunities.

Our next question comes from the line of Chris Quilty with Quilty Space.

Maybe a more nuanced question than Louie about the $1 billion commitments. Is that all commercial? Or is that a combination of commercial and government?

That's all commercial.

Great. And maybe to follow on, I mean you're capitalized now for 100 satellites. Again, I'm assuming that's all for the commercial side, obviously, secretary Department of War [ Hege ] speech, Friday indicating that contractors are going to have to commit their own capital to getting things done. Or is it fair to assume that most of the programs you're working on will be more in the sort of Star SpaceX Star shield model of vendor built and operated government-owned?

Yes. I mean, we have been a big proponent for a long time for the government for the dual-use comsat. Basically, we believe that to maintain competitiveness for United States, the ability to combine commercial usage with government usage is paramount. And so we basically -- our phone with the government, which is very substantial, it calls for that model. So we don't discard there will be occasions that we will manufacture certain assets tailor made to the government, but we're prioritizing the dual use in every opportunity that we have.

Great. And final question, just on the launch. When will you give us some visibility on specific launch vehicles as we approach the launch dates. Obviously, the heavy lift market is extremely constrained and I watched in the last week, both Blue Origin and ULA delay and delay. SpaceX is really the only operator out there that's launching on a regular cadence. It's a tight market at current time. And are you expecting other launch vehicles to become available?

We're expecting other loan vehicles to become available, but our current existing and immediate launch campaign, it is using the regular suspects, SpaceX, [ New Glen, Itron ] and there are new capacity coming up from other operations like NHI that are available to us. But the immediate launches are around American launches here in the U.S.

Got you. And are you still aiming for the same sort of 3 to 4 BlueBirds per Falcon 9, I think, 8 for New Glen? And are there things that you're doing or can do in order to increase the number of satellites per launch vehicle either in mass or dispenser design or other tricks?

Yes. No, that is correct. I mean we basically can go at Adobe of the speed in terms of number of satellites per launch with the New Glen platform that we can with the SpaceX platform. But yes, it's at full capacities, 8 in New Glen and around 3 in the Falcon 9.

Our next question comes from the line of Scott Searle with ROTH Capital Partners.

Maybe just a couple of quick follow-ups and clarifications. Now that you're funded up to 100 satellites and the initial phase of the constellation of 45 to 60 gets you to commercialization in the key developed markets, should we expect that you're just going to continue to roll through to build up to the 90 to 100-plus satellites in terms of, I'll call it, Phase 2 constellation as we go into 2027?

Or are there some other milestones to be thinking about in terms of customer contracts or otherwise that will be a precursor to that happening? And also as part of that, from a spectrum standpoint, you had a very astute buy of [ Logano ] spectrum in North America. I know you have access in international markets, but there are some other costs that come along with that. I wonder if you could just frame for us kind of how you're conceptually thinking about incremental spectrum costs going forward, particularly in international markets.

Yes. I mean, the architecture basically designed to basically mix and match our own spectrum with operator spectrum and tune all across the low band and mid-band spectrum. So basically, our cost of incremental spectrum is marginal. It doesn't cause us more on the platform to activate additional spectrum. So that would make it very attractive. We can partner with the 700 in certain jurisdictions. And in another one, we are in the mid-band, in combination with their own spectrum. So we -- our incremental cost for additional spectrum is marginal to none as long as it's 3GPP spectrum and it's as long as it's in devices.

And our strategy is always starting broadband services with a spectrum that is available in devices.

Great. And just a clarification in terms of your continued launch cadence, if you will, once we get to 60 satellites or are the milestones that you're thinking about or any sort of color you could add in terms of the continued expansion of the global constellation.

Sure. So our strategy on satellite deployment hasn't really changed either, right? Our strategy has been, as we have capital access and as we see positive NPV growth, we're going to commit to it. And so that was the driver behind how we announced and have thought about the 45 to 60 satellite target that we put in place a year or so ago. And with further access to capital and, frankly, further traction faster and more attractively on the operator side and potentially the government side as well, we've recalibrated those expectations, and that's part of what's behind the capital we've raised.

So where do we go from here? How do we continue to build those out? We pride ourselves on being very nimble. Remember, we're vertically integrated. We can put incremental improvements into our constellation as we go, like with the ASIC to come in Q1. And so we're going to continue to move that way. We are not making multiyear planning decisions. We're pivoting and moving quickly. And as we see things move and we see opportunities, we're going to pivot quickly.

But for us, at this point, we see nothing but opportunity. We see nothing but growth. So we're racing towards more satellites fast. And so that's how we're thinking about it, Scott, is there's no real holdup on us for continuing to build, but we're going to evaluate growth opportunities on a rolling basis, and that's what you've seen us do the last couple of years.

And we have reached the end of the question-and-answer session. And I'll now turn the call back over to Scott Wisniewski for closing remarks.

Thank you, operator. We want to thank all of our shareholders and the analysts for joining the call. We look forward to providing more updates soon. So please stay tuned. Thank you. Bye.

And ladies and gentlemen, this concludes today's conference, and you may disconnect your lines at this time. We thank you for your participation.