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

[00:00:06] Speaker A: This is the AST SpaceMobile Podcast. It will just basically come to your phone and be seamless regardless of where you are. We don't want the user even to know that it's connected by satellite. Listen, the opportunity that we have is very, very, very large.
[00:00:28] Speaker B: Everyone, good evening. Thanks for joining. Uh, I figured I'd do a space after that very bullish Q4 update. Um, there were some, obviously a few, you know, cons or disappointments, uh, in terms of timing, but then beyond that, it was an unbelievably bullish call. And so I thought it would be good to just have a, a brief space, hopefully brief, to just go through some of the highlights and then talk about, you know, what's ahead. But I went through the, you know, I listened to the call. I also went through the transcript and quickly reviewed the 10-K and just wanted to talk about a few of the highlights first. And so, and while I'm doing this, if folks have questions, feel free to comment on the space and I'll try to go through those at the end. But Yeah, this evening it was a very bullish call. This was the first time where it felt like, you know, the company obviously is now in the revenue generating stage. And unlike previous calls where there was always this idea of a business that was being built and revenues being delivered, but it was always something that was on the come and you kind of had to have faith in it. This quarter there was significant revenues and obviously, you know, for 2025 financial performance was great. And then there was the ability to discuss guidance for 2026 and then also, you know, providing some color around goals for 2027, which was great. And then beyond that, even some discussion of end of the decade you know, some color around what revenues could be. There was also talk about margins and, you know, a whole host of things, which I'll go into in a bit. But now we're at this part of inflection where things are tangible. You know, you have the business that's now, they're selling products, which is, you know, the gateways, consulting services. And then on top of that, you've got Government revenue, which is not dependent on the full deployment of the constellation, but is more coming in piecemeal as each satellite gets launched. And then after that, you're going to have these government awards that if they win, some of them could become programs of record, which then you're talking about billions of dollars over multiple years. And then commercial service getting turned on When the constellation is at a point where some type of continuous service can be provided to customers. And there the company talked about the idea of commercial service being dwarfing government, the government opportunity, and it was characterized as multiples of billions of dollars perhaps by the end of this decade. And so the end of this decade, you know, it seems far off, but it actually isn't, you know, that's 4 years from now. So, so yeah, I'll just go through some of the details, you know, Q4 performance, you know, the company hit $71 million of revenue, which is at the top end of the range, $50 to $75 million that they provided for second half of 2025. And so this, that $71 million of revenue, from what I understand, you know, the company was hoping to come in above $75, but then due to timing, the government shutdown and perhaps other factors, they delivered great performance, but they weren't able to top it, top 2025, which I think one of the key things that I thought was smart of management is that they, I think it was Scott was mentioning how for the next, until they really roll out commercial service where that, you know, you're serving consumers and you've got recurring monthly subscription revenues where it's a lot easier to predict. What management was saying is that the way to look at their business, at least for the near term, which is 2026 and perhaps part of 2027, you should be looking at their guidance for a whole year, you know, full-year revenues versus trying to triangulate to what each quarter with specificity is going to be. Because they're, you know, the timing of this stuff and when they deploy things and when they get awards and things like that, it's kind of hard to predict. And so I thought it was smart of them to get people off this idea that, you know, we're going to be managing quarter to quarter, but more so, you know, we have goals for the entire year and this is the range and we obviously are to some extent are being conservative and we expect to hopefully outperform these goals. And so that was good color. But yeah, so $71 million of revenue. The way that was characterized is that government was a significant contributor. At least as of 2025, they had 10 active contracts and then I think with the most recent award, that's more like 11 active contracts. And so at least for the near term, as Scott had mentioned, and he had talked about this, I think at UBS, how this coming 2026 was going to be government revenue dominated. And he said, you know, we're talking about low hundreds of millions. And so the fact that they guided to $150 to $200 million fit that very nicely. But yeah, so this quarter, you know, they, as I said before, they delivered $71 million of revenue. They also talked about how pro forma, because of the convertible debt that they raised, and they also tapped the ATM, at least pro forma, they are now at $3.9 billion of cash, which is quite a bit. And so they explicitly said that they didn't need to raise additional funding, although they didn't say, you know, that was in particular for convertible debt, which is for the company, it's been a great tool for them to raise money. And because the stock is so volatile, you're able to monetize the volatility by executing a convert and you get paid for that. And so it lowers your cost of capital in doing so. And so they were, Andy was very explicit about not needing to raise additional funding for the near and medium term, although they do have, as of I don't know if it was like as of the end of 2025 or currently, there's $80 million of capacity left on the ATM. And so they could obviously tap that over the next few weeks or months if they decide to. But that said, they're not looking to raise any major funding for the near to medium term. And so what does that mean? You know, my guess is at least for the next 2, 3, 4 months, If not more, but but yeah, for anyone I guess concerned about you know any transactions to raise additional funding, that's that's off the table for now. Let's see. So with the three point nine billion of cash, they they repeated you know that fully funds them for a hundred satellites. But then the additional amount of money that they raise will give them the ability to accelerate the business, taking advantage of new. AI opportunities, and they talked very specifically about deploying and monetizing the spectrum bands that they have. And so I think my guess is that the company— I know there's some theories that people think perhaps the company might go try to acquire Iridium or one of these other companies, but if they're saying they don't need to raise additional funding for the near to medium term, and then they're potentially looking at monetizing spectrum, I don't think that's probably M&A. I guess they could go issue stock and some cash to go buy a company, but maybe they're going to opportunistically add spectrum perhaps through partnerships or if they, because I think Iridium did mention potential partnerships and I haven't gone into detail about why doing something with Iridium would be difficult because they only have one band of spectrum, so they don't have dedicated uplink and downlink. And so anybody using that spectrum would have to have satellite technology that could utilize, instead of full duplex, having an uplink, dedicated uplink and dedicated downlink, you would actually have to utilize time-divided technology, which means for a period of time you send data up and then you wait and you get data coming down, but you basically share the same channel. So it adds quite a bit of complication. And so I think that's why, at least in my opinion, I don't think Iridium is optimal, but I mean, you could still make it work if you, I guess, if you paired that band with another spectrum band and made that band dedicated uplink and another spectrum band dedicated downlink or vice versa. But anyway, they did talk about monetizing their spectrum bands. And so That to me sounds like, and Scott didn't, or Abel talked about, because there was a question about deploying the mid-band constellation, when are you going to start building those birds? And Abel said that the expectation is that they would start production at the end of this year. And so my guess is, and it sounded like they did spend quite a bit of CapEx on procuring materials for many more satellites. And so I would think that they're going to try to pull forward development of mid-band Bluebird spectrums or mid-band Bluebird satellites. It's getting late, so I'm having a bit of a brain fart, but yeah, so it sounds like the additional capital that they raised, they also talked about procuring additional square footage for production capacity in Florida. The other thing, or sorry, in Texas, the reason why I mentioned Florida is that in the 10-K, for those that are interested, they actually break down the square footage by location. So they talk about Israel, India, Florida, Texas, and they talk about what exactly they're doing in Spain as well, what exactly they're doing at each facility. So if you do get a chance, definitely look at the 10-K. Maybe I'll put a tweet out before I go to bed of what exactly is going on in each of the facilities. But that was nice that they gave that additional disclosure. The other cool thing was that Scott disclosed that they sold 15 commercial gateways for 2025, and they were delivered to M&O partners across or sorry, they were delivered to 9 different M&O customers, or yeah, 9 different customers across 5 continents. And so that shows like, you know, the diversity, but also the fact that services is being geared up to be deployed across, you know, very broad geographic ranges. And so I think that was really nice insight because as Scott had mentioned, you know, you should start seeing Gateway sales ahead of commercial activation for service. And so that was nice color. In terms of guidance, the company provided 2026 expected revenue to at least double the high end of 2025. And so they gave a range of $150 to $200 million. And just to give you a sense, the Street had, let's see, 2026 at $233 million. So obviously $150 to $200 seems quite conservative versus 2026. And I know there were a number of people on Twitter asking about that. Doesn't that seem a bit too conservative? And yeah, I agree. I think it is conservative. But here, now that the company is revenue generating, they're now taking from good public companies where you provide some level of realistic to conservative guidance and you set people up to then beat and raise over the coming year. And so I think by providing $150 to $200, they've given an achievable baseline and hopefully they'll outperform that. Some of the color that they gave in regards to that number is that over half of it is already contracted, and so they feel very good about delivering that. and then de-risking that guidance. And then they believe they can beat that guidance depending on government milestones and contract awards that are going to come in over 2026. But they did provide some color as to what they expected for revenue, the makeup, which would be additional Gateway deliveries in anticipation of Commercial Service government milestones related to you know the ten or I guess now eleven contracts that they've got working with the various departments of government. You've got M and O consulting fees, and then of course commercial revenues, which I think some of the the revenue commitments they have start to kick in beyond you know in in lieu of Commercial Service. But that but that revenue starts kicking in, I believe, you know, at some point in 2026. The cool thing that got the people, that got, you know, folks interested and, you know, the stock popped, it was the fact that they did talk about, and I know some people have tweeted like, you know, it's a billion dollar, they guided to a billion dollars and it's a base case. I wouldn't go as far as saying it's base case. They, I think it was characterized as 2027, They could see annual revenue approaching one billion. So I don't think that's the base case, but that's something that they feel really good about. And so, you know, can they get to a billion or can they go beyond a billion? I think they're probably, you know, and of course this is dependent on the the constellation being up and running and commercial service launching. And and of course we know there's there's always going to be some level of delay, so you got to bake that in. But but they feel pretty good about a billion dollars. And and so. like I said before, this is the first time where the company is talking about a specific, in a very large number in a given year of revenue. And having, you know, when I listened to Scott and Abel, they felt really good about it. And so that was quite bullish. The makeup of that is primarily commercial and government service. And then there potentially could be upside from government contracts. So yeah, that billion dollars, I think I wouldn't say it's a base case, it's a goal, but then there is the potential to beat that. And so just for comparison, I know somebody posted this as well, but for 2027, the Street has projections. This is based off of 7 analyst estimates. The Street is projecting $726 million of revenue. So, you know, the company's a little light on 2026, but then the company, if you believe billion dollars is the right level, let's just, you know, reach level, let's say maybe, you know, conservatively $900 million, that's significantly higher than what they have for 2027. And so I think for the Street, when they tomorrow, when they update their models, you know, people will have to reduce 2026, but then 2027, you know, they may need to raise that estimate. And so let's see here. So, you know, Scott did talk about commercial in 2027 dwarfing government revenues. And so, you know, in 2027, that's when they expect commercial revenues to really start kicking in. And the cool thing too today is that they updated the total contracted revenue commitment. So I think this is a cool KPI that they provide. In Q3, they said, you know, they had reached about $1 billion of contracted revenue commitments from partners, and then this quarter they talked about $1.2 billion. And so I guess you could kind of look at it as bookings in some way, but obviously the timing of when that revenue gets recognized is unclear, although You know, Scott did talk about the fact that the contribution is probably going to be anywhere between $100 to $300 million a year. And so, you know, if you say it's $300 million, well, let's just say $1.2 billion over 5 years. Maybe that's kind of the way to look at it. But contracted revenue commitments, I think for those, you know, there are minimums, right? And so you could, or you would, and the company alluded to this. They think that that number is too low and that the numbers are going to come in significantly higher. And again, this goes back to the whole tone of the call was very bullish. I mean, for those that have followed the company for 5+ years, I don't think I've heard them— well, I take that back. I think it was like Q3 2022, No, Q. Yeah, Q3 2024. That was a very bullish call. But this call was is the bit the most bullish call that they've had, right? Because they're talking about you know the contracted revenues how that would be a disappointing number 1.2 billion. It should come well north of that. And then they they talked about this idea. Scott talked about this. Where by the end of the decade, so, you know, this is, I think, in response to $1 billion and one of the analysts said, well, you know, if you're going to have, if you're going to get, you know, go to multiples of that, let's just say 1 point, let's say take a range of $1.5 to $3 billion for 2028. Like, does that make sense? And then Scott pushed back and said, well, you know, I'm not, I didn't, I'm not saying multiples. in the following year of 2028. But then, you know, we're not putting out a 2028 number, but he was saying by the end of the decade, we should be multiples of $1 billion. And so, and by that he meant, you know, by that point we're going to have a lot more subscriber uptake and extension of markets. And I think when he meant extension of markets, that meant, you know, turning on additional MNOs in different regions. And so when you turn those on, obviously, There's this whole, you know, a bunch of subscribers that come with that. And then, you know, revenue, obviously, would you turn on a few hundred thousand subscribers and maybe you get, I don't know, 10, 15% penetration and, you know, you assume whatever monthly fees those folks are paying, that's a pretty big deal. And so yeah, that was very bullish. Multiples of revenue upside by the end of the decade relative to 2027, which is $1 billion. So that sounds good. Moving on, there was some color provided today on the margin story. And so one of the analysts had asked, you know, for the service revenue that you guys recognized in this quarter, you know, there's approximately a 90% gross margin on that. And so they were asking if this was a good indicator and Scott was like, yes, this is a, this is, you know, 90% is what you would expect for the business long-term. They get a lot of significant, you know, they get significant operating leverage due to the highly high fixed cost base that they have, which is obviously the majority of the fixed costs going forward is going to be building and launching satellites. But once they're up there, then you, you know, it's all margin basically, right? And so even though the company has been on this like hiring spree, the quarterly operating expenses aren't that bad. Like they're, I think next quarter they're projecting like $90 million of operating expense. And a lot of that is due to, you know, additional hiring. Now obviously like CapEx is pretty high, like Q1 this coming quarter, they're projecting CapEx to be $350 to $425 million. And that's mostly tied to launch payments, which was a majority of the CapEx spend last quarter as well. But going forward, like once you've already paid for production, you know, materials and you've put together the Bluebirds and you go launch them, yeah, when you turn on service, whether that's to customer, you know, consumers or government, all that revenue that comes in basically drops to the bottom line. It's all, you know, I think Scott mentioned, he's like, it's hard for us to find cost of goods sold or the cost of service revenue. Most of it's going to just drop to the bottom line. And so when someone had asked about EBITDA margins, Scott mentioned, you know, we should have, because of the largely fixed cost base and that we have this rev-share go-to-market strategy. They expect EBITDA margins of 90% or higher over time, which is, yeah, that's like, that's music to my ears. And I think it's important to put this in context where, you know, you've obviously, there's people out there who don't believe in the story or talk about like how, you know, they look at trailing financial results and how can this company trade at $30 billion and they only had a few million dollars of revenue. Well, now the company on the trailing basis has $71 million of revenue, but obviously that's still small. But you're looking at a company that by the end of the decade is probably going to do what, $5, $6, $7 billion. But there's a big difference between high-quality revenue and shitty revenue. And what I mean by that is, you know, you'll have people that try to do comps with other companies and say, oh, this company's trading at like 10 times revenue or, and they have great top line growth. And so maybe they should, you know, it's a growth company, they should trade at 20 times revenue. But oftentimes like some of these high growth companies will have shitty gross margins, right? Like, I mean, the extreme example of course is like a grocery store has 1 or 2%, 3% gross margins, but they're doing a ton of volume. You know, they have relative to what they're selling, they have low fixed costs and so they're eking out some margin, but the gross dollars are big, right? And so So that's different than what we have here where obviously the gross dollars are going to be big once the constellation's deployed and services scaled up, but then the margins are insane. And so obviously, you know, there's a tremendous amount of upfront investment that's required to put a constellation up, but once it's up, it's literally going to be a money printing machine. And so how do you value those revenues? Should it be similar to I won't say software companies, just given what's going on with AI. But yeah, like Palantir trades at a crazy revenue multiple, right? Let me just see what Palantir's margins are. Let me just look at Bloomberg here. Yeah, Palantir this year, this coming year, they're going to do $7 billion of revenue and their gross margin is 84%. Right? And so let's see here, and their EBITDA is $4.2 billion. And so that's why they traded at a really high valuation multiple because, you know, their 2025, I think it's $4.5 billion of revenue at 84% gross margins. That's going to like $7.2 billion and then 2027, $10.3 billion. And by the way, like that's really great growth, but if you think about what stage AST is in, and this is why the market values it as such, We're going from, and I think Kevin Chen had put this in a tweet, it's like 2024, $4.4 million of revenue, 2025, $71 million, 2026, $150 to $200 million, 2027, $1 billion. And then 2027 to '28, it's probably going to be at least double, right? Probably $2 to $3 billion. And then by the end of this decade, you're looking at maybe 10, right? And so, or, you know, you pick the number 7 or 8, but the fact that you're looking at EBITDA margins, because obviously there's, you're going to have depreciation from the satellites and there's going to be a ton of DNA because there's going to be these satellites that, you know, maybe they survive, can operate for 7 to 10 years or longer. You're going to be able to depreciate those assets, right? And so that's going to give you a nice little shelter on taxes. And so your EBITDA margins are going to be, yeah, I don't know, 92, 93%, which, you know, people laughed at this SPAC deck before, but that's what's coming in the next few years. And so how do you value those revenues if it's high growth and they're recurring in nature? You know, let's see, Palantir trades at, let's, for 2026, 47 times revenue, and then 2027, 33 times revenue. Yeah, that's kind of the comparable. Like we're not, and this is not to like knock other space companies, but for these space companies that are doing, you know, that make satellite buses or do launch or whatever, like if their gross margins are like 30, 35%, and then EBITDA margins are probably, I don't know, at best, and at best maybe 40%, 50%. Like that's a very different business and that's not recurring in nature, right? Like you're building a rocket and then it, and you launch it and then you gotta go build another rocket and launch it and it's a one-time type of payment. Unless of course, like you get to reusability and then you'll recover some of those costs and get to use it over again. But then for some of these other companies that make space systems, whether, and I've seen some gross margins that are like 10, 14, 15%. So EBITDA margins maybe are in the high teens at most. You can't really value those at the same revenue multiples as other companies because obviously the margins are much lower, right? And so even though there might be like reasonable growth, you know, I would argue that those companies should trade at lower valuations or they should trade at EBITDA multiples or if they're profitable, PE multiples, right? But yeah, that's, you know, one way to think about it. But today it was good because like the company for the first time explicitly talked about gross margins and EBITDA margins to be north of 90. So again, going back to this idea of a bullish call today was quite bullish. And so Andy also talked about the, you know, they're acutely focused on achieving profitability. And so from various growth initiatives around revenue, that's their goal. 'Cause that was one of the responses to, do you guys need to raise additional capital? And his response was, we want to get this business to a level of profitability where we do not need to raise money anymore. Now, obviously they're still going to need to raise money for the next, you know, call it 2 years. But then I think once you get to terminal velocity or max Q for this business where revenues are coming in and they're scaled, the business is going to fund itself. Like there's going to be no need for external capital. And so that, then you get into these like, these scenarios where people will start talking about share buyback and perhaps a dividend, which I don't think this company should do just given the growth opportunities in front of them. They should be plowing money back into building out additional shells and pursuing some other opportunities as well. Because I think as we've all seen for some of these legacy companies that have spent all their money on dividends and share buybacks and not have reinvested in their business, Then you end up being relegated to the dustbin of obsolescence, right? Like you want this company to always be on the front foot addressing new opportunities. And if you think about what we've talked about for this coming year with the US administration focused on space superiority and how defense is playing a much, much bigger role, and then on top of that, you've got this big push, a new market vertical has been created, which is AI data centers. you want to be putting R&D dollars back, you know, any money that you generate from the business, you want to deploy some decent chunk of that back into R&D because I think there's just tremendous opportunity in the space. But let's see. So going into tech and kind of future opportunities, the company did report 3,850 patents and patent pending claims. And so that's, I guess, the rate of patent growth has slowed down to a degree because in the previous quarter it was 3,800. So they added 50, which is not bad. I mean, obviously they've, as Abel said on the call, they've achieved what they need to in order to get the technology deployed and working. And so you are going to see somewhat of a slowdown in the number of patents. And I remember in 2021, the company was like at 700. And so that's pretty good from 700 to 3,850 to where we are today. That's a lot of R&D and IP. Let's see. So as I mentioned before, there was some talk about capturing commercial AI opportunities and specifically, I think it was discussed that enabling precise geolocation, radar technologies, these were some of the things that were mentioned. Precise geolocation. To me, that definitely smells like PNT, which is GPS alternative. And then radar technology is obviously sensing, tracking things. And then there's probably things that the company won't talk about, won't say publicly, which is like jamming and electronic warfare, which I think you know, is smart, right? Like they, they, I think there was the one conference where Scott talked about 10 different use cases for the military. And he did mention some of those to a degree, but you probably don't want to go into too much detail on those. But the other thing that I thought was very interesting, which I think we all need to dig into more, is this idea, you know, Abel talked about multiplying spectrum. Efficiency, and so we all know that the company with the current technology can achieve around three to four bits per hertz in capacity. But then Abel talked about this idea of multiplying that, so getting anywhere on the order of three to ten times more capacity. And so to me, I mean, that could be like Cohere, which is you know one of the companies that we speculate they're working with. But then Other things that they can do with the Bluebirds and in AI, it seems like there is additional optimization work they can do. But I mean, that's pretty nuts, right? Like 3 times is a lot. I don't, I'm not sure what he means by 10 times, but if that is true, yeah, we're, we may not be bullish enough. Like if you can get 120 megabits per second peak data rates. And then of course the company today said, hey, we can get in excess of that. And someone had pointed out like, oh, if they're talking about in excess of 120 megabits per second, maybe testing already with Bluebird 6 is going quite well, which I think that's probably a decent conclusion you can draw. But 10 times that, I mean, that seems a bit insane. Right. But then who knows? I mean, he did talk about doing carrier aggregation and having MIMO, and so maybe that plays a hand in it, but 10 times more. I wonder what these guys are cooking up because if you get to that level and you're using low-band spectrum, and if you have enough satellites, then You're talking about the potential to actually replace terrestrial towers, right? Now, you may not like, you may not have, be able to serve the densest areas of the population, but for suburban areas, forget about dead zones, but suburban areas, then if you're looking at orders of magnitude of 10 times spectral efficiency beyond 3 to 4 bits per hertz, then Yeah, you could replace towers, right? So that's something that I think maybe for the Q1 call, I'll submit a question or someone will submit a question and ask like, hey, can you guys talk about this in more detail? What did you mean by that? But yeah, it was kind of cool. Like the company did talk about having the ability to do 4G, 5G, and of course they dropped SigG on people, And so I think this was an important statement because this is one of the advantages of a bent pipe architecture where the satellite is basically communicating, doing signal processing, but sending all the hard stuff down to the gateway, which then the eNodeB is there. And so you pretty much become protocol agnostic because it's the It's the processing actually happens at the gateway. And so this was something that when I first spoke with Abel back in 2021, he had mentioned, he's like, we're a bent pipe architecture. And so the processing happens not on the satellite, but at the gateway. And so we can do 4G, 5G, 6G. And then he was joking, he's like, we can do 7G. And so the reason why that's important is that for And I'm not sure if this is true, fully true in what I'm saying, but for like Starlink, at least architecturally, they actually put the brains not at the gateway, but up in the satellite. And so it's not a bent pipe architecture. And so the eNodeB that's in the satellite, once you send it up there, then you're kind of stuck with that tech. And so if something along, something better comes along, In terms of protocol, so let's say 6G, then theoretically you would have to, maybe there's some software updates that you can do and make some changes, but then at some point in time, a lot of those satellites that are orbiting, if you're Starlink, they become obsolete and you have to wait. I mean, maybe you don't wait. I mean, eventually they're going to come down because they're flying in very low Earth orbit, so they're only lasting 3 years. You would have to go launch new satellites that have the 6G update on the eNodeB or a more advanced eNodeB that would allow you to handle some more advanced protocol, right? So if it's 6G or 7G or whatever it is, but the bent pipe architecture, you're going to be protocol agnostic because the heavy-duty processing actually happens at the ground station. The eNodeB sits— is in a rack. and it sits there in this data center or the gateway, right? And so if you, you know, if the protocol changes, you actually just switch out that eNodeB on the ground and the satellite's still doing its job. It's just sending signals back and forth. It's processing signals, which is really tough, and it's doing beamforming and all that. And that's why you need the FPGAs or ASICs. Like, it's doing a lot of complex work, but the— actual processing of the protocol actually happens down on Earth. So I've probably talked a bit too much about that, but I think that's the elegance of our solution where as the satellites, you know, when you think about a 7 to 10 year life, that's a true 7 to 10 year life and perhaps even beyond because that satellite can, you know, is going to work with evolving standards. Whereas I think for company like Starlink where they put the brains into the satellite, it is going to face a higher risk of obsolescence. But of course, again, the life of that satellite's only expected to be 3 years, just given the orbital decay. And so maybe that's not a problem. Let's see here. So I talked a bit about the Government contracts. So the company, I believe, has— they were talking— Scott was talking about it as of 10 contracts as of the end of the year. But then, of course, they got another one. So I think it's more like 11 government contracts. Some cool color, as I mentioned before, is that these contracts are not really predicated or require a full constellation deployed, but they really are based off of meeting milestones. And a lot of it is per satellite deployments. And so that's good because if you think about what the company's doing, they're launching more and more satellites and you're building this base of satellites. And as you do that, you're getting more and more government revenue. So that's a great dynamic to have. Let's see, you know, the company did talk about Golden Dome, the SDA $30 million award, and that they are now part of MDA SHiELD, which they can you know, they're eligible for a number of awards, but I think it was cool where, you know, we've gone from the company talking about the idea of Golden Dome and possibly being relevant to now they're in it. And so that's good and they're very explicit about it. And as I mentioned before, you know, the company has the opportunity for these programs, the 10, there are 11 programs that they have to grow into programs of record, which would be Multi-billions of dollars in value over several years. So that's the upside. They did provide update on partnerships, and so they talked about Verizon being signed in Saudi Telecom, you know, last year, in twenty or the end of 2025, and and how Saudi Telecom, which is good to hear, they did make the $175 million prepayment, which goes into the bank by. or happened at the end of 2025, which is great. Cool thing today was that they announced, you know, part SATCO or not, I keep calling it SATCO, Satellite Connect Europe, SCE. Maybe I'll just call it SATCO. I feel more comfortable saying that. But SATCO announced partnerships today with Orange, Telefónica, CK Hutchison, which is new, And of course, you know, 3 different Vodafone subsidiaries. And so as people will know, Orange, Telefonica, and of course Vodafone were already working with the company before. But the fact that today they became, you know, SATCO is this joint venture with Vodafone that started, I guess it was a year ago. But the fact that these carriers committed to work within the construct of SATCO or Satellite Connect Europe is big news, right? Because that entity is gearing up to be a sovereign solution for Europe. It's also going to pursue 2 GHz spectrum that's going to come up for allocation in 2027. And so the fact that you've got 4 of the top 5 European carriers who are backing this plan, I think they're going to be quite well positioned to get a spectrum allocation from Europe. Also, there's been some Space Lab due diligence where I think other players rounding out that top 10, British Telecom, and then Telecom Italia, I referred to that before, and one other as well, I think are probably likely to join. And so I don't know if we'll hear about that. This is our speculation, by the way, but I don't know if we'll hear about that this week 'cause the company was asked, you know, are you guys done with all your announcements for Mobile World Congress? And the response was, no, there's more to come. And so we might hear about some additional partners this coming week, which wouldn't be a surprise, and of course would be great news. The other carrier that was added today outside of Satellite Connect is Taiwan Mobile. Taiwan has three large carriers. Taiwan Mobile is the second largest carrier. I think Chenghua is the largest carrier. Chenghua used to be, and I might be wrong on this, but I think they were the state-owned, the equivalent of like AT&T before. But but Taiwan Mobile became a pretty large number two. I think they recently did like a merger deal. But but as I mentioned in the discussion this morning. Taiwan is a very unique mobile market in that obviously you've got the threat of China potentially invading. And so you need 100% connectivity, broadband connectivity all over the country, which is very mountainous. And then on top of that, you've got, so if there obviously is war, you want to have full connectivity, you want to have backups if things get, networks get taken down or there's jamming, imagine any scenario. But then on top of that, You have always the specter of a natural disaster. So whether that's earthquakes, typhoons, you know, there's a whole host of reasons why you want to have satellite connectivity. And so that was a great win to see today. And then, you know, the company did mention that they do expect to add more MNO partners in 2026 and then additional definitive agreements. One observation I will make is that 2026 will be a year where you will see carriers utilize Starlink, and I'm not talking about fixed wireless, but Starlink Direct-to-Cell, or we'll call it actually Starlink Mobile now. Let's do that. So you also have carriers use Starlink Mobile and ASD, and so they might use a specific, one of the services for a specific market and the other service for another. They might trial both of them, they might use both of them, and that's okay. Like, that's part of this market structure where it's going to be a duopoly and people will choose solutions based off of their needs, right? Like, some might like the ability to control all their data and they want to have, you know, they don't want their customer roaming on someone else's network. And so that would be AST. but then some others might be comfortable handing the customer over to Starlink. And then they might be okay with— excuse me— the data not originating or landing in their own country, and that would be Starlink. And so, or they, Starlink might be better positioned for certain markets versus AST. But I think What people should get comfortable with is that this is not going to be a complete zero-sum game. There are going to be some markets where both— oh, well, they're definitely going to— a majority of markets will have both solutions, right? Like you'll have on one side, they'll bifurcate into 2 or 3 carriers on one side using AST and then 1 or 2 carriers using Starlink on the other side, right? And so today, for example, Deutsche Telekom, which is the largest European MNO, the number one largest MNO, they announced a partnership with Starlink finally. And so it's been, this has been years in the making where back in 2022 when Elon said, hey, we're going to go do this thing, you would've thought like, okay, then that means that Deutsche Telekom's going to work with them because they obviously kicked it off with T-Mobile, which Deutsche Telekom still owns a pretty large financial stake and has influence and control over it. But they waited until 2026. And so the reason why that is, is that as we've talked about over and over again, Starlink's current satellites are pretty bad. They put down very large cells that are not fixed. They move. And so it's really hard for them to pinpoint and provide service without disrupting, providing Spilling interference into other areas and obviously respecting borders of countries. And so for Deutsche Telekom, it wasn't a viable solution. Whereas if you believe what Starlink is saying about around their second generation of Starlink mobile satellites, they'll be able to do quite a bit more. Similarly, I think what— or they're going to try to do what AST is doing. And so because of that, Deutsche Telekom said, hey, today we're announcing that we're going to work with Starlink and we're going to roll out service in 2028. And so you might ask yourself, like, why 2028? And so that satellite, it was revealed today that SpaceX Starship, they're planning to get to commercial viability on commercial cadence for launching rockets in mid-2027. And so it's going to take time, right, to get that constellation up where they're going to need thousands of satellites versus AC that only needs 100, because these things are flying at very low Earth orbit in the 300-kilometer range. They have small phased arrays. I think the design is like 5 meters by 5 meters, whereas ours is 15 meters by 15 meters. And so, so yeah, it's going to be It's a very different proposition. And for that technology to work, Deutsche Telekom needs for that constellation to be up and running and at scale before they roll out service. So that's 2028. But Deutsche Telekom was strategic in announcing that because obviously EchoStar, which is the spectrum that they own, spectrum that SpaceX is acquiring, they need to get a renewal on the European 2 GHz spectrum that they have the rights to. And that's coming up for Reallocation in May of 2027. And so by having Deutsche Telekom say, hey, we're going to use this service, we're the largest MNO, please give us that spectrum, they're angling to get that in 2027. But obviously there's this wildcard of Elon Musk who is not necessarily well-liked or a friend of Europe, the EU. That will be interesting to see how that that spectrum gets allocated. But anyway, but yeah, that's on the partnership side. So moving on to production, let's see. So the company gave an update. They are now, they have Bluebird 8 through 29 at various stages of production. And that's an update from the Q3 call where they said they had 8 to 10, no, 8 I think it was 8 to 19 Bluebirds in various states of production. So they've added another 10 in production and they expect to complete Micron assemblies enough for 40 satellites by first half of 2026. And so this has moved. I think they were targeting that for first quarter of 2026, and so it's moved by a quarter. And then of course they were supposed to ship the first, and this is the This is the disappointment part of this quarter update. Everything else was bullish, but this is the disappointing part, which is, you know, things got pushed back in terms of timeline. But let's see. So the first batches of the new Block 2 composite satellites, so Bluebird 8 and beyond, they were expected to be done sometime in, I think it was like December. No, no, January. And so that's, that's no, sorry, I think it was February. So that's been pushed off. But, you know, one of the things that we've heard from Space Mom due diligence is that these compo— whenever you use new technology, like new composites, it's, it's gonna take you, take you more time than you think. 'Cause it's not easy. It's not easy to develop like, you know, a composite shell, which is gonna encapsulate the bus and of course the microns. And so as we all know very well, space is hard and it takes time. And this company is focused on doing things right the first time, every time. And so now we're looking at, I believe, the first batch of Bluebird 8 and beyond satellites being shipped in April. And so that's basically 28 days from now, which isn't too far. But then of course, you know, once those microns are shipped, or sorry, not microns, once those satellites are shipped, it'll take 2 to 3 weeks to be integrated into a launch vehicle. And so you're probably looking at the next big batch of satellites being launched outside of Bluebird 7 being launched in late April or early May. And so that might give you like a little bit of heartburn. It's like, okay, well, how are they going to get to The number of satellites launched that they were targeting. And I'll get that, I'll get to that in a bit. But, you know, another thing about production, they talked about acquiring another site in Midland, which gets them beyond 500,000 square feet. I think they're currently at almost 500,000. And so this new space that they're getting is going to put them well over 500,000. In terms of metrics, I talked about this before, but They, let's see, they are going to get to, in terms of production cadence, they're expecting, or they did achieve 6 satellites worth of microns per month by the end of, at the end of 2025. And then they were hoping to get to 6 satellites per month fully assembled and tested by the end of 2025. But then it looks like that cadence is going to be achieved by the second half of 2026. And so they're hoping to get to 6 satellites— excuse me— fully manufactured and tested by second half, by June of 2026. As I mentioned before, composites take longer. And the other thing that they disclosed today is that what they're doing is they're figuring out how to properly stack these things. And so What I mean by that, they—I'm assuming. So Abel gave some color where when you stack, you know, six microns or maybe up to—or sorry, not microns. I keep saying that. If you stack six bluebirds or eight bluebirds, it's like imagine stacking a five-story building. And so these satellites, when you put them, these tuna cans, when you put them on top of one another, that. That introduces like a whole nother level of complexity and problems, right? So if you think about like a Blue Origin New Glenn, before you launch that thing, it actually is sideways. And so, and on top of, you know, the fairing has this like really solid metal piece and it's round. And then if you look at like Bluebird 7, it's on top of that thing and that's okay. It's one satellite, right? And you you figure out a way to attach it and secure it. But imagine if you have like 6 of these things stacked on top of each other or 8, and it's not vertical, but it's horizontal, right? It's like when they ship the rocket to the launch pad and then they raise the rocket, it's not vertical the entire time. It's actually going to be sideways. And so you've got to really do a good job of securing that. And of course it's got to go through vibration, testing and all this other stuff. But then if you imagine like the bottom, you know, Bluebird, that's going to require— that's going to have to have the strength to hold all the 7 above it. And then of course the second one's gonna have to hold all the 6 above it. And so I would assume like that's— I'm not an engineer, but that's probably a very difficult problem to solve. And then, you know, on top of that, you're working with like custom composites. And so, um, Maybe, I don't know, there's like a skeleton, like a very hardened skeleton that goes within the composite, or I'm not sure how this all works. But when Abel talked about stacking these things, that they've solved the problem of the stacking, I figured like that's probably, that probably took a good decent amount of time, right, to figure out. And so what was interesting is that Let's see here. So I think, you know, the company talked about, they, the target is to get 45 in orbit. Like the likely target is 45 in orbit by the end of this year, but 60 shipped by the end of this year as well. And so what that means is like, they, the last 2, I believe the last 2 shipments are going to be to New Glenn, 'cause obviously that's like 15 satellites. So if you assume that, you know, Falcon 9 can only take 3 to 4 at most, when you're getting into the 6 to 8 range, that's probably New Glenn. And so, yeah, I think based off of some of the due diligence that we've done where it looks like Blue Origin asked for an STA for New Glenn 4, 5, and 6, Now I know like some of those launches are going to be dedicated to Amazon LEO and of course like government missions, but there's some rumblings now where it seems like we are going to get a New Glenn dedicated launch for 6 to 8 satellites sooner than everyone expects and maybe even before 2 batches of Falcon 9, 2 batches of 3 for Falcon 9. And the reason why I say that is on the call, well, there's been some like due diligence where it seems like there might be a Blue Origin New Glenn freeing up. But then beyond that, on the call, which I thought was a bit weird, Abel talked about having 1 batch of 6 ready to ship in April. And so he didn't say 2 batches of 3. And, or I guess he could have said 2 batches of 6 total. Maybe it might be like, you know, English as a second language, but, and you can go back and read the transcript, but he talks about this idea of, you know, we'll have 6 ready to ship, 1 batch of 6 ready to ship in April. And so to me that says that I think the next rocket potentially is going to be New Glenn. New Glenn 4. So I, you know, we'll find out, but that would be one way to quickly catch up on delays in production, in production, in that you, you actually start leaning earlier and heavier on New Glenn. And so that, you know, going to launch, there was this discussion of, you know, them, but There was a reiteration, them reiterating that there's 13 launches across various vehicles, including of course New Glenn for BB-7. And the company didn't give color about how they've overbooked for 75 launches, or sorry, launches enough for 75 satellites, but I assume that probably still holds. But yeah, so let's see here. One interesting thing on the launch side is that they did sign an additional new heavy launch provider. They talked about adding one to the rotation. And so they signed an agreement to integrate a satellite with this new heavy launch vehicle that's now, I think for AST, they are now going to be a standby customer in their manifest. And so I feel pretty confident that it's probably Mitsubishi because I think when you put 4 SRBs on the, the Mitsubishi Heavy launch. It's gonna be able to take, I don't know, like, I think 2 or 3 Bluebirds. But the other alternatives could be Falcon Heavy, Ariane, and ULA. So I, I don't think ULA has any space. But that said, as we all know with any of these launch providers, sometimes the payloads don't show up when they're supposed to. And then for all these providers, they, they love having customers on standby who have cargo ready to go. And so if someone doesn't show up, which oftentimes could happen for, let's say, ULA, where there's, you know, if you're relying on a traditional prime to build satellites for the government, those things usually come in pretty late, but they still need to launch. Lo and behold, hey, there's some Bluebirds you can go launch. And so, so yeah, that, that, that was an interesting Tidbit that was dropped, and I think it's Mitsubishi because you know they've had a few successful launches recently, and there was this idea back in the day of getting import-export bank funding from the government of Japan. And so by utilizing Mitsubishi, there probably could be some economic incentives there. And obviously, we're you know close partners with Rakuten. And then Abel name-dropped Mitsubishi. I think it was like in the Q3 call. So I assume it's probably Mitsubishi. But yeah, that was a good one. So I think now we've got Blue Origin, New Glenn, we've got SpaceX Falcon 9, and then potentially Mitsubishi. And of course, ISRO, which I think at most can take 2 Bluebirds, 2 composite Bluebirds, but Yeah, I think the ordeal of shipping satellites all the way to India, probably don't want to do that again. But, but thanks, thanks, ISRO, for the ride. Anyway, that's, that's kind of all I had. I'm going to check, see if there's any questions, but now it's getting pretty late. I always say that I'm going to do these very quickly and they end up being an hour or more. Let me just see if there's any questions or comments. Let's see. How confident are you in the latest version of their manufacturing cadence chart guiding for 13 launches worth of Bluebirds ready to ship by end of year? Let's see. Management response to the analyst question is arguably the weakest part of the call. I don't know. I mean, I think, I think they feel good. They specifically talked about a reason, which was the stacking issue. And so that was like a real— and I thought about the complexity of that problem and it's like, oh yeah, that's a real— and I had actually candidly thought about it before, but that's a real problem that they had to solve. Right. And so I feel pretty confident, like maybe, I don't know, like maybe they'll get to 40 or 45. I think if they miss by 5 satellites by the end of the year, it's not that big of a deal, right? Like one thing I want to remind people is that this service and what AST is doing is inevitable. Like it, we may miss deadlines, we may be off by a few weeks, might be off by a few months. Like today SpaceX was talking about Starship going to be, you know, Starship launching Starlink mobile satellites in mid-2027. And when I saw that, I was like, okay, I'm going to tack on another 1 to 2 years or maybe even 3 years because we all know this stuff is hard and it's not like any particular company. It's like all companies, right? It takes longer. I mean, like Rocket Lab, Neutron was supposed to launch quarters ago and now it's getting delayed further because it's all hard. And this is like why I talked about how AI disruption probably isn't going to impact space companies that much because This stuff, moving atoms and doing difficult stuff in space is really difficult. And so I think that's part of the bargain that you make as an investor in space companies where on the one hand, you better have a stomach and be okay with delays and overruns and what have you. But once things happen and they're highly valued for a specific reason, it's not easy, then you have a very defensible moat. It's not easy to try to compete, right? And so, I mean, if you look at launch, I mean, how many companies have achieved reusability? There's only 2 now, and perhaps there will be more. I mean, of course, like the space shuttle was reusable too, but economically reusable. But yeah, I mean, I'm going to give management the benefit of the doubt and the fact that they feel, you know, we, I would say a year or 2 years ago when they would say, hey, you know, this is what we're thinking of doing and we feel pretty good about it, you would obviously discount that to a degree and you'd really be like, I hope these guys can pull it off. But then now we're at this point where they're actually generating revenues and getting contracts and, you know, getting customers to sign long-term agreements. And so The folks who are on the inside who are doing due diligence, they see the path, right? And yes, it's difficult and it takes time. Starlink talked about in 2022 launching their service and having beta rolled out in 2023. It took until 2025 for beta to roll out. And this is a company that is vertically integrated, has the keys to space and unlimited financial resources, but it took time, right? And so Yeah, I think it it could take longer and and that's okay. Let's see. Heard Abel mention in Q&A the next batch shipment is going to be six sets: NG four, NG five. If I had to bet, I think it's going to be NG four. I think it's actually going to be after NG three, New Glenn three, which is going to launch in March, and hopefully we're going to see. bunch of you there. Um, my guess is it's probably gonna be second half of March or maybe mid-March. Definitely not March 6th. Like, that one tweet was speculating. But, um, I, based off of like some due diligence people have done, I think we have a pretty good shot it's gonna be New Glenn 4. And so, um, yeah, mark that. I think New Glenn 4 in May, which for Blue Origin, that would be pretty quick turnaround. Like, to start to, to launch a new vehicle, um, basically a month after New Glenn 3. I think that, that's like, that's going to be pretty, a pretty big deal. Let's see. Also, I find it odd that the new schedule makes note of new stackable configuration, like of change of plans, although they plan on getting 8 in Bong without stacking them. Um, they, they were going to stack them, and my guess is I think Catseye had drawn a configuration where they stack them in 2 vertical stacks or maybe even 3 vertical stacks. But I don't know, maybe it is 2 vertical stacks, but it could be, you know, it's one thing to design for this stuff, but then when you actually put it into practice, I'm sure there were some really difficult engineering problems to solve. And so if you guys remember the Block 1 satellites, they had this like very elegant lattice. It was like an erector set that held all 5 satellites, you know, 4 on the bottom and then 1 on top. Whereas here, I believe in this new configuration, there's not going to be all this like extra stuff. These things are just literally, they're built to be stackable, right? Like imagine Legos, like they just stack on each other. I don't know how that works, but it sounds very complex and Yeah, I think, I think that I'm glad that they've seemed to have figured that out and they're moving forward because I think that's, that was the turn that DeBell set, set where he's like, hey, we figured this out and now we're full steam ahead on production. Um, let's see, someone's asking how many stackables fit into Neutron, Rocket Lab Neutron. Uh, that's a good question. I don't know. I think, I think, um, that's— he may have answered it once. I think he said maybe 2 satellites fit into Neutron. But yeah, man, it would be great to see Rocket Lab launch some Bluebird satellites. I mean, you always want to have a diversity of launch providers. I don't know if it would be economic to do that, especially if Blue Origin New Glenn is kind of like the, the, your, your main vehicle. Although, who knows, right? Like, we, New Glenn clearly, or probably, can take up one satellite, which is going to be FM2. Obviously it's heavier, but it'll be a very different task, which is why I think, you know, you'll see 6 in the beginning. And then of course, once it's optimized, 8, but even 6, like that's going to be, that's a big leap, right? From just taking out one heavy satellite to taking 6 heavy not as heavy satellites, but in totality, much heavier. But I did some due diligence around Blue Origin and just rocket development in general. I remember the amount of efficiency and power gained from the initial Falcon 9 to where we are today is leaps and bounds, right? And Blue Origin addresses too, where they, it's like tweaking a modified car, you, you're going to get more horsepower, like more, more thrust from the engines. There's all these different things you can do to kind of push, push, um, that vehicle for more performance. And so yeah, it'll be interesting to see. I mean, that, that will be a sight to see, to, you know, for 6 Bluebirds to go up on, on Blue Origin New Glenn, and then finally 8. But, um, but yeah, I, I think Neutron, my guess is too, but I'm not really sure. Um, anyway, that— I will wrap it up there. Um, it's been over an hour now and I'm very tired, so we'll see what happens tomorrow. I think what to look forward to, um, I think obviously there's some— there's going to be some disappointment around launch getting delayed, and, and people are going to try to extrapolate that, that as, oh my God, these guys can't do anything. But I think we all know, um, the people who are close to the company that, and who have followed Tesla, you've got to get through this like initial hump of getting a production line up and trying to automate as much as you can, having all these employees. Obviously the company's been hiring like crazy and solving difficult problems that are going to come up, right? Like stacking these satellites, working with composites. And so once you kind of get through this and you have the patience for it and the company then starts getting into this cadence and they can truly start building 6 satellites a month and then eventually they'll get to like 8, 10, 12, that's where things get really fun. But we're at this point where it's, you know, there's going to be some research analysts tomorrow that will talk about the puts and takes. And so there's some, obviously a lot of positive things, but then also some things that are, that have to be balanced, right? And so I think overnight, for example, Cantor Fitz Gerald put out a report and they kept their price target. They're overweight, but they kept the price target at $80, which obviously is below where the stock is trading. But my guess is that Colin Canfield, who's the analyst there, he's probably thinking, I'm not going to raise the price target of the stock until I see the first batch shipment go. And of course, like, I'd love to see Bluebird 7 successfully launched on Blue Origin New Glenn because, you know, we want to see the workhorse of what AST is using launched successfully for a 3rd time, right? And so, but yeah, tomorrow you might see some upgrades or people, I'm guessing that people are going to probably stay neutral. Not, well, they're going to keep their ratings, but they're going to keep the price targets somewhat close, right? You know, Scotiabank excluded, screw those guys. But like UBS has a $43 price target. They probably are going to raise the price target, but stay neutral, which is what they're rating Barclays is at underweight. They're at $60. Maybe they raise their price target to a degree, but stay underweight or neutral. I think tomorrow is going to be somewhat neutral. I mean, you've got the bulls like Deutsche Bank and ClearStreet at $137. They'll probably just stay there. So I think like the setup is going to be great going into April and May because then you're going to have the launch of BB-7 on Blue Origin New Glenn, and then you're going to get a batch shipment and probably a surprise to the market, which you're hearing here, that the next launch is not going to be Falcon 9. It's going to be another Blue Origin New Glenn, or who knows, maybe you'll have a New Glenn launch and a Falcon 9 sometime around the same time. But anyway, but yeah, I think, and I didn't talk about this this morning, but my fear was that we were going to be like all these other space companies like Rocket Lab and BlackSky and Redwire. I mean, obviously, like some of these, some of the folks, there were disappointments in the call, right? But I don't think there were any space companies that reacted positively to quarterly results. Whereas AST, I was thinking, oh man, I hope we don't have the same reaction or we don't have too much disappointment. I mean, they, I thought there would be bullish things, but Clearly today was a very bullish call aside from the delays, which I think at this point the market somewhat expected. And so the fact that the stock traded up a bit and tomorrow is probably going to trade up to some degree or maybe stay flat. But I think kind of once that works its way through the system and then people start getting set up for the next few months, I think the stock is going to work quite well. Um, and so, so I'm looking forward to it. Um, anyway, so I'll end it there. Thanks everyone for joining. Um, and we'll catch up tomorrow. Good night, everyone.
[01:12:47] Speaker A: Thanks for listening to the AST SpaceMobile Podcast. If you enjoyed this episode and you'd like to help support the podcast, please share it with others, post about it on social media, or leave a rating and review. To catch all the latest news about AST SpaceMobile, make sure to subscribe. Thanks again, and I'll see you next time. We're doing something very, very big, and I think with this technology we can really affect a billion lives. AST SpaceMobile is the only company that has proven technology to deliver cellular broadband connectivity directly from space to the everyday smartphone. People will just basically turn on their phone and be seamless. Regardless of where you are, we don't want you even to know that it's connected by satellite. Our role is to bring this into reality, always in partnership with the MNOs.
[01:13:45] Speaker B: Listen. Waffles.
[01:13:53] Speaker A: Waffles.