Satellite-to-cellphone connectivity provider AST SpaceMobile (NASDAQ: ASTS) is planning a summer launch for its new BlueWalker 3 satellite amid surging operating expenses. The company reported revenues of $2.4 million, up 150% year over year, alongside operating expenses that rose 170% YoY.
The company has capitalized $82.7 million in construction costs for the satellite, according to the quarterly report, and expects to begin offering services soon.
“While it has been only a short six weeks since our last public update, we have made strong progress, and … we’re on target for our planned BlueWalker 3 summer launch,” Abel Avellan, chairman and CEO, said during Monday’s earnings call.
AST plans 168 satellites in all that will enable the company to provide satellite-to-cellphone service in partnership with mobile network operators. “We have now more than 1.8 billion subscribers represented by mobile network operators with whom we have agreements and [memorandums of understanding],” Avellan said on the earnings call.
“Once in orbit, we’re expected to test cellular broadband globally with participating cellular operators in the U.S., Japan, Europe, Africa, South America and Asia,” he added. “This effort will be supported by ground control centers in Maryland, Colorado and Australia that have been ready to support BlueWalker 3 post-launch operations.”
The company is on target to complete its second production facility this year, located in Texas, where it will manufacture up to six satellites per month, according to the company’s earnings presentation.
AST SpaceMobile will have to launch frequently — weekly and then daily, Deutsche Bank (FRA: DBK) analyst Edison Yu said in a note earlier this month. “To achieve this, it must materially improve its production process and capabilities of next-gen launch vehicles which in turn will drive much better unit economics,” he said.
“We think this will certainly be challenging but believe the launch market will be constrained through at least 2026, giving Astra decent runway to prove out its approach,” Yu added.
That’s a change for the launch market, which was forecast to be burdened with oversupply as recently as February, before Russia’s invasion of Ukraine in March and Amazon’s (NASDAQ: AMZN) announcement of massive launch contracts for its Project Kuiper constellation in April.