Anpanman - Blue Origin New Glenn, Bank of America Fireside Chat and What Lies Ahead!

[00:00:06] Speaker A: This is the AST SpaceMobile Podcast.
[00:00:09] Speaker B: 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.
[00:00:27] Speaker C: Hey everybody, I am back. I'm broadcasting from my car, waiting for my son. He has soccer practice that goes late. So I'm here with you on what was initially, well, for most of the day, brutal day in the markets. It just seemed everything, especially growth and momentum, just going straight down, grinding lower the entire day. And so that was painful. But then I think like many of you, I was looking forward to Blue Origin's New Glenn launch, which initially was planned for basically right at around 3 o'clock. And then of course, as always happens with, you know, when you're launching a new vehicle, that got delayed because they wanted to check a few things. And then Eventually, they launched and had a 100% successful mission, which was something that I think all of us were hoping for, but didn't expect. Maybe at best, you know, similar to the first New Glenn launch, you might've had a successful reach of orbit and delivery of payload and then call it a day. Maybe the booster didn't land. But today they hit everything. And that's huge. That's huge in the sense of, you know, for our country, having 2 reusable vehicles, Falcon 9 and New Glenn. And then also for the space industry, I think by having a new competitive launch provider, which happens to be the largest, That's really going to change the dynamics for customers who want to send stuff up to space, but also break open the current, for the, you know, I think what most people recognize is a monopoly that SpaceX has. I think that's going to be opened up a bit. And obviously there's a number of other competitors that are nipping at the heels and will be bringing additional capacity. you know, throughout 2026 and then especially in 2027. But yeah, this is a huge day. And the reason why I think, for those people unaware, AST SpaceMobile shareholders are ecstatic and elated. The reason for that is, you know, the company going back to 2024 made a big commitment by deciding to procure some launches on SpaceX Falcon 9. And they've probably actually probably procured a few more launches and I'll go into that in more detail. But in 2024, that summer, Scott, Abel, and the management team made a big bet on Blue Origin and meeting with Blue Origin and outlining the company's needs for launch in the coming years. And then lining that up with what they viewed as a great launch vehicle, New Glenn, and that potentially lining up with their needs, they decided to make a big commitment back then in terms of selecting Blue Origin as a primary launch provider and then making financial commitments as such, which is good putting forward the down payments for those launches. And so that was a big, you know, I think we all at the time when we found out the company had signed multi-launch agreements and everyone was, on the one hand, you know, Blue Origin made sense. On the other hand, everyone was secretly hoping for SpaceX because, you know, Falcon 9 is a tried and true vehicle, right? And so I think everybody was secretly hoping that they would book most of the launches on Falcon 9. That would have de-risked the launch plans. And so when the company made the announcement that they had signed MLAs and we learned that ISRO would be the first launch and then SpaceX Falcon 9 would be the second, and then it sounded like there would be another SpaceX Falcon 9. And then from that point on, there was a majority of Blue Origin New Glens. I think everyone was like, oh yeah, that's great. But then secretly was like kind of nervous because at that point when the company had made this commitment, New Glenn had not even launched. And it wasn't until January of the following year, this past January, that New Glenn had its first launch. And I remember, you know, we were all ecstatic to see them successfully get to orbit and deploy the payload. Then of course the booster didn't land. And so later what we found out of course is that I guess on reentry, these things are tricky and I'm not an engineer, but when you have the fuel kind of swishing around, I guess there was some issue and they couldn't relight the booster. And so that's why they didn't land it. And so I think what people have forgotten though, like during that period of time, you know, it's understandable that they worked out that issue. And I remember talking to management at AST SpaceMobile and they felt very confident. They were like, you know, they know what the issues are, they're going to land it the second time. And of course you hear that and you're like, okay, that's great. And I think AST's management had frequent, whether it was weekly or daily updates with the Blue Origin team and had met, of course, Bezos, but also David Lipp multiple times and have visited the factory multiple times. I think Scott was like at their celebration party the last day or two. Maybe he was there now, but they had utmost confidence and that's great. And, you know, but of course as an investor, your management team can have utmost confidence in another provider, but then of course, you know, you're still nervous. And so Today was just absolutely tremendous. I mean, I think, I know there were some people who talked about watching it with their kids. I watched it with my kids and we were jumping up and down. And, you know, I know some people were crying too. I mean, what a tremendous accomplishment. And it's, it's for the people in Washington, the people in Alabama, that's where they, they build the rockets, both states. I mean, just imagine, like, I know, and for Blue Origin, like, people at this company have gotten a ton of stick. You know, yes, it's late. It's been delivered late versus what they were projecting. And yeah, guess what? SpaceX too. They're late on their stuff too. Space is hard. We all know that. But they just were the whipping boy. I mean, people would just go after them in the industry. And What a big fuck you. Like, they did it. They fucking did it. And it's not like they had to iterate multiple, multiple rockets and blow shit up all the time. Like, which is fine. That's a totally different approach and it's perfectly acceptable and it's a different way of doing things. But, um, but yeah, they have their own culture and their own engineering and, and on the, you know, they, they got this, this large rocket, uh, to orbit On the first try, and unfortunately the booster didn't land. On the second try, they did everything. And it's not like the booster like missed the target and, or was off or maybe landed in the ocean. It landed right in the center of the ship, of the barge. I mean, it's, to me, it's like just unbelievable. I still am beside myself. And so this company, Obviously they've had experience with New Shepard, which is a smaller rocket. And so it's not like they're new to this stuff, but obviously scaling from something that small to something much bigger is a totally different proposition. But yeah, I mean, I have a tremendous amount of respect for SpaceX and everything they've done, but now we've got another major player that has a vehicle that has demonstrated performance, the ability to deliver cargo into orbit, and then the booster to land it to be reused. And obviously it's like, there's probably stuff to figure out and things to optimize, and maybe some things may have gone wrong, which we don't know about, but for all intents and purposes, like, it looked successful. And so what that means for AST SpaceMobile, Which was interesting. Scott was at Bank of America today for a fireside chat, and I was going to go through some of the nuggets that came out of that discussion. But obviously there was a big focus on Blue Origin. The research analyst at Bank of America was like, okay, so you guys have to launch 45 to 60 satellites next year. How comfortable are you with that and who are you going to use? And so it was interesting, I tweeted about this before. One of the things that Scott disclosed today is that they've actually overbooked. So they haven't, and part of it is he talked about like, hey, in October we weren't expecting this, but we had the ability, we had the opportunity and we did it. We raised $2 billion, which is the 1.15 billion convert, and then they had raised some money from the ATM. And then they also, I think this is the math, I haven't checked it all out, but then, you know, I think he's including also the capped call, which they sold. And then I'm trying to think, I think he may have included the prepayment from Saudi Arabia or expecting that. But anyway, But with that amount of flexibility, what they did, what he disclosed today is that they've actually purchased enough launch for 75 satellites. And so what that tells me, and so that says that they, in my mind, he's disclosed that a majority of their launches are going to be on Blue Origin New Glenn. And we know that they do have, at least initially, There's like 3 SpaceX Falcon 9 launches. One is probably a rideshare for FM-2, or maybe it's a single, who knows? But then there's going to be 2 more, which carry 6 Bluebirds in total, 3, 3. But then there's going to be a bunch of Blue Origin launches as well. And so when you break that down, and by the way, Blue Origin, they're going to have to continue to optimize the engines. And I think initially they're probably going to just start taking 6 Bluebirds up, but then eventually when things get worked out, they'll be taking 8 of these things or up to 8. But when Scott discussed overbooking launches to take 75 satellites up, I think what that means, and then of course the disclosure that a majority, is that 50%? Is that 60%? I mean, who knows? But a majority of that is Blue Origin. But then with that, when he said that stuff today, that told me that they actually booked additional Falcon 9 launches. And I'm not sure the timing of those, but they're probably sprinkled throughout the year. So obviously like, this is great, Blue Origin, you know, they stuck the landing. And by the way, like the company would tell you that even if they didn't stick the landing today, or if they have issues in the future, It's not a customer's issue. Now, it's great for Blue Origin because then that saves them money. They can go refurbish this booster and then use it again. But apparently they've got a lot of these boosters in production. And so the thought was like, if they couldn't land this one or the next one, they were still going to have to launch these things because customers are paying for them. And so, however, now that they landed it, Obviously that changes the ballgame quite a bit, 'cause then I think the turnaround time and the ability for Blue Origin to run more rapid cadence is gonna be really useful and helpful. And then it's also going to obviously make life a lot more easy and economical for AST SpaceMobile if you've got 6 to 8 Bluebirds launching on a New Glenn, and then they can turn that rocket around and I'm not an expert, but maybe it's a few weeks, 30 days. I mean, who knows? But that, I think, for the AST SpaceMobile story, one of the ways that bears would frame the argument against it, one of the key ones is like, well, launches, you're capacity constrained and you're reliant on Falcon 9 and SpaceX and they're a competitor. They're going to delay things on purpose and give you a hard time. And then why would they ever launch your birds? And of course, for rational people who understand the space market, it's like, oh, SpaceX launches competitors all the time. They send up OneWeb satellites. They launch Kuiper, Amazon Kuiper, which is now named LEO. They launch their satellites. They launch everybody's satellites. Globalstar. They launch Iridium. Why would they do anything different? And we also have these things called antitrust laws in the US where if you do those things, then you can get in big trouble. And so that argument was always floating around there and then, well, you're launch constrained, but— Which is true. Like that, and that's why the company put forward these prepayments and is trying to leverage multiple providers because you don't ever want to be beholden to just one. However, the game has changed. We're like, now Blue Origin, New Glenn, it's demonstrated the capability that they were hoping. And so now with reusability, like they can start, you know, once they get into a rhythm, they can start launching AST SpaceMobile satellites. They're going to launch Amazon LEO or Kuiper. I get it. We'll call it LEO now. They're fixed wireless satellites. And so, yeah, the game has completely changed. And so I think it's going to take some time for the market to digest this because people don't associate, you know, obviously like if the booster didn't work or if Blue Origin has a problem, then bears will come out and say, oh, AST's in big trouble. But then once it works, I'm sure people aren't going to really recognize the two kind of being Somewhat connected. But I thought about it today. It's like, oh, when the next Blue Origin launch, and I don't know when our satellites will go on Blue Origin. It's probably, my guess is like, we're not going to put 6 Bluebirds on a Blue Origin flight until they've demonstrated maybe 1 or 2 more successful launches. That's my guess, which is why we'll probably use Falcon 9 until that happens. But, you know, when, I don't know, sometime in spring, we'll probably, my guess is we'll be on a Blue Origin flight sometime in spring, the end of spring, maybe Q— I'm sorry, probably February, March. It'll be interesting 'cause then all eyes will be on that flight and then they'll say, oh yeah, the customer is AST SpaceMobile and there's 6 Bluebird satellites on there, the largest satellites ever to, you know, to a, to go into low Earth orbit. And then people will be like, oh, what is that? What's Astra SpaceMobile? And then you'll have this, I think you'll have this surge of like awareness about what the company's doing. But yeah, today was an absolute game changer. I think, and this is good for the industry, like I said, like I remember talking to Scott before about how when the war in Ukraine happened, basically launch turned into a monopoly where it was, If you were a, you know, obviously NASA can use Russian rockets and they still do to a degree. Like, you know, we sent up astronauts on Soyuz to go to the space station, what was it, 2 or 3 months ago? But for US commercial companies and especially those that are connected to defense applications, that's a big no-no. And so after the war in Ukraine, Soyuz was off the table. And so then it was just really SpaceX. And then SpaceX, even though they, you know, the cost of launch went down for them as they scaled up, they continued to charge full freight for people. And so now that you've got a big player, I mean, Blue Origin New Glenn is the largest rocket now that's reusable. And, you know, obviously Starship is around the corner and And we'll see that come online at some point, um, if they can, you know, work, work the kinks out. But, um, for all the people that were making fun of Blue Origin, like, now they've got the crown. Like, they're the, they're the biggest and, and will be cost— the most cost-effective, um, once they get to a normal cadence. Now, obviously, Falcon 9 still has the, the crown in terms of reliability, reusability, and, um, And, you know, I think, but I think for Blue Origin, as they continue to develop the rocket, like that's going to change the landscape. And so hats off to Scott and Abel and the management team for taking a bet on Blue Origin. Because I think, I speak for everybody, like I think everybody was on the one hand like, oh yeah, that makes sense. On the other hand was like, like, were hopeful that they would go the other way. And, but that bet turned out to be the right one and hats off to them. And so, as I mentioned before, you know, going back earlier today, Scott did speak at this B of A conference and I just wanted to touch on a few things. So I didn't mention one of them, which is the fact that company has booked for 75 to launch 75 satellites. I think what that means is they probably kept Blue Origin at the number of whatever got them to 60, call it at the upper end. But then they probably, my guess is they added additional Falcon 9 launches to give them flexibility. And then I think Scott did mention it today that they may not need to use all all of the launches. They may just use the 60 and not need the additional 15, because I think in the contracts there is flexibility with Blue Origin where they can flex up or flex down. And so we'll see. I mean, maybe they'll give some additional color, maybe in the next quarterly update. Let me see here. I'm just going to go through some of my notes here. So they did talk about other vehicles as well. And in addition to, you know, the company, Scott emphasized that they've built the satellites in such a form factor that they will work in any standard fairing. And so today, specifically, you mentioned Japan's Mitsubishi Heavy Industries H3. Europe's Ariane 6, ULA Vulcan or Atlas, and then of course SpaceX, Blue Origin, or sorry, SpaceX Falcon 9, Blue Origin New Glenn, India LVM-3. And then he also shouted out Rocket Lab, Relativity, and others, which, you know, he was saying that 2026 will still be somewhat constrained, but by the time 2027 rolls around, It's the company's view that there will be plenty of launch because you've got a number of different vehicles that are coming online or will have matured by then, where they will be reliable vehicles that they can use. Let's see here. He did talk about, he was asked about some of the commercial contracts. And he went into a little more detail around the makeup of those. And so, you know, there's this idea of either on a subscription for a, and this is a, you know, consumer who subscribes through like, say, an AT&T or Verizon, there's the add-on service where it's split 50/50. And there, You know, if a user adds the service and they pay for, you know, some package that you could do it on, you know, a gigabyte or something like that, then, then, um, that would be pretty straightforward. Or they could also do plan inclusion where for premium plans, they would just charge the operator on a per subscriber basis. And so what he was saying is like, you know, it'll be up to operators to kind of figure out what makeshift they want there. But what he was saying though is that there are in these contracts, there's, you know, they continue to want to guide people down towards revenue, or sorry, these MNOs towards revenue prepayments, and then there will be minimums. And so, you know, he did mention, and I think he was talking about Saudi Telecom, that those minimums that are in that contract, they would be disappointed if they don't You know, well more than exceed those minimums. And so, and it sounds like it's not just something in the Saudi Telecom contract, it's also something that exists in Verizon and AT&T and Vodafone and others that they're working through. So I think on the commercial side, I think we're going to be pretty surprised. Like once the service is rolled out, there will be You know, the ramp is going to be higher than we, or perhaps the market thinks too. But like, in going back to the minimum revenue commitments, he was like, you know, these are basically floors. And he's like, these floors are, as I said before, like we, the expectation is that they're going to well outperform those floors. And so Let's see here. Yeah, so prepayments, you know, they'll be rec— the prepayments will be recognized once it's applied as the service is ramped up. And then there are quarterly or annual minimums that will need to be trued up. And so what he was saying is that once they're at scale, revenue recognition, at least initially, it'll be a bit lumpy, but then once they're at scale and they get a bunch of Subscribers on, it should be pretty smooth and it'll be predictable. Just like, you know, like normal institutional investors or retail investors, you like to see a subscription model like a Netflix where, you know, if a subscriber is paying $12, $13, $14 a month, or in this instance, sorry, $10 a month, and you get half of that, then as you add more subscribers and it's recurring revenue, it's high margin. And remember, like, this service is something that people will use in very specific times, but they're not going to be using it constantly. And so you can sell it multiple times, which is great. And so what he was saying is that over time, as they scale, the revenue will be very smooth. And as we know, the margins on that are going to be something approaching EBITDA margins, or sorry, gross margins are going to be somewhere in the 80s, 90s%. So it's going to be Very profitable. And so he did give a little color around revenue and he talked about how they're still guiding to $50 to $75 million of revenue in the second half of 2025. But that's not recurring revenue. That's not the level they expect once they're at full scale. And he was hinting, he was saying like, that's just like turning on the engine and It's demonstrating how the engine works and customers are, you know, and that customers are willing to pay for the service. But then he was saying, you know, 2026 will be significantly above that second half 2025 guidance. And they, and he said, you know, they think 2026 will get them perhaps to cash flow breakeven, like that level or above. And then 2027 will be the first full year of commercial service in key markets. And then he said it, he characterized it this way. That's when you start to build the billion-dollar, billion-plus revenue business. His words, not mine. So yeah, that was quite bullish. Let's see here. Just going through some of these notes. He did have some comments around defense. And so You know, there's, he discussed like existing programs and novel, you know, novel applications that they can, they can target in both communications and non-communications. And so he was saying they have in particular very, some very big opportunities within Golden Dome. And however, the funding structure of Golden Dome is still being worked out. But he did say that, you know, there's that and then there's some of these other defense opportunities, but he actually then put some figures around it. So this year the defense opportunity for them is tens of millions of dollars. And then next year he thinks it's hundreds of millions. And then the expectation is over time it'll be a billion-dollar-plus type of business. And so I think that, you know, that fits with kind of how we've been thinking about it. And yeah, I mean, I do think there is this possibility that the defense business is going to be bigger initially. And then of course, you know, the commercial business will eventually dwarf it, but especially in the early years and when, you know, before the constellation's fully deployed, there will be this demand from on the defense side, which I think is great. Let's see here. The other thing is they— he did talk about Legato today about how— and by the way, the Bank of America analyst, I think they'd been talking with people in DC, you know, they run regulatory checks. And from what they can tell, you know, he was like, yeah, I think it's going to be approved. Like, we haven't seen any issues. And Scott agreed. He's like, yeah, based off of The feedback that they've got. And he also, by the way, so this was an important part. Scott mentioned that there's like this oversight board where there's a few other branches of government that have a seat at that oversight board. And one of them is the Department of Defense, or now Department of War. And so whenever they'd get their various STAs or licenses approved, like that has to go through that oversight board. And so based off of the feedback there and kind of the process, they think that what has been a contentious issue with previous Legato and the Department of Defense, they think that this transaction, which basically shifts the Legato transaction from, or Legato Spectrum from terrestrial use back to what it was originally intended, which is MSS, That, that's going to make the Department of War happy and that they'll be on board. And so, um, for, I guess one nugget that came out of it today is that they've been ready to file the application for FCC approval for the spectrum transaction. However, because the government's been shut down, they haven't been able to file it yet. But now that the government is going to be open tomorrow, um, We will, they, they, he said they're gonna submit that application and then you're looking at a 6 to 9 month, you know, timeframe to process that, which is consistent with, you know, a normal regulatory review process. And so we probably should see that Legato filing at some point over tomorrow or the next, you know, few days. But that's exciting, you know. Data point that was released today. Let's see here. One other interesting thing that I guess has been kind of lost in all the market hype and people getting excited around direct device is that Scott mentioned this, and it is key point of emphasis, which I think is important, is that you know for devices to work with you know satellites today, like ASD space mobiles. initial approach and the main approach is to work on cellular frequencies. So, you know, 600 to 900 megahertz, then, you know, Scott emphasized today, like that's, there's 1,000 megahertz of cellular spectrum that works today on phones. Those frequencies already work on phones. And so that's what we, that was our original approach in the business. And that's what gives you the best coverage. You know, it gives you access to the most subscribers. And then, but now, you know, this was in response to a question from the analyst who was asking about, hey, you know, so what happens if Globalstar sells or, you know, if Iridium sells? And Scott was like, well, first, you know, I want to make it clear, like we are uniquely differentiated because we can work with existing cell phones today. We're using cellular spectrum that has great coverage and propagation characteristics. And then when the opportunity came to add MSS spectrum, which is Legato, then, and you want to have additional spectrum to then improve the capacity of the service, that's what we did. However, these other players, whether that's, if it's Globalstar and whatever they're trying to figure out to do, or if it's Iridium or Starlink for that matter, Starlink today, for those that don't know, operates at 1900 megahertz, which is effect— I mean, it's 1990, so it's effectively MSS spectrum. It's, um, T-Mobile's PCSG block. And so, um, that spectrum, you need to have, you know, unobstructed views of the sky. Um, it can work maybe potentially in your house, um, but not very well. It's not cellular spectrum. I mean, it's, it's designated cellular spectrum, but for all intents and purposes, given where that's basically 2 gigahertz, it's not the terrestrial spectrum that's good for propagation and coverage. And so that's a key differentiation point where Starlink today only works in mid-band spectrum. And then, you know, in 2027 when they're able to utilize the spectrum they bought from EchoStar, which is AWS-4, that's 2 gigahertz as well. And so they're still, Going to, if they want to compete at a similar service level, which is, you know, Apple has talked about this idea of, you know, a positive user experience where you can just use the phone. You don't have to worry about pointing at the sky or doing all these things. Like, that's not Globalstar, that's not Iridium, that's not what Starlink is. That's going to be AST SpaceMobile because they're using cellular spectrum now. Starlink could eventually do that. They could try to roll out satellites that will do low-band spectrum, and that would need a different phased array and basically a different satellite. Similar to AST, the Block 2 satellites are low-band cellular spectrum. They're focused on that. Block 3 will be mid-band spectrum, and that will be a separate satellite. So yeah, Starlink could do that, but they'll have to change their architecture in order to work with low-band spectrum. So they'll have to get a larger phased array. They'll need to do fixed cells instead of regenerative architecture. So they'll have to put down beam cells that are very precise to avoid interference because with cellular spectrum, there's already terrestrial towers out there and you have to like basically fill in all the holes where those towers don't cover. And so there's a lot of challenges there. And so I think that's like, you know, it's a point, a very important point that is a nuance that I think journalists aren't going to know. A lot of investors aren't going to know, but for the people who really dig in, it's like, oh, this service is going to be way better because it uses cellular spectrum and you have a satellite that can navigate Without interfering with other terrestrial towers. And so that was an important point, which I'm not sure that the BVA analyst guy totally got it, but we get it. There was a question about, let's see, technology differentiation. And this is important too, which is the fact that AST satellites are Scott would characterize it as they're dumb satellites, right? Like they're bent pipe architecture. They're smart at like collecting signals and putting down beams. They have a lot of power. They can like listen. But basically they take the information and then they, you know, on a cellular frequency and then they package it into, they put it all together and then they beam it down on QV band spectrum, which is higher band spectrum. And then that actually, the brains, the RAIN architecture is actually on the ground, right? And so that integrates into the MNO's core network, but all the brains happens on the ground. And so the satellites, whether you go from 5G to 6G, I mean, I remember speaking to Abel years ago and he's like, yeah, we could do 7G, 8G, whatever it is, right? You're protocol agnostic because you're just collecting signals and putting them back down. And the issue with some of these other architectures is that if there's any changes to the protocols or, you know, and if there's any updates to the technology, you basically have to replace all the satellites. Whereas with AST, it's just, it's basically almost, it's not this, but I'll just call it like it's a signal repeater. It catches signals and then it puts them back down on Earth and all the intelligence happens on Earth. Now, obviously there's a lot of processing that goes into collecting those signals, putting them together, and then beaming back down to Earth. And obviously, like, how you listen to them and beaming cells down, that's really important. But from a technological standpoint in fighting obsolescence, like, these satellites work with existing MNO carrier networks. And so by doing that, they're more friendly. They, you know, the MNOs have control over the data versus like Starlink where Starlink gets the data, they have control of the customer, and then they pass on the information eventually to the MNO. But this is a huge point of competitive differentiation. Another thing is that he mentioned today about the ASICs, how, you know, even if Intel or anybody wanted to create an ASIC, that's a 5-year process now. Maybe that's a bit, you know, for someone like SpaceX, maybe they can do an ASIC in 3 years or 2 years. I know someone at least claimed like they could do it in 2 years, but it took the company 5 years and they invested in the ASIC. And then of course the various satellite programs, they've invested now, I think well over $2 billion. And so yeah, this stuff is pretty hard. And it's not easy to do and it takes time. You can throw so much money at a problem, but you also need time and you have to test things and fix them. And so anyway, but he obviously made the point about having a very large phased array and that being able to connect to a satellite, or sorry, to a phone, a very small device with a small power, small antenna. And so that's a huge difference. different point of differentiation where that connection is going to be much stronger versus a competitor who has a phased array that's much smaller. Let me just see here. Already talked about military, the size of that business. Let's see here. Yeah, I mean, so those were some of the key takeaways. I think He also covered quite a bit of ground in this discussion, but it's a lot of stuff that we already know. But yeah, I do want to talk a little bit about what lies ahead. And so I know today is like, it's a crappy day for markets. I mean, I was looking at just growth stocks in general and my God, it was an absolute bloodbath. And there are some sectors that probably are overvalued. And, you know, I wouldn't be surprised. I wasn't surprised to see some names down like 10%, 11%, but it was just across the board. Like, I think, and obviously a lot of spec growth, high beta names have performed quite well over this past year. And that's an understatement. Like, they've done extremely well. But today it was just massive de-risking, right? And so I'm not really sure. I think the government shutdown and the economic numbers that are coming out are looking pretty bad. And, you know, like today, and I guess I'll talk about this since it was a headline, Verizon, I think one of the headlines is like they're going to lay off 10,000 and then it was 15,000. Now it's like 20,000. Bloomberg overnight saying they're going to lay off 20,000. And I think to me that's not unexpected because I think a lot of the carriers are are quite bloated. And candidly, I think they've been, you know, they just appointed a new CEO who's going to try to reinvigorate things and drive growth for the company. And they're cutting some employees. They're also removing some of their own direct distribution, and maybe they're going to start looking to sell phones at the retail level through distributors versus their own owned, their internally owned stores. But yeah, I think obviously carriers are under tremendous pressure. And so, you know, to a layperson, they might be like, well, if Verizon's in trouble, like, is that a bad thing for HTC U Mobile? And it's like, no, that's actually a good thing. It's a good thing that from a perspective of they're under pressure to deliver growth, number one, and number two, they're clearly cutting people because they're trying to Cut costs and increase margins. And so, lo and behold, you've got this company called AST Space Mobile. They just signed a commercial agreement. I guess they've been at three weeks now. What does AST do for them? Well, number one, it gives them a new service to sell to their customers, and it and that service is going to increase ARPU average revenue per user per month. That service is also going to reduce churn, which is a huge pain point for MNOs. For an MNO to acquire a new subscriber, it's like a few hundred dollars, right? Like they have to, they buy you out of your plan or they might give you a new phone. There's marketing costs associated with that. And so it's expensive to acquire new customers. And, but on the flip side, the, you know, so this is a selling point, you know, they can go after T-Mobile customers. Maybe they'll go after, if they position the right way, they might win some AT&T customers, which Of course, AT&T is going to offer a similar type of service and they're going to, you know, maybe get some rise of customers. But the idea is that both of them are going to point their guns at T-Mobile and just take all those customers, right? But aside from acquiring customers, like this whole service, if you can imagine being able to tell someone like, hey, you're going to have 100% guaranteed coverage no matter where you are. That's going to reduce churn, right? Churn is like a big— it's much easier to keep an existing customer. You don't have to go out and buy them, but if you can satisfy them, then they'll just keep paying their monthly bills and they'll upgrade their phone. And there's all kinds of things that are good about keeping somebody at your service. And so for Verizon, on the subscriber side, it's huge. It's like, we're going to sell you a new service, we're going to add more value, we're going to be able to raise pricing because you think the value's worth more. And you're not going to leave. And then on the flip side, or not the flip side, going down the cost curve or the cost side for Verizon, it's like, okay, so we can also save CapEx. Like some of these rural areas that I was planning to build a tower, I don't have to do that anymore. I'm just going to cover it with satellite. Or I've got this tower in rural Mississippi. I've got a whole swath of towers and They're barely being used. I'm just going to decommission them. And each of those towers, I'm going to save a few hundred thousand bucks a year. And so it's a huge CapEx story because like you don't have to expand your network and in some ways you can shrink your network, the terrestrial towers, right? You don't have to pay for those expensive leases to whoever, you know, that tower is sitting on a building or maybe the transmitters are on a building or They're in someone's property right off the highway. You don't have to pay that. You don't have to pay the electricity that's going to it. You don't have to pay a lot of things. And so yeah, it's a huge CapEx story where they can save money. And so I think today with Verizon making its move and T-Mobile too, they just replaced Sievert with this other internal Deutsche Telekom guy. I guess John Stankey is like the only one left standing out of the original, or the 3 CEOs. But yeah, the carriers are all under pressure, which on the flip side, like on the one hand, they're under pressure, but also I think they have this tremendous opportunity, right? Because like, if you think about AI and edge computing and connecting drones and all these things, like these carriers in some respects are well positioned because they're going to be connecting all these devices. And so, but they're driven by the profit motive. They've got to deliver results. And so today's news on Verizon, I think, just kind of underscores the need for these companies to put forward a service that's going to captivate and delight customers and On one hand, and then on the other hand, it's going to save them a lot of money. And so there's not many things out there that can do that. And so the AST space mobile service is going to be great. But yeah, today sucked. The market is bad. I think I do, for some of these speculative areas, yeah, I guess it's not a surprise and it's healthy. But I do think just given some of the economic numbers we're seeing, and obviously the market's kind of flying blind here where we haven't been able to get labor data, inflation, because the government's been shut down. And so the market's probably more uncertain than it has to be. But I still think for AST SpaceMobile, like we've got a number of huge catalysts. And so we're set up quite well heading into the end of the year. Now, obviously if the market crashes, it's going to crash and And I don't think it will. I think this administration is incentivized to keep the market somewhat stable, if not going up. I also just look at what one of the New York Fed governors was saying is that I think bank reserves are quite low and, you know, we've already shifted from ending of QT and it sounds like the Fed is going to start making asset purchases in order to build up reserves. And so that's going to be introducing liquidity into the system and we know what that does. And I'm in the camp that I think we get another cut, interest rate cut in December. Obviously the Fed doesn't want, you know, they were a bit more balanced about discussing that and yeah, there's, it's not guaranteed. And of course, like they're going to inject some uncertainty to keep things somewhat constrained, but I think they will have to cut rates. But anyway, I think as long as the market doesn't completely Unravel, we've got a bunch of great things that are coming up. So we've got, obviously Bluebird 6 is in India, it's being integrated into LVM-3, and that's going to go up the first or second week of December. In the next 2 weeks, we've got Bluebird 7 that will be delivered to Florida and that will launch probably mid to late December. And then also in December, We will have, at least according to the timeline, we'll have 2, potentially 2 batches of 3 Bluebirds ready. So call it BB-8 through BB-13. So 6 satellites potentially ready in December. You know, do they ship in December? Who knows? But, you know, they'll probably be delivered sometime in January or early January and launch. sometime in January. And so there's a lot of big catalysts that are coming up. And when you couple that with the fact that now that the government's reopened and we started to see some of the comments to AST SpaceMobile's application for US market access, that process is coming to a head. And so We could see, and I know Chair Carr had, Chairman Brendan Carr had put out a tweet saying, you know, there's a lot of things that you got to do to get back into the seat and, you know, start reviewing different applications and start approving things or whatever. But I do think we have a really good shot of getting FCC approval for US market access by the end of the year. And that's something that You know, most base mobile investors have been waiting for years and know, but I'm not sure the market actually understands or knows that. So that could be a big potential positive. And then of course we've got the DOD, whether that's the recent government win that we had, which still needs to be worked out once the government opens. I think we'll get more details about that, or the company said they were awarded it, but they had to wait. This was the 9th award because the government was closed, but then you also have Golden Dome awards that potentially could be coming out in the next few weeks. Yeah. And so I think though the biggest catalysts are, and the most visible are the 2 launches in December and then the delivery hopefully of those You know, whether it's 4 or 5 or 6 Bluebird satellites, at least, I mean, imagine like the press release that's going to come out where it's like, hey, we've completed 6 of these things. You know, like that's going to be pretty huge. And then, you know, we're shipping them to Florida and then they're going to launch in January and there's going to be a get-together and whatever it is, right? And so we're kind of in this really exciting phase, which I know The company, and now that like Blue Origin New Glenn launched and landed successfully, it's really up to the company to deliver now, right? Like now it's getting those freaking control sets completed because the microns, like they can, they're producing those like hotcakes, right? And so it's a matter of making sure that those composite shell control sets get done on time and Mated to the microns and then put out the door. And so now the race is on basically. And so I think, yeah, I mean, it's a pretty exciting time. Like today the market sucked and, you know, I bought more on the dip and then, and yeah, I was able to pick some up even under $60, which was kind of nuts. Although not that nuts because like, you know, if you think back, It wasn't that long ago that we were at 60 before. And so, I mean, the fact that we even hit 100, like that was kind of crazy. And it will probably happen again, like in the coming weeks, months. That I feel pretty certain about. But yeah, today I think going back to what the original part of discussion, like Blue Origin New Glenn, you know, launching and landing. I mean, I think for On behalf of everyone, I can, it was a huge, huge moment for the company and for the space industry. And I think, yeah, I was just elated and relieved at the same time because I think that de-risked quite a bit for us. And I think, Scott, maybe I didn't mention this before, but let me look here. I was in my notes. I mean, for Scott, oh, the other thing he mentioned about launch is that, you know, they were proactive in de-risking launch. And he did mention that they still are actively signing or looking to sign more launch contracts. So take that for what it's worth. I assume that some of these other providers I think Abel mentioned MHI. That probably is one that makes sense, if not economically, for commercial and political reasons, launching on a Japanese rocket, one or 2 Bluebirds, like that would be a good idea, I think. But yeah, what an exciting day. I mean, it's a crappy day and I've had a pretty painful drawdown since the peak, but Like I've said before, for anyone listening, it's, you know, when you do achieve your price objectives, like it's always a good idea to take some profits and put that aside, put aside taxes. And so then you can just ride the rest of volatility, right? And so on days like today, I didn't really even care about the market because I was focused on Blue Origin New Glenn. And when that went off, that made my day. And I think everyone's kind of focused on the macro, but once everyone gets back, once things kind of settle and people focus back on company-specific issues and milestones and things like that, I think today's successful launch and landing is going to reframe the AST SpaceMobile investment case. And I think for For bears and people who will throw things at the company that there's no capacity or you're beholden to SpaceX. It's like, no, we're not. We're not. SpaceX is a great partner. Falcon 9 has been wonderful. We have used them. They've put up all of our satellites with the exception of BlueWalker 1, and we will continue to use them and they've been great. But now we've got another partner. We've got 2 other partners and we're looking for more because we've got a lot of satellites to launch, not just, you know, 65 to, sorry, 45 to 60, but looking to launch in excess of 100, right? And so we're, Scott mentioned today, we're fully funded for well over 100. And it looks like, you know, we're going to be launching mid-band or start rolling out mid-band Bluebirds by the end of next year. And so yeah, it's a, it's a very exciting time. But anyway, I've been rambling. I hope this was informative and helpful. And I think, yeah, everyone should be, everyone should crack open a beer or what, however you choose to celebrate. But today was an amazing day. And I know no one likes to lose money, but the Blue Origin New Glenn news, I think once it sinks in and people start really understanding what the implications are of that, and that this goes for not just Astra SpaceMobile, but for other companies, I mean, like Rocket Rocket Lab day. What a great, you know, success that they were able to get those 2 satellites up there, um, which, you know, I think some people don't know that, but Rocket Lab, those, the 2 Escapade satellites were made by Rocket Lab. And so, so that's, that's a great, you know, accomplishment for them. Um, but yeah, this has been good for the US space program and, and it's what this administration, what future administrations want and what MCC and NASA to have this abundance of riches, right, of launch is going to be great. And so anyway, I'll end it there. Let me just, I guess I'll just take a quick look at, see if there's any comments here. Let's see. Presumably every country will need their own ground station for sovereignty purposes. Is this a complex operation more so than what we're already doing? Think of Iridium in its sector orbits. Yeah, I mean, the way that, so this person, thanks for the question. The way that the satellites are architected is that they send down signals and you need a ground station when the ground station is where the brains are. And so you can architect these things 2 ways. You can either put all the brains in the satellite, Or you can put all the brains on the ground. And when you have an architecture where if you put all the brains in the satellite, if there's any changes you need to do, then you have to change the satellite. Like if the protocols change or if anything, new technology comes out, that satellite has to be changed. And also it requires more power, it has more complexity versus Having a gateway where the brains are on the ground and the satellite's just sending stuff down. But to your question, does that introduce complexity? It does in the sense that over multiple countries, you might, well, in the EU, for example, the EU is going to be comfortable in landing all the data in Germany, for example, or Spain. But in some smaller countries, yeah, it could introduce a bit more complexity. But I'm sure the company can work that out. You know, like for example, Saudi Telecom covers the Kingdom of Saudi Arabia, but they also cover, what is it? I think 13 other countries. And so my guess is that they will use those gateways in Saudi Arabia and perhaps a few other countries, but to provide all the management of that data if you're a Saudi You know, customer in those other countries or in the Kingdom of Saudi Arabia. But yeah, I have been thinking about that. I mean, it is going to be a bit more complex, but I feel quite confident the company has thought about that and will work it out. Let's see. Any insight into the production cadence and stage 1s for New Glenn? Apparently they have many stage 2s already. Well, Scott mentioned it today and I mean, he didn't say the exact number, but he said they've got a bunch of boost, uh, stage 1 boosters in production or, or ready. And so, um, you know, he's been at the factory. I think he spends quite a amount of time down there. So, um, so yeah, I take him for his word, but I, I don't know if that means like there's 3 of 'em ready or there's 2 or, or 5 or, you know, but. I will tell you, like they have, they have an extra one because the one they launched today landed. So they can use that one again. Let's see, when do you believe this revenue ramp will start up? Well, I mean, we already have revenue ramp right now. We've got $50 to $75 million this second half. And then Scott mentioned that, you know, in terms of gateway sales, they're expecting that to what, average $10 million a month. And then They've got military contracts that are kicking in. I think you mentioned they're hoping to get into the hundreds or $100 million next year. And the commercial side, I think, you know, you're gonna start seeing some ramp. And so my guess, I mean, I think the Street has, maybe it's like, I, you know what, I don't wanna misspeak here, but I think, you know, I would expect us to next year have maybe $200 million of revenue or so. I mean, we'll see.
[00:58:36] Speaker A: Yeah.
[00:58:37] Speaker C: But that's going to ramp up quickly into billions, right? The following year, once commercial service is launched, you'd probably, in 2027, you're looking at several hundred million to up to a billion if, of course, timing goes right. But yeah, the ramp is going to be pretty insane. So hold onto your diaper. Let's see. Just looking at some of these questions. Some of them are not questions. Let's see. If the service is oversold, couldn't that lead to a scenario like a natural disaster where people expect AST service, but they're unable to deliver decent speeds? Yeah, so you can throttle people. I mean, what the company's going to do, for example, in some of these developing nations is that they are going to sell lower speed plans and you can overbook a satellite and deliver, basically throttle everyone. So Not everyone's going to, in a lower, you know, in a developing country, if people are paying a lower fee, they might get, you know, speeds that are 1 megabit per second or 2 megabits per second, something much slower. But then you can have more simultaneous users on that service. And so during a disaster, if there's a lot of people that need service, if the network's wiped out and you've got to get everybody online, Yeah, you could throttle the service where, of course, like you're not going to let someone watch Netflix while everyone's trying to call their loved ones. Like you might just allow people to do texting and some level of voice. You might throttle everybody during that period of time, but there is an ability to, yeah, manage the services in such a way where you get everybody connectivity because it's important, but then not everyone's going to be doing Full broadband, like it's going to be throttled back. Someone's asking, is this the start of the demise of Mr. Musk? No, I would not go out on a limb and say that. SpaceX is going to do just fine. If anything, it's going to keep them honest, right? Like they're going to have to lower their prices and innovate more, which they already do, to be fair. And so, but what I think Blue Origin, what it does is it introduces another launch provider. And for customers, that's good. There's choice and it's going to bring down prices. And yeah, I mean, competition is good, just like for AST SpaceMobile, they've got to compete with Starlink and perhaps another player at some point. But there's room, there's room and there's enough economics and yeah, the market's going to be big.
[01:01:21] Speaker B: So.
[01:01:21] Speaker C: I think that's it. I've been rambling on now for an hour. Maybe I'll cut it there. But yeah, an exciting day. I think everybody should celebrate. You know, I joke about the markets, you know, we haven't been this oversold since tomorrow. I mean, we'll see what tomorrow and the next few days bring, but putting aside all that near-term stuff, it's an exciting time for the company. Like we're on the cusp of Multi-launch campaign and commercial service. And today when Scott was speaking at Bank of America, like some of these things that he was saying, he was finally putting numbers around it. It just got me really excited. And then to see Blue Origin launch and land, that just gave me a huge sense of, yeah, excitement. Like we've got a lot of great things going on and to have your workhorse vehicle working, like that's a huge relief. So anyway, thanks everyone for joining. And yeah, we'll speak again. We'll see. I'm going to just like everyone spend this evening reading articles about the launch and watching videos again and reliving it. But thanks everyone for joining. We'll talk again soon.
[01:02:40] Speaker A: This has been 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.
[01:02:58] Speaker B: 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 mobile 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 the user even to know that it's connected by satellite. Our role is to bring this into reality, always in partnership Listen. Mmm, waffles.