AST SpaceMobile, Inc. Price & Performance (ASTS)

Many of us still experience gaps in coverage as we live, work and travel. Additionally, there are billions of people without cellular broadband who remain unconnected to the global economy. The markets we are pursuing are massive and the problem we are solving is important and touches nearly all of us. In this backdrop, AST SpaceMobile is building the first and only global cellular broadband networking space. To operate directly with everyday unmodified global devices and supported by our extensive IT and patent portfolio. We have made significant progress over the past year, and I am excited to pass the call to our Chairman and CEO of El Avalon, who will discuss our achievements and our vision going to 2025. Thank you, Scott. The faster amount has been transformational for ASPs based mobile.

And we continue to accelerate manufacturing, expand our partner ecosystem demonstrate unique and differentiated space based Cerro Brava Caboibic. 2024 was the year we validated ATS space mobile position as a technology leader and inventor. In this new industry. And in 2025, we will leverage the position alongside our expansive IP portfolio of more than 3,500 patents and patent pending claims.

To further enable Tustin base connectivity to the device, in your pocket today. Simply put, we entered 2025 with Italian partners technology and intellectual property access to space and spectrum, and the funding to move at an accelerated pace in this fast developing market. Key pieces of our business are now in place. Our technology has capacity to deliver voice data, video calls and other native cellular global capability. Making us a truly differentiated offering for us and our network partners. We're now moving forward to integrate with our partner networks which will enable initial service with our mobile network partners AT and T, Amber ISO in United States Polapon in United Kingdom and Turkey and Rakuten in Japan. Our mobile network operator partners include some of the largest telco providers in the world, and the number of Panarche continue to grow. We now have agreements with approximately 50 mobile network operators globally which have nearly 3,000,000,000 existing subscribers around the world. This year is about building our constellation to reach commercial service. As a reminder, our technology has been designed from the beginning to support broadband. Not just text messaging, or emergency SOS. As noted, recently by our partners AT and T, Verizon and Vodafone, who each completed video calls over our in orbit network.

We had the capability for voice and data services at broadband speed to modify the smartphones. Since our last business update call with Investor, we achieved several major milestones. First AST, we solidified our balance sheet with a significant financing with Anatra And with that, we are accelerating our manufacturing which I will speak to you shortly. Second, we signed an agreement that once completed will provide us with the largest block of high value lower mid band spectrum, our making the spectrum on and operated by our partner. [indiscernible] alongside with additional components and materials needed for overfits. Fourth, we continue to expand our commercial ecosystem developed an agreement and with the government contract. In fact, just this past week, we announced a new $43,000,000 contract award in support of the United States Space Development Agency or SDA. Our recent contract is just for the beginning of what we expect to achieve with the U. S. Government. And last, we continue to solidify the regulatory framework for our service. With the SEC. Let me briefly elaborate on each of these achievements. We completed €460,000,000 convertible senior notes offering.

Resulting in nearly $1,000,000,000 in cash on our balance sheet. Alongside with this capital raise, we secured cap coal transactions, which increased the effective conversion price of the note to approximately $45 per share.

With a 4.25% coupon we significantly reduced our cost of capital for the company And with the CapEx goal, we minimized effective dilution to existing shareholders to approximately 3%. The effective conversion price. Importantly, as part of this transaction, AT and T Google, Verizon and Vodafone converted their existing notes and became Class A common shareholders. We welcome our loyal partners of shareholders and we appreciate their ongoing support. Definancing of and our new balance sheet enabled us to immediately and aggressively accelerate our manufacturing We have accelerated the procurement of components and materials needed for us to complete 40 fully integrated [indiscernible] Additionally, we have accelerated procurement of components and materials needed for us to complete fully assembled micros. Which are the building block of our server. [indiscernible] As a reminder, the assembly stage is is one of the last steps in the manufacturing process and we procure low lead items first to ensure we remain on track for integration and assemble stages. As part of our accelerated manufacturing we had increased our global footprint approximately 194,000 per feet in Midland. Texas, 59,000 square feet in Barcelona, Spain And soon 85,000 additional square feet in Homestead, Florida perspective. We have completed this bring up and initial validation of our novel ASIC chip.

Which will support up to 10,000 megahertz 10 gigahertz in processing bandwidth per satellite with big data speed of up to two twenty megabits per second. [indiscernible] We expect to incorporate our ASIC into group Block two Blu Verzales later this year. We also exercised our contract option for more launches and now we have fully contracted loan capacity for approximately 60,000 during 2025 and 2026. Which gets us to continue servicing U. S, Europe and Japan and some selected markets outside The United States AST. Next, we signed an agreement which will provide long term access to up to 45 megahertz of lower mid band spectrum in United States. [indiscernible] This agreement when consummated will we'll unbuild our Capa business bearing existing plants for the coast in The United States on previous three EPP low line spectrum in the eight fifty megahertz fab.

Which offers superior penetration and coverage characteristics. With access to up to 45 megahertz of lower mid band spectrum, the largest available globe or high quality nationwide spectrum in United States. Spectrum is a scarce resource. And our spectrum agreement matches an attractive spectrum position with the largest satellite array for direct to device cellular broadband space. The agreement from loan long term access to this spectrum enhanced our strategy of working with MNO Our partner dedicate premium low line spectrum to support our service. This spectrum we are accessing and replify the existing capacity. Specifically, more spectrum means increased subscriber capacity and better service in The U. S. Enable peak data to admissions speed of up to 120 megawatt per second for a true broadband experience directed from Spain to everyday smartphone. This position AST and our mobile network provider for significant growth. While reinforcing our place in the broader wireless ecosystem with a valuable strategic asset. And just recently, we received a special authority FDA approval from the SEC to commence safety service with AT and T and Verizon in United States. This approval enabled us to connect and test our Bluebird's outlet with modified smartphone without the need of any specialized software device support or updates.

The SEC approvals [indiscernible] groundbreaking technology with our AST The first five commercial Rogue One Blue Versa is launched in September 2024 are fully operational. As a reminder, our Southern Armace each the largest ever commercial vehicle communication rate in low earth orbit other than the International Space Station. For context, our upcoming Block two satellites are more than three times the size of Block one satellites, mentioned approximately 2,400 square feet. As a result, we made a much smaller number satellites compared to traditional operators in below their orbits. These types of our satellites accelerate our path to commercial revenues and the design of our service and network decrease any single quarter failure reducing our risk profile. I am very pleased to report the first five bluebirds are all performing as expected. We have fully tested each salad and put them into operations. It was exciting to watch both CEO, Margarito Del Valle complete a video call using our state based technology. AT and T and Verizon completed video calls shortly after. This operational milestone demonstrates our unique capability that our assets were designed for. [indiscernible] but full broadband capabilities and other native cellular capabilities to completely unmodify smartphones.

On the order front, we recently secured an additional contract for $43,000,000 of revenue with the space development engines. Through a prime contractor. Will provide support details momentarily. But this commercial award highlighted capabilities for our dual use technology. For facial recognition applications. Our government contract pipeline continued to close 10 driven by new use cases for our unique technology which are becoming clearer every day.

We have successfully initiated launch and the progress of COVID-nineteen in and our commercial agreement you can see the key pieces of operationalizing the Fitbit mobile network, are now in place. I am incredibly proud of the entire effort from our team and our partners, particularly over the past several months. To get us to this critical point.

With each step, we move closer to achieving our mission of connecting you connected I look forward to bringing few more updates. In the utmost ahead. I will now pass AST call provide more details on our commercial products. Thank you, Abel. As Bell mentioned, the last few months have been truly significant for AST SpaceMobile.

All of the facets of our business are coming together nicely and and we entered 2025 in our strongest position to date. Let me provide additional details on some of the achievements and what they mean for the commercialization of the company. This last week, we signed a $43,000,000 revenue contract with the U. S. Space Development Agency through a prime contractor AST. This contract follows successful in orbit test testing on our BlueWalker three test satellite under the previous contract announced in February of twenty twenty four. Importantly, this is not a prepaid contract, but rather revenue we expect to receive and recognize alongside service delivered on our five satellites in orbit and our first Block two Bluebird satellite. This contract, as with our other U. S. Government contracts, date, serve as an evaluation of our capabilities in support of potential larger long term contracts. Now taking a step back, this marks our fifth contract award with the U. S. Government and our third supporting the Space Development Agency. We continue to see a strong demand profile for space applications from the DoD, which you can read about in the press. And in particular for our unique architecture, which facilitates a diverse set of communications and non communications applications.

Our network is also attractively positioned as dual use capable meaning the same spacecraft can be used for both consumer and government programs. On the commercial front, we continue to advance with our partners including the approximately 50 mobile network operators we have initial agreements with today. The depth and excitement of these conversations has continued to increase alongside our business milestones like the high profile video calls with Vodafone, AT and T and Verizon that we recently conducted. During 2025, we expect to round out our strategic markets with additional MNOs, building out the initial planned coverage footprint in The U. S. Europe, Japan and with the U. S. Government. Additionally, during the first half of twenty twenty five, you will begin to see gateway sales or bookings that will bring in cash and revenue during 2025 and also provide a leading indicator the markets where you'll see initial service revenue. Turning to Vodafone in particular, in December, we finalized a definitive long term commercial agreement for space mobile service through 02/1934. This agreement establishes the framework for Vodafone to offer space based cell broadband connectivity in its home markets as well as to other operators via its partner markets program.

Our agreement with Vodafone is a culmination of the many years working together to advance connectivity, marking another significant step in our historic partnership. And then AST yesterday, we announced the further agreement with Vodafone to accelerate commercialization of the space mobile network across all of Europe. This jointly owned entity will exclusively distribute our space based cellular broadband service, expanding our addressable market significantly in Europe. This means shared ground infrastructure to manage geographic boundaries and turnkey solutions to increase take up with smaller operators earlier in our deployment. Also in support of our European expansion, we are opening a research and validation hub in Malaga, Spain to support space, and land mobile broadband research. This strategic expansion along with our increased manufacturing footprint in Barcelona enhance our capabilities to serve the European market and underscore our long term commitment to the continent. With that, I will hand it off to Andy. Thanks, Scott, and good afternoon, everyone. I echo the sentiment expressed by Abel and Scott. 2024 was a pivotal year in the history of ASD's AST Space Mobile and we continued our rapid operating transformation during Q4 of twenty twenty four, Our successful launch of five Block one Bluebird satellites in September coupled with our achievement of full operational status of those satellites in early Q4, has positioned us well to continue our intense focus on expanding our customers both through commercial and U. S. Government engagements. 2024 came to a close, AST SpaceMobile was a transformed company.

Poised to lead the burgeoning direct to device satellite communication industry. We have the financial resources to support our bold initiatives to accelerate the manufacturing and deployment of our satellites in an effort to scale our revenue The start of 2025 has been a continuation of this significant [indiscernible] As mentioned earlier, we accelerated satellite manufacturing efforts in line with our plans to launch up to 60 Block two Bluebird satellites during 2025 and 2026. Strengthened our balance sheet through our strategic capital raising facilitating an increase in our production targets and including the planning and production of 40 Block two Bluebird satellites and phased array to support a total of 53 satellites. Production is well underway at our manufacturing facilities as we expand our foot globally. Moving to the operating and metrics slide, let's review the key operating metrics for the fourth quarter and full year 2024. On the first chart, for the fourth quarter of twenty twenty four, we incurred non GAAP adjusted cash operating versus $45,300,000 in the third quarter As a reminder, non GAAP adjusted operating expense including depreciation and amortization and stock based compensation. This quarter over quarter decrease resulted from $9,300,000 of reduced R and D AST, primarily related to our now completed ASIC bring up and initial validation work.

Partially offset by a $4,200,000 increase in adjusted engineering services costs and a slight increase of $600,000 in adjusted general and administrative costs in connection with our accelerated plans related to our Block II Bluebird satellites and investment to bolster our critical commercial AST administrative functions. For the full year 2024, non GAAP adjusted cash operating expenses totaled $151,800,000 compared to $154,600,000 for the full year 2023. Increased engineering services and G and A costs in 2024 were more than offset by a significant reduction in R and D costs as we reduced third party research and development efforts, and pivoted to our internal engineering and cross functional administrative support in connection with our satellite manufacturing, Deployment commercial and U. S. Government engagement efforts, related to our Block one and Block two Bluebird satellites. Turning towards the second chart on this slide, our capital expenditures for the fourth quarter of twenty twenty four were approximately $86,000,000 versus $26,500,000 for the third quarter of twenty twenty four. This figure is made up of approximately $77,000,000 of capitalized direct materials and labor for our Block two Bluebird satellites, and additional facility and production equipment for our recently expanded 194,000 square foot assembly, integration and test facilities in Midland, Texas.

This amount was just slightly less than our guidance of a approximately $100,000,000 that I provided on our last business update call November, due to timing of a payment ultimately made in January versus December. Overall and as expected, capital expenditures have continued to ramp in connection with Block two Bluebird satellite related launch commitments. Today, we are executing a plan to increase monthly satellite production to six satellites per month in the second half of twenty twenty five. In connection with scaling manufacturing and We expect capital expenditures will continue to increase as compared to prior quarters. We expect CapEx in the range of 151 hundred and $75,000,000 the first quarter. Of twenty twenty five. Consistent with the fourth quarter of twenty twenty four, we estimate that our adjusted cash operating expense will come in within a range of $40,000,000 to $45,000,000 as we continue to make critical investments across the organization, of our growth plans. Timing of the changes in our adjusted operating expenditures and capital expenditures, as I've just described, could be delayed or may not be realized due to a variety of factors. And on the final chart on this slide, we ended the fourth quarter with $567,500,000 in cash, up from $518,900,000 at the end of the third quarter.

Our ability to maintain cash above $500,000,000 during the fourth quarter despite the increased capital expenditures partially offset by the repayment of our previous senior credit facility I discussed on our last call. We currently have approximately $66,000,000 available on the ATM facility. Our disciplined and effective use of this facility has a allowed us to increase liquidity, supplement our other strategic financing initiatives accelerating future revenue opportunities position us well to move quickly in building and launching our network. As Isabelle commented earlier, in 2025, we further strengthened our cash position through the $460,000,000 convertible senior notes offering on attractive terms, including a capped call that increased the effective conversion price by 100% to $44.98 per share thus minimizing dilution considerably to approximately 3%. The offering was more than three times oversubscribed providing the opportunity to expand our investor base to many new long term holders that believe in our mission and execute Finally, we continue to make good progress on non dilutive financing from quasi governmental sources of capital in The United States, having passed key milestones, including transaction committee acceptance. If these applications are successful, we can use the proceeds to source cost effective long term debt funding of large projects.

In parallel, we continue to explore financing opportunities through both domestic and global development institutions, providing financial services to businesses like ours in emerging markets. We will provide updates as appropriate and we will be working with the partner banks and our advisors to refine our alternatives. With our growing revenue profile and further diversified capital market access, we we are confident that we can fund our accelerated operational plans AST our existing balance sheet continued focus on non dilutive customer prepayments, and prudent use of the ATM facility. We are proud of the progress we made in 2024 and remain focused on our mission as we continue a fast start to 2025. I look forward to keeping you updated on our financial progress as the year unfolds.

And with that, this completes the presentation component of our business update call and I'll pass it back to Scott. Thank you, Andy. Before we go to the queue questions, we'd like to address a few of the questions submitted by our investors AST. Operator, could you please start us off with the first question?

Lee Den from New Zealand asked.

When does ASTS expect to reach the six Bluebird per month manufacturing target?

Thank you, Leland, for the question. Great to see questions coming from New Zealand. We are in the process of manufacturing 40 satellites and we are working already on the long lead items and all key parts of our markets, which are the main building block our satellite, which is 53 of them. We believe that by second half of this year, we'll be at rate to six per month. For that, we had extended our facility Midland to around nineteen hundred one hundred and ninety thousand square feet of manufacturing. We're adding additional manufacturing facility in the tune of 85,000 square feet of manufacturing facility in Florida and another 50,000 square feet of manufacturing facility in Barcelona. Rick from The Netherlands asked, what do the current [indiscernible] due for the company besides testing Is there any progress On the defense or governmental part, Thank you, Rick, for the question. Yes, well, they are fully in operations at this point. We have got them approved to operate in United States under an SDA. For both testing of AT and T and Verizon. We already have demonstrated full broadband capability on them, including including voice, text, data and video calling capabilities.

That will be an SMB co nationwide across United States. Obviously, on intermittent manner on an intermittent fashion as there are only five hour building 45 to 60 between this year and next year.

With that also, the government usage is planned to start. They're starting doing testing on them. And recently announced a new program with the government that is on the basis of the test thing that they have done on BlueWalker three and now on the operational satellite that we have in orbit. Very bullish about that opportunity and what the government can use with our satellites. Which they are using it already with the satellites that are in operation. Andreas from New York AST Blue Origin, and ISRO Are you planning to expand beyond those three? Thank you, Andres.

So AST we thought about our launch strategy, we've done a few things on our side.

To position us for success. One is on the design of the satellite, it's launch vehicle agnostic. There's a lot of commonalities in the designs for launch vehicles and we were careful to design our Bluebird so that they're stackable and configurable for each of the major launch vehicles. So that was the first step.

And the second step was AST year we did a a deep dive on the market, looked at available capacity and we selected these three suppliers as we've talked about. So those were important early steps that we took. And to your direct question, we have the ability to use other launch providers over time for sure.

But in order to get the capacity we wanted during 2025 and 2026 up to 60 satellites, which we've as we mentioned on the call earlier, we've actually exercised that option for the full 60 We've got that capacity in the 2025 and 2026 timeframe and And as we build more capacity beyond that, we'll consider all the supply in the market. But for us, we like where we ended up and this gives us a lot of ability to get to the 60 satellite target. Brian from Maryland AST. To full authorization from the FCC for operating a commercial constellation. Thank you, Brian.

As you may have seen, we recently received STA authorization from the SEC to do initial services with our satellites for both Verizon and AT and T and that was the basis for the video calls we did with them a few weeks ago. We're also in the final stages of the process for commercial modification of our existing commercial license. And that's something that we're working on. Alongside that, we'll be rolling out a beta service that allows us to do scale testing and then a paid service will follow thereafter. And with that, I'd like to thank our shareholders for submitting those questions. Operator, let's open the call to analyst questions now.

Thank you. Will now be conducting a question and answer session. Our first question comes from the line of Griffin Boss with B. Riley Securities. Please proceed with your question. Hi, good evening. Thanks for taking my questions. So your agreements with the roughly 50 3,000,000,000 How many MNO subscribers could be addressed by this new Satco joint venture with Vodafone? Or yes, what would be more helpful is if you can give us a rough sense of the incremental number of subscribers subscribers this partnership could allow you to tap into given this opens up the entire European market, which I assume likely includes MNOs that you didn't already have MOUs with? Thank you, Griffin.

It's a great question and it's a key reason why we and Vodafone wanted to put this structure in place. So when you look at the full set of connections in Europe, You get to about 600 plus when you look at all the European countries together. And we were only covering before the Vodafone 10 home market. So this does a couple of things. One, it it sets a plan for gateways across the continent will be able to despite smaller country sizes, manage borders quite well, And at the same time, provide an efficient path to bringing on new countries, we hadn't originally contemplated and more MNOs in each country. So it's a big step up in that regard. Going from just 10 countries to probably 3x that although certainly we had good countries covered in the beginning, but this adds some really significant countries and some significant operator potential for us. And we think that having European European based European sovereign operator is really important. It's important for Europe. It's important for European operators and it's frankly an extension of how we built our network, right? We built it so that operators and regulators can be feel comfortable about how the traffic is managed and we think that this is a great extension of that.

That's great context. Thank you, Scott. And then next for me, it's related, but it will not related, to that, but two part question, both are related. First AST, this $43,000,000 contract with the SDA It's great to see. Are these or is this for non communication [indiscernible] applications and services that you've mentioned for some time now and discussed in the prepared remarks? And then second, part of this question, are you able to provide more detail as to what these non communications applications are that your architecture is able to support?

We talking missile tracking, PNT, remote sensing? Any color that you can provide to us, I think, would be helpful.

Thanks, Griffin. So in terms of the the capability that we're bringing to bear, It's noncommunications like we said and we won't more definition of that at this time. It's consistent with the frequencies that we operate. And so that's what the satellite can do, but it's we'll say it's noncommunications. And in terms of the size of the opportunity, yes, this is a kind of a second phase for the contract that we announced last February AST that we've earned revenue against on the first satellite. This is 43,000,000 we expect to earn in the next twelve months or so. Small relative to the total opportunity and it's one that we're very excited about. And like we said, that's a general timeframe and the satellites we need execute on the milestones to deliver $43,000,000 of revenue Okay. And is that should we so should we expect that to be linear linearly recognized over the next twelve months? Or are you providing some services now that might be more robust in six months? There might be a a slight lag in getting going in the next couple of months, but generally speaking linear is the right way to model it.

Okay, great. Thanks Scott. Appreciate it.

Thank you.

Our next question comes from the line of Chris Scholl with UBS. Great. Thank you. We saw a lot of buzz with T Mobile and Starlink's recent launch of its beta messaging service. Can you just remind us how your technology differs versus what T Mobile and Starlink are bringing to market and the advantages you have? And appreciate their service is just messaging to start, but given the price points they put out there, how does this influence your own pricing strategy as you're ready full voice and broadband product?

Thank you. Thank you, Chris. Well, I think that that is a reflection of what [indiscernible] [indiscernible] Poutine Essence is now still quasi intermittent, yes, messaging service. Our service is, as you know, Is voice, text, data [indiscernible] video, everything that you can do on your phone, normally. You will be able to do it through our system. So it's a very differentiated package what we can offer to the operators with We believe that our scale the reason why we had 10,000 megahertz of spectrum per satellite that was related to 10 gigahertz of spectrum per satellite 120 megabit per second data rate directly to your phone, without requiring any change on the phone or adaptation into the phone. Using premium existing eight fifty megahertz band is greatly differentiated. And it will allow the our partner operator to differentiate with much better service and packages that basically enable the consumer to have the full fledged connectivity when they get access to our service.

Got it. And then if I can just fit one more in on funding. I see the language in the 10 ks in indicating you have funding that you need for the next twelve months with the ATM.

Appreciate there are a number of moving pieces, but as you look to 2026 and the ability to launch the 60 satellites, any help sizing the amount of capital you think you still need to raise and how you evaluate the different [indiscernible] Yes, this is Andy. Thanks for the question, Chris.

AST we said both in our statements in the K, we're well positioned to get kind of that first threshold of 25 satellites, which starts a service and well beyond that. It is the case that we have 60 satellites under our launch campaign and we feel very good about our ability to manufacture the 40 that are in process right now.

Well, we're well positioned for the near term. We're always looking for smart capital raising opportunities and we'll continue to evaluate them. But with a pro form a balance sheet, of about $1,000,000,000 we're absolutely positioned in a very strong way for the next twelve months.

Thank you. Our next question comes from the line of Brian AST with Deutsche Bank. Please proceed with your question. Hi, good afternoon. I had a few if I could.

I guess first AST launches, are you still on track for an April launch of the next satellite? I think that's what you said. And you give us any rough sense for the pacing you expect for launches in 'twenty five and 'twenty six Just roughly how many of the up to 60 would you expect to launch this year versus next year? I had a question about AST per satellite, if that's changed at all or if it's still the $19,000,000 to $21,000,000 per satellite And then AST thing, I just want to ask you about was sort of following up on that funding topic from the last question. We get a lot of questions regarding how much funding you'll need to fund the business plan and get to free cash flow positive. But It seems like the more funding you have available, the wider the scope of the business plan becomes and the faster you accelerate the business plan. So it's not really about how much you need, but it's more about how much you can raise on attractive terms and invest at an attractive return Is that the right way to think about it? And anything you'd elaborate on there on from a funding perspective?

Thank you.

Yes, Brian. The way that we think about it is, when we combine the non communication application government [indiscernible] communications for consumers We get the ability to monetize in as you see in the recent order Not only by a constellation, but on a per satellite basis, So the last item that we gave you that we believe to be cash flow positive with around 25 satellites. It's not that we get to continue service, with 25 satellites, but with 25 satellites, we start getting enough applications that are noncommunications combined with some other sources of revenue like gateways and infrastructure built up. That allow us to get to our cash flow positive. With that, we have greatly accelerated our pace of production [indiscernible] closed the year. We entered into the year with around $1,000,000,000 in cash that we are basically putting into work into operating our capacity of building up to six satellites a month, which it translate to roughly some $0.72 per year.

And we need $45 to $60 to get continued service in The United basically planning our network buildup is basically start to get financed with rather than than equity or other type of the type of transactions. In terms of the launch, we have secured six sixty launches, 60 satellites to be launched, which we put well in our target obtaining continued service in U. S, Europe, Japan, and some selected markets [indiscernible] countries where there are customers that are getting getting to pay early access to our constellation. And that's another source of revenue that we will be utilizing going forward. With the New Glenn, we can launch up to eight satellites per launch. Pretty much double the cadence of what is possible with the Falcon nine.

And we expect [indiscernible] later in the year to start moving a launch cadence of around one launch every forty five days on the New Glen We have other other launches also that have been secured in advance to that. And so we are in the process of manufacturing 40 We have the process manufacturing long lead items of 53 that will dictate the cadence how we get them into space. Thanks, Valen.

Anything on the cost per satellite, has that changed at all or are you still in that dollars to $21,000,000 range?

No. Yes, we're not changing the guidance on that per satellite.

Okay. And then if I could just follow-up just on funding. So you still expect to get to free cash flow positive at 25 satellites. Is that I just want to make sure I understand that right or or does the acceleration sort of modify that timeline? No, this is Andy. The only qualifier I'd add is on an operating basis.

We see that we'll generate free cash flow at that basis. So obviously CapEx flexes. We're going to ramp up and we may dial back depending on [indiscernible] a point in time and when launch commitments are made. But on an actual operating basis, yes, as Robell explained, we believe that with 25 satellites, our application and opportunities are sufficient to generate free cash flow.

Okay.

And then I'm sorry, but just the AST, I guess, follow-up to that would then be, just trying to understand, so if you can get B, freight cash flow positive, roughly 25 satellites, Just trying to understand the need for the $5,000,000 in quasi government funding that you're pursuing. And I understand it's attractive money. Is that more to refinance or or do you need that money for other operational purposes?

I'd say, this is Scott. That has been a long term strategy of our funding plan and it's an attractive way that companies like us get funding. And I would say that while we do have diverse access to a lot of capital markets, this is another one to open up. So we have been very prudent and conservative with funding over the life of the company and this is a great pocket of capital to have available and we'll assess our cash needs when it becomes available. That particular funding source is a process [indiscernible] and it's one that we're in the middle of. And we'll assess how to use that and when to use that. When the time is right. But for us, I think we've seen benefits of having good liquidity for the company. We've been able to generate over the last six months AST we like having that backdrop a lot.

Are those quasi government sources? Are those more like [indiscernible] not pay interest on the whole thing? Or Is it once you get it, you get it and now you've got this pile of cash that you've got to [indiscernible] [indiscernible] Well, there's we're pursuing at least three seriously at the moment and different different facilities have different structures. But yes, at least one of them does have a structure that's delayed draw like you said or milestone based. Although, we're not going to be [indiscernible] penny wise pound foolish on cost of capital. The key is to maintain liquidity for the company. But you're right, with the backdrop that I described, having some sort of delayed draw component could be very useful. And in fact, that's one of the ways that we thought about the financing for our recent spectrum deal.

Okay.

All right. Thanks very much. Appreciate the color.

Thank you.

Our next question comes from the line of Colin Canfield with Cantor.

Please proceed with your question.

Hey, thanks. Maybe starting off, if you can talk a little bit about the organizational structure with respect to your chipset engineering team? And maybe reflect a little better or talk a little bit about how that chipset team is working with folks either AST more kind of a handset OE level or even to the higher levels of Vodafone, Google and the like?

I think one clear our ASIC platform it is required or used on the satellites only. We do not require any chipsets on the handsets. [indiscernible] The way that we have organized ourselves, we start launching satellites using a PEA, basically field programmable data base. Now that we have completed the ASIC, we're in the process of packaging and started cooperating them into the second half of this year So beta band chip, we have a 10 gigahertz processing capacity. One of the most advanced nodes that AST. On the market today, and certainly one of the most advanced in space.

But I wanted to make clear that we do not require any modification of the chipsets on the phones. Our system, it is designed to work on the phone that you have in your pocket without modifying [indiscernible] the satellite chip being baked. Just to make sure I kind of understood the level of signals and frequency teaming between OEs and AST. As we think about the non GAAP OpEx progression to the year, can you just maybe talk about how you think about the current guide and the level of step up through the year and where you expect most of the cost growth through the year to progress Andy? I think on the cost growth this year, we've got we'll be talking each quarter about CapEx. But I mean our CapEx is growth AST. It's based on ramping up the 40 plus satellites We obviously have 40 in production and long lead items Micron is for 53.

That will flex. We've started taking out that on and that sort of feeds into that guidance I gave on a ramp up of CapEx in Q1. Otherwise, I mean, we're we gave guidance consistent with our OpEx that sort of follows in line for the most part with Q4. Our ASIC AST will come down as we finish that work and begin to fully integrate. We'll make additional investments. We're becoming a commercial enterprise now. We're building out that muscle.

We are investing in administrative AST functions across the organization as we grow and prepare to be a full operating company. So you'll see you're not going to see any incredible difference over if you look at the past prior periods in terms of how we're thinking about operating expense. But at this point, come to you quarterly, which we have and give you a view on going forward. And [indiscernible] there I mentioned this in my remarks, but it's probably worth restating. The opportunity for us to really bring AST down is in our R and D a lot of ways was was primarily based on third party expense. That work's been done. We have a satellite that is fully developed and engineered now and we are moving to a full on production environment and you'll see investments in manufacturing, As Abel mentioned in his remarks, we've added space in Midland, Texas. We've added space in Barcelona and we're very excited to add manufacturing space in the very near term in Southern Florida. So you'll see those sorts of becoming a scaling manufacturing company that optimizes satellite production at about six per month in the second half of the year.

Got it. Got it. And then maybe a little bit on the European opportunity. It seems like the high level structure of IRIS is looking to track towards something like FDA there's a lot of manufacturing upfront and aspirations for large leveraging of, we'll say, kind of more prime type acquisition approaches. But as we've seen from the supply chain development kind of The U. S. Side, it's clear that there's obviously opportunities for services growth, right?

The $43,000,000 that ASC AST won. So maybe if you can talk about the structure of AST how you think about your ability to win contracts like the 42,000,000 from SDA and the types of rev rec that we should expect whether it's more cost or fee and kind of service delivery based approaches?

Sure. I'll take the one call in. First, just on rev rec. This is milestone AST. Given that this is kind of technology evaluation. And so there are reports, AST, activities we'll be doing with the satellites in orbit and that will drive that revenue rec over the next twelve months plus or minus that we talked about earlier? And in terms of structure of how these contracts will look as they scale, we've The U. S. Government and how they're thinking about buying defense stuff and how they're thinking about space evolves. And has a lot of different elements to it. But I would say we're we think we're really well positioned for all pieces of that. We function well in the desire to have kind of firm fixed price and and deliver in an environment where you're buying something, you know what the cost is and you can that's delivered by the supplier. We don't work on cost plus contracts. So that's a positive dynamic. And in terms of [indiscernible] Service versus hardware sales, we tend to fall on the service side with how we've built our satellites and how they're dual uses we discussed. We're open to the mission.

And we evaluate and they evaluate different ways to structure structure deals. For us, it's important to get a return on the investment that we've put in place our network, and we can be flexible on that. But we tend to fall on the service side more on the hardware sale obviously. Right, right. Okay. And then last one AST me, maybe latest and greatest AST terms of kind of expectations around the Ligato deal closing whether it's tracking court filings or kind of where you expect the next piece of information to come out?

Yes, this is Andy again. On the Legato deal, things are tracking nicely. We had publicly disclosed the main tenants of that deal when we signed our binding term sheet. So We have work to do to get to where we need to be to complete the deal, but we are well within the timeframe that the parties are set to do so.

And of course, with the bankruptcy proceedings, that all needs to play out. But we're working hard on that. We've talked a lot about it. It's a strategic initiative for us and we're making good progress.

Got it. Appreciate the color and thank you for the questions.

Thank you.

And we have reached the end of the question and answer session. And I'll now turn the call back over to Scott Wisniewski for closing comments. Thank you, operator.

We AST again, we want to thank all of our shareholders and of our very important mission. We look forward to providing you further updates and have a great evening.

And this concludes today's conference and you may disconnect your lines at this time. Thank you for your participation.