Third quarter 2026 earnings call, November 9, 2026

Blacklift: A Bet on Owning the Launch Pad

AST SpaceMobile used its third quarter call to outline its most consequential strategic shift to date. The company plans to build its own 20-ton reusable rocket, Blacklift, with first launches targeted for late 2028. Each vehicle would carry up to five BlueBird satellites. The design rests on the Miranda and Vira engine architecture acquired from Firefly. Management said the Miranda engine has completed more than 175 hot-fire tests totaling over 4,200 seconds, equivalent to roughly 20 first-stage flights, including a flight-like test at 110% of its 230,000 pounds of thrust rating.

The logic is economic as much as logistical. President Scott Wisniewski noted that launch is already "a significant majority of our unit cost," and management said it expects the current $21 million to $23 million all-in cost per satellite to fall "much lower" once it captures owner's economics. Wisniewski argued that external launch prices carry very high margins given industry scarcity, and that a 75% reduction in launch cost "is very feasible and frankly, probably much more." The company said it will provide sharper figures at a Blacklift unveiling event in New York on Thursday.

Investors should weigh this against the execution risk. Analyst Michael Funk of Bank of America noted that Firefly's Alpha engine has had a success rate of roughly 57%, and that only SpaceX and Chinese operators have demonstrated meaningful reusability. CEO Abel Avellan responded that AST is skipping the usual path of building a small rocket first and then upsizing, and that it is buying proven engine IP and relying on Firefly for stage engineering and integration. He described Blacklift as a single-purpose vehicle: "There is no plan to go to the moon. There is no plan to go to Mars." The rocket will be all composite, which management said leverages the composite manufacturing capacity already built for the satellites. Management offered no data on reusability and no breakeven analysis on the number of launches required. The honest read is that a first rocket program from a company that has not yet launched its production constellation carries substantial technical and schedule risk.

The financial commitment is meaningful. AST expects several hundred million dollars of incremental 2027 CapEx for Blacklift, covering equipment, facilities, test and manufacturing tooling, and launch-site infrastructure, with no guidance yet for 2028. The Firefly transaction includes about $400 million of cash plus stock priced off a forward VWAP, a three-year service agreement paid pro rata, and an engine supply agreement with a small upfront payment and the balance on delivery. The upfront cash and stock are due within days. Management said the mix was structured to keep the upfront payment lower and preserve capital. Initial launches will use existing Firefly pads, with Wallops requiring an upgrade and two additional sites in work. AST does not plan to launch outside the U.S. initially.

J-LEO Brings $1 Billion in Nondilutive Funding, With Strings

The Japanese Ministry of Internal Affairs and Communications subsidy of about $1 billion for mid-band satellite manufacturing was the other headline. Wisniewski said funding will arrive ahead of spacecraft and launch spending, with the majority received in 2027. AST will hold 49% of the joint venture, which will receive revenue from three targeted exclusive markets in Asia. Remaining capacity outside Japan will run as part of AST's global mid-band network, with a low single-digit net revenue share going to the joint venture.

Berenberg's Michael Filatov pointed out that the 10-Q shows AST subscribing roughly $1.4 billion of preferred shares in the venture over three years, which complicates the $1 billion headline. Wisniewski acknowledged that "the disclosure is not perfect" and that there are puts and takes in cash and noncash capital. He maintained that the net subsidy to AST for satellites and launch is the $1 billion figure. Management has not yet given accounting treatment for revenue from J-LEO, and said it will probably do so in the coming months. Wisniewski described J-LEO as a template for sovereign constellations, with "a handful of active conversations" internationally, and said he would be "shocked" if the model is not replicated over the next 5 to 10 years.

Separately, AST cited a pipeline of about $1.2 billion in additional quasi-governmental nondilutive financing for 2027. Wisniewski said it includes a few small subsidy programs, one received and one in process, with the balance being first-lien or CapEx-support debt. The larger piece is on a 6-plus month timeline, which points to mid-2027, and one component awaits final approval. That is a pipeline, not a commitment.

Manufacturing and Launch Cadence: Confidence Remains Ahead of Delivery

AST is pulling its next-generation ASIC forward from BlueBird 50 to BlueBird 34. Avellan called it the most advanced ASIC in orbit, a 7-nanometer chip delivering a 10x increase in processing bandwidth per spacecraft versus the Block 1 satellites in orbit, which translates into "a lower cost per gigabyte delivered to an end user." Production is underway through BlueBird 51 in Texas across two factories running full shifts, with a target of 6 satellites per month in December.

The launch schedule remains the pressure point. Three satellites in orbit, BlueBirds 11 to 13, are operating, while BlueBirds 14 to 16 shipped to the Cape in September and are still awaiting a SpaceX launch date confirmation. BlueBirds 17 to 19 ship this month for a Blue Origin New Glenn launch in early Q1 2027. Avellan said the three-satellite manifest is deliberate risk mitigation as New Glenn returns to flight. BlueBirds 20 to 25 ship in December and January for DPAS-rated launches in Q1 2027. The company targets about 45 satellites in orbit by mid-2027 and more than 100 under launch agreements across 2027 and 2028. Reaching 45 from 13 in roughly eight months depends on third-party launch availability and AST's own production ramp, and it will take a sharp acceleration in the pace seen so far. Asked by Oppenheimer's Tim Horan to explain the manufacturing delays, management did not address the cause directly, pointing instead to the current build position.

On BlueBird 11, which was questioned by New Street's David Barden, Avellan said the satellite took longer to unfold and had to be spun to warm it, but is now operating, and that no design changes resulted.

Service Timing and Revenue Outlook

AST reiterated it is on track for nationwide intermittent service activation in the U.S. and other key markets before year-end 2026, starting with the U.S., Canada, Japan, Saudi Arabia and the U.K. The company said it validated the first satellite beam handover between ground-based and space-based cellular networks with AT&T. Note the definition of the milestone: Wisniewski said this means lighting up gateways, spectrum and nationwide availability when a satellite is overhead for partners. End-user beta trials slip to early 2027 and are best run with about 25 satellites, though management said there is some flexibility. That is a considerably more modest outcome than commercial service, and the market should treat the year-end target accordingly.

Third quarter revenue was $42.3 million, driven by gateway deliveries and U.S. government milestones. AST reiterated full-year 2026 guidance of $150 million to $200 million, implying a steep fourth quarter of roughly $60 million to $110 million after the nine-month total. Management cited potential upside tied to the timing of milestones and J-LEO. The company said it continues to expect roughly $1 billion in revenue in the 12 months following commercial service launch, and Wisniewski said it may even be "in excess" given government progress. In response to Cantor Fitzgerald's Colin Canfield, he endorsed the analyst's building-block framework for 2027, stating that more than $100 million of gateway sales and more than $100 million of government revenue is already in sight, but declined to provide formal 2027 guidance. The newly announced Space Force award of about $100 million for advanced sensing is described as a first step toward a larger Airborne Moving Target Indication program of record. AST now counts 16 U.S. government awards.

Costs, Cash and Capital

Non-GAAP adjusted operating expenses were $133.6 million versus $119.1 million in Q2. Excluding cost of revenues, they were $109.4 million, within the $105 million to $115 million guidance, helped by a one-time $4.5 million R&D tax credit. Management guided Q4 to $130 million to $140 million on a larger workforce and the start of Blacklift work. Q3 CapEx was about $310 million, below the $350 million to $425 million guidance because launch payments shifted. That money has not disappeared, and Q4 CapEx is guided to $400 million to $500 million. The company ended the quarter with more than $3.2 billion in cash, cash equivalents and restricted cash, including $1.15 billion raised in July through 1.625% convertible notes due 2034, with a capped call lifting the effective conversion price to $149.20.

With Blacklift CapEx, a ramp to 6 satellites a month, the Firefly payments and the J-LEO preferred subscription all stacking up in 2027, the nondilutive funding timeline matters. The cash balance is strong, but the call offered no consolidated 2027 funding picture.

AI, Spectrum and Partners

Avellan said AST is working with Google, an investor, and Meta, among other AI companies, positioning the large phased array and low latency as an enabler of in-orbit AI inference. No commercial terms were disclosed, and this remains a narrative rather than a revenue line. The company also confirmed filings for an E-band phased array to be combined with its direct-to-device terminals. On spectrum, AST targets about 100 megahertz in the U.S. and more than 60 megahertz globally, and Wisniewski said it will not be "the top tick" on spectrum purchases and has no capital bucket earmarked.

Asked by Berenberg whether a major U.S. carrier without a definitive partnership is included in its stated plan to work with all major U.S. and European operators, Avellan declined to comment on future relationships. He said no major operator globally is "not very, very focused" on how to work with AST, which stops well short of confirming a deal.