AST SpaceMobile (ASTS.US) released its fiscal 2026 second-quarter earnings after the market close on Monday. The report showed revenue of $31.5 million, a notable increase from the same period last year but below the consensus estimate of $34.98 million. However, the net loss attributable to common shareholders widened significantly to $230.9 million, compared to a $99.4 million loss in the prior year. The quarterly loss per share was $0.77, far exceeding the Wall Street forecast of a $0.28 loss, with overall results missing market expectations. The company is collaborating with partners such as Vodafone, Orange, Telefónica, Vodafone Ukraine, and Deutsche Telekom to advance network integration and testing in several European countries, while also expanding into Canada, Japan, and Saudi Arabia, subject to local regulatory approvals. In terms of constellation deployment, with the recent successful launch of BlueBird satellites 11, 12, and 13, the total number of spacecraft in orbit has reached 13. BlueBird satellites 14 through 16 are ready for shipment, and satellites 17 through 46 are at various stages of production and assembly.
During the earnings call, AST SpaceMobile management's core message was that the company is rapidly transitioning from a "technology validation phase" to a "mass manufacturing, global deployment, and commercial monetization phase." The company now has over 60 mobile network operator (MNO) partners, collectively covering more than 3 billion users globally. With 13 satellites in orbit, approximately 20,000 square feet of array aperture hardware, and about 50 gateways worldwide in various stages of completion, installation, or planning, the company has already deployed over 3,000 low-band cellular sites in the United States. It plans to complete the deployment of approximately 5,600 sites covering the entire U.S. by the end of the year. The target is to have approximately 45 BlueBird satellites in orbit by early 2027 and increase the satellite assembly pace to six per month. The commercialization and order book are simultaneously approaching an inflection point. Second-quarter revenue reached $31.5 million, more than doubling from the first quarter, driven primarily by commercial gateway deliveries and milestones from U.S. government contracts. The company reaffirmed its full-year 2026 revenue guidance of $150 million to $200 million, expecting sequential quarterly growth with a heavier weighting in the fourth quarter. More crucially, the company's cumulative contracted revenue, partnership agreements, and awarded U.S. government contracts represent a backlog of approximately $1.3 billion. This quarter, the company secured three new government contracts, with the near-term funded expected value for 2026-2027 exceeding $100 million. Management even forecasts that the government business could expand into a multi-billion dollar annual recurring growth opportunity starting in 2027.
As D2D satellites are becoming a new connectivity gateway beyond traditional terrestrial cellular networks, the company is evolving "Direct-to-Device" (D2D) from a single communications product into a replicable space-based infrastructure platform. This accelerates the integration of satellite-direct-to-phone technology as a new infrastructure gateway into global cellular networks. Beyond cellular broadband, the existing satellite architecture is also targeting new markets such as radar, secure communications, emergency response, the Internet of Things (IoT), AI edge computing, and sovereign satellite constellations. AI computing capabilities are planned to be integrated starting with the 47th and 48th satellites currently in production. Meanwhile, the company's new ASIC equipment has entered full-scale production, supporting up to 10 GHz of processing bandwidth per satellite—a nearly tenfold increase over the current Block 1 BlueBird satellites. The company also anticipates that AI-powered spectrum management could further enhance user experience by up to approximately ten times. Spectrum is becoming another key barrier to entry: the satellites can tune across approximately 1,150 MHz of spectrum in the low and mid-band ranges, with the U.S. moving towards an available spectrum scale of about 100 MHz.
The company's non-GAAP adjusted operating expenses for the second quarter were $119.1 million, with capital expenditures reaching approximately $610 million. Capital expenditures in the third quarter are expected to be between $350 million and $425 million. The company estimates the average per-satellite capital cost for a constellation of over 90 BlueBird satellites, including direct materials and launch costs, to be between $21 million and $23 million. In July, the company completed a financing of $1.15 billion in aggregate principal amount of 1.625% convertible senior notes due 2034. Through a capped call transaction, the effective conversion price was raised to $149.20 per share, with expected dilution of less than 2%. This indicates that the biggest investment variable for AST SpaceMobile has shifted from "whether the satellite internet technology exists" to "whether it can build, launch, and convert the massive TAM into sustainable cash flow according to the capital expenditure plan." The following is a transcript of the AST SpaceMobile earnings call, assisted by AI tools for translation.
Initial Remarks and Q2 Progress
Operator: Good day and thank you for standing by. Welcome to the AST SpaceMobile 2026 Second Quarter Business Update Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Maxwell Colbert, Investor Relations Manager. Please go ahead. Maxwell Colbert: Thank you, and good afternoon, everyone. Joining me on the call today are Abel Avellan, Chairman and CEO; Scott Wisniewski, President; and Andrew Johnson, CFO and Chief Legal Officer. Please refer to Slide 2 of the presentation, which contains our safe harbor statement. We may make certain forward-looking statements during this call. These statements are based on current expectations and assumptions and are subject to risks and uncertainties. Many factors could cause actual events to differ materially from the forward-looking statements in this call. Please refer to the "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2025, and other filings with the SEC. Following our opening remarks, we will first address pre-submitted questions from shareholders before moving to the Q&A session. For those new to our company and mission, there are roughly 6 billion phones globally, yet many of us still encounter coverage gaps in our lives. Additionally, billions lack cellular broadband access. The market size AST SpaceMobile is pursuing is immense, and the problem we solve is critical. AST SpaceMobile is building the first and only space-based cellular broadband network that can connect directly to everyday, unmodified smartphones, supported by our extensive IP and patent portfolio. I will now turn the call over to Abel Avellan.
Founder, Chairman, and CEO Abel Avellan
Thank you, Max. Our execution in 2026 continues to reinforce the belief we have held since founding AST SpaceMobile: the combination of differentiated technology, deep MNO partnerships, and scaled vertical integration positions us to define the future of D2D cellular broadband. Our space-based D2D network will be the first to utilize low and mid-band spectrum for broadband speeds natively supporting cellular applications. We designed the network architecture with existing MNOs from the start, not to replace them, but to extend and complement terrestrial networks into space. This allows for efficient integration and evolution with future 3GPP standards. We are building a new connectivity layer to create a seamless experience, not just to fill coverage gaps. Spectrum is another area of significant advantage. Combining low-band spectrum from our MNO partners with spectrum we control, we are building the broadest spectrum portfolio globally, with satellite technology capable of tuning across approximately 1,150 MHz of low and mid-band spectrum, and future C-band tunability. In the U.S., we are moving towards approximately 100 MHz of spectrum, creating a lead that is difficult to match. The combination of over 3,900 issued and pending patent claims, large phased arrays, and our spectrum access provides higher capacity, better coverage, and flexibility. This comprehensive spectrum strategy is correct, providing the technology to increase user capacity and deliver services to target markets with our MNO partners. D2D cellular broadband is establishing itself as a new incremental connectivity layer. Beyond D2D, our TAM is expanding rapidly into government communications and non-communications areas like radar, emergency response, IoT, AI edge computing, and other advanced connectivity solutions. These markets will benefit from our space-based D2D network. Recently, subject to government approvals, we were selected with Rakuten for the J-LEO project in Japan, with an expected total value of up to approximately $1 billion, representing non-dilutive, non-debt government capital. This continues our work with FirstNet, AT&T, and governments through partners like Vodafone and Rakuten. Our partner-first strategy makes us the preferred MNO partner for D2D. Our ecosystem now has over 60 MNO partners covering over 3 billion users, including AT&T, Verizon, Vodafone, Rakuten, STC Group, Bell Canada, and Telus. We are at the cusp of commercial deployment, preparing to launch SpaceMobile services to everyday smartphones. We have 13 spacecraft in orbit with approximately 20,000 square feet of aperture hardware, and about 50 gateways at various stages worldwide. In the U.S., we have deployed over 3,000 low-band cellular sites and expect to deploy the remaining sites to light up approximately 5,600 sites. For network deployment, BlueBird 14-16 are nearing completion of manufacturing and assembly. The launch of BlueBird 11-13 demonstrates our ability to rapidly manufacture, launch, and deploy the largest phased arrays in LEO. Our ASIC chips are in full production, expected to nearly double the 98.9 Mbps peak data rate achieved with Block 1 BlueBird satellites. The ASIC design supports up to 10 GHz of processing bandwidth per satellite, a nearly tenfold increase. We expect AI-enabled spectrum management to further enhance user experience by up to ten times. In manufacturing, we have progressed to BlueBird 46, with satellites at various production stages. We continue to rely on a 95% vertically integrated manufacturing strategy for speed and precision. We have over 500,000 square feet of manufacturing and operations space globally, with a goal of producing six fully assembled satellites per month. We recently announced plans to add 400,000 square feet of manufacturing space in Midland, Texas, to meet U.S. government and commercial demand. Upon completion, we expect over 1 million square feet of global manufacturing and operations space, with over 900,000 square feet in the U.S. Overall, AST SpaceMobile is executing across every key dimension. Our backlog has increased to approximately $1.3 billion, supported by our strong balance sheet of over $3.7 billion.
President and Chief Strategy Officer Scott Wisniewski
Thank you, Abel. Since our last update, AST SpaceMobile has made significant progress in commercialization. We are considered the preferred MNO partner in D2D, with over 60 MNO partners covering over 3 billion users. We are advancing network deployment across key markets with strategic partners, balancing the next batch of markets beyond the U.S., Canada, Europe, Japan, Saudi Arabia, and the U.S. government. We are actively working with over 20 MNOs covering more than 50 country markets. These efforts will be reflected in the delivery and deployment of approximately 50 gateways in 20 markets. In Europe, infrastructure is already being deployed. We recently announced network integration and testing activities with Vodafone, Orange, Telefonica, Vodafone Ukraine, and Deutsche Telekom. The regulatory environment supports our commercialization, with the U.S. granting full commercial service approval earlier this year and progress in the UK, Japan, Brazil, and other countries. Our MSS spectrum assets have been approved for commercial use in several countries, especially S-band outside the U.S. More spectrum means more capacity for users. For the U.S. government, we made significant progress in revenue and backlog this quarter, recognizing revenue from existing contracts and winning three new awards. Our partners view our in-orbit technology as unique, strategic, and innovative. We have signaled a trend from small R&D contracts to larger contracts and operational deployments. The three new contract awards have a near-term funded expected value of over $100 million for 2026 and 2027. The "Golden Dome" opportunity and "Arsenal of Freedom" initiative remain strong. Beyond D2D, we believe we can significantly expand our TAM using our unique platform. Each of these new end markets has the potential to become a multi-billion dollar annual revenue opportunity for AST SpaceMobile. In the government and defense market, we have early progress in non-communications applications like radar. Our satellites are uniquely positioned to provide secure communications to low-profile, low-power devices, including standard 3GPP devices and custom-designed handhelds, radios, wearables, and drones. We are also seeing opportunities for large national or regional bodies seeking resilient sovereign communication capabilities, like the J-LEO award. Federal emergency and backup communications form another market, evident from our work with FirstNet and Vodafone Ireland. IoT is an attractive market for both cellular and satellite operators. Finally, space-based AI edge computing is a key direction. We will add computing capabilities to satellites starting with the 47th and 48th. All these markets represent an expansion of our core D2D TAM. For Q2 revenue, we achieved over $30 million, more than doubling from Q1, driven by U.S. government contract milestones and commercial infrastructure business. We delivered 13 gateways to 7 customers on 5 continents. We reaffirm our full-year 2026 revenue guidance of $150 million to $200 million.
Executive Vice President, CFO, and Chief Legal Officer Andrew Johnson
Thank you, Scott. In Q2 2026, we focused on strengthening our capital position, executing on commercial goals, and expanding manufacturing. Q2 revenue was in line with our internal plan. We expect sequential revenue growth each quarter, with revenue from commercial gateway sales and U.S. government contracts. We are on track to achieve our full-year 2026 revenue guidance of $150 million to $200 million. BlueBird 14-16 are ready for shipment, and BlueBird 17-46 are at various production stages. Our manufacturing progress supports our deployment plan to have approximately 45 BlueBirds in orbit by early 2027. Our balance sheet was strengthened by the convertible debt issuance in July, enabling us to complete the full constellation of over 100 BlueBirds. Q2 adjusted operating expenses were $119.1 million, up from $91.2 million in Q1, in line with expectations. Q2 capital expenditures were approximately $610 million, including payments for launch contracts, BlueBird satellite costs, and facility expenses. For Q3 2026, we expect adjusted operating expenses, excluding cost of revenue, to be between $105 million and $115 million. For the full year 2026, we expect these expenses to average approximately $100 million per quarter. We expect Q3 capital expenditures of approximately $350 million to $425 million. We maintain our average per-satellite capital cost estimate of $21 million to $23 million for a constellation of over 90 BlueBirds. Q2 revenue was $31.5 million, driven by commercial gateway deliveries and U.S. government milestones. We expect to generate $150 million to $200 million in full-year 2026 revenue. Revenue will continue from gateway deliveries, U.S. government project milestones, MNO consulting services, and potentially initial commercial service revenue. Our balance sheet, as of June 30, 2026, on a pro forma basis including the $1.15 billion convertible notes issuance, shows cash, cash equivalents, and restricted cash of over $3.7 billion.
Q&A Session
Operator: Our first question is from David from New Jersey. He asks: When should investors expect meaningful government revenue, and can you detail the constellation's radar capabilities? Scott Wisniewski: Thank you, David. As we mentioned, we are making good progress on contracts, with over $100 million in awards in recent months. We see this opportunity scaling up starting in 2027, eventually becoming a multi-billion dollar recurring opportunity. Operator: Our next question is from Lydon from New Zealand. He asks: How does ASTS owning spectrum assets impact the company? Abel Avellan: Thank you, Lydon. Spectrum is like fuel for our business. The efficiency of using that fuel is important. The combination of our large phased arrays, IP, and access to both MNO and our own spectrum allows us to efficiently use this fuel and create new revenue streams for the government business. This expands our TAM into seven new applications, significantly scaling it. Owning spectrum is highly strategic. Operator: The next question is from Kevin from Vancouver. He asks: What demand drivers led to the massive 400,000 sq ft facility expansion in Texas, and what is the target monthly production rate for BlueBirds? Abel Avellan: Our current capacity is reaching 6 per month. We want to expand further to meet government and non-government demand. The new 400,000 sq ft space will bring our manufacturing footprint to nearly 1 million sq ft. We are investing to build larger satellites to support communications, radar, GPS, AI, cloud computing, and IoT. Operator: A question from Lydon from New Zealand: Does ASTS see other countries launching their own FirstNet or J-LEO projects supported by ASTS? Scott Wisniewski: Yes, we believe the J-LEO project validates how large nations view resilient, controllable infrastructure. We expect this trend to repeat multiple times in the coming years, creating a new layer of communications infrastructure that governments can control. Operator: Our first analyst question comes from Greg Pendy of Clear Street. Gregory Pendy: Can you share details on the Rakuten joint venture? What factors allowed you to advance to this stage? Abel Avellan: Thank you, Greg. We are the only platform that is proven and currently delivering broadband capability. Our architecture allows governments to keep data and infrastructure management on the ground. The long-standing relationship with Rakuten is also a key factor. Gregory Pendy: Can you give a sense of the government portion of the $1.3 billion backlog? Scott Wisniewski: The government business is a minority of the backlog, but it is the area where we see the most significant potential for near-term scaling. Operator: The next question comes from Mike Crawford of B. Riley Securities. Michael Crawford: How many of the first 46 BlueBirds have or are planned to have L-band or S-band capability? And how should we view the spectrum mix for the full 90-satellite constellation? Abel Avellan: We are producing at a rate of about 6 per month, progressing to Micron 46. We will start producing mid-band capabilities later this year, with launches for urban applications planned for early 2027. The current Microns use low-band systems. Michael Crawford: How would a potential U.S. MNO joint venture affect your existing agreements with AT&T and Verizon, and your lack of an agreement with T-Mobile? Scott Wisniewski: Our existing agreements are not affected. The joint venture potentially unlocks third and fourth customer opportunities for us in the U.S. We support it. Our network works for all operators, and we expect to serve all of them. Operator: The next question is from Colin Canfield of Cantor Fitzgerald. Colin Canfield: As we model 2027 revenue, with roughly $100-200 million from gateways, $100-200 million from the U.S. government, and $100 million from international governments, can you clarify how commercial service revenue will be recognized? What are you hearing from operators about generating commercial revenue before the full constellation is deployed? Scott Wisniewski: Operators want the service now. We are working hard to launch test services, scaling up, and then launching commercial service when we have a minimum of 45 satellites. When commercial service starts, commercial service revenue will begin. We see gateway revenue exceeding $100 million, and government revenue hopefully significantly exceeding the figures mentioned. Colin Canfield: Regarding international government opportunities, can you discuss the market structure in Germany and Europe, and how you view customer demand for multi-source supply chains? Scott Wisniewski: In the defense market, our unique in-orbit technology is attractive to many parties. We see international governments beginning to structure services around this. The J-LEO award is an example. Europe and NATO are worth watching. Our technology and partnerships with companies like Rakuten and Vodafone are key. Operator: The next question comes from Michael Funk of Bank of America. Michael Funk: How many launches have you contracted for the remainder of 2026 and 2027, and how many satellites can each vehicle carry? Scott Wisniewski: We have booked 10 launches with two different providers, targeting a pace of approximately one launch every one to two months. Regarding Blue Origin, we are sorry for the May incident, but they have made progress and are targeting a return to flight this year. We are not dependent on that. We believe we can achieve the 45-satellite target by early 2027 through a mix of launches. Michael Funk: What is your current per-satellite manufacturing cost, and how do you expect it to change? Andrew Johnson: The cost, including launch and direct labor, is consistently between $21 million and $23 million per satellite. This is the average over the lifecycle of the constellation. We are looking for ways to lower costs. Operator: The next question is from Chris Schoell of UBS. Christopher Schoell: You mentioned expanded TAM in AI edge computing, federal emergency communications, and IoT. What needs to be done operationally to enter these markets, and what is the timeline? What are the funding needs for these areas? Abel Avellan: These opportunities are built on our existing architecture, leveraging our power generation and antenna gain. For AI computing, we will start adding capabilities to satellites from the 47th and 48th. IoT, radar, and emergency communications are already part of our existing architecture. Christopher Schoell: You mentioned moving towards 100 MHz in the U.S. and 60 MHz globally. Can you clarify how much you can use now and how you can access additional spectrum? Abel Avellan: Our satellites can tune across nearly 1,200 MHz of spectrum. The 100 MHz in the U.S. comes from our Ligado spectrum and MNO spectrum. Internationally, we are working country by country. Operator: The next question is from Louie DiPalma of William Blair. Louie DiPalma: In previous calls, you mentioned nearly $1 billion in revenue for 2027. How should we model next year and beyond, given the $1.3 billion backlog? Scott Wisniewski: Our target of nearly $1 billion in revenue for the first full year of commercial service remains. For next year, government business could contribute up to about half of that, with infrastructure revenue similar to this year, and commercial revenue ramping up. The question is when we start commercial service. Louie DiPalma: When can consumers test your network? What percentage of the day would a consumer have a satellite overhead with about 25 satellites? Scott Wisniewski: We are targeting late 2026 for consumer readiness. We will respect our partners' announcements. Regarding coverage, 25 satellites could provide connectivity for about half the day. Operator: The next question is from Bryan Kraft of Deutsche Bank. Bryan Kraft: On the proposed joint venture, how do you expect to work with it, and would the 50/50 revenue split be the model? Are you in discussions with T-Mobile or Deutsche Telekom? Abel Avellan: We expect to work with all U.S. operators. We plan to maintain our existing contracts and expand our relationships with all companies through the joint venture and direct partnerships. Operator: The next question is from Chris Quilty of Quilty Analytics. Christopher Quilty: Is the upper C-band already in your current ASIC reference design, or will you need a second chip? Abel Avellan: C-band is part of our ASIC architecture. We are working on a third-generation chip that includes L-band, MSS, mid-band, and C-band. Christopher Quilty: Will you need different satellite designs for different bands? Abel Avellan: We will have different phased arrays for each spectrum block. Christopher Quilty: For the government radar application, is it active or passive radar, and whose spectrum is used? Abel Avellan: The radar application in the U.S. uses government spectrum. It leverages our large phased array and high sensitivity. Christopher Quilty: Is L-band already designed for it? Abel Avellan: Our primary radar application is in the lower bands. Operator: The next question is from Scott Searle of ROTH Capital. Scott Searle: On the J-LEO opportunity, can you discuss the commonality with the existing system and the capital required from AST? How many other similar opportunities are in the pipeline? Abel Avellan: The satellites for Japan are essentially identical to the rest of the constellation. Approximately half of the capital for these satellites is covered by non-dilutive, non-debt capital. Scott Searle: Can you provide details on other opportunities in the pipeline? Scott Wisniewski: We are in discussions with other parties. We believe that any G20 country would want this kind of resilient, controllable capability. We expect to see many similar projects. Operator: This concludes our Q&A session. I will now turn the call over to Max Colbert for closing remarks. Maxwell Colbert: Thank you, operator. Thank you to all shareholders and analysts for joining. We appreciate it. Have a great rest of the week. Operator: This concludes today's conference call. You may now disconnect.
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