AST SpaceMobile Q3 common-stockholder loss hits $132M
Cash, cash equivalents and restricted cash totaled approximately $3.2 billion as of September 30, 2026, alongside $4.2 billion in total debt.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
AST SpaceMobile, Inc. (ASTS) is developing a satellite-based cellular broadband network for standard, unmodified devices. In the third quarter of 2026, revenue was $42.3 million, compared with $14.7 million a year earlier, while net loss attributable to common stockholders was $132.4 million, versus $122.9 million. For the first nine months, revenue was $88.6 million and net loss attributable to common stockholders was $554.3 million.
BB6, BB8, BB9 and BB10 were ready for intended use as of September 1, 2026, and BB11, BB12 and BB13 were deployed by September 30. Nine-month cash used in operating activities was $314.5 million, and cash used in investing activities was $1.294 billion. Cash, cash equivalents and restricted cash totaled approximately $3.2 billion at quarter-end; total debt was $4.161 billion. BB7 was de-orbited after reaching a lower-than-planned orbit. The company collected $32.4 million of insurance claims, reported a loss of approximately $126.0 million net of recoveries, and expects a replacement launch under its contract.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointNine-month revenue was $88.6 million, compared with $16.6 million in 2025.
Negative
- Moderate pointNine-month common-stockholder net loss: $554.3 million, versus $268.0 million in 2025.
- Moderate pointNine-month operating cash use was $314.5 million, versus $136.5 million in 2025.
- Minor pointThird-quarter common-stockholder net loss: $132.4 million, versus $122.9 million in 2025.
Filing Explained
The company reports
Key Figures
Key Terms
Noncontrolling interest financial
induced conversion expense financial
capped call financial
restricted cash financial
Low Earth orbit technical
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What was ASTS revenue in the third quarter of 2026?
What was ASTS's net loss for the first nine months of 2026?
How much purchase commitments did ASTS report?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File No.
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
(Zip Code) |
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(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of November 5, 2026, there were
AST SPACEMOBILE, INC.
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2026
TABLE OF CONTENTS
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Part I. Financial Information |
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Item 1. Financial Statements |
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Condensed Consolidated Balance Sheets as of September 30, 2026 and December 31, 2025 (Unaudited) |
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Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2026 and 2025 (Unaudited) |
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Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2026 and 2025 (Unaudited) |
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Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2026 and 2025 (Unaudited) |
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Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2026 and 2025 (Unaudited) |
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Notes to Condensed Consolidated Financial Statements (Unaudited) |
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. Quantitative and Qualitative Disclosures About Market Risk |
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Item 4. Controls and Procedures |
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Part II. Other Information |
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Item 1. Legal Proceedings |
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Item 1A. Risk Factors |
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds |
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Item 3. Defaults Upon Senior Securities |
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Item 4. Mine Safety Disclosures |
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Item 5. Other Information |
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Item 6. Exhibits |
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Signatures |
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i
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
AST SPACEMOBILE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands, except share data)
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ASSETS |
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Current assets: |
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Accounts receivable, net (includes related party accounts receivable of $ |
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Inventory |
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Prepaid expenses |
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Total current assets |
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Restricted cash |
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Property and equipment, net |
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Operating lease right-of-use assets, net |
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Other non-current assets (includes related party loan receivable of $ |
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TOTAL ASSETS |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current liabilities: |
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Accounts payable |
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Accrued expenses and other current liabilities |
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Current contract liabilities |
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Current operating lease liabilities |
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Current portion of long-term debt |
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Total current liabilities |
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Non-current liabilities: |
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Warrant liabilities |
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Non-current operating lease liabilities |
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Non-current contract liabilities |
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Long-term debt, net |
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Other non-current liabilities |
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Total liabilities |
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Commitments and contingencies (Note 8) |
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Stockholders' Equity: |
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Class A Common Stock, $ |
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Class B Common Stock, $ |
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Class C Common Stock, $ |
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Additional paid-in capital |
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Accumulated other comprehensive income |
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Accumulated deficit |
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Noncontrolling interest |
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Total stockholders' equity |
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
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$ |
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See accompanying notes to the unaudited condensed consolidated financial statements
1
AST SPACEMOBILE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in thousands, except share and per share data)
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For the Three Months Ended |
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For the Nine Months Ended |
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2026 |
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Revenues: |
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Products revenues (includes related party revenues of $ |
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Services revenues |
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Total revenues |
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Operating expenses: |
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Cost of revenues (exclusive of items shown separately below) |
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Cost of revenues - products (includes related party cost of revenues of $ |
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Cost of revenues - services |
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Engineering services costs |
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General and administrative costs |
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Research and development costs |
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Depreciation and amortization |
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Loss on involuntary conversion |
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Total operating expenses |
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Other (expense) income: |
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Gain (loss) on remeasurement of warrant liabilities |
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Interest expense |
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Interest income |
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Other expense, net |
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Total other expense, net |
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Loss before income tax benefit (expense) |
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Income tax benefit (expense) |
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Net loss before allocation to noncontrolling interest |
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Net loss attributable to noncontrolling interest |
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Net loss attributable to common stockholders |
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$ |
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$ |
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Net loss per share attributable to holders of Class A Common Stock |
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Basic and diluted |
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$ |
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$ |
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Weighted-average number of shares |
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Basic and diluted |
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See accompanying notes to the unaudited condensed consolidated financial statements
2
AST SPACEMOBILE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)
(Dollars in thousands)
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For the Three Months Ended |
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For the Nine Months Ended |
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2026 |
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2025 |
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2026 |
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2025 |
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Net loss before allocation to noncontrolling interest |
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$ |
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Other comprehensive (loss) income |
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Foreign currency translation adjustments |
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Total other comprehensive (loss) income |
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Total comprehensive loss before allocation to noncontrolling interest |
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Comprehensive loss attributable to noncontrolling interest |
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Comprehensive loss attributable to common stockholders |
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$ |
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$ |
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$ |
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$ |
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See accompanying notes to the unaudited condensed consolidated financial statements
3
AST SPACEMOBILE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)
(Dollars in thousands, except share data)
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Class A |
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Class B |
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Class C |
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Additional |
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Accumulated |
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Values |
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Values |
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Values |
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Paid-in |
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Comprehensive Income (Loss) |
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Accumulated Deficit |
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Noncontrolling Interest |
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Total Equity |
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Balance, June 30, 2026 |
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$ |
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$ |
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$ |
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$ |
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Stock-based compensation |
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Issuance of equity under employee stock plan |
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Issuance of equity to acquire spectrum priority rights and pay spectrum usage fees |
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Vesting of restricted stock units |
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Capped call |
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Redemption of AST LLC Common Units for Class A Common Stock |
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Foreign currency translation adjustments |
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Net loss |
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Balance, September 30, 2026 |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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Class A |
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Class B |
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Class C |
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Additional |
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Accumulated |
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Shares |
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Values |
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Values |
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Shares |
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Values |
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Paid-in |
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Comprehensive Income (Loss) |
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Accumulated Deficit |
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Noncontrolling Interest |
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Total Equity |
|
|
|||||||||||
Balance, December 31, 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
||||||||||
Stock-based compensation |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
||
Issuance of common stock, net of issuance costs |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
||||
Issuance of equity under employee stock plan |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
||||
Issuance of equity to acquire spectrum priority rights and pay spectrum usage fees |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|||
Vesting of restricted stock units |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
Capped call |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
||
2032 |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
||||
2032 |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
||||
Warrant exercise |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
||||
Redemption of AST LLC Common Units for Class A Common Stock |
|
|
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
||
Foreign currency translation adjustments |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Balance, September 30, 2026 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
||||||||||
See accompanying notes to the unaudited condensed consolidated financial statements
4
AST SPACEMOBILE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)
(Dollars in thousands, except share data)
|
|
Class A |
|
|
Class B |
|
|
Class C |
|
|
Additional |
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
Shares |
|
|
Values |
|
|
Shares |
|
|
Values |
|
|
Shares |
|
|
Values |
|
|
Paid-in |
|
|
Comprehensive Income (Loss) |
|
|
Accumulated Deficit |
|
|
Noncontrolling Interest |
|
|
Total Equity |
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance, June 30, 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
||||||||||
Stock-based compensation |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|||
Issuance of common stock, net of issuance costs |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
||||
Issuance of equity under employee stock plan |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
||||
Issuance of equity to acquire spectrum priority rights |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
||||
Vesting of restricted stock units |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
Capped call |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
2032 |
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|||||
Warrant exercise |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
||||
Redemption of AST LLC Common Units for Class A Common Stock |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
||
Foreign currency translation adjustments |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|||
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Balance, September 30, 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
||||||||||
|
|
Class A |
|
|
Class B |
|
|
Class C |
|
|
Additional |
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
Shares |
|
|
Values |
|
|
Shares |
|
|
Values |
|
|
Shares |
|
|
Values |
|
|
Paid-in |
|
|
Comprehensive Income (Loss) |
|
|
Accumulated Deficit |
|
|
Noncontrolling Interest |
|
|
Total Equity |
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance, December 31, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
|||||||||
Stock-based compensation |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|||
Issuance of common stock, net of issuance costs |
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|||||
Issuance of equity under employee stock plan |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
||||
Issuance of equity to acquire spectrum priority rights |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
||||
Vesting of restricted stock units |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
Issuance of penny warrants |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|||
Capped call |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
2034 Convertible Notes settlement |
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|||||
2032 |
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
98,138 |
|
|
|
|
|
||||
Warrant exercise |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
||||
Redemption of AST LLC Common Units for Class A Common Stock |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
||
Foreign currency translation adjustments |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|||
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Balance, September 30, 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
||||||||||
See accompanying notes to the unaudited condensed consolidated financial statements
5
AST SPACEMOBILE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in thousands)
|
|
For the Nine Months Ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
|
|
|
|
|
|
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net loss before allocation to noncontrolling interest |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net loss before noncontrolling interest to cash used in operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
||
Amortization of debt issuance costs |
|
|
|
|
|
|
||
Amortization of debt commitment fee |
|
|
|
|
|
|
||
Loss on disposal of property and equipment |
|
|
|
|
|
|
||
Induced conversion expense on convertible notes |
|
|
|
|
|
|
||
Loss on remeasurement of warrant liabilities |
|
|
|
|
|
|
||
Stock-based compensation |
|
|
|
|
|
|
||
Non-cash interest expense, net |
|
|
|
|
|
|
||
Loss from equity method investment |
|
|
|
|
|
|
||
Loss on involuntary conversion |
|
|
|
|
|
|
||
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
( |
) |
|
|
( |
) |
Prepaid expenses and other current assets |
|
|
( |
) |
|
|
( |
) |
Inventory |
|
|
( |
) |
|
|
( |
) |
Accounts payable and accrued expenses |
|
|
|
|
|
|
||
Contract liabilities |
|
|
|
|
|
|
||
Other assets and liabilities |
|
|
( |
) |
|
|
( |
) |
Net cash used in operating activities |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
Cash flows from investing activities: |
|
|
|
|
|
|
||
Purchase of property and equipment |
|
|
( |
) |
|
|
( |
) |
Capital advances to Ligado |
|
|
( |
) |
|
|
|
|
Purchase of spectrum intangibles |
|
|
( |
) |
|
|
( |
) |
Insurance proceeds received from BB7 launch |
|
|
|
|
|
|
||
Capital contribution to equity method investment |
|
|
( |
) |
|
|
|
|
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
Cash flows from financing activities: |
|
|
|
|
|
|
||
Proceeds from debt |
|
|
|
|
|
|
||
Repayments of debt |
|
|
( |
) |
|
|
( |
) |
Payment for debt issuance costs |
|
|
( |
) |
|
|
( |
) |
Proceeds from issuance of common stock |
|
|
|
|
|
|
||
Payments for third party equity issuance costs |
|
|
( |
) |
|
|
( |
) |
Issuance of equity under employee stock plan |
|
|
|
|
|
|
||
Employee taxes paid for stock-based compensation awards |
|
|
( |
) |
|
|
( |
) |
Purchase of capped call transactions |
|
|
( |
) |
|
|
( |
) |
Payments for debt commitment fee |
|
|
|
|
|
( |
) |
|
Proceeds from share issuances to repurchase 2032 |
|
|
|
|
|
|
||
Payments for repurchase of 2032 |
|
|
( |
) |
|
|
( |
) |
Proceeds from share issuances to repurchase 2032 |
|
|
|
|
|
|
||
Payments for repurchase of 2032 |
|
|
( |
) |
|
|
|
|
Net cash provided by financing activities |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
||
Net increase in cash, cash equivalents and restricted cash |
|
|
|
|
|
|
||
Cash, cash equivalents and restricted cash, beginning of period |
|
|
|
|
|
|
||
Cash, cash equivalents and restricted cash, end of period |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
||
Non-cash activities: |
|
|
|
|
|
|
||
Right-of-use assets obtained in exchange for operating lease liabilities |
|
$ |
|
|
$ |
|
||
Non-cash investing and financing activities: |
|
|
|
|
|
|
||
Purchases of property and equipment in accounts payable and accrued expenses |
|
$ |
|
|
$ |
|
||
Stock-based compensation capitalized in property and equipment |
|
|
|
|
|
|
||
PIK interest paid through issuance of PIK notes |
|
|
|
|
|
|
||
Deferred asset acquisition costs paid by issuance of penny warrants |
|
|
|
|
|
|
||
Convertible notes settled by issuance of Class A Common Stock |
|
|
|
|
|
|
||
Spectrum intangibles acquisition costs accrued or paid by issuance of shares |
|
|
|
|
|
|
||
Settlement of warrant liabilities by issuing shares |
|
|
|
|
|
|
||
Cash paid for: |
|
|
|
|
|
|
||
Interest |
|
$ |
|
|
$ |
|
||
Income taxes, net |
|
|
|
|
|
|
||
See accompanying notes to the unaudited condensed consolidated financial statements
6
AST SPACEMOBILE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2026
(Unaudited)
AST SpaceMobile, Inc., collectively with its subsidiaries (“SpaceMobile” or the “Company”) is currently designing, developing and manufacturing the constellation of BlueBird (“BB”) satellites and has begun launching its planned space-based Cellular Broadband network distributed through a constellation of low Earth orbit (“LEO”) satellites. Once deployed and operational, the BB satellites are designed to provide connectivity directly to off-the-shelf and unmodified devices at broadband speeds (the “SpaceMobile Service”) and be accessible for other applications for government use. The Company intends to offer the SpaceMobile Service to cellular subscribers and others through wholesale commercial agreements with cellular service providers. The Company also intends to leverage its patented technology, including large phased array and high power capability of its BB satellites, for a variety of applications in the government sector. The Company is headquartered in Texas where it operates satellite assembly, integration and testing (“AIT”) facilities. The Company also has engineering and development centers elsewhere in the United States, India and Scotland, and engineering, development and production centers in Spain and Israel. The Company’s global footprint was approximately 505,000 square feet as of September 30, 2026. The Company’s intellectual property (“IP”) portfolio is diverse, containing numerous and various innovations of the direct-to-device satellite ecosystem from space to Earth. The Company’s IP portfolio consists of
The Company launched five first generation commercial BB satellites (“Block 1 BB satellites”) on September 12, 2024. In October 2024, the Company completed the deployment of the phased array antennas and Q/V antennas in orbit and performed a series of monitoring tests and activities to confirm the successful initial operations of the Block 1 BB satellites. In January 2025, the Company successfully made the first SpaceMobile video call from space with Vodafone using standard unmodified 4G/5G smartphones. In February 2025, the Company completed the voice and video call tests on standard unmodified smartphones with AT&T and Verizon in the U.S. and also completed the tests for non-communication applications for the United States government. All five Block 1 BB satellites have participated in the tests at various stages. In April 2025, together with Rakuten Mobile, Inc., the Company successfully conducted a two-way broadband video call in front of a live audience using unmodified smartphones on the SpaceMobile network enabled by a Block 1 BB satellite in orbit today. On July 21, 2025, the Company and AT&T made the first-ever Voice over LTE (“VoLTE”) call and short message service over satellite using AT&T’s spectrum and core network with a standard unmodified cell phone. On October 2, 2025, together with Bell Canada, the Company achieved Canada’s first-ever space-based 4G VoLTE voice call, broadband data connection, and video streaming using standard unmodified smartphones. Using the Block 1 BB satellites, the Company has continued to conduct various successful tests with its partners, including the emergency communications tests, and has achieved 98.9 Mbps peak data speeds directly to a standard unmodified smartphone.
On December 23, 2025, the Company launched the first (“BB6”) of its next generation commercial BB satellites (“Block 2 BB satellites”), which was successfully deployed in February 2026. On April 19, 2026, during the New Glenn 3 mission, BB7 was placed into a lower than planned orbit by the upper stage of the launch vehicle. While the satellite separated from the launch vehicle and powered on, the altitude was too low to sustain operations with its on-board thruster technology and, as a result, BB7 was de-orbited. On June 17, 2026, the Company launched BB8, BB9, and BB10, which were successfully deployed in July 2026. On August 5, 2026, the Company successfully launched BB11, BB12, and BB13, which were successfully deployed by September 30, 2026. In September 2026, the Company completed the deployment of the communications phased array antennas and Q/V antennas in orbit and performed a series of monitoring tests and activities to confirm the successful initial operations of BB6, BB8, BB9, and BB10. Accordingly, the Company determined that BB6, BB8, BB9, and BB10 were ready for their intended use as of September 1, 2026. The Block 2 BB satellites feature an up to approximately 2,400 square feet phased array, the largest phased array ever deployed in a LEO for commercial use, which is more than three times larger than the phased array of the Block 1 BB satellites and designed to deliver up to 10 times the bandwidth capacity of the Block 1 BB satellites. The performance of the Block 2 BB satellites is driven by several breakthroughs in space-based architecture. The large antenna array allows the satellite to transmit and receive signals from standard handheld devices. Further, the large aperture enables precise beamforming, creating narrower, more focused coverage areas. This precision minimizes interference, maximizes network capacity and provides a consistent high-quality user experience for Cellular Broadband services, including voice, data and video.
The Company is organized in an “Up-C” structure in which the business is operated by AST & Science, LLC (“AST LLC”) and its subsidiaries and in which the Company's only direct assets consist of equity interests in AST LLC. As the managing member of AST LLC, the Company has full discretion to manage and control the business of AST LLC and to take all action it deems necessary to accomplish the purposes of AST LLC. The Company’s Class A Common Stock is listed on the Nasdaq Capital Market under the symbol “ASTS.”
2. Summary of Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
The accompanying unaudited condensed consolidated financial statements and related notes have been prepared by the Company in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and the requirements of the Securities and Exchange Commission (“SEC”). The unaudited condensed consolidated financial statements include the accounts of the Company, AST LLC and its subsidiaries. Intercompany transactions and balances have been eliminated upon consolidation. Certain comparative amounts have been reclassified to conform to the current period presentation. These reclassifications had no effect on the reported results of
7
operations. In the opinion of management, these unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal and recurring adjustments) necessary to fairly state the unaudited condensed consolidated financial statements.
As the Company is the sole managing member of AST LLC and has full, exclusive and complete discretion to manage and control the business of AST LLC and to take all actions it deems necessary, appropriate, advisable, incidental, or convenient to accomplish the purposes of AST LLC, the financial statements of AST LLC and its subsidiaries have been prepared on a consolidated basis with the Company.
The accompanying unaudited condensed consolidated financial statements and related notes should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2025, included in its Annual Report on Form 10-K filed with the SEC on March 2, 2026 (the “2025 Annual Report on Form 10-K”). The results of operations for the periods presented are not indicative of the results to be expected for the year ending December 31, 2026 or for any other interim period or other future year.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. The Company bases its estimates and assumptions on historical experience when available and on other market-specific or other relevant assumptions that it believes to be reasonable under the circumstances. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, useful lives assigned to property and equipment, potential impairment of long-lived assets and indefinite-lived intangibles, and equity-based compensation expense. The Company assesses estimates on an ongoing basis; however, actual results could materially differ from those estimates due to risks and uncertainties, including the continued uncertainty surrounding rapidly changing market and economic conditions due to geopolitical conflicts and macroeconomic conditions including changes in inflation and interest rates.
The Company’s significant accounting policies are described in Note 2 Summary of Significant Accounting Policies of the 2025 Annual Report on Form 10-K, and there have been no significant changes in these significant accounting policies as compared to those described therein.
Segment
Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance.
The Company’s CODM is its Chairman and Chief Executive Officer. The Company has determined that it operates in
Revenue Recognition
Revenue generated from sales of goods and services is recognized when a customer obtains control of promised goods or services in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”). During the three and nine months ended September 30, 2026, the Company recognized $
During the three and nine months ended September 30, 2026, the Company recognized $
8
prime contractors for U.S. government contracts. Under these arrangements, the Company has provided testing and other development services designed to enable future service capabilities. These contracts typically contain a single performance obligation and include a series of fixed-price milestones for which the Company has the right to invoice upon completion and customer acceptance. The Company recognizes revenue from these contracts over time when milestones are achieved and accepted by the customer, which reflects the pattern by which the Company satisfies its performance obligation through the transfer of service to the customer.
Additionally, the Company has definitive commercial agreements with MNOs to provide the SpaceMobile Service. These arrangements contain multiple performance obligations, including sale of gateway equipment hardware and software and a stand ready obligation to provide the SpaceMobile Service. Revenue for the SpaceMobile Service will be recognized over the life of the contract, beginning when the Company provides MNOs access to its satellite network. To date, the Company has not recognized any revenues from the SpaceMobile Service.
The Company defers revenue and recognizes contract liabilities in the event the performance obligations are not satisfied for which payment has been received. As of September 30, 2026 and December 31, 2025, $
Revenue allocated to remaining performance obligations of existing contracts, which includes contract liabilities and amounts that will be invoiced and recognized as revenue in future periods, was approximately $
Accounts Receivable and Allowance for Credit Losses
Accounts receivable are reported net of an allowance for credit losses that are not expected to be recovered. The Company recognizes the allowance for credit losses at inception of sales and reassesses quarterly based on management’s expectation of the asset’s collectability. The allowance is based on multiple factors including historical experience with bad debts, the credit quality of the customer base, the aging of such receivables and current macroeconomic conditions. The Company elected the practical expedient, available as part of the early adoption of Accounting Standards Update (“ASU”) 2025-05 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, not to consider management’s expectations of conditions in the future for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606. The Company’s contractual payment terms with its customers generally range from 60 to 90 days. As of September 30, 2026, management evaluated the collectability of its accounts receivable portfolio and did not identify any material credit risk. The allowance for credit losses was immaterial for the three and nine months ended September 30, 2026 and 2025.
Future Adoption of Recently Issued Accounting Pronouncements
In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which is intended to improve the disclosures of expenses by providing more detailed information about the types of expenses in commonly presented expense captions. The standard is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The standard can be applied either prospectively or retrospectively. The Company is currently evaluating the potential impacts of adopting this ASU on the presentation of its consolidated financial statements.
In September 2025, the FASB issued ASU 2025-06, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). ASU 2025-06 modernizes the accounting for internal-use software costs by eliminating the prescriptive "project stage" model and introducing a principles-based framework that is intended to better reflect current software development practices. The amendment is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the potential impacts of adopting this ASU on its consolidated financial statements.
In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities. The ASU establishes authoritative guidance in GAAP about accounting for government grants received by business entities, clarifies the appropriate accounting, in an effort to reduce diversity in practice, and increase consistency of application across business entities. The ASU is effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods. Adoption of this ASU can be applied using a modified prospective approach, a modified retrospective approach, or a retrospective approach. Early adoption is permitted. The Company is currently evaluating the potential impacts of adopting this ASU on its consolidated financial statements.
9
All other new accounting pronouncements issued, but not yet effective or adopted, have been deemed to be not relevant to the Company and, accordingly, are not expected to have a material impact once adopted.
The Company’s financial assets and liabilities measured at fair value on a recurring basis were as follows (in thousands):
|
|
As of September 30, 2026 |
|
|||||||||
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|||
Assets: |
|
|
|
|
|
|
|
|
|
|||
Cash equivalents |
|
$ |
|
|
$ |
- |
|
|
$ |
- |
|
|
Total assets measured at fair value |
|
$ |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
As of December 31, 2025 |
|
|||||||||
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|||
Assets: |
|
|
|
|
|
|
|
|
|
|||
Cash equivalents |
|
$ |
|
|
$ |
- |
|
|
$ |
- |
|
|
Total assets measured at fair value |
|
$ |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|||
Liabilities: |
|
|
|
|
|
|
|
|
|
|||
Private placement warrant liability |
|
|
- |
|
|
|
- |
|
|
|
|
|
Total liabilities measured at fair value |
|
$ |
|
|
$ |
- |
|
|
$ |
|
||
As of September 30, 2026 and December 31, 2025, the Company had approximately $
As of December 31, 2025, warrant liabilities were comprised of private placement warrants (“Private Placement Warrants”), which have been classified as Level 3 due to the use of historical volatility of the Company’s shares and implied volatility derived from options on the Company’s shares. Warrant liabilities are described in detail in Note 7 Warrant Liabilities.
The Private Placement Warrants were valued using a Black-Scholes-Merton model. The Company’s Black-Scholes-Merton model to value Private Placement Warrants required the use of the following subjective assumption inputs:
10
Property and equipment, net consisted of the following (in thousands):
|
|
As of |
|
|||||
|
|
September 30, |
|
|
December 31, |
|
||
|
|
2026 |
|
|
2025 |
|
||
Land |
|
$ |
|
|
$ |
|
||
Buildings and building improvements |
|
|
|
|
|
|
||
Leasehold improvements |
|
|
|
|
|
|
||
Satellites in orbit |
|
|
|
|
|
|
||
Lab, assembly, and integration equipment |
|
|
|
|
|
|
||
Satellite antenna |
|
|
|
|
|
|
||
Computer hardware and software |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Construction in progress |
|
|
|
|
|
|
||
Satellite materials and advance payments, satellites under construction, and advance launch payments |
|
|
|
|
|
|
||
Other construction in progress and capital advances |
|
|
|
|
|
|
||
Total property and equipment, gross |
|
$ |
|
|
$ |
|
||
Accumulated depreciation and amortization |
|
|
( |
) |
|
|
( |
) |
Total property and equipment, net |
|
$ |
|
|
$ |
|
||
Total depreciation and amortization expense for the three months ended September 30, 2026 and 2025 was approximately $
During the three and nine months ended September 30, 2026, the Company recognized losses on disposal of property and equipment of $
On April 19, 2026, during the New Glenn 3 mission, the Company's Block 2 BB7 satellite was placed into a lower than planned orbit and, as a result, BB7 was de-orbited. The Company maintained launch insurance coverage for this launch that covered a portion of the satellite and launch costs and expects a replacement launch pursuant to the terms of the applicable contract with the launch provider. As of September 30, 2026, the Company had collected $
Accrued expenses and other current liabilities consist of the following (in thousands):
|
|
September 30, |
|
|
December 31, |
|
||
|
|
2026 |
|
|
2025 |
|
||
Property and equipment |
|
$ |
|
|
$ |
|
||
Accrued interest expense |
|
|
|
|
|
|
||
Other professional services |
|
|
|
|
|
|
||
Accrued inventory |
|
|
|
|
|
|
||
Salaries, wages and benefits |
|
|
|
|
|
|
||
Spectrum priority rights acquisition cost |
|
|
|
|
|
|
||
Accrued cost of acquiring intangible assets |
|
|
|
|
|
|
||
Others |
|
|
|
|
|
|
||
Total accrued expenses and other current liabilities |
|
$ |
|
|
$ |
|
||
11
Long-term debt consists of the following (in thousands):
|
|
As of |
|
|||||
|
|
September 30, 2026 |
|
|
December 31, 2025 |
|
||
2032 |
|
$ |
|
|
$ |
|
||
2032 |
|
|
|
|
|
|
||
2036 |
|
|
|
|
|
|
||
2036 |
|
|
|
|
|
|
||
2034 |
|
|
|
|
|
|
||
Prosperity Capital Equipment Loan |
|
|
|
|
|
|
||
Prosperity Term Loan |
|
|
|
|
|
|
||
Trinity Capital Equipment Loan(1) |
|
|
|
|
|
|
||
UBS Bridge Financing Loan |
|
|
|
|
|
|
||
Total debt |
|
$ |
|
|
$ |
|
||
Less: current portion of long-term debt |
|
|
( |
) |
|
|
( |
) |
Less: unamortized debt issuance costs(1) |
|
|
( |
) |
|
|
( |
) |
Long-term debt, net of issuance costs |
|
$ |
|
|
$ |
|
||
(1)
As of September 30, 2026, the aggregate fair value of the Company’s debt was $
Debt discount and issuance costs are comprised of costs incurred in connection with debt issuance and are presented in the unaudited condensed consolidated balance sheets as a deduction to the carrying amount of the debt and amortized using the effective interest method to interest expense over the term of the debt. During the three and nine months ended September 30, 2026, the Company recognized $
2032 4.25% Convertible Notes
On January 27, 2025, the Company issued $
Holders may convert their notes at their option at any time prior to the close of business on the business day immediately preceding December 1, 2031 only under the following conditions: (1) during any calendar quarter commencing after the calendar quarter ending on September 30, 2025 (and only during such calendar quarter), if the last reported sale price of the Company’s Class A Common Stock for at least
12
date; or (4) upon the occurrence of specified corporate events. On or after December 1, 2031 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their notes at any time, at the option of the holder regardless of the foregoing conditions. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company’s Class A Common Stock or a combination of cash and shares of the Company’s Class A Common Stock, at the Company’s election.
The Company may not redeem the notes prior to March 6, 2029. The Company may redeem for cash all or any portion of the notes, at the Company’s option, on or after March 6, 2029, but only if (1) the liquidity condition (as defined in the indenture) is satisfied and (2) the last reported sale price of the Company’s Class A Common Stock has been at least
The initial conversion rate for the 2032 4.25% Convertible Notes is
The 2032 4.25% Convertible Notes include customary covenants and certain events of default after which the notes may be declared immediately due and payable and set forth certain types of bankruptcy or insolvency events of default after which the notes become automatically due and payable.
On July 3, 2025, July 31, 2025 and October 29, 2025, the Company completed the repurchase of $
On February 20, 2026 and February 23, 2026, the Company completed an additional repurchase of approximately $
2032 2.375% Convertible Notes
On July 29, 2025, the Company issued $
Holders may convert their notes at their option at any time prior to the close of business on the business day immediately preceding July 15, 2032 only under the following conditions: (1) during any calendar quarter commencing after the calendar quarter ending on December 31, 2025 (and only during such calendar quarter), if the last reported sale price of the Company’s Class A Common Stock for at least
13
the occurrence of specified corporate events. On or after July 15, 2032 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their notes at any time, at the option of the holder regardless of the foregoing conditions. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company’s Class A Common Stock or a combination of cash and shares of the Company’s Class A Common Stock, at the Company’s election.
The Company may not redeem the notes prior to October 22, 2029. The Company may redeem for cash all or any portion of the notes, at the Company’s option, on or after October 22, 2029, but only if (1) the liquidity condition (as defined in the indenture) is satisfied and (2) the last reported sale price of the Company’s Class A Common Stock has been at least
The initial conversion rate for the 2032 2.375% Convertible Notes is
The 2032 2.375% Convertible Notes include customary covenants and certain events of default after which the notes may be declared immediately due and payable and set forth certain types of bankruptcy or insolvency events of default after which the notes become automatically due and payable.
On February 20, 2026 and February 23, 2026, the Company completed the repurchase of $
2036 2.25% Convertible Notes
On February 17, 2026, the Company issued $
Holders may convert their notes at their option at any time prior to the close of business on the business day immediately preceding January 15, 2036 only under the following conditions: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2026 (and only during such calendar quarter), if the last reported sale price of the Company’s Class A Common Stock for at least
The initial conversion rate for the 2036 2.25% Convertible Notes is
14
The 2036 2.25% Convertible Notes include customary covenants and certain events of default after which the notes may be declared immediately due and payable and set forth certain types of bankruptcy or insolvency events of default after which the notes become automatically due and payable.
2034 1.625% Convertible Notes
On or about July 20, 2026, the Company issued $
Holders may convert their notes at their option at any time prior to the close of business on the business day immediately preceding November 1, 2033 only under the following conditions: (1) during any calendar quarter commencing after the calendar quarter ending on December 31, 2026 (and only during such calendar quarter), if the last reported sale price of the Company’s Class A Common Stock for at least
The initial conversion rate for the 2034 1.625% Convertible Notes is
The 2034 1.625% Convertible Notes include customary covenants and certain events of default after which the notes may be declared immediately due and payable and set forth certain types of bankruptcy or insolvency events of default after which the notes become automatically due and payable.
Prosperity Capital Equipment Loan
On August 14, 2023, AST LLC and certain other subsidiaries of the Company entered into a loan agreement with Lone Star State Bank of West Texas (“Lone Star”), succeeded by Prosperity Bank by merger with Lone Star, providing for a $
As part of AST LLC and certain other subsidiaries of the Company (together with AST LLC, the “AST Companies”) entering into the Trinity Capital Equipment Loan, the AST Companies and Prosperity Bank amended the Lone Star Loan Agreement whereby Prosperity Bank released the lien on certain real property fixtures and equipment and the AST Companies pledged the $
On March 11, 2026, the Company repaid the principal amount, including accrued interest aggregating to approximately $
Prosperity Term Loan
On December 8, 2021, the Company’s subsidiary, AST & Science Texas, LLC, executed an agreement to purchase real property, including offices, industrial warehouse buildings and equipment for a total purchase price of $
15
On March 11, 2026, the Company repaid the principal amount, including accrued interest aggregating to approximately $
Trinity Capital Equipment Loan
On June 27, 2025, the AST Companies entered into a Master Equipment Financing Agreement (the “MEFA”) with Trinity Capital, Inc. (“Trinity”), as agent (the “Agent”) and lender, and the other lenders party thereto (the “Lenders”) providing for a conditional commitment to provide financing of up to $
In 2025, the AST Companies, the Agent and the Lenders executed four
On September 1, 2026, the Company entered into an amendment to the Schedules (the “Amendment”) with the Lenders. Under the Amendment, the Company made scheduled payments totaling $
Other than as described above, there were no new debt issuances or significant changes related to the above listed debt during the nine months ended September 30, 2026. See Note 7 Debt to the Company’s Consolidated Financial Statements included in its 2025 Annual Report on Form 10-K for additional information regarding the debt listed above.
Warrant liabilities were comprised of Private Placement Warrants. Each Private Placement Warrant entitled the registered holder to purchase one whole share of Class A Common Stock at a price of $
As of December 31, 2025, there were
During the three and nine months ended September 30, 2025,
16
Purchase Commitments
As of September 30, 2026, the Company has purchase commitments of approximately $
Legal Proceedings
The Company is subject to the legal proceedings and claims described below.
Securities Class Action
The Company and certain of its current executive officers have been named as defendants in a putative stockholder class action lawsuit pending in the United States District Court for the Western District of Texas. The action is styled Hunter v. AST SpaceMobile, Inc. et al., No. 7:26-cv-00378 (W.D. Tex.) (the “Securities Class Action”). The complaint in the Securities Class Action, which was filed on September 14, 2026, alleges that defendants violated the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and SEC Rule 10b-5 promulgated thereunder by making false and misleading statements and omissions, and that the current executive officers named as defendants are control persons under Section 20(a) of the Exchange Act. The complaint was filed on behalf of stockholders who purchased shares of the Company’s common stock between March 4, 2025 and July 16, 2026, and seeks monetary damages on behalf of the purported class.
Derivative Actions
The Company has been named as a nominal defendant and certain of its current and former executive officers and directors have been named as defendants in two derivative lawsuits filed in the United States District Court for the Western District of Texas on October 21, 2026 and November 5, 2026, respectively. The actions are styled Papa et al. v. Avellan et al., No. 7:26-cv-00430 (W.D. Tex.) and Paul et al. v. Avellan et al., No. 7:26-cv-00446 (W.D. Tex.) (the “Derivative Actions”). The complaints assert claims under the Exchange Act and for breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets against all defendants, and claims for contribution under the Exchange Act against certain of the defendants. The Derivative Actions seek compensatory damages, disgorgement of compensation and profits, revisions to the Company’s governance and internal procedures, and attorneys’ fees and costs.
The Securities Class Action and the Derivative Actions are at an early stage. The Company intends to defend itself and its current and former directors and officers vigorously against the claims alleged in the Securities Class Action and Derivative Actions.
In addition, the Company is subject to various legal proceedings and claims that have arisen in the ordinary course of business and that have not been fully adjudicated.
In the opinion of management, there was not at least a reasonable possibility the Company may have incurred a material loss, or a material loss in excess of any recorded accrual, with respect to loss contingencies. However, the outcome of litigation is inherently uncertain. Therefore, although management considers the likelihood of such an outcome to be remote, if one or more of these legal matters were resolved against the Company in a reporting period for amounts in excess of management’s expectations, the Company’s consolidated financial statements for that reporting period could be materially adversely affected.
Class A Common Stock
As of September 30, 2026, there were
Class B Common Stock
As of September 30, 2026, there were
17
Officer (“Mr. Avellan”)) at the time of the Business Combination and are non-economic, but entitle the holder to one vote per share. The Company is authorized to issue
The existing equity holders of AST LLC (other than Mr. Avellan) at the time of the Business Combination own economic interests in AST LLC which are redeemable into either shares of Class A Common Stock on a one-for-one basis or cash at the option of the Company. Upon redemption of the AST LLC Common Units by the existing equity holders (other than Mr. Avellan), a corresponding number of shares of Class B Common Stock held by such existing equity holders will be cancelled. During the nine months ended September 30, 2026, the existing equity holders redeemed
Class C Common Stock
As of September 30, 2026, there were
Mr. Avellan owns economic interests in AST LLC which are redeemable into either shares of Class A Common Stock on a one-for-one basis or cash at the option of the Company. Upon redemption of any AST LLC Common Units held by Mr. Avellan, a corresponding number of shares of Class C Common Stock held by Mr. Avellan will be cancelled. Correspondingly, the Super-Voting Rights associated with the cancelled shares of Class C Common Stock will be terminated.
Preferred Stock
As of September 30, 2026, there were
Noncontrolling Interest
The noncontrolling interests represent the equity interest in AST LLC held by members other than the Company. Changes in the Company’s ownership interest in AST LLC while retaining control of AST LLC are accounted for as equity transactions. Income or loss is attributed to the noncontrolling interests based on their contractual distribution rights, and the relative percentages of equity interest held by the Company and the other members during the period.
As the sole managing member of AST LLC controlling the operating decisions of AST LLC, the Company consolidates the financial position and results of operations of AST LLC and its subsidiaries. The Company reports equity interests in AST LLC held by members other than the Company as noncontrolling interest in the consolidated balance sheets. The noncontrolling interest is classified as permanent equity within the consolidated balance sheets as the Company may only elect to settle a redemption request in cash if the cash delivered in the exchange is limited to the amount of net proceeds from the issuance and sale of Class A Common Stock from a new permanent equity offering.
Each issuance of the Company's Class A Common Stock is accompanied by a corresponding issuance of AST LLC Common Units to the Company, which results in changes in ownership and reduction in noncontrolling interest. In addition, the Fifth Amended and Restated Limited Liability Company Operating Agreement of AST LLC permits the noncontrolling interest holders of AST LLC Common Units to exchange AST LLC Common Units, together with related shares of the Class B Common Stock or Class C Common Stock, for shares of the Class A Common Stock on a one-for-one basis or, at the election of the Company, for cash (a “Cash Exchange”). A Cash Exchange is limited to the amount of net proceeds from the issuance and sale of Class A Common Stock from a new permanent equity offering. Future redemptions or direct exchanges of AST LLC Common Units by the noncontrolling interest holders will result in a change in ownership and reduce the amount recorded as noncontrolling interest.
As of September 30, 2026 and December 31, 2025, the noncontrolling interest in AST LLC was approximately
18
October 2025 Equity Distribution Agreement
On October 7, 2025, the Company entered into an Equity Distribution Agreement (the “October 2025 Sales Agreement” or “October 2025 ATM Equity Program”) with B. Riley Securities, Inc., Barclays Capital Inc., BofA Securities, Inc., Cantor Fitzgerald & Co., Deutsche Bank Securities Inc., Roth Capital Partners, LLC, Scotia Capital (USA) Inc., UBS Securities LLC, William Blair & Company, L.L.C. and Yorkville Securities, LLC (collectively, the “agents”) to sell shares of the Company’s Class A Common Stock having an aggregate sale price of up to $
Under the October 2025 Sales Agreement, the Company issued
July 2026 Capped Calls
On or about July 20, 2026, in connection with the issuance of the 2034
Stock-Based Compensation Expense
Stock-based compensation, measured at the grant date based on the fair value of the award, is typically recognized ratably over the requisite service period, using the straight-line method of expense attribution.
|
|
For the Three Months Ended |
|
|
For the Nine Months Ended |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Engineering services |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
General and administrative costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of revenues - services |
|
$ |
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
During the three and nine months ended September 30, 2026, stock-based compensation expense capitalized to property and equipment, net was $
19
The Company estimates the fair value of the stock option awards to employees, non-employees and non-employee members of the Board of Directors using the Black-Scholes option pricing model, which requires the input of subjective assumptions, including (i) the expected volatility of the Company's stock, (ii) the expected term of the award, (iii) the risk-free interest rate, and (iv) any expected dividends. Due to the lack of company-specific historical and implied volatility data, the Company based the estimate of expected volatility on the estimated and expected volatilities of a representative group of publicly traded companies. For these analyses, the Company selects companies with comparable characteristics including enterprise value, risk profiles, position within the industry, and with historical share price information sufficient to meet the expected life of the stock-based awards. The Company computes the historical volatility data using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of the stock-based awards. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of the Company’s stock price becomes available. For awards that qualify as “plain-vanilla” options, the Company estimates the expected life of the employee stock options using the “simplified” method, whereby, the expected life equals the average of the vesting term and the original contractual term of the option. The expected term of stock options granted to non-employees is equal to the contractual term of the option award. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.
The fair value of restricted stock units or restricted stock granted to employees, non-employees, and non-employee members of the Board of Directors is based on the fair value of the Company’s stock on the grant date. The Company elects to account for forfeitures as they occur rather than apply an estimated forfeiture rate to stock-based compensation expense.
AST LLC 2019 Equity Incentive Plan
Prior to the Business Combination, under the 2019 Equity Incentive Plan (“AST LLC Incentive Plan”), AST LLC was authorized to issue ordinary shares, as well as options exercisable for ordinary shares, as incentives to its employees, non-employees, and non-employee members of its Board of Directors. Following the Business Combination, no further grants were made or will be made under the AST LLC Incentive Plan. In connection with the Business Combination, the existing AST LLC options were reclassified into options to acquire AST LLC Incentive Equity Units, and there was no incremental compensation cost and the terms of the outstanding awards, including fair value, vesting conditions and classification, were unchanged. Each AST LLC Incentive Equity Unit is convertible into one AST LLC Common Unit and each AST LLC Common Unit is redeemable for one share of Class A Common Stock on the later of the (i) 24-month anniversary of the consummation of the Business Combination and (ii) six-month anniversary from the vesting date. The AST LLC Incentive Plan continues to govern the terms and conditions of the outstanding awards granted under it, except that in lieu of ordinary shares, holders of options under the AST LLC Incentive Plan have the right to exercise for AST LLC Incentive Units, which may then be converted into AST LLC Common Units, which may further be converted into shares of the Class A Common Stock.
There were two types of options granted under the AST LLC Incentive Plan: (1) service-based options and (2) performance-based options. Service-based options typically vest over a
As of September 30, 2026, AST LLC was authorized to issue a total of
The following table summarizes the Company’s option activity under the AST LLC Incentive Plan for the nine months ended September 30, 2026:
|
|
Options |
|
|
Weighted-Average Exercise Price |
|
|
Weighted-Average Remaining Contractual Term (years) |
|
|||
Outstanding as of December 31, 2025 |
|
|
|
|
$ |
|
|
|
|
|||
Granted |
|
|
|
|
|
|
|
|
- |
|
||
Exercised |
|
|
( |
) |
|
|
|
|
|
- |
|
|
Cancelled or forfeited |
|
|
|
|
|
|
|
|
- |
|
||
Outstanding as of September 30, 2026 |
|
|
|
|
$ |
|
|
|
|
|||
Options exercisable as of September 30, 2026 |
|
|
|
|
$ |
|
|
|
|
|||
Vested and expected to vest as of September 30, 2026 |
|
|
|
|
$ |
|
|
|
|
|||
20
The following table summarizes the Company’s unvested option activity for the nine months ended September 30, 2026:
|
|
Number of Shares |
|
|
Weighted-Average Grant Date Fair Value |
|
||
Unvested as of December 31, 2025 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
|
|
||
Vested |
|
|
|
|
|
|
||
Forfeited |
|
|
|
|
|
|
||
Unvested as of September 30, 2026 |
|
|
|
|
$ |
|
||
Compensation cost related to options issued under the AST LLC Incentive Plan has been fully recognized except for performance-based options for which performance conditions were not deemed probable as of September 30, 2026.
SpaceMobile 2020 Incentive Award Plan
In connection with the Business Combination, the Company adopted the 2020 Incentive Award Plan (the “2020 Plan”). Awards may be made under the 2020 Plan covering an aggregate number of Class A Common Stock shares equal to
Stock Options
As of September 30, 2026, there were
The following table summarizes the Company’s option activity under the 2020 Plan for the nine months ended September 30, 2026:
|
|
Options |
|
|
Weighted-Average Exercise Price |
|
|
Weighted-Average Remaining Contractual Term (years) |
|
|||
Outstanding as of December 31, 2025 |
|
|
|
|
$ |
|
|
|
|
|||
Granted |
|
|
|
|
|
|
|
|
|
|||
Exercised |
|
|
( |
) |
|
|
|
|
|
|
||
Cancelled or forfeited |
|
|
( |
) |
|
|
|
|
|
|
||
Outstanding as of September 30, 2026 |
|
|
|
|
$ |
|
|
|
|
|||
Options exercisable as of September 30, 2026 |
|
|
|
|
$ |
|
|
|
|
|||
Vested and expected to vest as of September 30, 2026 |
|
|
|
|
$ |
|
|
|
|
|||
The following table summarizes the Company’s unvested option activity for the nine months ended September 30, 2026:
|
|
Number of Shares |
|
|
Weighted-Average Grant Date Fair Value |
|
||
Unvested as of December 31, 2025 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
|
|
||
Vested |
|
|
( |
) |
|
|
|
|
Forfeited |
|
|
( |
) |
|
|
|
|
Unvested as of September 30, 2026 |
|
|
|
|
$ |
|
||
21
As of September 30, 2026, total unrecognized compensation expense related to the unvested stock options under the 2020 Plan was $
Restricted Stock Units
As of September 30, 2026, there were
The following table summarizes the Company’s unvested restricted stock unit activity for the nine months ended September 30, 2026:
|
|
Number of Shares |
|
|
Weighted-Average Grant Date Fair Value |
|
||
Unvested as of December 31, 2025 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
|
|
||
Vested |
|
|
( |
) |
|
|
|
|
Forfeited |
|
|
( |
) |
|
|
|
|
Unvested as of September 30, 2026 |
|
|
|
|
$ |
|
||
As of September 30, 2026, total unrecognized compensation expense related to the unvested restricted stock units under the 2020 Plan was $
SpaceMobile 2024 Incentive Award Plan
On September 10, 2024, the Company’s stockholders approved the AST SpaceMobile, Inc. 2024 Incentive Award Plan, which replaced and superseded the 2020 Plan, effective July 29, 2024 (the “Effective Date”). On November 21, 2025, the Company’s stockholders approved the amended and restated AST SpaceMobile, Inc. 2024 Incentive Award Plan (as amended and restated, the “2024 Plan”), effective November 21, 2025.
Any shares distributed pursuant to an award may consist, in whole or in part, of authorized and unissued Common Stock, treasury Common Stock or Common Stock purchased on the open market. The 2024 Plan provides for the grant of stock options, restricted stock, dividend equivalents, restricted stock units, incentive unit awards, stock appreciation rights, and other stock or cash-based awards. Each incentive unit issued pursuant to an award, if any, shall count as one share for purposes of calculating the aggregate number of shares available for issuance under the 2024 Plan.
22
Stock Options
As of September 30, 2026, there were
The following table summarizes the Company’s option activity under the 2024 Plan for the nine months ended September 30, 2026:
|
|
Options |
|
|
Weighted-Average Exercise Price |
|
|
Weighted-Average Remaining Contractual Term (years) |
|
|||
Outstanding as of December 31, 2025 |
|
|
|
|
$ |
|
|
|
|
|||
Granted |
|
|
|
|
|
|
|
|
- |
|
||
Exercised |
|
|
( |
) |
|
|
|
|
|
- |
|
|
Cancelled or forfeited |
|
|
( |
) |
|
|
|
|
|
- |
|
|
Outstanding as of September 30, 2026 |
|
|
|
|
$ |
|
|
|
|
|||
Options exercisable as of September 30, 2026 |
|
|
|
|
$ |
|
|
|
|
|||
Vested and expected to vest as of September 30, 2026 |
|
|
|
|
$ |
|
|
|
|
|||
The following table summarizes the Company’s unvested option activity for the nine months ended September 30, 2026:
|
|
Number of Shares |
|
|
Weighted-Average Grant Date Fair Value |
|
|
||
Unvested as of December 31, 2025 |
|
|
|
|
$ |
|
|
||
Granted |
|
|
|
|
|
|
|
||
Vested |
|
|
( |
) |
|
|
|
|
|
Forfeited |
|
|
( |
) |
|
|
|
|
|
Unvested as of September 30, 2026 |
|
|
|
|
$ |
|
|
||
There were
At September 30, 2026, total unrecognized compensation expense related to the unvested stock options under the 2024 Plan was $
Restricted Stock Units and Restricted Stock
As of September 30, 2026, there were
The following table summarizes the Company’s unvested restricted stock unit and restricted stock activity under the 2024 Plan for the nine months ended September 30, 2026:
|
|
Number of Shares |
|
|
Weighted-Average Grant Date Fair Value |
|
|
||
Unvested as of December 31, 2025 |
|
|
|
|
$ |
|
|
||
Granted |
|
|
|
|
|
|
|
||
Vested |
|
|
( |
) |
|
|
|
|
|
Forfeited |
|
|
( |
) |
|
|
|
|
|
Unvested as of September 30, 2026 |
|
|
|
|
$ |
|
|
||
As of September 30, 2026, total unrecognized compensation expense related to the unvested service-based restricted stock units, restricted stock, and performance-based restricted stock units for which performance conditions were probable as of September 30, 2026 under the 2024 Plan was $
SpaceMobile 2020 Employee Stock Purchase Plan
In connection with the Business Combination, the Company adopted the 2020 Employee Stock Purchase Plan (the “ESPP”). The aggregate number of Common Stock shares that may be issued pursuant to rights granted under the ESPP is
23
The Company, organized as a C corporation, owns an equity interest in AST LLC in what is commonly referred to as an “Up-C” structure. For U.S. federal and state income tax purposes, AST LLC has elected to be treated as a partnership and does not pay any income taxes since its income and losses are included in the returns of the members. The portion of the Company’s taxable income or loss attributable to the noncontrolling interests of AST LLC is taxed directly to such members. Consequently, no provision for income taxes has been included in the financial statements related to this portion of taxable income. Certain foreign wholly-owned entities are taxed as corporations in the jurisdictions in which they operate, and accruals for such taxes are included in the consolidated financial statements. The Company has operations in India, the United Kingdom (“U.K.”), Spain and Israel with tax filings in each foreign jurisdiction.
The consolidated effective tax rate for the three and nine months ended September 30, 2026 was
The Company recorded a net deferred tax asset for the difference between the book value and tax basis of the Company’s investment in AST LLC at the time of the Business Combination. The Company has assessed the realizability of its deferred tax assets and in that analysis has considered the relevant positive and negative evidence available to determine whether it is more likely than not that some portion or all of the deferred tax assets will be realized. As a result, the Company has recorded a full valuation allowance against its deferred tax asset resulting from the Business Combination. As of September 30, 2026, there is a valuation allowance recorded against certain deferred tax assets. Management believes it is more likely than not that the remaining deferred tax assets will be fully realized. The foreign deferred tax assets are subject to foreign exchange risk, which could reduce the amount the Company may ultimately realize.
The Company had
In conjunction with the Business Combination, the Company also entered into the Tax Receivable Agreement (“TRA”) with AST LLC. Pursuant to the TRA, the Company is generally required to pay TRA holders (as defined in the TRA) (i)
Basic and diluted net loss per share attributable to the holders of Class A Common Stock is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares outstanding during the period.
The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted net loss per share of Class A Common Stock (in thousands, except share and per share data):
|
|
For the Three Months ended |
|
|
For the Nine Months ended September 30, 2026 |
|
||
Numerator |
|
|
|
|
|
|
||
Net loss before allocation to noncontrolling interest |
|
$ |
( |
) |
|
$ |
( |
) |
Net loss attributable to noncontrolling interest |
|
|
( |
) |
|
|
( |
) |
Net loss attributable to common stockholders - basic and diluted |
|
$ |
( |
) |
|
$ |
( |
) |
Denominator |
|
|
|
|
|
|
||
Weighted-average number of shares - basic and diluted |
|
|
|
|
|
|
||
Net loss per share attributable to holders of Class A Common Stock - basic and diluted |
|
$ |
( |
) |
|
$ |
( |
) |
24
|
|
For the Three Months ended |
|
|
For the Nine Months ended September 30, 2025 |
|
||
Numerator |
|
|
|
|
|
|
||
Net loss before allocation to noncontrolling interest |
|
$ |
( |
) |
|
$ |
( |
) |
Net loss attributable to noncontrolling interest |
|
|
( |
) |
|
|
( |
) |
Net loss attributable to common stockholders - basic and diluted |
|
$ |
( |
) |
|
$ |
( |
) |
Denominator |
|
|
|
|
|
|
||
Weighted-average number of shares of Class A Common Stock outstanding - basic and diluted |
|
|
|
|
|
|
||
Weighted-average number of penny warrants - basic and diluted |
|
|
|
|
|
|
||
Weighted-average number of shares - basic and diluted |
|
|
|
|
|
|
||
Net loss per share attributable to holders of Class A Common Stock - basic and diluted |
|
$ |
( |
) |
|
$ |
( |
) |
As of September 30, 2026, the Company excluded from the calculation of diluted earnings per share
Shares of Class B Common Stock and Class C Common Stock do not participate in the earnings or losses of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class B Common Stock and Class C Common Stock under the two-class method has not been presented.
On January 5, 2025, AST LLC entered into a binding agreement (the “Strategic Collaboration Term Sheet”) with Ligado Networks LLC (“Ligado LLC”) under which the Company will receive long-term access to up to 45 MHz of lower mid-band spectrum in the United States and Canada for direct-to-device satellite applications. The Strategic Collaboration Term Sheet was entered into as part of the restructuring of Ligado LLC, which together with certain of its direct and indirect subsidiaries (together with Ligado LLC, “Ligado”) filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (“Bankruptcy Court”).
On March 22, 2025, pursuant to the Strategic Collaboration Term Sheet, the Company, AST LLC, Spectrum USA I, LLC, a subsidiary of AST LLC (“SpectrumCo”) and Ligado entered into certain definitive agreements that, among other things, provided for (1) a $
On June 13, 2025, the Company announced a Settlement Term Sheet (the “Mediated Agreement”) among various parties including the Company, Ligado, Viasat, Inc. and Inmarsat Global Limited (“Inmarsat”). Pursuant to the Mediated Agreement, subject to confirmation of Ligado’s Chapter 11 plan and as long as the financial sponsors of Ligado provide a backstop commitment to Ligado that is acceptable to the Company, in support of a full refund of payments by Ligado in the event applicable regulatory approvals are not obtained and the closing does not occur (the “Backstop Commitment”), the Company agreed that, with respect to the $
25
release from escrow is subject to effectiveness of Ligado’s Chapter 11 plan or further order of the Bankruptcy Court. The Company presented the $
The Backstop Commitment provided by Ligado’s financial sponsors has been memorialized in an amendment to Ligado’s debtor in possession financing arrangements and has been approved by the Bankruptcy Court. The funds under the $
To support consideration payments in connection with the Spectrum Usage Rights Transaction, on July 15, 2025 (the “Credit Facility Closing Date”), SpectrumCo entered into a credit agreement (the “Sound Point Credit Agreement”) with Sound Point Agency LLC, as administrative agent and collateral agent, and the lenders from time to time party thereto. The Sound Point Credit Agreement provided for a non-recourse senior-secured delayed-draw term loan facility (the “Sound Point Credit Facility”) in an aggregate principal amount of $
As of September 30, 2026, the Company recorded $
14. Vodafone Joint Venture
On July 7, 2025, the Company and Vodafone entered into an agreement to create SatCo, a jointly-owned European satellite service business headquartered in Luxembourg, to exclusively distribute the Company’s broadband satellite services to MNOs in European markets. In addition, SatCo is expected to deploy a small network of earth stations that integrate with operators of existing 4G/5G terrestrial networks, providing backhaul links, as well as extended coverage across Europe from the anticipated satellite constellation in LEO. Upon formation of the joint venture, the Company contributed exclusive distribution rights at a determined fair value of approximately $
SatCo is a variable interest entity of which the Company is not a primary beneficiary, and the Company accounts for its investment using the equity method of accounting. During the three and nine months ended September 30, 2026, the Company recognized a loss from equity method investment of $
15. Subsequent Events
Firefly Agreements
On November 6, 2026, the Company entered into a license agreement (the “License Agreement”) and a Supply and Services Agreement (the “Supply and Services Agreement”) with Firefly Aerospace, Inc. (“Firefly”) to build its own 20-ton rocket (“Blacklift”) to deploy BB satellites in LEO using Miranda and Vira engines from Firefly.
Pursuant to the License Agreement, Firefly will grant the Company a perpetual license to manufacture the Miranda and vacuum-variant Vira engines. In consideration for the license, the Company will pay Firefly $
26
Commission; however,
Pursuant to the Supply and Services Agreement, Firefly will supply the Company engines for the first three Blacklift rockets and provide engineering and other support services over a three-year period. As consideration for the Supply and Services Agreement, the Company will pay Firefly (1) a services fee of $
Closing of the License Agreement and the Supply and Services Agreement is expected to occur in the fourth quarter of 2026, subject to customary closing conditions.
Rakuten AST Joint Venture
On
The Company will subscribe for no-coupon preferred shares to fund the remaining cost (above the grant award) for the deployment of the J-LEO Constellation. The preferred shares will have a liquidation preference over common shares in case of dissolution or termination of RAST. The J-LEO Constellation will be used by RAST and Rakuten to provide services in Japan and three exclusive markets. RAST will receive
The joint venture agreement (“Joint Venture Agreement”) contemplates a series of commercial agreements to be entered into by RAST, Rakuten and the Company, including a satellite supply agreement (the “Satellite Supply Agreement”) and a Mission Control and Monitoring System Software License Agreement (the “Rakuten License Agreement”) that were signed as part of the closing of the joint venture. Under the Satellite Supply Agreement, the Company will supply satellites to RAST. Under the Rakuten License Agreement, the Company will provide a non-exclusive, non-transferable and non-sublicensable license to RAST of the Company’s mission control and monitoring software to establish the Japan satellite operations center and the Japan payload operations center. In consideration for the license, RAST will pay the Company a one-time license fee of $
The term of the joint venture ends on the later of (i) the 8th anniversary of the Joint Venture Agreement closing or (ii) the permanent retirement of the last satellite, unless extended or terminated earlier pursuant to the terms of the Joint Venture Agreement.
27
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Except as otherwise noted or where the context requires otherwise, references in this report (this “Quarterly Report”) to “we,” “us” or the “Company” refer to AST SpaceMobile, Inc. and references to our “management” refer to our officers and directors.
The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included in Item 1 of this Quarterly Report and with our Annual Report on Form 10-K for the year ended December 31, 2025, including our audited consolidated financial statements and related notes contained therein. Unless otherwise indicated, all references to “dollars” and “$” in this Quarterly Report are to, and all monetary amounts in this Quarterly Report are presented in, U.S. dollars.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking statements” for the purposes of federal securities laws that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek,” “plan,” “predict,” “potential,” and variations and similar words and expressions are intended to identify such forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this Quarterly Report may include, for example, statements about:
28
Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to Part I, Item 1A. Risk Factors included in our Annual Report on Form 10-K for the year ended December 31, 2025 and Part II Item 1A. Risk Factors included in this Quarterly Report. The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Overview
We are building the first and only global Cellular Broadband network in space to be accessible directly by everyday smartphones (2G/4G-LTE/5G devices) for commercial use, and other applications for government use utilizing our extensive intellectual property (“IP”) and patent portfolio. The SpaceMobile Service is being designed to provide cost-effective, high-speed Cellular Broadband services to end-users who are out of terrestrial cellular coverage using existing mobile devices. The SpaceMobile Service currently is planned to be provided by a constellation of high-powered, large phased-array satellites in low Earth orbit (“LEO”) using low-band and mid-band spectrum controlled by MNOs.
On March 22, 2025, we and certain of our subsidiaries entered into certain definitive agreements with Ligado Networks LLC (“Ligado LLC”) and its subsidiaries for usage rights for mid-band spectrum, which were approved by the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) on June 23, 2025. Ligado’s Chapter 11 plan was confirmed by the Bankruptcy Court on or about September 29, 2025. Subject to the completion of certain conditions, including regulatory approval, as a result of the transaction with Ligado, we expect our network will be enhanced by our long-term access to up to 45 MHz of the lower mid-band satellite spectrum in the United States (“U.S.”) and Canada through our usage agreements. In addition, on September 25, 2025, we completed the acquisition of an entity that holds certain S-Band International Telecommunication Union (“ITU”) priority rights to Mobile Satellite Services frequencies in the range of 1980-2010 MHz and 2170-2200 MHz, for use in LEO. We expect the acquisition will further enhance our network by up to 60 MHz of mid-band satellite spectrum globally.
As of September 30, 2026, our IP portfolio consists of approximately 3,500 patent and patent pending claims worldwide, of which approximately 2,100 have been officially granted or allowed. This includes 40 patent families worldwide. Our patents have various terms expiring starting 2039. We are headquartered in Texas where we operate our satellite assembly, integration and testing (“AIT”) facilities. We also have engineering and development centers elsewhere in the United States, India and Scotland, and engineering, development and production centers in Spain and Israel. Our global footprint was approximately 505,000 square feet as of September 30, 2026.
We intend to work with MNOs to offer the SpaceMobile Service to the MNOs’ end-user customers. Our vision is that users will not need to subscribe to the SpaceMobile Service directly through us, nor will they need to purchase any new or additional equipment. Instead, users will be able to access the SpaceMobile Service when prompted on their mobile device that they are no longer within range of the land-based facilities of the MNOs or will be able to purchase a plan directly with their existing mobile provider. We intend to seek to use a revenue-sharing business model for the SpaceMobile Service in our agreements with MNOs.
The SpaceMobile Service is expected to be highly attractive to MNOs as it will enable them to improve and differentiate their service offering without significant incremental capital investments. The SpaceMobile Service is expected to enable MNOs to augment and extend their coverage without building towers or other land-based infrastructure, including where it is not cost-justified or is difficult due to geographical challenges. As a result of the incremental coverage created by the planned SpaceMobile Service, we believe that MNOs will have the opportunity to increase subscribers’ average revenue per user.
We also intend to leverage our patented technology, including the large phased array and high power capability of our BB satellites, for a variety of non-communication and communication applications in the government sector. To this end, we have entered into agreements with the U.S. government either directly or through prime contractors to perform certain tasks.
We launched five Block 1 BB satellites on September 12, 2024. In October 2024, we completed the deployment of the communications phased array antennas and Q/V antennas in orbit and performed a series of monitoring tests and activities to confirm the successful initial operations of the Block 1 BB satellites. In January 2025, we successfully made the first SpaceMobile video call from space with Vodafone using standard unmodified smartphones. In February 2025, we completed the voice and video call tests on standard unmodified smartphones with AT&T and Verizon in the U.S. and also completed the tests for non-communication applications for the U.S. government. All five Block 1 BB satellites have participated in the tests at various stages. In April 2025, together with Rakuten Mobile, Inc., we
29
successfully conducted a two-way broadband video call in front of a live audience using unmodified smartphones on the SpaceMobile network enabled by a Block 1 BB satellite in orbit today. On July 21, 2025, we and AT&T made the first-ever VoLTE call and short message service over satellite using AT&T’s spectrum and core network with a standard unmodified cell phone. On October 2, 2025, together with Bell Canada, we achieved Canada’s first-ever space-based 4G VoLTE voice call, broadband data connection, and video streaming using standard unmodified smartphones. Using our Block 1 BB satellites, we have continued to conduct various successful tests with our partners, including emergency communications tests, and have achieved 98.9 Mbps peak data speeds directly to a standard unmodified smartphone.
On December 23, 2025, we launched the first (“BB6”) of our next generation commercial BB satellites (“Block 2 BB satellites”), which was successfully deployed in February 2026. On April 19, 2026, BB7 was placed into a lower than planned orbit and, as a result, BB7 was de-orbited. In connection with the loss of BB7, we have received insurance recovery with respect to a portion of the total loss associated with this event and expect a replacement launch pursuant to the terms of the applicable contract with the launch provider. On June 17, 2026, we launched BB8, BB9, and BB10, which were successfully deployed in July 2026. On August 5, 2026, we successfully launched BB11, BB12, and BB13, which were successfully deployed by September 30, 2026. In September 2026, we completed the deployment of the communications phased array antennas and Q/V antennas in orbit and performed a series of monitoring tests and activities to confirm the successful initial operations of BB6, BB8, BB9, and BB10. The Block 2 BB satellites feature an up to approximately 2,400 square feet phased array, the largest phased array ever deployed in a LEO for commercial use, which is more than three times larger than the phased array of the Block 1 BB satellites and designed to deliver up to 10 times the bandwidth capacity of the Block 1 BB satellites. We believe the larger aperture array will provide greater spectrum reuse, enhanced signal strength and increased capacity, thereby reducing the necessary number of satellites to achieve service coverage as compared to smaller apertures.
The performance of the Block 2 BB satellites is driven by several breakthroughs in space-based architecture. The large antenna array allows the satellite to transmit and receive signals from standard handheld devices. Further, the large aperture enables precise beamforming, creating narrower, more focused coverage areas. This precision minimizes interference, maximizes network capacity and provides a consistent high-quality user experience for Cellular Broadband services, including voice, data and video. In addition, when we introduce our own AST5000 ASIC chip in the Block 2 BB satellites, we expect to achieve materially greater throughput capacity of up to 40 MHz per beam and up to 10,000 MHz of processing bandwidth per Block 2 BB satellite, require less power and offer a lower overall unit cost. We have reached a steady production stage of ASIC chips and secured supply to support our production of Block 2 BB satellites using our ASIC chips. In parallel to assembly, integration and testing of Block 2 BB satellites based on our ASIC chip, we expect to continue to assemble and launch Block 2 BB satellites based on FPGA chips.
We have entered into launch agreements with multiple launch service providers which will enable us to continue our planned launch campaign to launch over 60 Block 2 BB satellites. In addition to our currently contracted 10 launches, our expected new launches based on our Defense Priorities and Allocations System (“DPAS”) rating and our newly signed non-binding agreement for at least five (5) additional launches, we now expect to have launches to support a total of over 100 BB satellites on a cumulative basis by the end of 2028. We have commenced our launch campaign with the launch of BB6 on December 23, 2025 and based on our current expectations regarding launch availability, we are targeting approximately 45 BB satellites by the middle of 2027. The timing of launch of the Block 2 BB satellites is contingent on a number of factors including satisfactory and timely completion of the assembly and testing of the Block 2 BB satellites, readiness of the launch vehicle, logistics and other factors, many of which are beyond our control.
We are developing a phased satellite deployment plan and a corresponding commercial launch plan of the SpaceMobile Service based on targeted geographical markets to provide the SpaceMobile Service to the most commercially attractive MNO markets. This prioritization of coverage is designed to minimize the capital required to initiate and operate commercial service that generates cash flows from operating activities sooner. We expect that such a successful commercial service would enable us to attract additional capital to continue to assemble and launch additional BB satellites to expand our capacity and geographic coverage area, although there can be no assurance that such capital would be available on terms acceptable to us, or at all.
We plan to achieve noncontinuous SpaceMobile Service in the selected, targeted geographical markets with the launch and operation of a total of 25 BB satellites (five Block 1 BB satellites and 20 Block 2 BB satellites). We believe we can enable Continuous SpaceMobile Service coverage across key markets such as the United States, Europe, Japan and other strategic markets with the launch and operation of a total of approximately 45 to 60 BB satellites, and achieve Continuous SpaceMobile Service in all targeted geographical markets to meet our long term business goals with the launch and operation of a total of approximately 90 BB satellites. Continuous SpaceMobile Service means, with respect to a particular geographical market, close to 100% reliable persistent service across the geographical areas within certain latitudes and a substantially high degree of reliable persistent service across the remaining geographical areas outside the said latitudes. We anticipate launching and deploying additional satellites beyond the initial 90 satellites in order to enhance coverage and system capacity in response to incremental market demand. Our current plan is subject to numerous uncertainties, many of which are beyond our control, including satisfactory and timely completion of assembly and testing of the satellites, regulatory approvals, readiness of launch vehicles, availability of launch windows by the launch providers, logistics, our ability to raise additional capital for manufacturing of satellites and launch payments beyond the currently funded constellation size, proposed orbits and resulting satellite coverage, launch costs, ability to enter into agreements with MNOs and other factors. We may adopt a strategy for commercial launch of the SpaceMobile Service, including the nature and type of services offered and the geographic markets where we may launch such services, that may differ materially from our current plan.
We are accelerating our procurement and production of Block 2 BB satellites in alignment with our launch campaign. Supplier agreements and orders are in place for the procurement of materials and components needed, in accordance with our production plan, for the assembly,
30
integration and testing of a large majority of the planned constellation of over 90 BB satellites.
Our manufacturing, assembly, and testing strategy for Block 2 BB satellites includes continuous production and assembly of various components and subsystems for economies of scale, cost efficiencies, and unlocking capacity constraints, to build sufficient quantity of components and subsystems readily available on hand to be able to complete the final integration and testing of the required number of Block 2 BB satellites closer to the planned launch timelines. We have completed our planned investments to increase the capacity to assemble, integrate, and test up to six Block 2 BB satellites per month. As the planned capacity has been achieved, we continue to accelerate our manufacturing, assembly, integration and testing to reach the production run rate of up to six Block 2 BB satellites per month to meet our planned launches in 2026 and 2027. As of the date of this Quarterly Report, we have completed fully assembled microns for up to BB51 which include the BB satellites shipped or launched. Satellites BB14, BB15 and BB16 are in Cape Canaveral, Florida, awaiting an available launch window, and BB17 to BB51 are in various stages of production and integration including certain satellites in final pre-shipment quality review.
We have recognized revenue from completion of performance obligations in agreements with the U.S. government either directly or indirectly through prime contractors utilizing the initial BB satellites and expect to continue to recognize revenue as and when we complete the remaining performance obligations under the agreements. We have also generated revenue from the sale of gateway equipment, software and related services to MNOs and expect to continue to generate revenue as MNOs build out ground infrastructure for commercial readiness.
The SpaceMobile Service has not been launched and therefore has not yet generated any revenue. We plan to utilize the initial BB satellites to initiate intermittent coverage in targeted geographical markets, including in the United States. We believe initiation of intermittent coverage, as well as completing the milestones under the agreements with the U.S. government and prime contractors for the U.S. government, will help to demonstrate the advantages of our satellite-based Cellular Broadband service in the market. We have deployed and released many fixed cells across multiple gateways over the continental U.S. to our MNO and Original Equipment Manufacturer partners as the reference cells for network integration. We have received approval to activate fixed cells from multiple MNOs and continue to test the spectrum quality and persistency of those fixed cells. In addition, we have validated satellite fixed cell handover, which demonstrated our ability to seamlessly handover cell service from one satellite to the other without impacting cell service. We have also recently achieved successful handoff between an MNO’s ground-based cellular network and our direct-to-device satellite network. We expect to continue to activate fixed cells, test the SpaceMobile Service automation, and integrate our network to MNOs’ core networks prior to rollout of the initial intermittent coverage. During the initial intermittent coverage phase, service will be available within the satellites’ coverage area. Additional satellite deployments will extend the duration and frequency of coverage as we advance toward continuous service.
Our planned non-geostationary orbit constellation will provide services from LEO that rely on the use of radio frequency spectrum. We have received Federal Communications Commission authorization to deploy our 248 satellite network including operating in the low-band International Mobile Telecommunications terrestrial frequencies domestically and internationally, as well as Q/V band feeder links in the V band. Additionally, we rely on contractual agreements with MNOs to access some of the spectrum we will utilize to provide services. We currently have partnerships with over 60 MNOs with over 3 billion subscribers globally.
We are an early stage company and, as such, we are subject to all of the risks associated with early stage companies. Please refer to Risk Factors contained in Part I, “Item 1A. Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2025 and Part II Item 1A. Risk Factors included in this Quarterly Report.
Recent Developments
Firefly Agreements
On November 6, 2026, we entered into a license agreement (the “License Agreement”) and a Supply and Services Agreement (the “Supply and Services Agreement”) with Firefly Aerospace, Inc. (“Firefly”) in an effort to build our own 20-ton rocket (“Blacklift”) to deploy BB satellites in LEO using Miranda and Vira engines from Firefly. Refer to the “Liquidity and Capital Resources” section below for further details.
Rakuten AST Joint Venture
On November 6, 2026, we and Rakuten Group, Inc. (“Rakuten”) agreed to establish a joint venture (“Rakuten AST, Inc.” or “RAST”) in Japan to own and operate a constellation of mid-band LEO satellites (“J-LEO Constellation”). The J-LEO Constellation is expected to be capable of providing direct-to-device (“D2D”) communications network in Japan to commercially available devices including in the event of disasters and other emergencies, and D2D communications network globally subject to regulatory approvals. Refer to the “Liquidity and Capital Resources” section below for further details.
Impact of Global Macroeconomic Conditions and Geopolitical Conflicts
31
We continue to closely monitor the impact of macroeconomic conditions, including inflation expectations, changes to fiscal and monetary policies, changes in interest rates, volatility in the capital markets, supply chain challenges, changes in U.S. trade policy, including with respect to tariffs, and geopolitical conflicts on all aspects of our business across geographies, including how it has and may continue to impact our operations, workforce, suppliers, and our ability to raise additional capital to fund operating and capital expenditures.
Changes in the prices of satellite materials due to inflation, supply chain challenges, the impact of tariffs and other macroeconomic factors may affect our capital costs estimates to build and launch the satellite constellation and adversely affect our financial condition. The extent of impact of these factors on our business will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time. To date, these factors have not had a material impact to our technology development efforts or results of our operations. However, if macroeconomic conditions deteriorate or there are unforeseen developments, our results of operations and financial condition may be adversely affected.
While the tariffs imposed on certain supply chain products manufactured in several jurisdictions have not had a material impact to our operations, the U.S. government may in the future announce, reimpose or increase these tariffs or expand them to other jurisdictions which may have a material impact to our technology development efforts or results of our operations. Our operations in Israel constituted approximately 1% of our consolidated total assets and approximately 6% of our consolidated total operating expenses during the nine months ended September 30, 2026. To date, our operations in Israel have not been materially impacted by the geopolitical conflict in the Middle East. We currently do not expect potential interruptions to our operations in Israel to have a material impact on the Company.
Factors Affecting Comparability of Our Future Results of Operations to Our Historical Results of Operations
Our historical financial performance has been, and we expect our financial performance in the future to be, driven by our ability to execute on our strategy. We believe that our future results of operations could differ materially from the historical results of operations as we initiate the SpaceMobile Service, complete the deployment of the planned constellation, complete the development of the next generation of satellites, complete the development and production of our own Blacklift rockets, secure additional contracts with the U.S. government or its prime contractors for non-commercial use of our BB satellites, enter into commercial arrangements with additional MNOs including contracts to sell gateway equipment, software and related services, close our proposed transactions with Ligado and with Firefly, and fulfill our promises in various commercial arrangements with RAST.
Components of Results of Operations
Products Revenues
Products revenues primarily consist of the sale of gateway equipment, software and related services to MNOs.
Services Revenues
Services revenues primarily consist of revenues from performance obligations completed under agreements with the U.S. government either directly or indirectly through prime contractors.
Cost of Revenues - Products
Costs of revenues - products primarily consists of those costs directly attributable to the sale of gateway equipment and software to MNOs.
Cost of Revenues - Services
Cost of revenues - services primarily consists of labor costs and sales commissions directly attributable to providing the service.
Engineering Services Costs
Engineering services costs are charged to expense as incurred. Engineering services costs primarily consist of the cost of employees and consultants involved in designing and developing the BB satellites, managing the network and satellite operations centers, and indirectly supporting the assembly, integration and testing of the BB satellites, license cost, and general expenses related to AIT facilities and engineering development centers.
General and Administrative Costs
General and administrative costs primarily consist of compensation and related expenses for non-engineering personnel, office and facilities expenses, and professional services, including legal fees, accounting, and public relations. These costs also include insurance, software licensing and subscriptions.
Research and Development Costs
Research and development (“R&D”) costs are charged to expense as incurred. R&D costs primarily consist of development activities in which we typically engage third-party vendors for the design and development of electronic componentry, software, and mechanical
32
deployment systems, and are largely driven by the achievement of milestones that trigger payments and costs of materials and supplies consumed in the development activities. R&D costs are expected to fluctuate quarter over quarter depending on new initiatives and achievement of milestones.
Depreciation and Amortization
Depreciation and amortization expense includes depreciation expense related to property and equipment. We began depreciating the BB6, BB8, BB9, and BB10 satellites as of September 1, 2026 over their expected remaining useful lives of approximately 84 months and the Block 1 BB satellites as of October 29, 2024 over their expected remaining useful lives of approximately 60 months.
Loss on Involuntary Conversion
Loss on Involuntary Conversion consists of the loss recognized for the asset write-off of the BB7 satellite, net of related insurance recoveries.
Gain (Loss) on Remeasurement of Warrant Liabilities
Private Placement Warrants issued by us are accounted for as liability-classified instruments at their initial fair value on the date of issuance. They are remeasured on each balance sheet date or on the date of exercise and changes in the estimated fair value are recognized as a gain or loss in the consolidated statements of operations.
Interest Expense
Interest expense primarily consists of cash interest payments and amortization of debt issuance costs associated with our debt arrangements and amortization of the Sound Point Credit Facility commitment fee.
Interest Income
Interest income consists of interest earned on cash and cash equivalents held in interest bearing demand deposit accounts and money market accounts and on our loan receivable from SatCo.
Other (Expense) Income, Net
Other (expense) income, net primarily consists of non-operating expense and income, including induced conversion expense related to the repurchase of a portion of the 2032 4.25% Convertible Notes and the 2032 2.375% Convertible Notes, losses on disposal of property and equipment, and foreign exchange gains or losses.
Income Tax Benefit (Expense)
AST LLC is treated as a partnership for U.S. federal and state income tax purposes. Accordingly, all income, losses, and other tax attributes pass through to the members’ income tax returns, and no U.S. federal and state and local provision for income taxes has been recorded for AST LLC in the consolidated financial statements. Certain foreign wholly-owned entities are taxed as corporations in the jurisdictions in which they operate, and accruals for such taxes are included in the consolidated financial statements.
Noncontrolling Interest
Noncontrolling interest primarily represents the equity interest in AST LLC held by members other than us. We attribute a portion of net income or loss generated at AST LLC to the noncontrolling interest based on their ownership interests. As of September 30, 2026 and December 31, 2025, the noncontrolling interest in AST LLC was approximately 22.9% and 23.9%, respectively. The decrease in noncontrolling interest percentage during the nine months ended September 30, 2026 was a result of the issuance of Class A Common Stock in connection with the repurchase of a portion of the 2032 4.25% Convertible Notes and 2032 2.375% Convertible Notes, payment for a portion of the L-band Annual Payment and the Crown Castle Annual Payment in shares, issuance of Class A Common Stock under the October 2025 Sales Agreement and in a subscription agreement, exercises of the Private Placement Warrants and Penny Warrants, redemptions of AST LLC Common Units in exchange for Class A Common Stock, exercises of options and vesting of restricted stock units and restricted stock.
33
Results of Operations
Three Months Ended September 30, 2026 Compared to the Three Months Ended September 30, 2025
We report our results of operations under one operating segment. The following table sets forth a summary of our unaudited condensed consolidated statements of operations for the three months ended September 30, 2026 and 2025 (in thousands), and the discussion that follows compares the three months ended September 30, 2026 to the three months ended September 30, 2025.
|
For the Three Months Ended |
|||||||||||||||
|
(unaudited) |
|||||||||||||||
|
2026 |
|
|
2025 |
|
|
$ Change |
|
|
% Change |
||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Products revenues |
$ |
20,571 |
|
|
$ |
7,746 |
|
|
$ |
12,825 |
|
|
* |
|
% |
|
Services revenues |
|
21,750 |
|
|
|
6,993 |
|
|
|
14,757 |
|
|
* |
|
|
|
Total revenues |
|
42,321 |
|
|
|
14,739 |
|
|
|
27,582 |
|
|
* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of revenues (exclusive of items shown separately below) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of revenues - products |
|
22,451 |
|
|
|
5,511 |
|
|
|
16,940 |
|
|
* |
|
|
|
Cost of revenues - services |
|
2,863 |
|
|
|
- |
|
|
|
2,863 |
|
|
* |
|
|
|
Engineering services costs |
|
95,788 |
|
|
|
40,836 |
|
|
|
54,952 |
|
|
* |
|
|
|
General and administrative costs |
|
55,705 |
|
|
|
29,822 |
|
|
|
25,883 |
|
|
|
87 |
|
|
Research and development costs |
|
9,094 |
|
|
|
5,530 |
|
|
|
3,564 |
|
|
|
64 |
|
|
Depreciation and amortization |
|
25,078 |
|
|
|
12,716 |
|
|
|
12,362 |
|
|
|
97 |
|
|
Loss on involuntary conversion |
|
47 |
|
|
|
- |
|
|
|
47 |
|
|
* |
|
|
|
Total operating expenses |
|
211,026 |
|
|
|
94,415 |
|
|
|
116,611 |
|
|
* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other (expense) income: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gain on remeasurement of warrant liabilities |
|
- |
|
|
|
2,938 |
|
|
|
(2,938 |
) |
|
* |
|
|
|
Interest expense |
|
(30,340 |
) |
|
|
(7,545 |
) |
|
|
(22,795 |
) |
|
* |
|
|
|
Interest income |
|
30,110 |
|
|
|
12,239 |
|
|
|
17,871 |
|
|
* |
|
|
|
Other expense, net |
|
(6,660 |
) |
|
|
(91,409 |
) |
|
|
84,749 |
|
|
|
(93 |
) |
|
Total other expense, net |
|
(6,890 |
) |
|
|
(83,777 |
) |
|
|
76,887 |
|
|
|
(92 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss before income tax benefit (expense) |
|
(175,595 |
) |
|
|
(163,453 |
) |
|
|
(12,142 |
) |
|
|
7 |
|
|
Income tax benefit (expense) |
|
3,785 |
|
|
|
(374 |
) |
|
|
4,159 |
|
|
* |
|
|
|
Net loss before allocation to noncontrolling interest |
|
(171,810 |
) |
|
|
(163,827 |
) |
|
|
(7,983 |
) |
|
|
5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss attributable to noncontrolling interest |
|
(39,430 |
) |
|
|
(40,953 |
) |
|
|
1,523 |
|
|
|
(4 |
) |
|
Net loss attributable to common stockholders |
$ |
(132,380 |
) |
|
$ |
(122,874 |
) |
|
$ |
(9,506 |
) |
|
|
8 |
|
% |
* Percentage greater than or equal to 100 or not meaningful
Products Revenues
Products revenues of $20.6 million and $7.7 million for the three months ended September 30, 2026 and 2025, respectively, were primarily attributable to sales of gateway equipment and software to MNOs.
Services Revenues
Services revenues of $21.8 million and $7.0 million for the three months ended September 30, 2026 and 2025, respectively, were primarily attributable to the completion of performance obligations under agreements with the U.S. government either directly as a prime contractor or indirectly through prime contractors.
Cost of Revenues - Products
Cost of revenues - products increased by $16.9 million to $22.5 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. The increase was primarily attributable to cost of gateway equipment and software.
34
Cost of Revenues - Services
Cost of revenues - services of $2.9 million for the three months ended September 30, 2026 was primarily attributable to labor costs and sales commissions in provision of services. Cost of revenues - services were not presented separately for three months ended September 30, 2025.
Engineering Services Costs
Total engineering services costs increased by $55.0 million to $95.8 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. The increase was attributable to a $26.6 million increase in payroll and employee-related costs driven by an increase in headcount and higher stock-based compensation expense, a $16.1 million increase in consulting and professional fees, a $7.1 million increase in third-party engineering activities, equipment, and other overhead, including facilities costs, and a $5.1 million increase in travel expenses and other costs.
General and Administrative Costs
Total general and administrative costs increased by $25.9 million, or 87%, to $55.7 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. The increase was attributable to a $21.1 million increase in payroll and employee-related costs driven by an increase in headcount and higher stock-based compensation expense, a $1.7 million increase in office and facilities expenses, a $0.8 million increase in consulting and professional fees, and a $2.3 million increase in travel expenses and other costs.
Research and Development Costs
Total R&D costs increased by $3.6 million, or 64%, to $9.1 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. The increase in R&D costs was primarily attributable to the development and design of our satellites.
Depreciation and Amortization
Total depreciation and amortization expense increased by $12.4 million, or 97%, to $25.1 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. The increase was primarily attributable to higher depreciation expense associated with lab, assembly, and integration equipment, in addition to BB6, BB8, BB9, and BB10 having been placed into service on September 1, 2026.
Loss on Involuntary Conversion
Loss on involuntary conversion of less than $0.1 million for the three months ended September 30, 2026 consisted of immaterial adjustments associated with the loss recognized for the asset write-off of the BB7 satellite, net of related insurance recoveries, during the three months ended June 30, 2026.
Gain on Remeasurement of Warrant Liabilities
There was no remeasurement of warrant liabilities for the three months ended September 30, 2026 as compared to a gain of $2.9 million for the three months ended September 30, 2025. The gain in the prior year period was largely driven by a decrease in fair value of warrant liabilities upon exercises of the Private Placement Warrants from the prior quarter-end valuation date.
Interest Expense
Interest expense increased by $22.8 million to $30.3 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. The increase was due to the net increase in borrowings that included the issuance of the 2032 2.375% Convertible Notes, the 2036 2.00% Convertible Notes, the 2036 2.25% Convertible Notes, the 2034 1.625% Convertible Notes, the UBS Bridge Financing Loan, and an increase in the Trinity Capital Equipment Loan, partially offset by decreases in the 2032 4.25% Convertible Notes, of which $456.5 million was repurchased, and the Prosperity Capital Equipment Loan and Prosperity Term Loan, which were fully repaid on March 11, 2026.
Interest Income
Interest income increased by $17.9 million to $30.1 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. The increase was driven by a higher cash and cash equivalents balance held primarily in interest bearing short-term money market funds.
Other Expense, Net
Other expense, net was $6.7 million for the three months ended September 30, 2026, as compared to $91.4 million for the three months ended September 30, 2025. The $84.7 million decrease in other expense, net was primarily due to an $84.3 million decrease in induced
35
conversion expense related to the July 2025 repurchases of our 2032 4.25% Convertible Notes in the prior year period and a $2.8 million decrease in finance charges and other borrowing related fees, partially offset by a $1.5 million increase in loss from our equity method investment and a $0.9 million increase in other charges.
Income Tax Benefit (Expense)
Income tax benefit was $3.8 million for the three months ended September 30, 2026 as compared to the income tax expense of $0.4 million for the three months ended September 30, 2025. The consolidated effective tax rate for the three months ended September 30, 2026 and September 30, 2025 was 2.17% and (0.23%), respectively. Refer to Note 11 Income Taxes in the accompanying notes to the unaudited condensed consolidated financial statements for further information.
Net Loss Attributable to Noncontrolling Interest
Net loss attributable to noncontrolling interest was $39.4 million for the three months ended September 30, 2026 as compared to $41.0 million in the three months ended September 30, 2025. This decrease in net loss attributable to noncontrolling interest was due to a decrease in noncontrolling interest’s ownership percentage in AST LLC, partially offset by an increase in net loss generated at AST LLC.
Nine Months Ended September 30, 2026 Compared to the Nine Months Ended September 30, 2025
The following table sets forth a summary of our unaudited condensed consolidated statements of operations for the nine months ended September 30, 2026 and 2025 (in thousands), and the discussion that follows compares the nine months ended September 30, 2026 to the nine months ended September 30, 2025.
|
For the Nine Months Ended |
|||||||||||||||
|
(unaudited) |
|||||||||||||||
|
2026 |
|
|
2025 |
|
|
$ Change |
|
|
% Change |
||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Products revenues |
$ |
58,404 |
|
|
$ |
8,114 |
|
|
$ |
50,290 |
|
|
* |
|
% |
|
Services revenues |
|
30,171 |
|
|
|
8,499 |
|
|
|
21,672 |
|
|
* |
|
|
|
Total revenues |
|
88,575 |
|
|
|
16,613 |
|
|
|
71,962 |
|
|
* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of revenues (exclusive of items shown separately below) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of revenues - products |
|
55,916 |
|
|
|
5,803 |
|
|
|
50,113 |
|
|
* |
|
|
|
Cost of revenues - services |
|
4,614 |
|
|
|
- |
|
|
|
4,614 |
|
|
* |
|
|
|
Engineering services costs |
|
267,171 |
|
|
|
96,346 |
|
|
|
170,825 |
|
|
* |
|
|
|
General and administrative costs |
|
163,263 |
|
|
|
75,448 |
|
|
|
87,815 |
|
|
* |
|
|
|
Research and development costs |
|
23,990 |
|
|
|
19,058 |
|
|
|
4,932 |
|
|
|
26 |
|
|
Depreciation and amortization |
|
63,357 |
|
|
|
35,394 |
|
|
|
27,963 |
|
|
|
79 |
|
|
Loss on involuntary conversion |
|
125,958 |
|
|
|
- |
|
|
|
125,958 |
|
|
* |
|
|
|
Total operating expenses |
|
704,269 |
|
|
|
232,049 |
|
|
|
472,220 |
|
|
* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other (expense) income: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss on remeasurement of warrant liabilities |
|
(1,174 |
) |
|
|
(65,300 |
) |
|
|
64,126 |
|
|
|
(98 |
) |
|
Interest expense |
|
(80,695 |
) |
|
|
(17,938 |
) |
|
|
(62,757 |
) |
|
* |
|
|
|
Interest income |
|
84,807 |
|
|
|
28,452 |
|
|
|
56,355 |
|
|
* |
|
|
|
Other (expense) income, net |
|
(110,056 |
) |
|
|
(91,852 |
) |
|
|
(18,204 |
) |
|
|
20 |
|
|
Total other expense, net |
|
(107,118 |
) |
|
|
(146,638 |
) |
|
|
39,520 |
|
|
|
(27 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss before income tax benefit (expense) |
|
(722,812 |
) |
|
|
(362,074 |
) |
|
|
(360,738 |
) |
|
* |
|
|
|
Income tax benefit (expense) |
|
1,524 |
|
|
|
(1,284 |
) |
|
|
2,808 |
|
|
* |
|
|
|
Net loss before allocation to noncontrolling interest |
|
(721,288 |
) |
|
|
(363,358 |
) |
|
|
(357,930 |
) |
|
|
99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss attributable to noncontrolling interest |
|
(166,987 |
) |
|
|
(95,384 |
) |
|
|
(71,603 |
) |
|
|
75 |
|
|
Net loss attributable to common stockholders |
$ |
(554,301 |
) |
|
$ |
(267,974 |
) |
|
$ |
(286,327 |
) |
|
* |
|
% |
|
* Percentage greater than or equal to 100 or not meaningful
Products Revenues
Products revenues of $58.4 million and $8.1 million for the nine months ended September 30, 2026 and 2025, respectively, were primarily attributable to sales of gateway equipment and software to MNOs.
36
Services Revenues
Services revenues of $30.2 million and $8.5 million for the nine months ended September 30, 2026 and 2025, respectively, were primarily attributable to the completion of performance obligations under agreements with the U.S. government either directly as a prime contractor or indirectly through prime contractors.
Cost of Revenues - Products
Cost of revenues - products increased by $50.1 million to $55.9 million for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025. The increase was primarily attributable to cost of gateway equipment and software.
Cost of Revenues - Services
Cost of revenues - services of $4.6 million for the nine months ended September 30, 2026 was primarily attributable to labor costs and sales commissions in provision of services. Cost of revenues - services were not presented separately for the nine months ended September 30, 2025.
Engineering Services Costs
Total engineering services costs increased by $170.8 million to $267.2 million for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025. The increase was attributable to a $104.7 million increase in payroll and employee-related costs driven by an increase in headcount and higher stock-based compensation expense, a $35.2 million increase in consulting and professional fees, a $21.0 million increase in third-party engineering activities, equipment, and other overhead, including facilities costs, resulting from the expansion of our global facilities footprint, and a $9.9 million increase in travel expenses and other costs.
General and Administrative Costs
Total general and administrative costs increased by $87.8 million to $163.3 million for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025. The increase was attributable to a $68.9 million increase in payroll and employee-related costs driven by an increase in headcount and higher stock-based compensation expense, a $7.2 million increase in travel and other expenses, a $4.2 million increase in consulting and professional fees, a $4.1 million increase in facility and office expense, and a $3.4 million increase in legal costs largely driven by regulatory initiatives.
Research and Development Costs
Total R&D costs increased by $4.9 million, or 26%, to $24.0 million for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025. The increase in R&D costs was primarily attributable to the development and design of our satellites.
Depreciation and Amortization
Total depreciation and amortization expense increased by $28.0 million, or 79%, to $63.4 million for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025. The increase was primarily attributable to higher depreciation expense associated with lab, assembly, and integration equipment, in addition to BB6, BB8, BB9, and BB10 having been placed into service on September 1, 2026.
Loss on Involuntary Conversion
Loss on involuntary conversion of $126.0 million for the nine months ended September 30, 2026 consisted of the loss recognized for the asset write-off of the BB7 satellite, net of related insurance recoveries.
Loss on Remeasurement of Warrant Liabilities
Loss on remeasurement of warrant liabilities was $1.2 million for the nine months ended September 30, 2026 as compared to a loss of $65.3 million for the nine months ended September 30, 2025. The losses in the current period and in the prior year period were largely driven by increases in our share price which increased the fair value of warrant liabilities.
Interest Expense
Interest expense increased by $62.8 million to $80.7 million for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025. The increase was due to the net increase in borrowings that included the 2032 2.375% Convertible Notes, the 2036 2.00% Convertible Notes, the 2036 2.25% Convertible Notes, the 2034 1.625% Convertible Notes, the UBS Bridge Financing Loan, and an increase in the Trinity Capital Equipment Loan, partially offset by decreases in the 2032 4.25% Convertible Notes, of which $456.5 million was repurchased, the 2034 Convertible Notes issued in 2024, which we converted into shares of our Class A Common Stock on January 22, 2025, and the Prosperity Capital Equipment Loan and Prosperity Term Loan, which were fully repaid on March 11, 2026.
37
Interest Income
Interest income increased by $56.4 million to $84.8 million for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025. The increase was driven by a higher cash and cash equivalents balance held primarily in interest bearing short-term money market funds.
Other (Expense) Income, Net
Other expense, net was $110.1 million for the nine months ended September 30, 2026, as compared to $91.9 million for the nine months ended September 30, 2025. The approximately $18.2 million increase in other expense, net was primarily due to a $8.0 million increase in loss from our equity method investment, a $5.5 million increase in induced conversion expense related to repurchases of a portion of our 2032 4.25% Convertible Notes and 2032 2.375% Convertible Notes, a $2.2 million increase in finance charges and other borrowing related fees, a $2.0 million increase in foreign exchange losses, and a $1.0 million increase in loss on disposal of fixed assets, partially offset by a $0.5 million decrease in other charges.
Income Tax Benefit (Expense)
The income tax benefit was $1.5 million for the nine months ended September 30, 2026 as compared to the income tax expense of $1.3 million for the nine months ended September 30, 2025. The consolidated effective tax rate for the nine months ended September 30, 2026 and September 30, 2025 was 0.21% and (0.35%), respectively. Refer to Note 11 Income Taxes in the accompanying notes to the unaudited condensed consolidated financial statements for further information.
Net Loss Attributable to Noncontrolling Interest
Net loss attributable to noncontrolling interest was $167.0 million for the nine months ended September 30, 2026 as compared to $95.4 million in the nine months ended September 30, 2025. This increase in net loss attributable to noncontrolling interest was due to an increase in net loss generated at AST LLC, partially offset by a decrease in noncontrolling interest’s ownership percentage in AST LLC.
Liquidity and Capital Resources
Our current sources of liquidity are cash and cash equivalents on hand. As of September 30, 2026, we had approximately $3.2 billion of cash and cash equivalents and restricted cash on hand, including $434.6 million of restricted cash. We believe our cash and cash equivalents on hand will be sufficient to meet our current working capital needs, planned operating expenses and capital expenditures for a period of the next 12 months from the date of this Quarterly Report.
The design, assembly, integration, testing and launch of satellites and related ground infrastructure is capital intensive. We continue to estimate the average capital costs, consisting of direct materials and launch costs, for a constellation of over 90 Block 2 BB satellites to be approximately $21.0 million to $23.0 million per satellite, with initial launches higher than that range and trending down over time as we optimize payloads and related launch terms and evaluate a multitude of launch opportunities. The estimated average capital cost per Block 2 BB satellite excludes cost of certain initial satellites used to validate satellite performance and operations and cost of a replacement launch and is based on securing future launch contracts with more favorable terms, diversifying our supply chain to include cost-effective and low-cost suppliers, cost reductions due to the benefits of economies of scale, continuous process improvements, and other factors. If we are unable to achieve the supply chain diversifications, cost reductions, process improvements, and secure favorable future launch contracts, the average capital cost of the Block 2 BB satellites will be higher and such variations could be material.
We believe we need to launch and operate a total of 25 BB satellites (five Block 1 BB satellites and 20 Block 2 BB satellites) in order to provide coverage to the most commercially attractive MNO markets. We believe we can enable Continuous SpaceMobile Service coverage across key markets such as the United States, Europe, Japan and other strategic markets with the launch and operation of a total of approximately 45 to 60 BB satellites and additional worldwide strategic markets with approximately 90 BB satellites. We believe that we are fully funded for our costs necessary to manufacture and launch a constellation of approximately 90 BB satellites.
We evaluate our market, product and coverage plans based upon the attractiveness of certain markets, our technology, regulatory concerns and our access to capital and other resources. We believe we can develop satellite configurations that target delivering service to certain attractive markets without the necessity of building a constellation which covers the entire globe. This modularity of our satellite configuration enables us to alter the timing and size of our satellite roll out and provides us flexibility to dynamically change our market plans and capital requirements. As a result, we believe we have the ability to accelerate or slow down our business plan depending upon the availability of capital to support our strategies.
We plan to raise additional capital through the issuance of equity, equity-linked or debt securities (secured or unsecured), secured or unsecured loans or other debt facilities, and credit from government or financial institutions or commercial partners. Our ability to access the capital markets during this period of volatility may require us to modify our current expectations. There can be no assurance that additional funds will be available to us on favorable terms or at all. If we cannot raise additional funds when needed in the future, our financial condition, results of operations, business and prospects may be materially and adversely affected.
38
Commitments
There were no material changes in the contractual minimum principal and interest payments required on all of our outstanding debt and operating leases described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, other than the issuance of the 2036 2.25% Convertible Notes and the 2034 1.625% Convertible Notes, the repurchase of a portion of the 2032 4.25% Convertible Notes and the 2032 2.375% Convertible Notes, the repayment of the two Prosperity loans, and the partial repayment of the Trinity Capital Equipment Loan as described below.
As of September 30, 2026, we had contractual commitments with third parties in the aggregate amount of approximately $840.0 to $860.0 million primarily related to R&D programs, operational services, capital improvements and procurement of BB satellite components needed, in accordance with our production plan, for the assembly, integration and testing necessary to complete the planned constellation of over 90 BB satellites, gateway equipment, and other projects. We have various rights to adjust the quantity of satellite components on the purchase orders and/or change the delivery timelines in accordance with our ongoing business plan. We also have rights to terminate these agreements in accordance with the terms of the agreements and potentially incur a termination fee in certain cases. In addition, we have launch agreements under which payments are due at scheduled milestones over the duration of the agreements. We have contractual rights to cancel these launches or terminate the related agreements at any time by paying a termination fee, and in certain cases without incurring a termination fee, and any excess payments made to the launch providers for these launches will be refunded to us. As of September 30, 2026, we have made payments in excess of our minimum commitments related to future launches.
Firefly Agreements
On November 6, 2026, we entered into a License Agreement and a Supply and Services Agreement with Firefly to build our own 20-ton rocket (“Blacklift”) to deploy BB satellites in LEO using Miranda and Vira engines from Firefly.
Pursuant to the License Agreement, Firefly will grant us a perpetual license to manufacture the Miranda and vacuum-variant Vira engines. In consideration for the license, we will pay Firefly $400.0 million in cash and an estimated 10 to 14 million in shares of our Class A Common Stock, a portion of which is subject to lock-up, as determined by a forward VWAP calculation. The shares will be issued pursuant to an effective registration statement of the Company filed with the Securities and Exchange Commission; however, 2.4 million shares will be freely tradable at closing, with the remaining shares subject to a lock-up that permits additional shares to be sold at six months, one year and three years post-closing.
Pursuant to the Supply and Services Agreement, Firefly will supply us engines for the first three Blacklift rockets and provide engineering and other support services over a three-year period. As consideration for the Supply and Services Agreement, we will pay Firefly (1) a services fee of $250.0 million over a three-year period and (2) a hardware fee of $250.0 million for delivery of the engines for our first three rockets. The Supply and Services Agreement has a 36-month term, extendable by mutual agreement, unless early terminated pursuant terms of the Supply and Services Agreement.
Closing of the License Agreement and the Supply and Services Agreement is expected to occur in the fourth quarter of 2026, subject to customary closing conditions.
Rakuten AST Joint Venture
On November 6, 2026, we and Rakuten agreed to establish RAST, a joint venture, in Japan to own and operate a constellation of mid-band LEO satellites (“J-LEO Constellation”). The J-LEO Constellation is expected to be capable of providing direct-to-device (“D2D”) communications network in Japan to commercially available devices including in the event of disasters and other emergencies, and D2D communications network globally subject to regulatory approvals.
Rakuten and we own 51% and 49%, respectively, of the voting common shares in RAST. Common share contributions were de minimis. The Japanese Ministry of Internal Affairs and Communications (the “Japanese MIC”) selected the joint proposal from Rakuten’s preparatory company and Rakuten Mobile, Inc. for the publicly solicited "J-LEO: Japan Low Earth Orbit Satellite Communications Project". Rakuten AST is expected to receive a grant of up to JPY 148.0 billion (approximately $938.0 million based on a dollar/yen exchange rate of 157.75) to be paid over approximately three years to deploy and manage the J-LEO Constellation. RAST is expected to be funded by the grant award and our investments in RAST through preferred shares subscriptions, as discussed below. Such funds will be used to buy satellites, launch support services, and software licenses from us, and establish the infrastructure to deploy and manage the J-LEO Constellation.
We will subscribe for no coupon preferred shares to fund the remaining cost (above the grant award) for the deployment of the J-LEO Constellation. The preferred shares will have a liquidation preference over common shares in case of dissolution or termination of RAST. The amount of our subscription is subject to numerous factors such as satellite materials and launch costs and our preliminary estimate is that the subscription will be approximately $1.4 billion over an approximately three year period. The J-LEO Constellation will be used by RAST and Rakuten to provide services in Japan and three exclusive markets. RAST will receive 100% of the revenue generated in the three exclusive markets. The remaining capacity of the J-LEO Constellation will be used solely by us to provide services to our customers worldwide subject to regulatory approvals, with us sharing a pre-determined low single digit percentage of qualifying revenue with RAST. The revenue earned by RAST is expected to be used, subject to shareholders deciding otherwise, to reinvest in expanding the constellation and buying additional satellites from us.
39
The joint venture agreement (“Joint Venture Agreement”) contemplates a series of commercial agreements to be entered into by RAST, Rakuten and us, including a satellite supply agreement (the “Satellite Supply Agreement”) and a Mission Control and Monitoring System Software License Agreement (the “Rakuten License Agreement”) that were signed as part of the closing of the joint venture. Under the Satellite Supply Agreement, we will supply satellites to RAST. Under the Rakuten License Agreement, we will provide a non-exclusive, non-transferable and non-sublicensable license to RAST of our mission control and monitoring software to establish the Japan satellite operations center and the Japan payload operations center. In consideration for the license, RAST will pay the Company a one-time license fee of $75.0 million.
The term of the joint venture ends on the later of (i) the 8th anniversary of the Joint Venture Agreement closing or (ii) the permanent retirement of the last satellite, unless extended or terminated earlier pursuant to the terms of the Joint Venture Agreement.
Spectrum Usage Rights Transaction and Related Financing
On January 5, 2025, AST LLC entered into a binding agreement (the “Strategic Collaboration Term Sheet”) with Ligado LLC under which we will receive long-term access to up to 45 MHz of lower mid-band spectrum in the United States and Canada for direct-to-device satellite applications. The Strategic Collaboration Term Sheet was entered into as part of the restructuring of Ligado LLC, which together with certain of its direct and indirect subsidiaries filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the Bankruptcy Court.
On March 22, 2025, pursuant to the Strategic Collaboration Term Sheet, we, AST LLC, Spectrum USA I, LLC, a subsidiary of AST LLC (“SpectrumCo”) and Ligado entered into certain definitive agreements that, among other things, provided for (1) a $550.0 million contingent payment from us to Ligado, (2) SpectrumCo’s obligation to make spectrum access usage payments of at least $80.0 million annually (“L-band Annual Payment”) (with the option to pay the excess of the amount owed by Ligado to utilize the L-band spectrum in our Class A Common Stock for the first three years), and revenue share payments in exchange for the right to use up to 40 MHz of the L-band spectrum, (3) our obligation to pay a usage fee amount due in cash (plus a 30% premium with respect to each such payment payable in our Class A Common Stock or cash at our discretion) (the “Crown Castle Annual Payment”) for the right to use the up to 5 MHz of the 1670-1675 MHz spectrum, and (4) issuance of 4,714,226 penny warrants (“Penny Warrants”) on March 22, 2025 to Ligado, which were fully exercised for shares of our Class A Common Stock at an exercise price per share equal to $0.01 per share in the first quarter of 2026.
On June 23, 2025, the Bankruptcy Court approved the transactions (the “Spectrum Usage Rights Transaction”) contemplated in the Strategic Collaboration Term Sheet. The closing of the Spectrum Usage Rights Transaction is subject to receipt of satisfactory regulatory approvals required for the proposed use of the spectrum, as well as other closing conditions. On or about September 29, 2025, the Bankruptcy Court confirmed Ligado’s Chapter 11 plan.
Our obligation to make the L-band Annual Payment to Ligado began on June 23, 2025, and we have also commenced paying the Crown Castle Annual Payment. The total of the L-band Annual Payment and the Crown Castle Annual Payment payable by us that we have the option to pay in shares of our Class A Common Stock aggregates to approximately $74.8 million as of September 30, 2026.
Settlement Term Sheet
On June 13, 2025, we announced a Settlement Term Sheet (the “Mediated Agreement”) among various parties including us, Ligado, Viasat, Inc. and Inmarsat. Pursuant to the Mediated Agreement, subject to confirmation of Ligado’s Chapter 11 plan and as long as the financial sponsors of Ligado provide a backstop commitment to Ligado that is acceptable to us, in support of a full refund of payments by Ligado in the event applicable regulatory approvals are not obtained and the closing does not occur (the “Backstop Commitment”), we agreed that, with respect to the $550.0 million otherwise owed to Ligado in connection with the Spectrum Usage Rights Transaction, we would pay $420.0 million to Ligado for the benefit of Inmarsat on October 31, 2025, $100.0 million to Ligado for the benefit of Inmarsat on March 31, 2026 and $15.0 million to Ligado for the benefit of Inmarsat on receipt of specified regulatory approvals and the closing of the Spectrum Usage Rights Transaction. The remaining $15.0 million would be paid to Ligado at closing. On October 31, 2025, we made the first $420.0 million payment to Ligado for the benefit of Inmarsat. On or about March 31, 2026, we made the $100.0 million payment in accordance with the Mediated Agreement. Per the Mediated Agreement, the funds were intended to be for the benefit of Inmarsat and paid over to Inmarsat. However, by order of the Bankruptcy Court dated April 2, 2026, the $100.0 million payment has been placed in escrow. Distribution of these funds following their release from escrow is subject to effectiveness of Ligado’s Chapter 11 plan or further order of the Bankruptcy Court. The Backstop Commitment provided by Ligado’s financial sponsors has been memorialized in an amendment to Ligado’s debtor in possession financing arrangements and has been approved by the Bankruptcy Court. The funds under the $520.0 million Backstop Commitment will be available to be drawn by Ligado only in the event the applicable regulatory approvals are not obtained in accordance with the definitive documents between us and Ligado, and is subject to the satisfaction of certain other limited conditions. The proceeds of the Backstop Commitment can only be used to refund us for the amount that we paid to Ligado for the benefit of Inmarsat prior to receipt of the applicable regulatory approvals.
Sound Point Credit Facility
To support consideration payments in connection with the Spectrum Usage Rights Transaction, on July 15, 2025 (the “Credit Facility Closing Date”), SpectrumCo entered into a credit agreement (the “Sound Point Credit Agreement”) with Sound Point Agency LLC, as administrative agent and collateral agent, and the lenders from time to time party thereto. The Sound Point Credit Agreement provided for a non-recourse senior-secured delayed-draw term loan facility (the “Sound Point Credit Facility”) in an aggregate principal amount of $550.0 million (“Loan Amount”). The Sound Point Credit Facility was available to SpectrumCo to draw until October 5, 2026 with an option to extend for an additional 180 days (“Availability Period”) subject to payment of an additional 1% fee on the Loan Amount. On
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October 5, 2026, the Sound Point Credit Facility expired and we did not exercise the option to extend. Additionally, on October 31, 2025, BackstopCo entered into the UBS Loan Agreement with UBS AG, Stamford Branch, as lender. The UBS Loan Agreement provides for a cash collateralized UBS Loan Facility in an aggregate principal amount of $420.0 million. Refer to discussion below under “UBS Bridge Financing Loan” for further details.
No assurance can be provided that the Spectrum Usage Rights Transaction will be consummated. The Spectrum Usage Rights Transaction is subject to a number of conditions, including regulatory approval. Moreover, even if the Spectrum Usage Rights Transaction is consummated, the benefits of the transaction will be subject to, among other things, integration, technology and regulatory risks. The Spectrum Usage Rights Transaction may significantly increase our indebtedness and our annual required cash spend.
Our ability to obtain regulatory approval for the Spectrum Usage Rights Transaction may also be impacted by pending litigation with Inmarsat. In June 2025 we entered into the Mediated Agreement, which was subsequently approved by the Bankruptcy Court and is binding on the parties to the Mediated Agreement. The Mediated Agreement provides, among other things, that Inmarsat will provide certain regulatory support for the Spectrum Usage Rights Transaction. However, rather than perform its regulatory support obligations, Inmarsat filed an action in New York State Supreme Court (such action, the “New York State Action”) in December 2025. In January 2026, we and Ligado filed motions before the Bankruptcy Court seeking to compel Inmarsat to dismiss the New York State Action and perform its regulatory support obligations in accordance with the Mediated Agreement. In January 2026, the Bankruptcy Court granted our motion and Ligado’s motion, and ordered Inmarsat to dismiss the New York State Action and to comply with its obligations under the Mediated Agreement, including by providing regulatory support before the Federal Communications Commission. Inmarsat has appealed the matter to the United States District Court for the District of Delaware (the “District Court”). On February 27, 2026, the District Court stayed the Bankruptcy Court’s order requiring Inmarsat to comply with its regulatory support obligations and, on the same day, Inmarsat filed papers with the Federal Communications Commission opposing Ligado’s application seeking approval of the Spectrum Usage Rights Transaction. That same day, we and Ligado filed appeals with the United States Court of Appeals for the Third Circuit (the “Third Circuit”) seeking to vacate the District Court’s order. On March 2, 2026, the Third Circuit vacated the District Court’s stay order, and, on the same day, Inmarsat withdrew the papers it previously filed with the Federal Communications Commission. Inmarsat subsequently filed papers in support of Ligado’s application to the Federal Communications Commission. Inmarsat’s appeal of the Bankruptcy Court’s ruling requiring Inmarsat to provide regulatory support remains pending before the District Court and, if that ruling is overturned on appeal, this could impair our ability to obtain regulatory approval for the Spectrum Usage Rights Transaction.
Prosperity Term Loan
In December 2021, concurrent with the purchase of real property and certain equipment in Midland, Texas, AST & Science Texas, LLC entered into a credit agreement with Lone Star State Bank of West Texas (“Lone Star”), succeeded by Prosperity Bank by merger with Lone Star, providing for a $5.0 million term loan secured by certain property (the “Term Loan Credit Agreement”). Borrowings under the term loan bore interest at a fixed rate equal to 4.20% per annum.
On March 11, 2026, we repaid the principal amount, including accrued interest aggregating to approximately $4.2 million.
Prosperity Capital Equipment Loan
On August 14, 2023, we entered into a loan agreement with Lone Star, succeeded by Prosperity Bank by merger with Lone Star, as lender, providing for a $15.0 million principal term loan commitment secured by certain real property fixtures and equipment in one of our Texas facilities (the “Lone Star Loan Agreement”). We drew the entire $15.0 million on September 19, 2023. The Lone Star Loan Agreement included certain customary affirmative and negative covenants. As part of entering into the Master Equipment Financing Agreement (the “MEFA”) with Trinity Capital, Inc., we and Prosperity Bank amended the Lone Star Loan Agreement whereby Prosperity Bank released the lien on certain real property fixtures and equipment and we pledged a $15.0 million deposit in the Lone Star Bank Money Market Fund as security for the loan. Borrowings accrued interest at the Prime Rate plus 0.75%, subject to a ceiling rate. Interest payments were due and payable on a monthly basis. Interest payments began in September 2023 and principal payments began in April 2025. Principal repayments were due in 48 equal monthly installments until January 2029, the maturity date of the loan.
On March 11, 2026, we repaid the principal amount, including accrued interest aggregating to approximately $12.1 million.
Trinity Capital Equipment Loan
On June 27, 2025, we entered into the MEFA with Trinity Capital, Inc., as agent (the “Agent”) and lender, and the other lenders party (the “Lenders”) thereto, providing for a conditional commitment to provide financing in the total amount of up to $100.0 million. In 2025, we, the Agent and the Lenders executed four five-year Equipment Financing Schedules (“Schedules”) to the MEFA (together with the Schedules, the “Agreements”) borrowing a total of $50.5 million. The borrowings carry an aggregate monthly payment of approximately $1.1 million and an end of term payment of 9% of the drawn amounts. The Company received proceeds of approximately $49.1 million, net of debt issuance costs of approximately $0.1 million, commitment fee of approximately $0.8 million and other finance charges of approximately $0.5 million. The remaining amount of up to $49.5 million may be funded in one or more draws on or before June 30, 2027, subject to the satisfaction of various conditions.
Our obligations under the Agreements are secured by certain of our tangible assets. The MEFA contains customary affirmative and negative covenants. The MEFA also contains certain customary events of default that, if they occur, will be deemed to occur under all Schedules.
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On September 1, 2026, we entered into an amendment to the Schedules (the “Amendment”) with the Lenders. Under the Amendment, we made scheduled payments totaling $11.5 million, applied in inverse order of maturity, and received releases of the Lenders’ security interests in certain real property fixtures and equipment. The payments did not result in prepayment premiums, and no non-utilization fee is payable under the MEFA or any Schedule. We continue to make an aggregate monthly payment of approximately $1.1 million and an end of term payment of 9% of the drawn amounts.
UBS Bridge Financing Loan
On October 31, 2025, BackstopCo entered into the UBS Loan Agreement with UBS AG, Stamford Branch, as lender. The UBS Loan Agreement provides for a cash collateralized UBS Loan Facility in an aggregate principal amount of $420.0 million. The UBS Bridge Financing Loan bears interest at a floating rate equal to Term SOFR plus 2.0% per annum and matures on the earlier of (a) October 31, 2028 and (b) the date on which the UBS Loan Facility shall be terminated or accelerated as provided in the UBS Loan Agreement. The UBS Bridge Financing Loan can be prepaid in whole or in part, without penalty or premium, subject to payment of any applicable breakage costs.
The UBS Loan Facility is secured by a first-priority lien on substantially all of BackstopCo’s assets. We are not liable as a borrower or guarantor or otherwise for any payments owing in connection with the UBS Loan Facility. AST LLC will act as a limited guarantor under the UBS Loan Facility solely upon the occurrence of certain “bad boy” actions adverse to the lender by AST LLC or its affiliates, and the lender’s recourse to the assets of AST LLC is limited to AST LLC’s equity interests in BackstopCo. In addition, the affirmative and negative covenants contained in the UBS Loan Agreement (as described further below), apply to BackstopCo and/or AST LLC, as applicable.
The UBS Loan Agreement includes customary affirmative and negative covenants, including restrictions on additional indebtedness, liens, investments, asset dispositions, mergers, affiliate transactions, and dividends, as well as requirements relating to use of proceeds and compliance with specified agreements, among other covenants. Further, at all times following the UBS Loan Facility closing date until the maturity or termination of the UBS Loan Facility, BackstopCo is required to maintain cash or cash equivalents on deposit or credited to its collateral account in an amount equal to (or in excess of) 102.0% of the outstanding principal amount of the loan under the UBS Loan Facility. The UBS Loan Agreement also contains customary events of default (subject to grace periods, where applicable), including, among others, failure to pay principal or interest, cross-defaults to other agreements, breaches of representations and warranties, covenant defaults, the occurrence of a change in control and certain bankruptcy and insolvency events.
2032 4.25% Convertible Notes
On January 27, 2025, we issued $460.0 million aggregate principal amount of convertible senior notes due 2032 (the “2032 4.25% Convertible Notes”), including the exercise in full of the option granted to the initial purchasers to purchase up to $60.0 million aggregate principal amount of notes. The net proceeds of the 2032 4.25% Convertible Notes were $446.3 million after deducting the initial purchasers’ discounts and commissions and the estimated offering expenses payable by us. We used approximately $44.5 million of the net proceeds to pay the cost of the privately negotiated capped call transactions (the “January 2025 Capped Calls”). The remaining net proceeds were used for working capital or other general corporate purposes. On November 4, 2025, we sold the January 2025 Capped Calls for net cash proceeds of approximately $74.5 million.
On July 3, 2025, July 31, 2025 and October 29, 2025, we completed the repurchase of $225.0 million, $135.0 million and $50.0 million, respectively, of the outstanding principal amount of the 2032 4.25% Convertible Notes in separate, privately negotiated repurchase transactions with a limited number of note holders for an aggregate repurchase price of approximately $502.9 million, $346.9 million and $161.1 million, respectively, which included accrued and unpaid interest. The repurchase was funded with the net proceeds from a registered direct offering of 9,450,268 shares, 5,775,635 shares and 2,048,849 shares, respectively, of our Class A Common Stock to the same note holders participating in the note repurchase.
On February 20, 2026 and February 23, 2026, we completed the repurchase of approximately $46.5 million of the outstanding principal amount of the 2032 4.25% Convertible Notes in separate, privately negotiated repurchase transactions with a limited number of note holders for an aggregate repurchase price of approximately $180.5 million. The repurchase was funded with the net proceeds from a registered direct offering of 1,862,741 shares of our Class A Common Stock to the same note holders participating in the note repurchase.
The 2032 4.25% Convertible Notes are our senior, unsecured obligations and bear interest at a fixed rate of 4.25% per year, payable semiannually in arrears on March 1 and September 1 of each year, beginning on September 1, 2025. The 2032 4.25% Convertible Notes will mature on March 1, 2032, unless earlier repurchased, redeemed, or converted. The 2032 4.25% Convertible Notes are convertible at the option of the holders under certain circumstances. Upon conversion, we will pay or deliver, as the case may be, cash, shares of our Class A Common Stock or a combination of cash and shares of our Class A Common Stock, at our election.
2032 2.375% Convertible Notes
On July 29, 2025, we issued $575.0 million aggregate principal amount of convertible senior notes due 2032 (the “2032 2.375% Convertible Notes”), including the exercise in full of the option granted to the initial purchasers to purchase up to $75.0 million aggregate principal amount of notes. The net proceeds of the 2032 2.375% Convertible Notes were $560.0 million after deducting the initial purchasers’ discounts and commissions and the estimated offering expenses payable by us. We used approximately $54.0 million of the net proceeds to pay the cost of the privately negotiated capped call transactions (the “July 2025 Capped Calls”). The remaining net proceeds were used for working capital or other general corporate purposes.
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On February 20, 2026 and February 23, 2026, we completed the repurchase of $250.0 million of the outstanding principal amount of the 2032 2.375% Convertible Notes in separate, privately negotiated repurchase transactions with a limited number of note holders for an aggregate repurchase price of approximately $433.7 million, which included accrued and unpaid interest. The repurchase was funded with the net proceeds from a registered direct offering of 4,475,223 shares of our Class A Common Stock to the same note holders participating in the note repurchase.
The 2032 2.375% Convertible Notes are our senior, unsecured obligations and bear interest at a fixed rate of 2.375% per year, payable semiannually in arrears on April 15 and October 15 of each year, beginning on April 15, 2026. The 2032 2.375% Convertible Notes will mature on October 15, 2032, unless earlier repurchased, redeemed, or converted. The 2032 2.375% Convertible Notes are convertible at the option of the holders under certain circumstances. Upon conversion, we will pay or deliver, as the case may be, cash, shares of our Class A Common Stock or a combination of cash and shares of our Class A Common Stock, at our election.
2036 2.00% Convertible Notes
In October 2025, we issued $1,150.0 million aggregate principal amount of convertible senior notes due 2036 (the “2036 2.00% Convertible Notes”), including the exercise in full of the option by the initial purchasers to purchase up to $150.0 million aggregate principal amount of the notes. The net proceeds of the 2036 2.00% Convertible Notes were $1,129.2 million after deducting the initial purchasers’ discounts and commissions and the estimated offering expenses payable by us. Proceeds from the issuance of the 2036 2.00% Convertible Notes are expected to be used for general corporate purposes, including without limitation funding the deployment of our worldwide constellation of satellites in anticipation of adding incremental strategic markets for our SpaceMobile Service.
The 2036 2.00% Convertible Notes are our senior, unsecured obligations and bear interest at a fixed rate of 2.00% per year, payable semiannually in arrears on January 15 and July 15 of each year, beginning on July 15, 2026. The 2036 2.00% Convertible Notes will mature on January 15, 2036, unless earlier repurchased, redeemed, or converted. The 2036 2.00% Convertible Notes are convertible at the option of the holders under certain circumstances. Upon conversion, we will pay or deliver, as the case may be, cash, shares of our Class A Common Stock or a combination of cash and shares of our Class A Common Stock, at our election.
2036 2.25% Convertible Notes
In February 2026, we issued $1,075.0 million aggregate principal amount of convertible senior notes due 2036 (the “2036 2.25% Convertible Notes”), including the exercise of the option by the initial purchasers to purchase an additional $75.0 million aggregate principal amount of the notes. The net proceeds of the 2036 2.25% Convertible Notes were $1,057.5 million after deducting the initial purchasers’ discounts and commissions and the estimated offering expenses payable by us. The net proceeds are expected to be used for general corporate purposes, including without limitation, accelerating the deployment of our controlled spectrum bands on a global basis, monetizing the capabilities of our proprietary technology to capture the evolving commercial opportunities related to artificial intelligence, enhancing investment in government space opportunities in the U.S., reducing higher interest debt, and pursuing opportunistic investments to accelerate our SpaceMobile Service and capabilities.
The 2036 2.25% Convertible Notes are our senior, unsecured obligations and bear interest at a fixed rate of 2.25% per year, payable semiannually in arrears on April 15 and October 15 of each year, beginning on October 15, 2026. The 2036 2.25% Convertible Notes will mature on April 15, 2036, unless earlier repurchased or converted. The 2036 2.25% Convertible Notes are convertible at the option of the holders under certain circumstances. Upon conversion, we will pay or deliver, as the case may be, cash, shares of our Class A Common Stock or a combination of cash and shares of our Class A Common Stock, at our election.
2034 1.625% Convertible Notes
In July 2026, we issued $1,150.0 million aggregate principal amount of convertible senior notes due 2034 (the “2034 1.625% Convertible Notes”), including the exercise of the option by the initial purchasers to purchase an additional $150.0 million aggregate principal amount of the notes. The net proceeds of the 2034 1.625% Convertible Notes were $1,131.2 million after deducting the initial purchasers’ discounts and commissions and the estimated offering expenses payable by us. We used approximately $111.4 million of the net proceeds to pay the cost of the privately negotiated capped call transactions (the “July 2026 Capped Calls”). We intend to use the remaining net proceeds to pursue an expanding universe of growth initiatives and secure additional access to orbit for our space-based cellular broadband network, including partnerships and/or acquisitions to further vertically integrate our business and mitigate risks associated with third-party launch providers. The Company currently does not have any understandings or agreements with respect to any such strategic transactions.
The 2034 1.625% Convertible Notes are our senior, unsecured obligations and bear interest at a fixed rate of 1.625% per year, payable semiannually in arrears on February 1 and August 1 of each year, beginning on February 1, 2027. The 2034 1.625% Convertible Notes will mature on February 1, 2034, unless earlier repurchased or converted. The 2034 1.625% Convertible Notes are convertible at the option of the holders under certain circumstances. Upon conversion, we will pay or deliver, as the case may be, cash, shares of our Class A Common Stock or a combination of cash and shares of our Class A Common Stock, at our election.
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Commercial Prepayments
On May 23, 2024, AST LLC and Verizon entered into a Memorandum of Understanding which provides, among other things, that Verizon will make a $45.0 million commercial payment for prepaid service revenue, creditable against future service revenue of AST LLC, subject to us receiving certain regulatory approvals for our SpaceMobile Service and entry into a definitive commercial agreement. On October 8, 2025, we announced the signing of a definitive commercial agreement with Verizon. On April 22, 2026, we received certain regulatory approvals for our SpaceMobile Service. As of the date of this Quarterly Report, the $45.0 million commercial payment is due from Verizon.
Cash Flows
Historical Cash Flows
The following table summarizes our sources and uses of cash for the nine months ended September 30, 2026 and 2025 (in thousands):
|
For the Nine Months Ended |
|
|||||
|
(unaudited) |
|
|||||
|
2026 |
|
|
2025 |
|
||
Cash, cash equivalents and restricted cash |
$ |
3,233,480 |
|
|
$ |
1,220,123 |
|
Cash used in operating activities |
|
(314,477 |
) |
|
|
(136,486 |
) |
Cash used in investing activities |
|
(1,294,068 |
) |
|
|
(697,006 |
) |
Cash provided by financing activities |
|
2,061,138 |
|
|
|
1,487,053 |
|
Operating activities
Cash used in operating activities was $314.5 million for the nine months ended September 30, 2026 as compared to cash used in operating activities of $136.5 million for the nine months ended September 30, 2025. The $178.0 million increase in cash used in operating activities was attributable to an increase of $104.8 million in cash expenses to support operations and an increase of $73.2 million in working capital during the nine months ended September 30, 2026.
Investing activities
Cash used in investing activities was $1,294.1 million for the nine months ended September 30, 2026, as compared to cash used in investing activities of $697.0 million for the nine months ended September 30, 2025. The $597.1 million increase in cash used in investing activities was attributable to an increase of $485.2 million in purchases of property and equipment, including procurement of BB satellite materials, advance payments made under launch contracts, advance payments made to procure BB satellite materials and other capital advances, a $100.0 million advance payment made in the Spectrum Usage Rights Transaction pursuant to the Mediated Agreement, an increase of $32.7 million payments consisting of the L-band Annual Payment, a revenue share payment, and the Crown Castle Annual Payment made during the nine months ended September 30, 2026, and an $11.6 million additional equity investment in SatCo, partially offset by $32.4 million insurance proceeds received for the BB7 launch during the nine months ended September 30, 2026.
Financing activities
Cash provided by financing activities was $2,061.1 million and $1,487.1 million during the nine months ended September 30, 2026 and 2025, respectively. The $574.0 million increase in cash provided by financing activities was attributable to an increase of $1,160.0 million in net proceeds from the issuance of debt and a decrease of $814.4 million in repayments of debt, partially offset by a $1,326.6 million decrease in net proceeds from issuance of equity, an increase of $60.9 million used to settle equity awards under our stock-based compensation plans, and an increase of $12.9 million that was used in purchases of capped calls.
Funding Requirements
We believe our existing cash and cash equivalents as of September 30, 2026 will be sufficient to meet anticipated cash requirements for the next 12 months from the date hereof. However, our forecast of the period of time through which our financial resources will be adequate to support operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. We have based this estimate on assumptions that may prove to be wrong, and we could expend capital resources sooner than we expect.
Future capital requirements will depend on many factors, including:
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Until such time, if ever, as we can generate substantial revenues to support our cost structure, we expect to finance cash needs through the issuance of equity, equity-linked or debt securities (secured or unsecured), secured or unsecured loans or other debt facilities, and credit from government or financial institutions or commercial partners. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of stockholders will be, or could be, diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise funds through commercial agreements, or other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies and/or future revenue streams, or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock. Also, our ability to raise necessary financing could be impacted by geopolitical events, higher interest rates and inflationary economic conditions and their effects on the market conditions. If we are unable to raise additional funds through equity offerings, debt financings or commercial arrangements when needed, we may be required to delay, limit, reduce or terminate our commercialization efforts or grant rights to develop and market other services even if we would otherwise prefer to develop and market these services ourselves, or potentially discontinue operations.
Critical Accounting Policies
Our unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). Preparation of the financial statements requires our management to make judgments, estimates and assumptions that impact the reported amount of revenue and expenses, assets and liabilities and the disclosure of contingent assets and liabilities. We consider an accounting judgment, estimate or assumption to be critical when (1) the estimate or assumption is complex in nature or requires a high degree of judgment and (2) the use of different judgments, estimates and assumptions could have a material impact on our unaudited condensed consolidated financial statements. For a discussion of our critical accounting policies, see “Critical Accounting Policies” in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes to our critical accounting policies since our Annual Report on Form 10-K for the year ended December 31, 2025.
Off-Balance Sheet Arrangements
On June 13, 2025, we announced the Mediated Agreement among various parties including us, Ligado, Viasat, Inc. and Inmarsat. Pursuant to the Mediated Agreement, as long as the financial sponsors of Ligado provide the Backstop Commitment to Ligado that is acceptable to us, in support of a full refund of payments by Ligado in the event applicable regulatory approvals are not obtained and the closing does not occur, we have agreed that, with respect to the $550.0 million otherwise owed to Ligado in connection with the Spectrum Usage Rights Transaction, we would pay $420.0 million to Ligado for the benefit of Inmarsat on October 31, 2025, $100.0 million to Ligado for the benefit of Inmarsat on March 31, 2026 and $15.0 million to Ligado for the benefit of Inmarsat on receipt of specified regulatory approvals and the closing of the Spectrum Usage Rights Transaction. The remaining $15.0 million would be payable to Ligado at the closing. On October 31, 2025, we made the first $420.0 million payment to Ligado for the benefit of Inmarsat. On or about March 31, 2026, we made the $100.0 million payment in accordance with the Mediated Agreement. Per the Mediated Agreement, the funds were intended to be for the benefit of Inmarsat and paid over to Inmarsat. However, by order of the Bankruptcy Court dated April 2, 2026, the $100.0 million payment has been placed in escrow. Distribution of these funds following their release from escrow is subject to effectiveness of Ligado’s Chapter 11 plan or further order of the Bankruptcy Court. As of the date of this Quarterly Report, the remaining payments under the Mediated Agreement constitute an off-balance sheet commitment, as the related payment obligations have not been made or are subject to closing of the Spectrum Usage Rights Transaction and, therefore, are not recognized in our unaudited condensed consolidated financial statements.
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On June 23, 2025, the Bankruptcy Court approved the Spectrum Usage Rights Transaction contemplated in the Strategic Collaboration Term Sheet. On or about September 29, 2025, the Bankruptcy Court confirmed Ligado’s Chapter 11 plan. The closing of the Spectrum Usage Rights Transaction is still subject to receipt of satisfactory regulatory approvals required for the proposed use of the spectrum, as well as other closing conditions. AST LLC’s obligation to make the Crown Castle Annual Payment and SpectrumCo’s obligation to make the L-band Annual Payment each began on June 23, 2025. Refer to discussion under “Spectrum Usage Rights Transaction and Related Financing” in the “Liquidity and Capital Resources” section and Note 13 Spectrum Usage Rights and Related Financing for further details.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risks in the ordinary course of our business. Our exposure to market risk has not changed materially from what we previously disclosed in Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the year ended December 31, 2025 other than additional interest rate risk exposure from issuing the 2036 2.25% Convertible Notes and the 2034 1.625% Convertible Notes as described below:
On February 17, 2026, we issued the 2036 2.25% Convertible Notes with an aggregate principal amount of $1,075.0 million, the full amount of which was outstanding as of September 30, 2026. We carry the 2036 2.25% Convertible Notes at face value less the unamortized debt issuance costs on our unaudited condensed consolidated balance sheets. The 2036 2.25% Convertible Notes have a fixed interest rate; therefore, we have no financial statement risk associated with changes in interest rates with respect to the 2036 2.25% Convertible Notes. The fair value of the 2036 2.25% Convertible Notes changes when the market price of our stock fluctuates or market interest rates change.
On July 20, 2026, we issued the 2034 1.625% Convertible Notes with an aggregate principal amount of $1,150.0 million, the full amount of which was outstanding as of September 30, 2026. We carry the 2034 1.625% Convertible Notes at face value less the unamortized debt issuance costs on our unaudited condensed consolidated balance sheets. The 2034 1.625% Convertible Notes have a fixed interest rate; therefore, we have no financial statement risk associated with changes in interest rates with respect to the 2034 1.625% Convertible Notes. The fair value of the 2034 1.625% Convertible Notes changes when the market price of our stock fluctuates or market interest rates change.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)) as of September 30, 2026. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2026.
Changes in Internal Control over Financial Reporting
There have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this Quarterly Report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
The Company is subject to the legal proceedings and claims described below.
Securities Class Action
The Company and certain of its current executive officers have been named as defendants in a putative stockholder class action lawsuit pending in the United States District Court for the Western District of Texas. The action is styled Hunter v. AST SpaceMobile, Inc. et al., No. 7:26-cv-00378 (W.D. Tex.) (the “Securities Class Action”). The complaint in the Securities Class Action, which was filed on September 14, 2026, alleges that defendants violated the Exchange Act, and SEC Rule 10b-5 promulgated thereunder by making false and misleading statements and omissions, and that the current executive officers named as defendants are control persons under Section 20(a) of the Exchange Act. The Complaint was filed on behalf of stockholders who purchased shares of the Company’s common stock between March 4, 2025 and July 16, 2026, and seeks monetary damages on behalf of the purported class.
Derivative Actions
The Company has been named as a nominal defendant and certain of its current and former executive officers and directors have been named as defendants in two derivative lawsuits filed in the United States District Court for the Western District of Texas on October 21, 2026 and November 5, 2026, respectively. The actions are styled Papa et al. v. Avellan et al., No. 7:26-cv-00430 (W.D. Tex.) and Paul et al. v. Avellan et al., No. 7:26-cv-00446 (W.D. Tex.) (the “Derivative Actions”). The complaints assert claims under the Exchange Act and for breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets against all defendants, and claims for contribution under the Exchange Act against certain of the defendants. The Derivative Actions seek compensatory damages, disgorgement of compensation and profits, revisions to the Company’s governance and internal procedures, and attorneys’ fees and costs.
The Securities Class Action and the Derivative Actions are at an early stage. The Company intends to defend itself and its current and former directors and officers vigorously against the claims alleged in the Securities Class Action and Derivative Actions.
Additionally, the Company is subject to various legal proceedings and claims that have arisen in the ordinary course of business and that have not been fully adjudicated.
In the opinion of management, there was not at least a reasonable possibility we may have incurred a material loss, or a material loss in excess of any recorded accrual, with respect to loss contingencies. However, the outcome of litigation is inherently uncertain. Therefore, although management considers the likelihood of such an outcome to be remote, if one or more of these legal matters were resolved against us in a reporting period for amounts in excess of management’s expectations, our consolidated financial statements for that reporting period could be materially adversely affected. Refer to Note 8 Commitments and Contingencies for further information.
Item 1A. Risk Factors.
For a detailed discussion of the risks and uncertainties related to our business, please refer to the section titled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 2, 2026. There have been no material changes from the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2025, except as specified below.
We may not be able to launch our satellites, or operate our satellites after launch, successfully.
We rely on third parties to launch our satellites. If we fail to find third parties to launch our satellites or if the third parties fail to perform or delay their performance, the SpaceMobile Service may not be made operational in the anticipated timeframe or at all. There are a limited number of third parties with the capabilities to launch our satellites, some of which have launched services that could compete with the SpaceMobile Service and some of which only have a limited track record of being capable of launching our satellites. We have entered into launch agreements with multiple launch service providers that we believe will enable us to launch over 100 BB satellites by the end of 2028. Additionally, we have access to certain priority launches for U.S. Government missions alongside the DPAS rated program. Although we have secured contracts with various launch providers and have access to priority launches for U.S. Government missions alongside the DPAS rated program, our launch partners may encounter launch, deployment, or in-orbit delays or failures. Such delays or failures could slow the anticipated timeline of the SpaceMobile Service, our planned launch campaign or even lead to the damage or complete loss of our satellites, which would materially adversely affect our business, financial condition and results of operations.
We do not presently have long-term contracts with third parties to launch all of the satellites which we intend to launch.
Also, we may not be able to operate our satellites successfully due to mechanical deployment failures after launch or problems occurring during the deployment once in space. In addition, we may not achieve the desired altitudes to operate our satellites which could result in a failure of our satellites to operate as planned.
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We may experience delays or other complications in the design and manufacture of Blacklift or could experience delayed launches or launch failures.
On November 6, 2026, we entered into a License Agreement and a Supply and Services Agreement with Firefly to build Blacklift, our own 20-ton rocket to deploy BB satellites in LEO using Miranda and Vira engines from Firefly. The successful development of our Blacklift rockets and related technology involves many uncertainties, some of which are beyond our control, including:
Additionally, even if we are able to successfully develop and manufacture our Blacklift rockets, we may experience delayed launches or launch failures. Delays in launching launch vehicles are common and can result from manufacturing delays, supply chain delays, natural or man-made disasters, adverse weather conditions or issues at the facilities used for testing, training, and operating space-related activities, including launch sites, delays in obtaining required regulatory approvals, regulatory standards preventing us from launching at certain times, unexpected national priority events, launch failures, and unexpected events or disruptions that occur during transportation of launch vehicles or other equipment to the launch payload processing facility. If launch vehicle schedules are not met, a launch opportunity may not be available at the time the satellites are ready to be launched. In addition, launch vehicles or satellite deployment mechanisms may fail, which could result in the destruction of any satellites we have in that launch vehicle or an inability for the satellites to perform their intended mission.
Any delays or other complications in the design and manufacture of Blacklift or delayed launches or launch failures in the future could materially adversely affect our business, financial condition and results of operations.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not Applicable.
Item 5. Other Information.
In the quarter ended September 30, 2026,
On November 6, 2026, we entered into the License Agreement and the Supply and Services Agreement with Firefly to build our own 20-ton rocket to deploy BB satellites in LEO using Miranda and Vira engines from Firefly.
On November 6, 2026, we and Rakuten agreed to establish a joint venture in Japan to own and operate a constellation of mid-band LEO satellites. The J-LEO Constellation is expected to be capable of providing direct-to-device communications network in Japan to commercially available devices including in the event of disasters and other emergencies, and D2D communications network globally subject to regulatory approvals.
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For information regarding the above transactions and agreements, see Note 15 Subsequent Events of our notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report, which section is incorporated by reference into this Part II, Item 5.
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Item 6. Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
4.1 |
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Indenture, dated as of July 20, 2026, by and between AST SpaceMobile, Inc. and U.S. Bank Trust Company, National Association, as Trustee (incorporated by reference to Exhibit 4.1 to the registrant’s Current Report on Form 8-K filed with the SEC on July 20, 2026). |
4.2 |
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Form of Global Note, representing AST SpaceMobile, Inc.’s 1.625% Convertible Senior Notes due 2034 (included as Exhibit A to the Indenture filed as Exhibit 4.1) (incorporated by reference to Exhibit 4.2 to the registrant’s Current Report on Form 8-K filed with the SEC on July 20, 2026). |
10.1 |
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Form of Confirmation for Base Capped Call Transactions, dated July 15, 2026 (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed with the SEC on July 20, 2026). |
10.2† |
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AST SpaceMobile, Inc. Senior Management Change of Control Severance Policy (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed with the SEC on September 28, 2026). |
31.1* |
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Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
31.2* |
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Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
32.1* |
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Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
32.2* |
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Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
101.INS |
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Inline XBRL Instance Document |
101.CAL |
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Inline XBRL Taxonomy Extension Calculation Linkbase Document |
101.SCH |
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Inline XBRL Taxonomy Extension Schema Document |
101.DEF |
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Inline XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB |
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Inline XBRL Taxonomy Extension Labels Linkbase Document |
101.PRE |
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Inline XBRL Taxonomy Extension Presentation Linkbase Document |
104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
† Management contract or compensatory plan or arrangement
* Filed herewith
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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AST SPACEMOBILE, INC. |
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Date: November 9, 2026 |
By: |
/s/ Abel Avellan |
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Name: |
Abel Avellan |
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Title: |
Chairman and Chief Executive Officer |
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Principal Executive Officer |
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Date: November 9, 2026 |
By: |
/s/ Andrew M. Johnson |
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Name: |
Andrew M. Johnson |
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Title: |
Chief Financial Officer and Chief Legal Officer |
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Principal Financial Officer |
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