Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Except as otherwise noted or where the context requires otherwise, references in this report (this “Quarterly Report”) to “we,” “us” or the “Company” refer to AST SpaceMobile, Inc. and references to our “management” refer to our officers and directors.
The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included in Item 1 of this Quarterly Report and with our Annual Report on Form 10-K for the year ended December 31, 2024, including our audited consolidated financial statements and related notes contained therein. Unless otherwise indicated, all references to “dollars” and “$” in this Quarterly Report are to, and all monetary amounts in this Quarterly Report are presented in, U.S. dollars.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking statements” for the purposes of federal securities laws that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek,” “plan,” “predict,” “potential,” and variations and similar words and expressions are intended to identify such forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this Quarterly Report may include, for example, statements about:
•our strategies and future financial performance, including our business plans or objectives, products and services, pricing, marketing plans, operating expenses, market trends, revenues, liquidity, cash flows and uses of cash and capital expenditures;
•expected functionality of the SpaceMobile Service;
•the timing of the assembly, integration and testing as well as regulatory approvals for the launch of our next generation of commercial BB satellites (“Block 2 BB satellites”);
•anticipated timing and level of deployment of satellites and anticipated developments in technology included in our satellites;
•anticipated demand and acceptance of mobile satellite services;
•anticipated costs necessary to execute our business plan, many of which are preliminary estimates subject to change based upon a variety of factors, including but not limited to our success in deploying and testing our constellation of satellites;
•anticipated timing of our needs for capital or expected incurrence of future costs;
•prospective performance and commercial opportunities and competitors;
•our ability to continue to raise funds to finance our operating expenses, working capital and capital expenditures;
•commercial partnership acquisition and retention;
•the negotiation of definitive agreements with Mobile Network Operators (“MNOs”) and governmental entities relating to the SpaceMobile Service that would supersede preliminary agreements and memoranda of understanding;
•our success in retaining or recruiting, or changes required in, our officers, key employees or directors;
•our expansion plans and opportunities, including the size of our addressable market;
•our ability to comply with domestic and foreign regulatory regimes and the timing of obtaining regulatory approvals;
•changes in applicable laws or regulations;
•our ability to invest in growth initiatives and enter into new geographic markets;
•the possibility we may be adversely affected by other economic, business and/or competitive factors;
•the outcome of any legal proceedings that may be instituted against us;
•our ability to deal appropriately with conflicts of interest in the ordinary course of our business;
•our ability to consummate the proposed strategic transaction with Ligado, including our ability to realize the anticipated benefits of our proposed transaction with Ligado and to satisfy the conditions to funding under the Sound Point Credit Facility;
•changes in U.S. trade policy, including changes to existing trade agreements and any resulting changes in international trade relations; and
•our ability to realize the anticipated benefits of our strategic transactions such as acquisitions, investments, partnerships, joint ventures and other growth strategies.
Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events,
performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to Part I, Item 1A. Risk Factors included in our Annual Report on Form 10-K for the year ended December 31, 2024 and in Part II, Item 1A. Risk Factors included in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 and in this Quarterly Report. The Company’s filings with the SEC can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Overview
We are building the first and only global Cellular Broadband network in space to be accessible directly by everyday smartphones (2G/4G-LTE/5G devices) for commercial use, and other applications for government use utilizing our extensive intellectual property (“IP”) and patent portfolio. The SpaceMobile Service is being designed to provide cost-effective, high-speed Cellular Broadband services to end-users who are out of terrestrial cellular coverage using existing mobile devices. The SpaceMobile Service currently is planned to be provided by a constellation of high-powered, large phased-array satellites in low Earth orbit (“LEO”) using low-band and mid-band spectrum controlled by MNOs.
On March 22, 2025, we and certain of our subsidiaries entered into certain definitive agreements with Ligado Networks LLC (“Ligado LLC”) and its subsidiaries (together with Ligado LLC, “Ligado”) for usage rights for mid-band spectrum, which were approved by the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) on June 23, 2025. Ligado’s Chapter 11 plan was confirmed by the Bankruptcy Court on or about September 29, 2025. Subject to the completion of certain conditions, including regulatory approval, as a result of the transaction with Ligado, we expect our network will be enhanced by our long-term access to up to 45 MHz of the lower mid-band satellite spectrum in the United States and Canada through our usage agreements. In addition, on September 25, 2025, we completed the acquisition of an entity that holds certain S-Band International Telecommunication Union priority rights to Mobile Satellite Services frequencies in the range of 1980-2010 MHz and 2170-2200 MHz, for use in LEO. We expect the acquisition will further enhance our network by up to 60 MHz of mid-band satellite spectrum globally.
As of September 30, 2025, our IP portfolio consists of approximately 3,800 patent and patent pending claims worldwide, of which approximately 1,800 have been officially granted or allowed. This includes 36 patent families worldwide. Our patents have various terms expiring starting 2039. We are headquartered in Texas where we operate over 200,000 square feet satellite assembly, integrating and testing (“AIT”) facilities.
We intend to work with MNOs to offer the SpaceMobile Service to the MNOs’ end-user customers. We currently have partnerships with over 50 MNOs with nearly 3 billion subscribers globally. Our vision is that users will not need to subscribe to the SpaceMobile Service directly through us, nor will they need to purchase any new or additional equipment. Instead, users will be able to access the SpaceMobile Service when prompted on their mobile device that they are no longer within range of the land-based facilities of the MNOs or will be able to purchase a plan directly with their existing mobile provider. We intend to seek to use a revenue-sharing business model for the SpaceMobile Service in our agreements with MNOs.
The SpaceMobile Service is expected to be highly attractive to MNOs as it will enable them to improve and differentiate their service offering without significant incremental capital investments. The SpaceMobile Service is expected to enable MNOs to augment and extend their coverage without building towers or other land-based infrastructure, including where it is not cost-justified or is difficult due to geographical challenges. As a result of the incremental coverage created by the planned SpaceMobile Service, we believe that MNOs will have the opportunity to increase subscribers’ average revenue per user.
We also intend to leverage our patented technology, including the large phased array and high power capability of our BlueBird (“BB”) satellites, for a variety of applications in the government sector. To this end, we have entered into agreements with prime contractors for the United States (“U.S.”) government to perform certain tasks, including a new contract award entered in February 2025 with the United States Space Development Agency (“SDA”) through a prime contractor with total expected revenue of $43.0 million to provide certain testing services utilizing the five first generation commercial BB satellites (“Block 1 BB satellites”) and one next generation Block 2 BB satellite and a new contract award entered in April 2025 with the Defense Innovation Unit (“DIU”) through a prime contractor with total expected revenue of up to approximately $20.0 million for SpaceMobile capabilities with multiple U.S. government agencies in support of government communications over land, sea, and air. We intend to seek to enter into other similar agreements with the U.S. government, either directly or through prime contractors, to develop and test certain non-communication applications and, once qualified, provide certain non-communication and communication services through our satellites.
On April 1, 2019, we launched our first test satellite, BlueWalker 1, which was used to validate our satellite to cellular architecture and was capable of managing communications delays from LEO and the effects of doppler in a satellite to ground cellular environment using the 4G-LTE protocol.
We launched our Blue Walker 3 (“BW3”) test satellite on September 10, 2022, and announced the completion of the deployment of the communication phased array antenna of the BW3 test satellite in orbit on November 14, 2022. Using the BW3 test satellite, we successfully completed two-way 5G voice calls directly to standard unmodified smartphones, achieved repeated successful download speeds of above 21 megabits per second (“Mbps”) to standard unmodified smartphones and spectral efficiency of approximately 3 bits per second per hertz.
We have also successfully completed initial in-orbit and ground testing for non-communication government applications. We intend to continue testing capabilities of the BW3 test satellite, including further testing with cellular service providers and the U.S. government.
We launched five Block 1 BB satellites on September 12, 2024. The Block 1 BB satellites are of similar size and weight to the BW3 test satellite and have ten times higher throughput than the BW3 test satellite. In October 2024, we completed the deployment of the communication phased array antennas and Q/V antennas in orbit and performed a series of monitoring tests and activities to confirm the successful initial operations of the Block 1 BB satellites. In January 2025, we successfully made the first SpaceMobile video call from space with Vodafone using standard unmodified smartphones. In February 2025, we completed the voice and video call tests on standard unmodified smartphones with AT&T and Verizon in the United States and also completed the tests for non-communication applications for the U.S. government. All five Block 1 BB satellites have participated in the tests at various stages. In April 2025, together with Rakuten Mobile, Inc., we successfully conducted a two-way broadband video call in front of a live audience using unmodified smartphones on the SpaceMobile network enabled by a Block 1 BB satellite in orbit today. On July 21, 2025, we and AT&T made the first-ever Voice over LTE (“VoLTE”) call and short message service over satellite using AT&T’s spectrum and core network with a standard unmodified cell phone. On October 2, 2025, together with Bell Canada, we achieved Canada’s first-ever space-based 4G VoLTE voice call, broadband data connection, and video streaming using everyday smartphones. We have deployed and released many fixed cells over the continental U.S. to our MNO and Original Equipment Manufacturer partners as the reference cells for routing testing. We expect to continue testing for SpaceMobile Service automation including beta testing prior to rollout of initial noncontinuous SpaceMobile Service in select markets including the United States, Europe, Japan and other strategic markets.
The SpaceMobile Service has not been launched and therefore has not yet generated any revenue. We currently plan to utilize the Block 1 BB satellites to initiate a limited, noncontinuous SpaceMobile Service in targeted geographical markets, including in the United States, and validate and test non-commercial government applications and seek to generate revenue from such services. Prior to initiating SpaceMobile Service in each jurisdiction, we will need to obtain regulatory approvals in each jurisdiction where we would provide such service and would need to enter into commercial agreements with MNOs relating to the offering of such service in each jurisdiction.
We received an initial license from the Federal Communications Commission (“FCC”) to launch and operate the Block 1 BB satellites using V-, S- and UHF-band frequencies to support orbit raising maneuvers and Telemetry, Tracking, and Command (“TT&C”) operations, and to employ the V-band for routine gateway feeder link operations. We obtained special temporary authorities (“STAs”) from the FCC to test our space-based cellular broadband network in the United States, employing low-band spectrum in the 700/800 MHz bands from AT&T and Verizon as well as FirstNet Band 14 spectrum dedicated for first responders and the public safety community. We have also obtained and currently hold STAs for service-link testing in the United Kingdom with Vodafone, in Canada with Bell Canada, and in Japan with Rakuten Mobile, Inc. In July 2025, we received an experimental authorization from the FCC to launch and operate our first Block 2 BB satellite (“FM 1” or “BlueBird 6”) using V-, S- and UHF-band frequencies to support orbit raising maneuvers, TT&C and gateway feeder link operations.
Further, we have filed our Part 25 modification application for authority to launch and operate our planned 248-satellite LEO network to provide supplemental coverage from space (“SCS”) service to the continental United States and Hawaii, using 700/800 MHz spectrum licensed to AT&T, Verizon, and FirstNet. The FCC has partially granted our Part 25 modification application to authorize launch and operations of 20 Block 2 BB satellites using V-, S- and UHF-band frequencies to support orbit raising maneuvers and TT&C operations. The FCC also has placed our Part 25 modification application on public notice, accepting it for filing and seeking comment on the application. Before we begin providing full commercial SpaceMobile Service, we will need a grant of our remaining Part 25 modification application. To commence commercial SpaceMobile Service outside the United States, we will need to obtain additional approvals from the relevant non-U.S. regulatory authorities. AST SpaceMobile has also obtained STAs for V-band gateway operations with the Block 1 BB satellites at several U.S. sites, and has filed or expects to file with the FCC STA and license applications for existing and new V-band gateways to communicate with our planned 248-satellite constellation, including FM 1 and the Block 2 BB satellites.
We have entered into a space-based wireless connectivity agreement with AT&T to provide SpaceMobile Service to AT&T’s end users for use within the continental United States (excluding Alaska) and Hawaii and with Vodafone to provide SpaceMobile Services to Vodafone’s end users for use outside the United States. On October 8, 2025, we announced the signing of a definitive commercial agreement with Verizon to provide direct-to-cellular AST SpaceMobile service when needed for Verizon customers starting in 2026. On October 29, 2025, we entered into a ten-year commercial agreement with Saudi Telecom Company (“STC”) to enable direct-to-device satellite mobile connectivity across Saudi Arabia and key regional markets. We are also expanding our efforts on ground infrastructure development for commercial readiness and integrating our SpaceMobile Service into the MNOs’ infrastructure to initiate commercial services.
Beginning in the first quarter of 2024, we have recognized revenue from completion of performance obligations under agreements with prime contractors for the U.S. government and expect to continue to recognize revenue as and when we complete the remaining performance obligations under the agreements. Beginning in the fourth quarter of 2024, we began to generate revenue from the resale of gateway equipment, software and associated services to MNOs. We believe initiation of limited, noncontinuous SpaceMobile Service, as well as completing the milestones under the agreements with prime contractors for the U.S. government, will help to demonstrate the advantages of our satellite-based Cellular Broadband service in the market. These market activities will commence while we continue the development and testing of the next generation of commercial BB satellites.
Our next generation of commercial BB satellites, Block 2 BB satellites, featuring up to approximately 2,400 square feet communication array, the largest communication array to be ever deployed in a LEO for commercial use and more than three times bigger than the communication array of the Block 1 BB satellites in orbit today, are designed to deliver up to 10 times the bandwidth capacity of the Block
1 BB satellites. We believe the larger aperture array is expected to provide greater spectrum reuse, enhanced signal strength and increased capacity, thereby reducing the necessary number of satellites to achieve service coverage as compared to smaller apertures. In addition, when we introduce our own AST5000 Application Specific Integrated Circuit (“ASIC”) chip in the Block 2 BB satellites, we expect to achieve materially greater throughput capacity of up to 40 MHz per beam to support 120 Mbps peak data rates and up to 10,000 MHz of processing bandwidth per Block 2 BB satellite, require less power and offer a lower overall unit cost. We have reached key production milestones and have provided flight candidate ASIC units for assembly into the electronic board. Until we introduce our ASIC chip in Block 2 BB satellites, we expect to continue to manufacture and launch Block 2 BB satellites that are based on a Field Programmable Gate Arrays chip.
We have entered into launch agreements with multiple launch service providers which will allow us to accelerate a planned launch campaign during 2025 and 2026 to launch over 60 Block 2 BB satellites. We have continued to assemble and test the Block 2 BB satellites in accordance with our plan to meet this launch campaign to enable Continuous SpaceMobile Service coverage across key markets such as the United States, Europe, Japan and other strategic markets as well as to facilitate U.S. government applications. Continuous SpaceMobile Service means with respect to a particular geographical market close to 100% reliable persistent service across the geographical areas within certain latitudes and a substantially high degree of reliable persistent service across the remaining geographical areas outside the said latitudes. On October 12, 2025, we shipped BlueBird 6, our sixth BB to be launched into orbit. We are engaged with the launch provider to mutually determine the launch date of BlueBird 6. Our launch campaign of over 60 Block 2 BB satellites in 2025 through 2026 is planned at a cadence of one launch approximately every one to two months on average. The timing of shipment and launch of the Block 2 BB satellites are contingent on a number of factors including satisfactory and timely completion of the assembly and testing of the Block 2 BB satellites, regulatory approvals for the shipment and launch, availability of capital, readiness of the launch vehicle, logistics and other factors, many of which are beyond our control.
We are developing a phased satellite deployment plan and a corresponding commercial launch plan of the SpaceMobile Service based on targeted geographical markets to provide the SpaceMobile Service to the most commercially attractive MNO markets. This prioritization of coverage is designed to minimize the capital required to initiate and operate commercial service that generates cash flows from operating activities sooner. We expect that such a successful commercial service would enable us to attract additional capital to continue to assemble and launch additional BB satellites to expand our capacity and geographic coverage area, although there can be no assurance that such capital would be available on terms acceptable to us, or at all.
We are progressing according to our previously announced plan for the procurement and production of Block 2 BB satellites in alignment with our planned 2025 and 2026 launch cadence. Supplier agreements and orders are in place for the procurement of substantially all materials and components needed, in accordance with our production plan, for the assembly, integration and testing necessary to complete 40 fully integrated and assembled Block 2 BB satellites and fully assembled microns and phased array for 53 Block 2 BB satellites.
Our manufacturing, assembly, and testing strategy for Block 2 BB satellites includes continuous production and assembly of various components and sub systems for economies of scale, cost efficiencies, and unlocking capacity constraints, to build sufficient quantity of components and sub systems readily available on hand to be able to complete the final integration and testing of the required number of Block 2 BB satellites closer to the planned launch timelines. As of the date of this Quarterly Report, we have completed the microns for over 10 Block 2 BB satellites and completed acceptance and testing of substantially all components and sub systems for the integration and assembly of multiple Block 2 BB satellites. We will continue with manufacturing, assembly, integration and testing of the Block 2 BB satellites at our current capacity and once we complete our planned investments to increase the capacity to assemble, integrate, and test up to six Block 2 BB satellites per month in 2025, we plan to accelerate the manufacturing, assembly, integration and testing of the Block 2 BB satellites to meet our planned launches in 2025 and 2026.
We plan to achieve noncontinuous SpaceMobile Service in the selected, targeted geographical markets with the launch and operation of a total of 25 BB satellites (five Block 1 BB satellites and 20 Block 2 BB satellites). We believe the operation of a constellation of 25 BB satellites will enable us to potentially generate cash flows from operating activities to further support the buildup of the remaining constellation. We believe we can enable Continuous SpaceMobile Service coverage across key markets such as the United States, Europe, Japan and other strategic markets with the launch and operation of a total of approximately 45 to 60 BB satellites, and achieve Continuous SpaceMobile Service in all targeted geographical markets to meet our long term business goals with the launch and operation of a total of approximately 90 BB satellites. We anticipate launching and deploying additional satellites beyond the initial 90 satellites in order to enhance coverage and system capacity in response to incremental market demand. Continuous coverage is not expected to be available at all times in certain areas due to numerous factors, including number of active satellites in the region, latitude coverage range, and other factors. Our current plan is subject to numerous uncertainties, many of which are beyond our control, including satisfactory and timely completion of assembly and testing of the satellites, regulatory approvals, readiness of launch vehicles, availability of launch windows by the launch providers, logistics, our ability to raise additional capital for manufacturing of satellites and launch payments, proposed orbits and resulting satellite coverage, launch costs, ability to enter into agreements with MNOs and other factors. We may adopt a strategy for commercial launch of the SpaceMobile Service, including the nature and type of services offered and the geographic markets where we may launch such services, that may differ materially from our current plan.
We are an early stage company and, as such, we are subject to all of the risks associated with early stage companies. Please refer to Risk Factors contained in Part I, “Item 1A. Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2024 and in Part II, “Item 1A. Risk Factors” included in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 and in this Quarterly Report.
Recent Developments
Spectrum Usage Rights Transaction and Related Financing
In March 2025, we entered into agreements with Ligado for the Spectrum Usage Rights Transaction (defined below) which was approved by the Bankruptcy Court on June 23, 2025. The closing of the Spectrum Usage Rights Transaction is still subject to receipt of satisfactory regulatory approvals required for the proposed use of the spectrum, as well as other closing conditions.
On June 13, 2025, we announced a Term Sheet (defined below) among various parties including us, Ligado, Viasat, Inc. and Inmarsat Global Limited (“Inmarsat”). The Term Sheet provides that, among other things, as part of Ligado’s ongoing restructuring, Inmarsat will support us receiving long-term spectrum usage rights for 80 years or more with respect to up to 40 MHz of L-Band Mobile Satellite Service (“MSS”) spectrum in the United States and Canada held by Ligado, plus access to up to an additional 5 MHz in the 1670-1675 MHz Band in the United States. In addition, under the Term Sheet, Inmarsat has agreed to provide affirmative support for our planned regulatory applications with the FCC in the United States and Innovation, Science and Economic Development (“ISED”) in Canada seeking authority to operate a Non-Geostationary Orbit (“NGSO”) system within the L-Band mid-band spectrum in North America.
The Term Sheet supplements the definitive documents previously entered into between us and Ligado. Closing of the Ligado Transaction will be subject to receipt of satisfactory regulatory approvals required for the proposed use of the spectrum, as well as other closing conditions. The Term Sheet also provides that once Ligado’s Chapter 11 plan is confirmed and as long as the financial sponsors of Ligado provide a backstop commitment to Ligado that is acceptable to us, in support of a full refund of payments by Ligado in the event applicable regulatory approvals are not obtained and the closing does not occur, we have agreed that, with respect to the $550.0 million otherwise owed to Ligado in connection with the Spectrum Usage Rights Transaction, we will pay $420.0 million to Ligado for the benefit of Inmarsat on October 31, 2025, $100.0 million to Ligado for the benefit of Inmarsat on March 31, 2026 and $15.0 million to Ligado for the benefit of Inmarsat on receipt of specified regulatory approvals and the closing of the Spectrum Usage Rights Transaction. The remaining $15.0 million would be payable to Ligado at the closing. On or about September 29, 2025, the Bankruptcy Court confirmed Ligado’s Chapter 11 plan. We have made the first $420.0 million payment to Ligado for the benefit of Inmarsat, which was required to be made by October 31, 2025.
On July 15, 2025, SpectrumCo (defined below) entered into the Sound Point Credit Facility (defined below). The proceeds of the loan borrowed under the Sound Point Credit Facility will be used to support certain payment obligations owed to Ligado relating to the Spectrum Usage Rights Transaction. The Sound Point Credit Facility will be available to SpectrumCo upon the satisfaction of certain conditions, including receipt of all required regulatory and FCC approvals relating to the Spectrum Usage Rights Transaction. Refer to discussion under “Spectrum Usage Rights Transaction and Related Financing” in the “Liquidity and Capital Resources” section below for further details.
On October 31, 2025 (the “UBS Loan Facility Closing Date”), BackstopCo, LLC, a subsidiary of AST LLC (“BackstopCo”), entered into a loan agreement with UBS AG, Stamford Branch, as lender (the “UBS Loan Agreement”). The UBS Loan Agreement provides for a cash collateralized term loan facility (the “UBS Loan Facility”) in an aggregate principal amount of $420.0 million (“UBS Loan Amount”). The loan under the UBS Loan Facility bears interest at a floating rate equal to Term SOFR plus 2.0% per annum and matures on the earlier of (a) October 31, 2028 and (b) the date on which the UBS Loan Facility shall be terminated or accelerated as provided in the UBS Loan Agreement. The loan under the UBS Loan Facility can be prepaid in whole or in part, without penalty or premium, subject to payment of any applicable breakage costs. Refer to discussion under “Spectrum Usage Rights Transaction and Related Financing” in the “Liquidity and Capital Resources” section below for further details.
No assurance can be provided that the Ligado transaction will be consummated or that the related financing will be disbursed. The Ligado transaction and the disbursement of the related financing are subject to a number of conditions, including regulatory approval. In addition, Ligado’s ongoing bankruptcy proceedings present risks that the Ligado transaction will not be consummated. Moreover, even if the Ligado transaction is consummated, the benefits of the Ligado transaction will be subject to, among other things, integration, technology and regulatory risks. The Ligado transaction may significantly increase our indebtedness (though any debt incurred pursuant to the Sound Point Credit Facility will be non-recourse to us) and our annual required cash spend.
2036 2.00% Convertible Notes
In October 2025, we issued $1,150.0 million aggregate principal amount of convertible senior notes due 2036, including the exercise in full of the option granted to the initial purchasers to purchase up to $150.0 million aggregate principal amount of notes (the “2036 2.00% Convertible Notes”). The 2036 2.00% Convertible Notes are our senior, unsecured obligations and bear interest at a fixed rate of 2.00% per year, payable semiannually in arrears on January 15 and July 15 of each year, beginning on July 15, 2026. The 2036 2.00% Convertible Notes will mature on January 15, 2036, unless earlier repurchased, redeemed, or converted. The 2036 2.00% Convertible Notes are convertible at the option of the holders under certain circumstances. Upon conversion, we will pay or deliver, as the case may be, cash, shares of our Class A Common Stock or a combination of cash and shares of our Class A Common Stock, at our election. Refer to discussion under “2036 2.00% Convertible Notes” in the “Liquidity and Capital Resources” section below for further details.
Repurchase of Existing Convertible Notes
On January 27, 2025, the Company issued $460.0 million aggregate principal amount of convertible senior notes due 2032 (the “2032 4.25% Convertible Notes”), including the exercise in full of the option granted to the initial purchasers to purchase up to $60.0 million aggregate principal amount of notes. On October 29, 2025, we completed the repurchase of $50.0 million of the outstanding principal amount of the 2032 4.25% Convertible Notes in separate, privately negotiated repurchase transactions with a limited number of note holders and funded the repurchases with the net proceeds from a registered direct offering of 2,048,849 shares of our Class A Common Stock to the same note holders participating in the note repurchases. Refer to discussion under “2032 4.25% Convertible Notes” in the “Liquidity and Capital Resources” section below for further details.
October 2025 Equity Distribution Agreement
On October 7, 2025, we entered into a new Equity Distribution Agreement (the “October 2025 Sales Agreement” or “October 2025 ATM Equity Program”) with B. Riley Securities, Inc., Barclays Capital Inc., BofA Securities, Inc., Cantor Fitzgerald & Co., Deutsche Bank Securities Inc., Roth Capital Partners, LLC, Scotia Capital (USA) Inc., UBS Securities LLC, William Blair & Company, L.L.C and Yorkville Securities, LLC (collectively, the “agents”) to sell shares of the Class A Common Stock having an aggregate sale price of up to $800.0 million through an “at the market offering” program under which the agents act as sales agents. Refer to discussion under “October 2025 Equity Distribution Agreement” in the “Liquidity and Capital Resources” section below for further details.
Sale of January 2025 Capped Calls
On November 4, 2025, we sold the January 2025 Capped Calls (defined below) for net cash proceeds of approximately $74.5 million. No January 2025 Capped Calls were outstanding after the sale.
Impact of Global Macroeconomic Conditions and Geopolitical Conflicts
We continue to closely monitor the impact of macroeconomic conditions, including heightened inflation, changes to fiscal and monetary policies, higher interest rates, volatility in the capital markets, supply chain challenges, imposition of tariffs and geopolitical conflicts on all aspects of our business across geographies, including how it has and may continue to impact our operations, workforce, suppliers, and our ability to raise additional capital to fund operating and capital expenditures.
Changes in the prices of satellite materials due to inflation, supply chain challenges, tariffs, and other macroeconomic factors may affect our capital cost estimates to build and launch the satellite constellation and adversely affect our financial condition. The extent of impact of these factors on our business will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time. To date, these factors have not had a material impact to our technology development efforts or results of our operations. However, if macroeconomic conditions deteriorate or there are unforeseen developments, our results of operations and financial condition may be adversely affected.
We operate from multiple locations that include our corporate headquarters and over 200,000 square feet of AIT facilities in Texas where the final AIT is performed, engineering and development centers in the United States, India and Scotland, and engineering, development and production centers in Spain and Israel. Our operations in Israel constitute approximately 1% of our consolidated total assets and approximately 10% of our consolidated total operating expenses. To date, our operations in Israel have not been materially impacted by the geopolitical conflict in the Middle East. We currently do not expect potential interruptions to our operations in Israel to have a material impact on the Company.
Factors Affecting Comparability of Our Future Results of Operations to Our Historical Results of Operations
Our historical financial performance has been, and we expect our financial performance in the future to be, driven by our ability to execute on our strategy. We believe that our future results of operations could differ materially from the historical results of operations as we initiate the limited, noncontinuous SpaceMobile Service in certain targeted geographical markets, secure additional contracts with the U.S. government or its prime contractors for non-commercial use of our BB satellites, complete the development of the Block 2 BB satellites, increase our capacity and scale to manufacture BB satellites for the planned launches, launch the Block 2 BB satellites, enter into commercial arrangements with additional MNOs including contracts to sell gateway equipment, software and services, and close our proposed transaction with Ligado and related financing.
Components of Results of Operations
Revenues
To date, we have not generated any revenues from our SpaceMobile Service and do not expect to generate revenue until we launch the limited, noncontinuous SpaceMobile Service. During the three and nine months ended September 30, 2025, we recognized $14.7 million and $16.6 million of revenue, respectively, from performance obligations completed under agreements with prime contractors for U.S. government contracts and from resale of gateway equipment and software to MNOs. We expect to continue to recognize revenue under these agreements with prime contractors for U.S. government contracts and under gateway equipment and software resale agreements with MNOs as and when we complete the remaining performance obligations. We currently plan to initiate a limited, noncontinuous SpaceMobile Service in the United States.
Cost of Revenues
Cost of revenues primarily include costs of equipment and software for resale to MNOs.
Engineering Services Costs
Engineering services costs are charged to expense as incurred. Engineering services costs consist primarily of the cost of employees and consultants involved in designing and developing the BB satellites, managing the network and satellite operations centers, and indirectly supporting the assembly, integration and testing of the BB satellites, license cost, and general expenses related to AIT facilities and engineering development centers.
General and Administrative Costs
General and administrative costs include the costs of insurance, cost of non-engineering personnel and personnel related expenses, software licensing and subscriptions, office and facilities expenses, investor relations, and professional services, including public relations, accounting and legal fees.
Research and Development Costs
Research and development (“R&D”) costs are charged to expense as incurred. R&D costs consist principally of development activities in which we typically engage third-party vendors and are largely driven by the achievement of milestones that trigger payments and costs of materials and supplies consumed in the R&D activities. R&D costs are expected to fluctuate quarter over quarter depending on achievement of milestones.
Depreciation and Amortization
Depreciation and amortization expense includes depreciation expense related to property and equipment including the Block 1 BB satellites. We began depreciating the Block 1 BB satellites as of October 29, 2024 over their expected remaining useful lives of approximately 60 months.
Gain (Loss) on Remeasurement of Warrant Liabilities
Private Placement Warrants issued by us are accounted for as liability-classified instruments at their initial fair value on the date of issuance. They are remeasured on each balance sheet date and changes in the estimated fair value are recognized as an unrealized gain or loss in the unaudited condensed consolidated statements of operations.
Interest Expense
Interest expense consists of cash interest payments and amortization of debt issuance costs associated with our debt arrangements.
Interest Income
Interest income consists of interest earned on cash and cash equivalents held in interest bearing demand deposit accounts.
Other (Expense) Income, Net
Other (expense) income, net primarily consists of non-operating expense and income, including foreign exchange gains or losses.
Income Tax Expense
AST LLC is treated as a partnership for U.S. federal and state income tax purposes. Accordingly, all income, losses, and other tax attributes pass through to the members’ income tax returns, and no U.S. federal and state and local provision for income taxes has been recorded for AST LLC in the unaudited condensed consolidated financial statements. Certain foreign entities are taxed as corporations in the jurisdictions in which they operate, and accruals for such taxes are included in the unaudited condensed consolidated financial statements.
Noncontrolling Interest
Noncontrolling interest primarily represents the equity interest in AST LLC held by members other than us. We attribute a portion of net income or loss generated at AST LLC to the noncontrolling interest based on their ownership interests. As of September 30, 2025 and December 31, 2024, the noncontrolling interest in AST LLC was approximately 24.7% and 30.1%, respectively. The decrease in noncontrolling interest percentage during the nine months ended September 30, 2025 was a result of the issuance of Class A Common Stock due to the repurchase of a portion of the 2032 4.25% Convertible Notes, conversion of the 2034 Convertible Notes, the issuance of Class A Common Stock to acquire certain S-Band ITU priority rights, the issuance of Class A Common Stock under the 2024 Sales
Agreement and the May 2025 Sales Agreement, the redemption of AST LLC Common Units in exchange for Class A Common Stock, the exercise of options for Class A Common Stock and the vesting of restricted stock units.
Results of Operations
Three Months Ended September 30, 2025 Compared to the Three Months Ended September 30, 2024
We report our results of operations under one operating segment. The following table sets forth a summary of our unaudited condensed consolidated statements of operations for the three months ended September 30, 2025 and 2024 (in thousands), and the discussion that follows compares the three months ended September 30, 2025 to the three months ended September 30, 2024.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
September 30, |
|
|
|
(unaudited) |
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|
% Change |
Revenues |
$ |
14,739 |
|
|
$ |
1,100 |
|
|
$ |
13,639 |
|
|
* |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues (exclusive of items shown below) |
|
5,511 |
|
|
|
- |
|
|
|
5,511 |
|
|
* |
|
|
Engineering services costs |
|
40,836 |
|
|
|
21,828 |
|
|
|
19,008 |
|
|
|
87 |
|
|
General and administrative costs |
|
29,822 |
|
|
|
15,551 |
|
|
|
14,271 |
|
|
|
92 |
|
|
Research and development costs |
|
5,530 |
|
|
|
14,724 |
|
|
|
(9,194 |
) |
|
|
(62 |
) |
|
Depreciation and amortization |
|
12,716 |
|
|
|
14,543 |
|
|
|
(1,827 |
) |
|
|
(13 |
) |
|
Total operating expenses |
|
94,415 |
|
|
|
66,646 |
|
|
|
27,769 |
|
|
|
42 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (expense) income: |
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) on remeasurement of warrant liabilities |
|
2,938 |
|
|
|
(236,912 |
) |
|
|
239,850 |
|
|
* |
|
|
Interest expense |
|
(7,545 |
) |
|
|
(5,400 |
) |
|
|
(2,145 |
) |
|
|
40 |
|
|
Interest income |
|
12,239 |
|
|
|
4,014 |
|
|
|
8,225 |
|
|
* |
|
|
Other (expense) income, net |
|
(91,409 |
) |
|
|
1,410 |
|
|
|
(92,819 |
) |
|
* |
|
|
Total other (expense) income, net |
|
(83,777 |
) |
|
|
(236,888 |
) |
|
|
153,111 |
|
|
|
(65 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income tax expense |
|
(163,453 |
) |
|
|
(302,434 |
) |
|
|
138,981 |
|
|
|
(46 |
) |
|
Income tax expense |
|
(374 |
) |
|
|
(646 |
) |
|
|
272 |
|
|
|
(42 |
) |
|
Net loss before allocation to noncontrolling interest |
|
(163,827 |
) |
|
|
(303,080 |
) |
|
|
139,253 |
|
|
|
(46 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to noncontrolling interest |
|
(40,953 |
) |
|
|
(131,134 |
) |
|
|
90,181 |
|
|
|
(69 |
) |
|
Net loss attributable to common stockholders |
$ |
(122,874 |
) |
|
$ |
(171,946 |
) |
|
$ |
49,072 |
|
|
|
(29 |
) |
% |
* Percentage greater than or equal to 100 or not meaningful
Revenues
Revenues increased by $13.6 million to $14.7 million for the three months ended September 30, 2025 as compared to $1.1 million for the three months ended September 30, 2024. The increase was attributable to a $7.7 million increase in revenue from resale of gateway equipment and software to MNOs and a $5.9 million increase in revenue from completion of performance obligations under agreements with prime contractors for U.S. Government contracts and a satellite communications provider.
Cost of Revenues
Cost of revenues for the three months ended September 30, 2025 was attributable to cost of gateway equipment and software resale. We did not have gateway equipment and software resale for the three months ended September 30, 2024.
Engineering Services Costs
Total engineering services costs increased by $19.0 million, or 87%, to $40.8 million for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024. The increase was attributable to a $9.2 million increase in payroll and employee related costs driven by an increase in headcount and higher stock-based compensation expenses, a $5.3 million increase in consultants and professional fees, a $2.7 million increase in AIT facilities and activities and engineering development costs resulting from expansion of our global footprint, and a $1.8 million increase in travel and other expenses.
General and Administrative Costs
Total general and administrative costs increased by $14.3 million, or 92%, to $29.8 million for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024. The increase was attributable to a $6.5 million increase in legal costs largely driven by our Spectrum Usage Rights Transaction and related financing, our acquisition of certain S-Band ITU priority rights and our joint venture with Vodafone, a $3.9 million increase in payroll and employee related costs driven by an increase in headcount and higher stock-based compensation expenses, a $3.1 million increase in consultants and other professional services and a $0.8 million increase in other expense.
Research and Development Costs
Total R&D costs decreased by $9.2 million, or 62%, to $5.5 million for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024. The decrease in R&D costs was primarily attributable to the completion of the development of our ASIC chip.
Depreciation and Amortization
Total depreciation and amortization expense decreased by $1.8 million, or 13%, to $12.7 million for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024. The decrease was due to a lower depreciation expense recognized for the Block 1 BB satellites, which we launched in September 2024, as compared to the depreciation expense recognized in the comparative period for the BW3 test satellite which was fully depreciated as of August 30, 2024.
Gain (Loss) on Remeasurement of Warrant Liabilities
The fair value adjustment for Private Placement Warrants exercised during the quarter and outstanding at September 30, 2025 resulted in a gain of $2.9 million for the three months ended September 30, 2025 as compared to a loss of $236.9 million for the three months ended September 30, 2024. The gain in the current period was largely driven by a decrease in fair value of warrant liabilities upon exercises of the Private Placement Warrants from the prior quarter-end valuation date. The loss in the comparative period was largely driven by an increase in fair value of warrant liabilities for public warrants exercised and the Private Placement Warrants then outstanding.
Interest Expense
Interest expense increased by $2.1 million, or 40%, to $7.5 million for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024. The increase in interest expense was largely due to an increase in interest expense recognized on the 2032 4.25% Convertible Notes issued on January 27, 2025, the 2032 2.375% Convertible Notes issued on July 29, 2025 and the Trinity Capital Equipment Loan (defined below), partially offset by decreases in interest expense recognized on the 2034 Convertible Notes, which we converted into shares of our Class A Common Stock on January 22, 2025, and on a senior secured credit facility which we terminated on November 13, 2024.
Interest Income
Interest income was $12.2 million for the three months ended September 30, 2025 as compared to interest income of $4.0 million for the three months ended September 30, 2024. The increase was driven by a higher cash and cash equivalents balance held in interest bearing short-term money market funds.
Other (Expense) Income, Net
Other expense, net was $91.4 million for the three months ended September 30, 2025, as compared to other income, net of $1.4 million for three months ended September 30, 2024. The net change of $92.8 million was primarily due to a $84.3 million increase in induced conversion expense related to repurchases of our 2032 4.25% Convertible Notes, a $5.3 million increase in finance charges and other borrowing related fees, and a $3.2 million increase in other charges.
Income Tax Expense
The provision for income taxes was $(0.4) million and $(0.6) million for the three months ended September 30, 2025 and 2024, respectively. The consolidated effective tax rate for the three months ended September 30, 2025 and 2024 was (0.23%) and (0.21%), respectively. Refer to Note 11 Income Taxes in the accompanying notes to the unaudited condensed consolidated financial statements for further information.
Net Loss Attributable to Noncontrolling Interest
Net loss attributable to noncontrolling interest was $41.0 million for the three months ended September 30, 2025 as compared to $131.1 million for the three months ended September 30, 2024. This decrease in net loss attributable to noncontrolling interest was due to a decrease in noncontrolling interest’s ownership percentage in AST LLC, partially offset by an increase in net loss generated at AST LLC.
Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024
We report our results of operations under one operating segment. The following table sets forth a summary of our unaudited condensed consolidated statements of operations for the nine months ended September 30, 2025 and 2024 (in thousands), and the discussion that follows compares the nine months ended September 30, 2025 to the nine months ended September 30, 2024.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended
September 30, |
|
|
|
(unaudited) |
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|
% Change |
Revenues |
$ |
16,613 |
|
|
$ |
2,500 |
|
|
$ |
14,113 |
|
|
* |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues (exclusive of items shown below) |
|
5,803 |
|
|
|
- |
|
|
|
5,803 |
|
|
* |
|
|
Engineering services costs |
|
96,346 |
|
|
|
62,546 |
|
|
|
33,800 |
|
|
|
54 |
|
|
General and administrative costs |
|
75,448 |
|
|
|
45,677 |
|
|
|
29,771 |
|
|
|
65 |
|
|
Research and development costs |
|
19,058 |
|
|
|
23,435 |
|
|
|
(4,377 |
) |
|
|
(19 |
) |
|
Depreciation and amortization |
|
35,394 |
|
|
|
54,880 |
|
|
|
(19,486 |
) |
|
|
(36 |
) |
|
Total operating expenses |
|
232,049 |
|
|
|
186,538 |
|
|
|
45,511 |
|
|
|
24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (expense) income: |
|
|
|
|
|
|
|
|
|
|
|
|
Loss on remeasurement of warrant liabilities |
|
(65,300 |
) |
|
|
(284,839 |
) |
|
|
219,539 |
|
|
|
(77 |
) |
|
Interest expense |
|
(17,938 |
) |
|
|
(14,732 |
) |
|
|
(3,206 |
) |
|
|
22 |
|
|
Interest income |
|
28,452 |
|
|
|
8,886 |
|
|
|
19,566 |
|
|
* |
|
|
Other (expense) income, net |
|
(91,852 |
) |
|
|
1,661 |
|
|
|
(93,513 |
) |
|
* |
|
|
Total other (expense) income, net |
|
(146,638 |
) |
|
|
(289,024 |
) |
|
|
142,386 |
|
|
|
(49 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income tax expense |
|
(362,074 |
) |
|
|
(473,062 |
) |
|
|
110,988 |
|
|
|
(23 |
) |
|
Income tax expense |
|
(1,284 |
) |
|
|
(1,172 |
) |
|
|
(112 |
) |
|
|
10 |
|
|
Net loss before allocation to noncontrolling interest |
|
(363,358 |
) |
|
|
(474,234 |
) |
|
|
110,876 |
|
|
|
(23 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to noncontrolling interest |
|
(95,384 |
) |
|
|
(210,008 |
) |
|
|
114,624 |
|
|
|
(55 |
) |
|
Net loss attributable to common stockholders |
$ |
(267,974 |
) |
|
$ |
(264,226 |
) |
|
$ |
(3,748 |
) |
|
|
1 |
|
% |
* Percentage greater than or equal to 100 or not meaningful
Revenues
Revenues increased by $14.1 million to $16.6 million for the nine months ended September 30, 2025 as compared to $2.5 million for the nine months ended September 30, 2024. The increase in revenues was attributable to an $8.1 million increase in revenue from resale of gateway equipment and services to MNOs and a $6.0 million increase in revenue from completion of performance obligations under agreements with prime contractors for U.S. Government contracts and a satellite communications provider.
Cost of Revenues
Cost of revenues for the nine months ended September 30, 2025 was primarily attributable to costs of gateway equipment and software resale. We did not have gateway equipment and software resale for the nine months ended September 30, 2024.
Engineering Services Costs
Total engineering services costs increased by $33.8 million, or 54%, to $96.3 million for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024. The increase was attributable to a $17.6 million increase in payroll and employee related costs driven by an increase in headcount and higher stock-based compensation expenses, a $8.8 million increase in consultants and professional fees, a $4.9 million increase in AIT facilities and activities and engineering development costs resulting from the expansion of our global footprint, a $1.5 million increase in travel expenses, and a $1.0 million increase in other expenses.
General and Administrative Costs
Total general and administrative costs increased by $29.8 million, or 65%, to $75.4 million for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024. The increase was attributable to a $13.2 million increase in legal costs largely driven by our Spectrum Usage Rights Transaction and related financing, our acquisition of certain S-Band ITU priority rights and our joint venture with Vodafone, a $8.9 million increase in consultants and other professional services, a $6.1 million increase in payroll and
employee related costs driven by an increase in headcount and higher stock-based compensation expenses, a $1.1 million increase in office and facilities expenses and a $0.5 million increase in other expenses.
Research and Development Costs
Total R&D costs decreased by $4.4 million, or 19%, to $19.1 million for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024. The decrease in R&D costs was primarily attributable to the completion of the development of our ASIC chip.
Depreciation and Amortization
Total depreciation and amortization expense decreased by $19.5 million, or 36%, to $35.4 million for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024. The decrease was due to a lower depreciation expense recognized for the Block 1 BB satellites, which we launched in September 2024, as compared to the depreciation expense recognized in the comparative period for the BW3 test satellite, which was fully depreciated as of August 30, 2024.
Loss on Remeasurement of Warrant Liabilities
The fair value adjustment for Private Placement Warrants exercised during the year and outstanding at September 30, 2025 resulted in a loss of $65.3 million for the nine months ended September 30, 2025 as compared to a loss of $284.8 million for the nine months ended September 30, 2024. The loss in the current period was largely driven by an increase in fair value of warrant liabilities for Private Placement Warrants exercised and outstanding. The loss in the comparative period was largely driven by an increase in fair value of warrant liabilities for public warrants exercised and the Private Placement Warrants then outstanding.
Interest Expense
Interest expense increased by $3.2 million, or 22%, to $17.9 million for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024. The increase in interest expense was largely due to an increase in interest expense recognized on the 2032 4.25% Convertible Notes we issued on January 27, 2025, the 2032 2.375% Convertible Notes we issued on July 29, 2025 and the Trinity Capital Equipment Loan, partially offset by decreases in interest expense recognized on the 2034 Convertible Notes, which we converted into shares of our Class A Common Stock on January 22, 2025, and on a senior secured credit facility, which we terminated on November 13, 2024.
Interest Income
Interest income increased by $19.6 million to $28.5 million for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024. The increase was driven by a higher cash and cash equivalents balance held in interest bearing short-term money market funds.
Other (Expense) Income, Net
Other expense, net was $91.9 million for the nine months ended September 30, 2025, as compared to other income, net of $1.7 million for the nine months ended September 30, 2024. The $93.6 million increase in other expense, net was primarily due to a $84.3 million increase in induced conversion expense related to repurchases of our 2032 4.25% Convertible Notes, a $5.3 million increase in finance charges and other borrowing related fees, and a $4.0 million increase in other charges.
Income Tax Expense
The provision for income taxes was $(1.3) million and $(1.2) million for the nine months ended September 30, 2025 and 2024, respectively. The consolidated effective tax rate for the nine months ended September 30, 2025 and September 30, 2024 was (0.35%) and (0.25%), respectively. Refer to Note 11 Income Taxes in the accompanying notes to the unaudited condensed consolidated financial statements for further information.
Net Loss Attributable to Noncontrolling Interest
Net loss attributable to noncontrolling interest was $95.4 million for the nine months ended September 30, 2025 as compared to $210.0 million in the nine months ended September 30, 2024. This decrease in net loss attributable to noncontrolling interest was due to a decrease in noncontrolling interest’s ownership percentage in AST LLC, partially offset by an increase in net loss generated at AST LLC.
Liquidity and Capital Resources
Our current sources of liquidity are cash and cash equivalents on hand and access to the October 2025 ATM Equity Program which has $517.6 million remaining as of the date of this Quarterly Report. As of September 30, 2025, we had $1,220.1 million of cash and cash equivalents on hand, including $15.8 million of restricted cash. In October 2025, we raised additional net proceeds of approximately $277.4 million from the sale of shares of our Class A Common Stock under the October 2025 ATM Equity Program and approximately $1,129.2 million from the issuance of the 2036 2.00% Convertible Notes after deducting the initial purchasers’ discounts and commissions and the estimated offering expenses payable by us. We have made the first $420.0 million payment to Ligado for the benefit of Inmarsat in connection with the Spectrum Usage Rights Transaction, which was required to be made by October 31, 2025. To finance the $420.0 million payment made to Ligado, on October 31, 2025, BackstopCo entered into a loan agreement with UBS AG which provided for a cash collateralized UBS Loan Facility in an aggregate principal amount of $420.0 million and resulted in net proceeds of $416.5 million after deducting the estimated debt issuance costs payable by us. On November 4, 2025, we sold the January 2025 Capped Calls for net cash proceeds of approximately $74.5 million. We believe our existing cash and cash equivalents on hand will be sufficient to meet our anticipated cash requirements, including current working capital needs, planned operating expenses and capital expenditures for a period of the next 12 months from the date of this Quarterly Report.
The design, assembly, integration, testing and launch of satellites and related ground infrastructure is capital intensive. We continue to estimate the average capital costs, consisting of direct materials and launch costs, for a constellation of over 90 Block 2 BB satellites to be approximately $21.0 million to $23.0 million per satellite, with initial launches higher than that range and trending down over time as we optimize payloads and related launch terms and evaluate a multitude of launch opportunities. The estimated average capital cost per Block 2 BB satellite is based on securing future launch contracts with more favorable terms, diversifying our supply chain to include cost-effective and low-cost suppliers, cost reductions due to the benefits of economies of scale, continuous process improvements, and other factors. If we are unable to achieve the supply chain diversifications, cost reductions, process improvements, and secure favorable future launch contracts, the average capital cost of the Block 2 BB satellites will be higher and such variations could be material.
We believe we need to launch and operate a total of 25 BB satellites (five Block 1 BB satellites and 20 Block 2 BB satellites) in order to provide noncontinuous coverage to the most commercially attractive MNO markets and potentially generate cash flow from operating activities. We believe we can enable Continuous SpaceMobile Service coverage across key markets such as the United States, Europe, Japan and other strategic markets with the launch and operation of a total of approximately 45 to 60 BB satellites and additional worldwide strategic markets with approximately 90 BB satellites. We believe that we are fully funded for our costs necessary to manufacture and launch a constellation of approximately 90 BB satellites.
We evaluate our market, product and coverage plans based upon the attractiveness of certain markets, our technology, regulatory concerns and our access to capital and other resources. We believe we can develop satellite configurations that target delivering service to certain attractive markets without the necessity of building a constellation which covers the entire globe. This modularity of our satellite configuration enables us to alter the timing and size of our satellite roll out and provides us flexibility to dynamically change our market plans and capital requirements. As a result, we believe we have the ability to accelerate or slow down our business plan depending upon the availability of capital to support our strategies.
We plan to raise additional capital through the issuance of equity, equity-linked or debt securities (secured or unsecured), secured or unsecured loans or other debt facilities, and credit from government or financial institutions or commercial partners. Our ability to access the capital markets during this period of volatility may require us to modify our current expectations. There can be no assurance that additional funds will be available to us on favorable terms or at all. If we cannot raise additional funds when needed in the future, our financial condition, results of operations, business and prospects may be materially and adversely affected.
Spectrum Usage Rights Transaction and Related Financing
On January 5, 2025, AST LLC entered into a binding agreement (the “Strategic Collaboration Term Sheet”) with Ligado LLC under which we will receive long-term access to up to 45 MHz of lower mid-band spectrum in the United States and Canada for direct-to-device satellite applications. The Strategic Collaboration Term Sheet was entered into as part of the restructuring of Ligado LLC, which together with certain of its direct and indirect subsidiaries filed voluntary petitions for relief under Chapter 11 of United States Bankruptcy Code in the Bankruptcy Court.
On March 22, 2025, pursuant to the Strategic Collaboration Term Sheet, we, AST LLC, Spectrum USA I, LLC, a subsidiary of AST LLC (“SpectrumCo”) and Ligado entered into certain definitive agreements that, among other things, provided for (1) a $550.0 million contingent payment from us to Ligado, (2) SpectrumCo’s obligation to make spectrum access usage payments of at least $80.0 million annually (“L-band Annual Payment”) (with the option to pay the excess of the amount owed by Ligado to utilize the L-band spectrum in our Class A Common Stock for the first three years), and revenue share payments in exchange for the right to use the up to 40 MHz of the L-band spectrum, (3) our obligation to pay a usage fee amount due in cash (plus a 30% premium with respect to each such payment payable in our Class A Common Stock) (the “Crown Castle Annual Payment”) for the right to use the up to 5 MHz of the 1670-1675 MHz Spectrum, and (4) issuance of 4,714,226 penny warrants (“Penny Warrants”) to Ligado exercisable for shares of our Class A Common Stock at an exercise price per share equal to $0.01 per share, subject to a 12-month lock-up. The total of the L-band Annual Payment and the Crown Castle Annual Payment payable by us that we have the option to pay in shares of our Class A Common Stock aggregate to approximately $102.5 million.
On June 23, 2025, the Bankruptcy Court approved the transactions (the “Spectrum Usage Rights Transaction”) contemplated in the Strategic Collaboration Term Sheet. The closing of the Spectrum Usage Rights Transaction is subject to receipt of satisfactory regulatory approvals required for the proposed use of the spectrum, as well as other closing conditions.
Settlement Term Sheet
On June 13, 2025, we announced a Settlement Term Sheet (the “Term Sheet”) among various parties including us, Ligado, Viasat, Inc. and Inmarsat. Pursuant to the Term Sheet, once Ligado’s Chapter 11 plan is confirmed and as long as the financial sponsors of Ligado provide a backstop commitment to Ligado that is acceptable to us, in support of a full refund of payments by Ligado in the event applicable regulatory approvals are not obtained and the closing does not occur, we have agreed that, with respect to the $550.0 million otherwise owed to Ligado in connection with the Spectrum Usage Rights Transaction, we will pay $420.0 million to Ligado for the benefit of Inmarsat on October 31, 2025, $100.0 million to Ligado for the benefit of Inmarsat on March 31, 2026 and $15.0 million to Ligado for the benefit of Inmarsat on receipt of specified regulatory approvals and the closing of the Spectrum Usage Rights Transaction. The remaining $15.0 million would be paid to Ligado at closing. On or about September 29, 2025, the Bankruptcy Court confirmed Ligado’s Chapter 11 plan and on October 31, 2025 we made the first $420.0 million payment to Ligado for the benefit of Inmarsat. On October 31, 2025, BackstopCo entered into a loan agreement with UBS AG which provides for a cash collateralized UBS Loan Facility in an aggregate principal amount of $420.0 million. The loan under the UBS Loan Facility will bear interest at a floating rate equal to Term SOFR plus 2.0% per annum and will mature on the earlier of (a) October 31, 2028 and (b) the date on which the UBS Loan Facility shall be terminated or accelerated as provided in the UBS Loan Agreement. The loan under the UBS Loan Facility can be prepaid in whole or in part, without penalty or premium, subject to payment of any applicable breakage costs. Our obligation to make the L-band Annual Payment to Ligado began on June 23, 2025, and we have also commenced paying sublease spectrum amounts under the sublease with Crown Castle MM Holding LLC.
Sound Point Credit Facility
To support the consideration that may become payable under the definitive agreements related to the Spectrum Usage Rights Transaction described above, on July 15, 2025 (the “Credit Facility Closing Date”), SpectrumCo entered into a credit agreement (the “Credit Agreement”) with Sound Point Agency LLC, as administrative agent and collateral agent, and the lenders from time to time party thereto. The Credit Agreement provides for a non-recourse senior-secured delayed-draw term loan facility (“Sound Point Credit Facility”) in an aggregate principal amount of $550.0 million (“Loan Amount”). The Sound Point Credit Facility will be available to draw until October 5, 2026 with an option to extend for an additional 180 days (“Availability Period”) subject to payment of an additional 1% fee on the Loan Amount. The Sound Point Credit Facility will be available to SpectrumCo upon the satisfaction of certain conditions, including, among others, (i) entry into security documents and other related documents, (ii) receipt of all required regulatory and FCC approvals relating to the Spectrum Usage Rights Transaction, (iii) confirmation and occurrence of certain bankruptcy-related events pertaining to Ligado and (iv) certain other customary conditions to funding.
The Sound Point Credit Facility requires SpectrumCo to pay a commitment fee equal to 2% of the Loan Amount. The Sound Point Credit Facility also includes a ticking fee equal to 0.15% of the Loan Amount payable on a monthly basis from the Credit Facility Closing Date to the date the Sound Point Credit Facility is drawn. If SpectrumCo terminates the Sound Point Credit Facility prior to the end of the Availability Period, it will be required to pay a termination fee, payable in cash or shares of our Class A Common Stock at SpectrumCo’s option, ranging from 1% to 5% of the Loan Amount depending on when SpectrumCo terminates the Sound Point Credit Facility. The Sound Point Credit Facility also requires SpectrumCo to pay an upfront fee equal to 3% of the Loan Amount that will become payable when the Sound Point Credit Facility is drawn (and will act as a reduction to proceeds received) and some other fees that will become payable starting from the Credit Facility Closing Date.
Loans drawn under the Sound Point Credit Facility will bear interest, at SpectrumCo’s option, at either (i) Term SOFR plus an applicable margin of 8.0% per annum or (ii) an alternate base rate plus an applicable margin of 9.0% per annum. The scheduled maturity date will depend on the funding date, ranging from 48 to 60 months after funding, and any prepayments made prior to 30 months after the funding date will be subject to a premium (which decreases over time).
SpectrumCo’s obligations under the Sound Point Credit Facility will be secured by a first-priority lien over substantially all of its assets and by a pledge by AST LLC of its equity interests in SpectrumCo. SpectrumCo’s obligations will not be guaranteed by us or any of our subsidiaries and will not be secured by any assets of us or any of our subsidiaries, except to the extent stated herein, and the affirmative and negative covenants apply only to SpectrumCo and any guarantor. Neither we nor AST LLC will be liable as a borrower or guarantor or otherwise for any payments owing in connection with the Sound Point Credit Facility, and the lenders’ recourse to the assets of AST LLC will be limited to AST LLC’s equity interests both in SpectrumCo and in the newly formed subsidiary that will purchase and collect the receivables associated with the revenues generated from use of the L-band spectrum. The Sound Point Credit Facility contains customary affirmative and negative covenants, customary events of default (subject to grace periods, where applicable), and a minimum liquidity covenant (applicable to SpectrumCo at all times following the funding date) calculated by reference to payments owed to Ligado in connection with the Spectrum Usage Rights Transaction.
No assurance can be provided that the Ligado transaction will be consummated or that the related financing will be disbursed. The Ligado transaction and the disbursement of the related financing are subject to a number of conditions, including regulatory approval. In addition, Ligado’s ongoing bankruptcy proceedings present risks that the Ligado transaction will not be consummated. Moreover, even if the Ligado transaction is consummated, the benefits of the Ligado transaction will be subject to, among other things, integration, technology and regulatory risks. The Ligado transaction may significantly increase our indebtedness (though any debt incurred pursuant to the Sound Point Credit Facility will be non-recourse to us) and our annual required cash spend.
Global S-Band Spectrum Priority Rights Acquisition
On September 25, 2025, we acquired 100% of the issued and outstanding equity interests in EllioSat Ltd., whose wholly owned subsidiary, Sky and Space Global (UK) Limited, holds certain S-Band ITU priority rights to MSS frequencies in the range of 1980-2010 MHz and 2170-2200 MHz, for use in LEO (the “Transaction”). The Transaction has a total consideration of $64.5 million, to be paid in stock or cash at our election, with (i) $26.0 million paid at closing, (ii) $10.0 million to be paid on the second anniversary of closing, and (iii) $10.0 million to be paid on the third anniversary of closing. Additionally, we are obligated to pay $16.65 million upon the successful launch and effective in-service of a L/S satellite to be manufactured and $1.85 million upon continuous operation of such L/S satellite for a period of at least ninety (90) days.
Commitments
During the nine months ended September 30, 2025, the contractual minimum principal and interest payments required on all of our outstanding debt and operating leases described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 changed to reflect (i) the full conversion of the 2034 Convertible Notes into shares of our Class A Common Stock, (ii) the drawing of $32.5 million of the Trinity Capital Equipment Loan, (iii) the conversion of $360.0 million principal of the 2032 4.25% Convertible Notes into shares of our Class A Common Stock, and (iv) the issuance of $575.0 million 2032 2.375% Convertible Notes as described below. As of the date of this Quarterly Report, our contractual minimum principal and interest payments further changed to reflect: (i) the conversion of $50.0 million principal of the 2032 4.25% Convertible Notes into shares of our Class A Common Stock and (ii) the issuance of $1,150.0 million of 2036 2.00% Convertible Notes as described below.
As of September 30, 2025, we had contractual commitments with third parties in the aggregate amount of approximately $317.6 million related to procurement of BB satellite components, R&D programs, operational services, and capital improvements for meeting our goal of production of 40 fully integrated BB satellites and microns for 53 BB satellites. We have various rights to adjust the quantity of satellite components on the purchase orders and/or change the delivery timelines in accordance with our ongoing business plan. We also have rights to terminate these agreements in accordance with the terms of the agreement and potentially incur a termination fee in certain cases. In addition, we have launch agreements under which payments are due at scheduled milestones over the duration of the agreement, including certain milestones where payments are contingent and not due unless launch providers meet the milestones as defined in the agreement. As of September 30, 2025, the minimum commitments related to the future launches are approximately $90.0 - $120.0 million. We have contractual rights to cancel these launches or terminate the related agreements at any time by paying a termination fee, and in certain cases without incurring a termination fee, and any excess payments made to the launch providers for these launches will be refunded to us.
2024 Equity Distribution Agreement
On September 5, 2024, we entered into an Equity Distribution Agreement (the “2024 Sales Agreement” or “2024 ATM Equity Program”) with B. Riley Securities, Inc., Barclays Capital Inc., BofA Securities, Inc., Cantor Fitzgerald & Co., Deutsche Bank Securities Inc., Roth Capital Partners, LLC, Scotia Capital (USA) Inc. and UBS Securities LLC (collectively, the “agents”) to sell shares of the Class A Common Stock having an aggregate sale price of up to $400.0 million through an “at the market offering” program under which the agents acted as sales agents. The agents were entitled to total compensation at a commission rate of up to 3.0% of the gross sales price per share sold.
Under the 2024 Sales Agreement, we issued 2,918,407 shares of our Class A Common Stock during the nine months ended September 30, 2025 and received proceeds of approximately $74.8 million, net of commissions paid to the agents and transaction costs. During the nine months ended September 30, 2025, we paid commission of approximately $1.9 million to the agents with respect to such sales. There were no issuances during the three months ended September 30, 2025. Having utilized virtually the entire capacity of the 2024 ATM Equity Program, we terminated the 2024 ATM Equity Program on May 13, 2025 when we entered into the May 2025 ATM Equity Program (defined below). Proceeds from the sale of the Class A Common Stock under the 2024 Sales Agreement were used for general corporate purposes.
May 2025 Equity Distribution Agreement
On May 13, 2025, we entered into a new Equity Distribution Agreement (the “May 2025 Sales Agreement” or “May 2025 ATM Equity Program”) with B. Riley Securities, Inc., Barclays Capital Inc., BofA Securities, Inc., Cantor Fitzgerald & Co., Deutsche Bank Securities Inc., Roth Capital Partners, LLC, Scotia Capital (USA) Inc., UBS Securities LLC and William Blair & Company, L.L.C. (collectively, the “agents”) to sell shares of the Class A Common Stock having an aggregate sale price of up to $500.0 million through an “at the market offering” program under which the agents acted as sales agents. The agents were entitled to total compensation at a commission rate of up to 3.0% of the gross sales price per share sold.
Under the May 2025 Sales Agreement, we issued 2,476,311 and 13,605,359 shares of our Class A Common Stock during the three and nine months ended September 30, 2025, and received proceeds of approximately $111.3 million and approximately $488.7 million, net of commissions paid to the agents and transaction costs during the three and nine months ended September 30, 2025, respectively. During the three and nine months ended September 30, 2025, we paid commission of approximately $2.6 million and approximately $11.2 million to the agents with respect to such sales, respectively. Having utilized virtually the entire capacity of the May 2025 ATM Equity Program, we terminated the May 2025 ATM Equity Program on July 23, 2025. Proceeds from the sale of the Class A Common Stock under the May 2025 Sales Agreement were used for general corporate purposes.
October 2025 Equity Distribution Agreement
On October 7, 2025, the Company entered into a new Equity Distribution Agreement (the “October 2025 Sales Agreement” or “October 2025 ATM Equity Program”) with B. Riley Securities, Inc., Barclays Capital Inc., BofA Securities, Inc., Cantor Fitzgerald & Co., Deutsche Bank Securities Inc., Roth Capital Partners, LLC, Scotia Capital (USA) Inc., UBS Securities LLC, William Blair & Company, L.L.C and Yorkville Securities, LLC (collectively, the “agents”) to sell shares of the Class A Common Stock having an aggregate sale price of up to $800.0 million through an “at the market offering” program under which the agents act as sales agents. The agents are entitled to total compensation at a commission rate of up to 3.0% of the gross sales price per share sold. Proceeds from the sale of the Class A Common Stock under the October 2025 ATM Equity Program will be used for general corporate purposes.
Prosperity Term Loan
In December 2021, concurrent with the purchase of real property and certain equipment in Midland, Texas, AST & Science Texas, LLC (“AST Texas”) entered into a credit agreement with Lone Star State Bank of West Texas (“Lone Star”), succeeded by Prosperity Bank by merger to Lone Star, providing for a $5.0 million term loan secured by certain property (the “Term Loan Credit Agreement”). Borrowings under the term loan bear interest at a fixed rate equal to 4.20% per annum until December 7, 2026, and from December 8, 2026 until December 8, 2028 at a fixed rate per annum equal to 4.20% plus adjustment if the index rate (as defined in the Term Loan Credit Agreement) is greater than 4.20%, subject to a maximum interest rate of 4.90% per annum.
The Term Loan Credit Agreement contains certain customary events of default, and certain covenants that limit AST Texas’ ability to, among other things, create liens on collateral, consolidate, merge, sell, or otherwise dispose of all or substantially all of their assets; and enter into certain transactions with their affiliates. If AST Texas fails to perform its obligations under these and other covenants, or should any event of default occur, the term loan may be terminated and any outstanding borrowings, together with unpaid accrued interest, could be declared immediately due and payable, and the lender will be authorized to take possession of the collateral.
Prosperity Capital Equipment Loan
On August 14, 2023, we entered into a loan agreement with Lone Star, succeeded by Prosperity Bank by merger to Lone Star, as lender, providing for $15.0 million principal term loan commitment secured by certain real property fixtures and equipment in one of our Texas facilities (the “Lone Star Loan Agreement”). We drew the entire $15.0 million on September 19, 2023. The Lone Star Loan Agreement includes certain customary affirmative and negative covenants. As part of entering into the Master Equipment Financing Agreement (the “MEFA”) with Trinity Capital, Inc., we and Prosperity Bank amended the Lone Star Loan Agreement whereby Prosperity Bank released the lien on certain real property fixtures and equipment and we pledged a $15.0 million deposit in the Lone Star Bank Money Market Fund as a security for the loan.
Borrowings accrue interest at the Prime Rate plus 0.75%, subject to a ceiling rate. Interest payments are due and payable on a monthly basis. Interest payments began in September 2023 and principal payments began in April 2025. Principal repayments are due in 48 equal monthly installments until January 2029, the maturity date of the loan.
Trinity Capital Equipment Loan
On June 27, 2025, we entered into the MEFA with Trinity Capital, Inc., as agent (the “Agent”) and lender, and the other lenders party (the “Lenders”) thereto, providing for a conditional commitment to provide financing in the total amount of up to $100.0 million. On June 27, 2025, June 30, 2025 and September 26, 2025, we, the Agent and the Lenders executed Equipment Financing Schedules No. 1 (“Schedule No. 1”), No. 2 (“Schedule No. 2”) and No. 3 (“Schedule No. 3,” and together with Schedule No. 1, Schedule No. 2, and the MEFA, the “Agreements”) to the MEFA in the amount of $21.5 million (the “Draw 1 Total Cost”), $3.5 million (the “Draw 2 Total Cost”) and $7.5 million (the “Draw 3 Total Cost,” and together with Draw 1 Total Cost and Draw 2 Total Cost, the “Trinity Capital Equipment Loan”), respectively. The remaining amount of up to $67.5 million may be funded in one or more draws on or before June 30, 2027 (the “Termination Date”), subject to the satisfaction of various conditions.
For the five-year term of the initial draws, which began on July 1, 2025 for Schedule No. 1 and Schedule No. 2 and on October 1, 2025 for Schedule No. 3, we will make monthly payments of $478,719, $77,931 and $166,995, respectively, and an end of term payment in the amount of 9% of the Draw 1 Total Cost, the Draw 2 Total Cost and the Draw 3 Total Cost. Additionally, if the aggregate amount of draws funded through the Termination Date is less than $50.0 million, then we will pay the Agent for the benefit of the Lenders a non-utilization fee equal to 2.50% of the difference between $50.0 million and the aggregate amount of draws funded through the Termination Date. If the amounts under Schedule No. 1, Schedule No. 2 or Schedule No. 3 are voluntarily prepaid, we will pay a prepayment fee equal to 3% to 5% of the Draw 1 Total Cost, the Draw 2 Total Cost or the Draw 3 Total Cost, as applicable, depending on the timing of the prepayment.
Our obligations under the Agreements are secured by certain of our tangible assets. The MEFA contains customary affirmative and negative covenants. The MEFA also contains certain customary events of default that, if they occur, will be deemed to occur under all schedules.
Convertible Security Investment Agreement
Pursuant to the Convertible Security Investment Agreement which we entered into with certain investors, we issued subordinated convertible notes (“2034 Convertible Notes”) for an aggregate principal amount of $110.0 million on January 16, 2024 to AT&T, Google, and Vodafone, and for an aggregate principal amount of $35.0 million on May 23, 2024 to Verizon. The 2034 Convertible Notes bear interest at a rate of 5.50% per year, payable semi-annually in arrears on June 30 and December 30 of each year, beginning on June 30, 2024. We have the option to pay interest on the 2034 Convertible Notes in cash or in kind. We elected to pay interest on the 2034 Convertible Notes in kind on June 30, 2024, resulting in the principal amount of the 2034 Convertible Notes being increased by approximately $3.0 million. Interest will accrue on such increased principal amount in subsequent interest periods. We elected to pay interest on the 2034 Convertible Notes in cash on December 30, 2024. The net proceeds of the 2034 Convertible Notes were used for general corporate purposes.
On January 22, 2025, we notified the holders of the 2034 Convertible Notes that we exercised our option to require all of such notes to be converted into shares of our Class A Common Stock. In the first quarter of 2025, the then outstanding principal amount of the 2034 Convertible Notes, which included an additional interest accrual of approximately $0.5 million, was converted into 25,818,541 shares of our Class A Common Stock and our obligation under the 2034 Convertible Notes was automatically cancelled upon such share issuance.
2032 4.25% Convertible Notes
On January 27, 2025, we issued $460.0 million aggregate principal amount of convertible senior notes due 2032, including the exercise in full of the option granted to the initial purchasers to purchase up to $60.0 million aggregate principal amount of notes. The net proceeds of the 2032 4.25% Convertible Notes were $446.3 million after deducting the initial purchasers’ discounts and commissions and the estimated offering expenses payable by us. We used approximately $44.5 million of the net proceeds to pay the cost of the privately negotiated capped call transactions (the “January 2025 Capped Calls”). The remaining net proceeds were and are expected to continue to be used for working capital or other general corporate purposes.
On July 3, 2025, July 31, 2025 and October 29, 2025, we completed the repurchase of $225.0 million, $135.0 million and $50.0 million, respectively, of the outstanding principal amount of the 2032 4.25% Convertible Notes in separate, privately negotiated repurchase transactions with a limited number of note holders for an aggregate repurchase price of approximately $502.9 million, $346.9 million and $161.1 million, respectively, which included accrued and unpaid interest. The repurchase was funded with the net proceeds from a registered direct offering of 9,450,268, 5,775,635 and 2,048,849 shares, respectively, of our Class A Common Stock to the same note holders participating in the note repurchase.
The 2032 4.25% Convertible Notes are our senior, unsecured obligations and bear interest at a fixed rate of 4.25% per year, payable semiannually in arrears on March 1 and September 1 of each year, beginning on September 1, 2025. The 2032 4.25% Convertible Notes will mature on March 1, 2032, unless earlier repurchased, redeemed, or converted. The 2032 4.25% Convertible Notes are convertible at the option of the holders under certain circumstances. Upon conversion, we will pay or deliver, as the case may be, cash, shares of our Class A Common Stock or a combination of cash and shares of our Class A Common Stock, at our election.
2032 2.375% Convertible Notes
On July 29, 2025, we issued $575.0 million aggregate principal amount of convertible senior notes due 2032 (the “2032 2.375% Convertible Notes”), including the exercise in full of the option granted to the initial purchasers to purchase up to $75.0 million aggregate principal amount of notes. The 2032 2.375% Convertible Notes are our senior, unsecured obligations and bear interest at a fixed rate of 2.375% per year, payable semiannually in arrears on April 15 and October 15 of each year, beginning on April 15, 2026. The 2032 2.375% Convertible Notes will mature on October 15, 2032, unless earlier repurchased, redeemed, or converted. The 2032 2.375% Convertible Notes are convertible at the option of the holders under certain circumstances. Upon conversion, we will pay or deliver, as the case may be, cash, shares of our Class A Common Stock or a combination of cash and shares of our Class A Common Stock, at our election. The net proceeds of the 2032 2.375% Convertible Notes were $560.0 million after deducting the initial purchasers’ discounts and commissions and the estimated offering expenses payable by us. We used approximately $54.0 million of the net proceeds to pay the cost of the privately negotiated capped call transactions (the “July 2025 Capped Calls”). The remaining net proceeds were and are expected to continue to be used for working capital or other general corporate purposes.
2036 2.00% Convertible Notes
In October 2025, we issued $1,150.0 million aggregate principal amount of convertible senior notes due 2036, including the exercise in full of the option by the initial purchasers to purchase up to $150.0 million aggregate principal amount of the notes. The 2036 2.00% Convertible Notes are our senior, unsecured obligations and bear interest at a fixed rate of 2.00% per year, payable semiannually in arrears on January 15 and July 15 of each year, beginning on July 15, 2026. The 2036 2.00% Convertible Notes will mature on January 15, 2036, unless earlier repurchased, redeemed, or converted. The 2036 2.00% Convertible Notes are convertible at the option of the holders under certain circumstances. Upon conversion, we will pay or deliver, as the case may be, cash, shares of our Class A Common Stock or a combination of cash and shares of our Class A Common Stock, at our election. The net proceeds of the 2036 2.00% Convertible Notes were $1,129.2 million after deducting the initial purchasers’ discounts and commissions and the estimated offering expenses payable by us. Proceeds from the issuance of the 2036 2.00% Convertible Notes are expected to be used for general corporate purposes, including
without limitation funding the deployment of our worldwide constellation of satellites in anticipation of adding incremental strategic markets for our SpaceMobile Service.
Commercial Prepayments
On May 23, 2024, AST LLC and Verizon entered into a Memorandum of Understanding which provides, among other things, that Verizon will make a $45.0 million commercial payment for prepaid service revenue, creditable against future service revenue of AST LLC, subject to us receiving certain regulatory approvals for our SpaceMobile Service and entry into a definitive commercial agreement. On October 8, 2025, we announced the signing of a definitive commercial agreement with Verizon. The $45.0 million commercial payment is only contingent on us receiving certain regulatory approvals for our SpaceMobile Service.
On October 29, 2025, AST LLC entered into a ten-year commercial agreement with STC to enable direct-to-device satellite mobile connectivity across Saudi Arabia and key regional markets. As part of this agreement, STC has committed to a prepayment of $175.0 million during 2025 for future services and made a significant long-term commercial revenue commitment.
Cash Flows
Historical Cash Flows
The following table summarizes our sources and uses of cash for the nine months ended September 30, 2025 and 2024 (in thousands):
|
|
|
|
|
|
|
|
|
For the Nine Months ended
September 30, |
|
|
(unaudited) |
|
|
2025 |
|
|
2024 |
|
Cash, cash equivalents and restricted cash |
$ |
1,220,123 |
|
|
$ |
518,886 |
|
Cash used in operating activities |
|
(136,486 |
) |
|
|
(97,703 |
) |
Cash used in investing activities |
|
(697,006 |
) |
|
|
(92,095 |
) |
Cash provided by financing activities |
|
1,487,053 |
|
|
|
620,426 |
|
Operating activities
Cash used in operating activities was $136.5 million for the nine months ended September 30, 2025 as compared to cash used in operating activities of $97.7 million for the nine months ended September 30, 2024. The $38.8 million increase in cash used in operating activities was attributable to an increase of $35.4 million in expenses to support operations and an increase of approximately $3.4 million in working capital during the nine months ended September 30, 2025.
Investing activities
Cash used in investing activities was $697.0 million for the nine months ended September 30, 2025 as compared to cash used in investing activities of $92.1 million for the nine months ended September 30, 2024. The $604.9 million increase in cash used in investing activities was attributable to an increase of $576.9 million in purchases of property and equipment, including procurement of BB satellite materials, advance launch and BB satellite materials payments and other capital advances as well as an increase of $28.0 million in payments to acquire spectrum usage rights.
Financing activities
Cash provided by financing activities was $1,487.1 million for the nine months ended September 30, 2025 as compared to cash provided by financing activities of $620.4 million for the nine months ended September 30, 2024. The $866.7 million increase in cash provided by financing activities was attributable to an increase of $1,083.3 million in net proceeds raised from issuance of equity, including $849.8 million with respect to share issuance to repurchase the 2032 4.25% Convertible Notes and an increase of $891.3 million in net proceeds raised from issuance of debt, partially offset by an increase of $845.6 million in repayments of debt, including $842.8 million used to repurchase the 2032 4.25% Convertible Notes, a decrease of $153.3 million in proceeds from warrants exercises, an increase of $98.6 million used to purchase the January 2025 Capped Calls and the July 2025 Capped Calls and an increase of $10.4 million used to settle equity awards under our stock-based compensation plans.
Funding Requirements
We believe our existing cash and cash equivalents on hand will be sufficient to meet our anticipated cash requirements, including current working capital needs, planned operating expenses and capital expenditures, for the next 12 months from the date hereof. However, our forecast of the period of time through which our financial resources will be adequate to support operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. We have based this estimate on assumptions that may prove to be wrong, and we could expend capital resources sooner than we expect.
Future capital requirements will depend on many factors, including:
•Establishing and maintaining supply and manufacturing relationships with third parties that can provide adequate, in both amount and quality, products and services to support our satellite development;
•Technological or manufacturing difficulties, design issues or other unforeseen matters;
•Negotiation of launch agreements (including launch costs), launch delays or failures, deployment failures or in-orbit satellite failures;
•Seeking and obtaining necessary regulatory approvals;
•Timing of the launch of our satellites and subsequent initiation of service in various markets, delays in which will result in increased operating expenses;
•Addressing any competing technological and market developments;
•Ability to adjust our expenditures and contractual commitments based on capital availability;
•Ability to operate under the covenants in our debt agreements;
•Attracting, hiring, and retaining qualified personnel;
•Applicable regulatory approval and closing of our proposed transaction with Ligado and related financing; and
•Ability to realize the anticipated benefits of our proposed transaction with Ligado.
Until such time, if ever, as we can generate substantial revenues to support our cost structure, we expect to finance cash needs through the issuance of equity, equity-linked or debt securities (secured or unsecured), secured or unsecured loans or other debt facilities, and credit from government or financial institutions or commercial partners. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of stockholders will be, or could be, diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise funds through commercial agreements, or other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies and/or future revenue streams, or grant licenses on terms that may not be favorable to us and/or may reduce the value of our Common Stock. Also, our ability to raise necessary financing could be impacted by recent geopolitical events, higher interest rates, inflationary economic conditions and imposition of tariffs and their effects on the market conditions. If we are unable to raise additional funds through equity offerings, debt financings or commercial arrangements when needed, we may be required to delay, limit, reduce or terminate our commercialization efforts or grant rights to develop and market other services even if we would otherwise prefer to develop and market these services ourselves, or potentially discontinue operations.
Critical Accounting Policies
Our unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP). Preparation of the financial statements requires our management to make judgments, estimates and assumptions that impact the reported amount of revenue and expenses, assets and liabilities and the disclosure of contingent assets and liabilities. We consider an accounting judgment, estimate or assumption to be critical when (1) the estimate or assumption is complex in nature or requires a high degree of judgment and (2) the use of different judgments, estimates and assumptions could have a material impact on our unaudited condensed consolidated financial statements. For a discussion of our critical accounting policies, see “Critical Accounting Policies” in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024. There have been no material changes to our critical accounting policies since our Annual Report on Form 10-K for the year ended December 31, 2024.
Off-Balance Sheet Arrangements
On June 13, 2025, we announced the Term Sheet among various parties including us, Ligado, Viasat, Inc. and Inmarsat. Pursuant to the Term Sheet, as long as the financial sponsors of Ligado provide a backstop commitment to Ligado that is acceptable to us, in support of a full refund of payments by Ligado in the event applicable regulatory approvals are not obtained and the closing does not occur, we have agreed that, with respect to the $550.0 million otherwise owed to Ligado in connection with the Spectrum Usage Rights Transaction, we will pay $420.0 million to Ligado for the benefit of Inmarsat on October 31, 2025, $100.0 million to Ligado for the benefit of Inmarsat on March 31, 2026 and $15.0 million to Ligado for the benefit of Inmarsat on receipt of specified regulatory approvals and the closing of the Spectrum Usage Rights Transaction. The remaining $15.0 million would be payable to Ligado at the closing. The Company has made the $420.0 million payment to Ligado for the benefit of Inmarsat, which was required to be made by October 31, 2025. As of the date of this Quarterly Report, the remaining payments under the Term Sheet constitute an off-balance sheet commitment, as the related payment obligations have not been made or are subject to closing of the Spectrum Usage Rights Transaction and, therefore, are not recognized in our unaudited condensed consolidated financial statements.
On June 23, 2025, the Bankruptcy Court approved the Spectrum Usage Rights Transaction contemplated in the Strategic Collaboration Term Sheet. On or about September 29, 2025, the Bankruptcy Court confirmed Ligado’s Chapter 11 plan. The closing of the Spectrum Usage Rights Transaction is still subject to receipt of satisfactory regulatory approvals required for the proposed use of the spectrum, as well as other closing conditions. AST LLC’s obligation to make the Crown Castle Annual Payment and SpectrumCo’s obligation to make the L-band Annual Payment each began on June 23, 2025. Refer to discussion under “Spectrum Usage Rights Transaction and Related
Financing” in the “Liquidity and Capital Resources” section and Note 13 Spectrum Usage Rights Transaction and Related Financing for further details.