AST SpaceMobile ( $ASTS ) Q3 2021 Earnings Call - a thread
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First let me get the mundane part of the earnings report out of the way.
Business highlights:
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Business highlights:
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Financial highlights:
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For reference purposes, you can find the Q2 2021 summary of the earnings report at
businesswire.com/news/home/2021…
The Q3 2021 summary is at
newsfilter.io/a/5d74820b4c06…
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businesswire.com/news/home/2021…
The Q3 2021 summary is at
newsfilter.io/a/5d74820b4c06…
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Let's cover a few things from the business and financial summaries first, then we will get to some areas that I can add some perspective, and hopefully value for my followers.
At the end of Q2, there was $402.6 million in cash and equivalents. Now there is $360.4 million in
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At the end of Q2, there was $402.6 million in cash and equivalents. Now there is $360.4 million in
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cash and equivalents.
There was no debt at the end of Q2, and there is still no debt.
Total cash burn during the quarter was $42.2 million.
Cash was spent on operating expenses needed to run the company and capital expenses.
The operating expenses are things like R&D to
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There was no debt at the end of Q2, and there is still no debt.
Total cash burn during the quarter was $42.2 million.
Cash was spent on operating expenses needed to run the company and capital expenses.
The operating expenses are things like R&D to
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design the hardware and software needed to bring SpaceMobile to life, engineering services, general administrative expenses (salaries), and depreciation of plant and equipment (which is a non-cash expense)
The total operating expenses for Q3 were 23.1 million - a decline of
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The total operating expenses for Q3 were 23.1 million - a decline of
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2 million from the previous quarter. R&D expenses fell by $4.7 million, but engineering expenses rose by 2.7 million.
On the capex side, total expenses for BlueWalker 3 now total 56.7 million. At the end of Q2, total expenses totaled 51.7 million. So 5 million was spent
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On the capex side, total expenses for BlueWalker 3 now total 56.7 million. At the end of Q2, total expenses totaled 51.7 million. So 5 million was spent
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on BW3 during the 3rd quarter.
The original estimate for building BW3 was $48 million. So the cost is running on the hot side.
This is nothing new and I commented on it during the last earnings call thread that I wrote
Honestly, it's not surprising that costs are coming
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The original estimate for building BW3 was $48 million. So the cost is running on the hot side.
This is nothing new and I commented on it during the last earnings call thread that I wrote
Honestly, it's not surprising that costs are coming
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in a bit high. It's common on complex projects. Also, despite Jerome Powell's ability to say it with a straight fact, inflation is not transitory. And it shows up in the cost of materials and labor.
While we are on the subject, during the call we received a new estimate
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While we are on the subject, during the call we received a new estimate
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the cost of building BlueBird1 model satellites.
The new range is $13 to $15 million. The original estimate was $10 to $12 million.
With some quick back-of-the-envelope math, ASTS still has enough cash on hand to launch and test BW3, and build and deploy the 20 BB1
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The new range is $13 to $15 million. The original estimate was $10 to $12 million.
With some quick back-of-the-envelope math, ASTS still has enough cash on hand to launch and test BW3, and build and deploy the 20 BB1
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satellites needed to deploy phase 1 of SpaceMobile.
And that is before receiving an additional $202 million in cash from converting existing warrants into shares once the price is above $18 for 20 of 30 consecutive trading days.
In addition to Jerome Powell being wrong
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And that is before receiving an additional $202 million in cash from converting existing warrants into shares once the price is above $18 for 20 of 30 consecutive trading days.
In addition to Jerome Powell being wrong
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wrong about inflation, there is another reason that BB1 satellites will be more expensive than originally projected
BW3 uses a type of chip called a Field Programmable Gate Array (FPGA) As the name implies, these chips can be programmed "in the field" i.e. during operation
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BW3 uses a type of chip called a Field Programmable Gate Array (FPGA) As the name implies, these chips can be programmed "in the field" i.e. during operation
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FPGAs are the perfect engineering choice for something like a satellite that you are testing.
You can change behavior of the software while the satellite is in space.
After the on-satellite software is working as desired, it will be burned into a specialized type of chip
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You can change behavior of the software while the satellite is in space.
After the on-satellite software is working as desired, it will be burned into a specialized type of chip
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called an Application Specific Integrated Circuit (ASIC)
By an amazing coincidence, I was in a recent conversation with my good friend CatSE where we discussed the time that it would take from knowing the technology was ready to being able to build BB1 satellites.
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By an amazing coincidence, I was in a recent conversation with my good friend CatSE where we discussed the time that it would take from knowing the technology was ready to being able to build BB1 satellites.
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During that conversation, the topic of going from FPGA to ASICs came up - specifically the topic of how much time it would add to the time needed to start building BB1s.
Well it looks like similar conversations were taking place at AST.
The initial BB1s that will be
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Well it looks like similar conversations were taking place at AST.
The initial BB1s that will be
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launched will be running FPGAs, not ASICs.
From an engineering and/or operations perspective, it doesn't really matter.
The satellites will perform the same.
But moving from FPGAs to ASICs is necessary to reduce the costs of BB1 satellites.
Next lets talk a little more
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From an engineering and/or operations perspective, it doesn't really matter.
The satellites will perform the same.
But moving from FPGAs to ASICs is necessary to reduce the costs of BB1 satellites.
Next lets talk a little more
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about Blue Walker 3 while it is still on the ground.
There is some outstanding news to report. But there is also news to report that may cause some people to fret. (It isn't necessarily bad news, but a delay is possible)
First the outstanding news.
As people who have
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There is some outstanding news to report. But there is also news to report that may cause some people to fret. (It isn't necessarily bad news, but a delay is possible)
First the outstanding news.
As people who have
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talked a little SpaceMobile with me know, I view the deployment/unfurling of the satellite to be the highest risk thing that needs to be tested during the testing process of BW3.
Abel has stated that he is absolutely certain that deployment will be successful.
I still view
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Abel has stated that he is absolutely certain that deployment will be successful.
I still view
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deployment as being the highest risk area.
Also, honestly, what would you expect the CEO to say? That he doesn't think it will work, but he will keep his fingers crossed?
But beyond the confidence in Abel's voice when he talked about the deployment mechanism working was
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Also, honestly, what would you expect the CEO to say? That he doesn't think it will work, but he will keep his fingers crossed?
But beyond the confidence in Abel's voice when he talked about the deployment mechanism working was
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something else he said - and this is the perfect lead in to the potential for a delayed BW3 launch.
They are testing BW3 on the ground - and not just the normal checks of circuits and such to make sure that everything was assembled correctly.
They are testing it's ability
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They are testing BW3 on the ground - and not just the normal checks of circuits and such to make sure that everything was assembled correctly.
They are testing it's ability
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to work with ordinary, unmodified cell phones.
Having a phone in space (BlueWalker1) and a satellite on the ground as well as the ability to use other ground based cell phones allows AST to make sure that BW3 is ready before the launch.
Abel sounded resolute when he talked
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Having a phone in space (BlueWalker1) and a satellite on the ground as well as the ability to use other ground based cell phones allows AST to make sure that BW3 is ready before the launch.
Abel sounded resolute when he talked
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about the potential for a delay - he said that BlueWalker 3 won't be launched until they are absolutely certain that it is ready.
Given preparation for shipping a huge satellite like BW3, transporting it to Cape Canavaral, and then preparing the satellite to be loaded on a
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Given preparation for shipping a huge satellite like BW3, transporting it to Cape Canavaral, and then preparing the satellite to be loaded on a
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SpaceX rocket, they need to be certain that BW3 is ready before the end of December
While a delay would be disappointing, that disappointment is more than offset for me personally knowing that there is a high degree of certainty that there won't be a BlueWalker4 because BW3
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While a delay would be disappointing, that disappointment is more than offset for me personally knowing that there is a high degree of certainty that there won't be a BlueWalker4 because BW3
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is going to work.
Also, about that testing process of BlueWalker3, I read over my thread on the topic (
Abel clarified what
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Also, about that testing process of BlueWalker3, I read over my thread on the topic (
https://twitter.com/steve_larrison/status/1419363336408371200), and given that I have no inside information or connections, I am kind of happy with the foresight I showed in that thread.
Abel clarified what
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BW3 testing will consist of (and also gave a rough timeline)
The specific activities he highlighted were the deployment mechanism, and working with the onboard portion of the software stack to ensure that it works with partner MNO networks.
On the deployment mechanism,
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The specific activities he highlighted were the deployment mechanism, and working with the onboard portion of the software stack to ensure that it works with partner MNO networks.
On the deployment mechanism,
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Abel confirmed what I suspected - that BW3 is a special build and they will be capturing data from the unfurling and analyzing it.
In addition to a video feed, they have other sensors on board to track timing and forces on the panels of BW3.
This is still speculation,
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In addition to a video feed, they have other sensors on board to track timing and forces on the panels of BW3.
This is still speculation,
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but I believe that the final configuration of BB1 satellites won't be determined until data collected during the unfurling is analyzed
Abel said that it should take a couple of weeks to know if deployment was truly successful
But the majority of the things that need to be
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Abel said that it should take a couple of weeks to know if deployment was truly successful
But the majority of the things that need to be
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during the testing process is going to be software and the ability to interoperate with MNO networks.
If you haven't watched the David Marshack video, do so now.
Here is a link - you have no excuse not to watch it
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If you haven't watched the David Marshack video, do so now.
Here is a link - you have no excuse not to watch it
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Not mentioned during the call, but things that I am pretty sure that they will test are basic maneuverability tests (both to test the satellite as well as software in their ground stations) and load testing
But given the confidence that Abel had in the deployment mechanism
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But given the confidence that Abel had in the deployment mechanism
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combined with Abel's willingness to delay the launch unless he is certain that everything will work, I think my confidence in a successful test of BW3 has actually increased.
So back to a little less exciting news from the earnings report.
AST has signed a lease in for a
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So back to a little less exciting news from the earnings report.
AST has signed a lease in for a
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16,000 square foot property in Maryland - this will become the Satellite and Network Operations Center.
AST has also purchased a 100,000 square foot facility to add to their existing 85,000 square foot facility in Midland Texas.
They will be investing heavily in automation
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AST has also purchased a 100,000 square foot facility to add to their existing 85,000 square foot facility in Midland Texas.
They will be investing heavily in automation
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so that they can bring their production capacity up to the 6 BlueBird1 satellites per month number mentioned in the last earnings call.
All in all, I think the call was positive.
I don't like the possibility of a delay in the launch of BW3, but I'll take a delay over a
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All in all, I think the call was positive.
I don't like the possibility of a delay in the launch of BW3, but I'll take a delay over a
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failed test any day. And having the CEO stand up during an earnings call and say that he will take the delay if it is necessary is encouraging.
That attitude goes by another name - leadership.
Also, it's worth noting that MOUs were signed with 3 MNOs during the quarter
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That attitude goes by another name - leadership.
Also, it's worth noting that MOUs were signed with 3 MNOs during the quarter
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just ended. Also, one of the MNOs - MTN Group is one of the 10 largest MNOs in the world.
Compare that to the CEO of a competitor who stated that their strategy is to go after small deals because they can close quicker and you will begin to understand why I appreciate what
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Compare that to the CEO of a competitor who stated that their strategy is to go after small deals because they can close quicker and you will begin to understand why I appreciate what
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AST is doing.
It would have been nice to hear more about the FCC licensing process, but I guess there wasn't news to share on that front right now.
And it would have been even nicer to hear that AST YOLOed the $402 million they had at the end of last quarter on DWACW at
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It would have been nice to hear more about the FCC licensing process, but I guess there wasn't news to share on that front right now.
And it would have been even nicer to hear that AST YOLOed the $402 million they had at the end of last quarter on DWACW at
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$3 and sold at $79, but I guess that just wasn't meant to be.
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