AST SpaceMobile, Inc.

Operator: Good day, and thank you for standing by. Welcome to AST Space Mobile's First Quarter 2026 Business Update. Please be advised that today's call is being recorded. I will now turn the conference over to Max Colbert, Investor Relations Manager of AST Space Mobile. Thank you. You may begin. Maxwell Colbert: Thank you, and good afternoon, everyone. Today, I'm also joined by Chairman and CEO of Abel Avellan, President, Scott Wisniewski and CFO and Chief Legal Officer, Andy Johnson. Let me refer you to Slide 2 of the presentation, which contains our safe harbor disclaimer. . During today's call, we may make certain forward-looking statements. These statements are based on current expectations and assumptions, and as a result, are subject to risks and uncertainties. Many factors could cause actual events to differ materially from the forward-looking statements on this call. For more information about these risks and uncertainties, please refer to the Risk Factors section of AST Space Mobile's annual report on Form 10-K for the year-end December 31, 2025, with the Securities and Exchange Commission and other documents filed by AST Space Mobile with the SEC from time to time. Also, after our initial remarks, we will be starting our Q&A section with questions submitted in advance by our shareholders. For those of you who may be new to our company and mission, there are nearly 6 billion mobile phones today around the world, but many of us still experience gaps in coverage as we live, work and travel. Additionally, there are billions of people without cellular broadband and who remain unconnected to the global economy. The markets we are pursuing at AST Space Mobile are massive, and the problem we are solving is important and touches nearly all of us. In this backdrop, AST Space Mobile is building the first and only global cellular broadband network in space to operate directly with everyday unmodified mobile devices, supported by our extensive IP and patent portfolio. It is now my pleasure to pass this over to Chairman and CEO, Abel Avellan, who will go through our activities since our last public update. Abel Avellan: Thank you, Max. At Space Mobile start to 2026 reflect our progress in scaling manufacturing and production, mobile network operator partner expansion, grand network integration, multi-partner launch and a fortress capital position. This advancement across nearly all initiatives help solidify why AST SpaceMobile is the only company whose technology is positioned to capture the direct-to-device seller of [indiscernible] opportunity in full. We continue to execute on key business objectives at the company transitioning from R&D stage to fully scale operational deployment. On the manufacturing front, we have over 0.5 million square feet of manufacturing and operations space globally, as we continue to scale our manufacturing efforts. We're in advanced stages of producing an assembly through Blue Bird 33, we faced a race completed through Bluebird 28. A detailed cadence of our '25 and '26 deployment plan is shown in the accompanied quarterly presentation found on our IR website. Our 95% vertically integrated manufacturing strategy is significant long-term advantage with our manufacturing team ramping up significantly over the past several quarters. I am thrilled to report that the leadership we have in place is now producing microns, face a race stackable sale composite structure at an accelerating pace to support our target cadence of 6 fully assembly satellites per month. Our custom ASIC is designed to support up to 10 gigahertz of processing bandwidth per satellite and is expected to nearly double the peak data speed recently achieved using our on-orbit Block 1 Bluebird satellites, helping unlock true space-based cellular functionality and enabling native cellular capabilities that consumers now expect everywhere all the time. As a reminder, we're building the largest phase array in low earth orbit. We possess the ability to deploy significant power to orbit at a meaningful scale and competitive costs. They give us an ample opportunity to scale our space-based cellular broadband constellation based on demand signals from our growing lease of partners. That is a unique important concept for the direct-to-device industry with even broader implications as the space becomes an energy reach and data native industrial environment. We continue to leverage these advantages by driving innovation into every aspect of our sale capabilities. We are deploying a specific AI edge computing and AI spectrum management features for on-orbit capabilities to incorporate into novel AI platforms and maximize user experience. We currently expect to integrate these features into our next-generation bluebird satellite targeting blue birds in production by year-end. Our multi provider orbital launch strategy feature Orbital launch about Blue Origin, SpaceX and others. As a reflection of our multiport launch strategy, while returning to the launch pad at the [indiscernible] in mid-June with Bluebirds 8, 9 and 10, [ abora59 ] launch vehicle. We are excited to get back to the launch pad very soon and are targeting approximately 45 satellites in Norway by year-end through a combination of our launch providers. Our ground-based gateway architecture act as a native attention of our network operator partners, interfacing directly with Nokia Innovis and MNO course over standard 3GPP protocols. This means our gateway architecture and/or satellite network scales natively with 4G, 5G and future city standards, reducing network integration complexity. We're actively scaling our ground network integration efforts around the world, including in the United States, Canada, United Kingdom, India, Brazil, Spain, Germany, France, Romania, Saudi Arabia, Japan, New Zealand, the Philippines, Co d'Ivoire, Kenya, Nigeria and Senegal, targeting a combined population of 2.9 billion people. It is an incredible fit to scale our business outside of the United States, an effort which requires significant scale and commitment from our company, our partners and global regulators. We continue to make progress on partner and ecosystem network integration as we move closer to service activation in key partner markets. We're actively deploying hundreds of fixed cells per week as part of this effort, we achieved satellite-to-satellite cellular broadband connectivity handoff without disrupting to the connectivity experience on the map. Additionally, we recently achieved big data speed of an incredible 98.9 megabits per second using our in-orbit blog 1 satellites. This latest record was conducted over international waters directly to modify off-the-shelf smartphones. This achievement is significant for several reasons. In other [indiscernible] that our satellite technology is the only 1 specifically designed for space-based direct-to-device cellular broadband. Achieving these speeds that our partners expect for the customer no matter where they are located everywhere in the planet and we're just getting started. We expect our on-orbit Block II Bluebird satellite to nearly double the peak data speed recently achieved using our on-orbit blown Bluebird satellites when enabled with an of spectrum on a region-by-region basis. AST SpaceMobile network operator partner of choice. For space-based cellular broadband because our [indiscernible] system integration solution worked actively with existing terrestrial infrastructure and is designed to support a space-based serenity. Our ecosystem includes nearly 60 global MNO partners covering over 3 billion subscribers, including key partners like AT&T, Verizon, Vodafone, Rakuten, STC, Bell Canada and Telus. Our commercial advancements have enabled us to secure over $1.2 billion in contracted revenue commitment from our commercial partners and we plan to accelerate this as we further deploy our network. On the regulatory front, we are granted FCC authorization to operate our bluebird satellite constellation commercially in the United States enabling direct-to-device connectivity in the U.S. on premium low-band spectrum in coordination with our partners, Verizon, AT&T and FirstNet. The grant also reflects the FCC recognition of our ability to deliver direct device sell robot connectivity from space and operate alongside the retiral communication network, further validating our unique technology and network design. We think the current administration the FCC and Commissioner Car for his leadership in bringing new technologies online to advise United States leadership in space. Our comprehensive spectrum strategy leverage our satellite technology, which is capable of tuning within approximately 1,100 megahertz of low band and mid-band tuna MNO spectrum globally including 45 megahertz of MS lower mid-band spectrum and 60 megahertz of licensed S-band spectrum priority rights outside of North America. In particular, the 45 megahertz of L-band spectrum is currently unused. Providing us with an ample opportunity to drive business against the use of that spectrum. Additionally, the lower mid-band L-band spectrum feature higher quality propagation characteristics when compared to other MSS frequencies. This means more opportunities to grow subscriber capacity and bring additional service to targeted markets around the world alongside our MNO partners. We expect the combination of our satellite technology, featuring the largest face orbits and access to MNO share spectrum, MSS spectrum and AI spectrum management features will enable us to effectively multiply spectrum efficiencies and develop a completely new layer of connectivity on a global scale. The combination of building a native space-based cellular broadband network with our partner, first integration design is second to none. Were supported by our extensive IP and patent portfolio of approximately 3,900 patents and patent-pending claims we successfully advanced from early-stage R&D to scale deployment of satellites and ground-based gateways. In closing, our company has key assets, including IP, manufacturing, partnerships, spectrum and balance sheet cash with approximately $3.5 billion to build and launch over 100 Bluebird satellites to enable global coverage of space mobile service. Our team is focused, disciplined and executing against our deployment plan. We are encouraged by the progress we are making and the momentum we see across our commercial, regulatory and government initiatives. And with that, I will turn the call back to Scott. Scott Wisniewski: Thank you, Abel. Since our last business update 10 weeks ago, we have continued to execute against the broader commercialization priorities we laid out at the start of the year. Our key task leading the business is to leverage our revolutionary technology deployment and best-in-class partnerships to achieve our 2026 and 2027 revenue objectives as we build out the revenue platform for the company to maximize long-term shareholder value. The market pull for our network, the one we're deploying today a global, resilient, space-based cellular broadband network with dual-use capabilities. It remains extremely strong. Against this backdrop, we have recently signed additional mobile network operator contracts and received additional U.S. government awards. First, we announced an agreement with TELUS as our second partner in Canada, who also made an equity investment in ASTS, Telus and Bell will be our commercial partner in Canada. And in Africa, we are pleased to be partnering with Axiom Telecom, a pan-African operator in 11 different countries, joining our existing agreements with Vodacom, Orange and MTN. Our dialogue globally with mobile network operators has increased in both volume and depth, and we've been building out the broad organizational capabilities to support the rollout of commercial services in these markets. Looking ahead, we expect additional MNO agreements to be signed with increasing velocity throughout 2026. On the U.S. government side, we continue to grow the pipeline with 3 additional awards through prime contractors. These awards address 3 unique use cases across secure communications and noncommunications capabilities, reflecting strong proof points ahead of larger contracts. Alongside further developing these important national security capabilities, including those related to Golden Dome, these awards are expected to contribute significantly to 2026 revenue objectives. As a reminder, our goal across all our contract is to develop capabilities that could grow into programs of record with billions of annual revenue potential in aggregate over the medium and long term for missions important to U.S. national security. As a commitment to these efforts, we've made significant progress expanding our organizational capabilities through AST SpaceMobile's wholly owned government and defense subsidiary. This alignment enables us to better allocate resources and expand our organizational capabilities to best serve the U.S. government customer. Transitioning to revenue we achieved nearly $15 million in reported revenue during Q1, again, driven by milestone achievements under our U.S. government contracts and commercial gateway deliveries to MNOs. On the commercial side, we saw execution with 4 different customers that contributed to revenue in the quarter. With the hardware to deliver initial commercial services now in their respective regions across 5 continents, the ground readiness initiatives that Abel referenced are firmly underway. This is an important step to have started during 2025 because it gives the teams on the ground time to prepare, deploy real hardware solutions for backhaul and integrate with customer network cores. This is a very significant operational effort that is an important leading indicator ahead of commercial service activation. 2026 revenue will benefit from this commercial deployment effort as we deliver against existing contractual orders and signed new contract wins. Both of which show a deep pipeline. Turning to revenue from our U.S. government business. We executed across 5 existing contracts during the quarter, further demonstrating the in-orbit capabilities of our bluebird satellites. To give you some additional color, we advanced the milestones under our prime contract with the Space Development Agency as part of the Europa Track 2 Commercial Solutions Program under Halo. This work is focused on delivering operationally relevant tactical communications capabilities directly to government and devices. We also advanced our communications efforts with milestones against contracts where Fairwinds is the prime contractor, some of which is a follow-on related to our previously demonstrated NTN tactical SATCOM capabilities. That field test showcased real-time connectivity to a tactical salt kit over a VPN with multimedia streaming via the tactical salt kit and secure multiparty video calls, all executed on standard unmodified smartphones with active participation from U.S. Indoco Paycom including representation from multiple branches of the United States Armed Services. Lastly, we also continue to execute against our contract with the Space Development Agency through a prime contractor for noncommunications on-orbit testing and capability development. The progress we are seeing across both commercial and government activities supports our confidence in reiterating our 2026 revenue guidance of $150 million to $200 million. This outlook is supported by our existing contracted pipeline with additional upside potential from new government awards. What we are seeing in the first half of 2026 is continued progress in building out the revenue base ahead of a large jump in 2027. As I described on the last call, we see the 2027 revenue opportunity approaching $1 billion. Comprised of revenue both long-term contracted or highly recurring in nature. We expect this growth to be driven from, one, our scaled network in Orbit for cellular broadband service as it becomes available in some of the largest markets worldwide; and two, providing one or more increasingly scaled use cases for the U.S. government. Taken together, we are steadily executing across our key priorities, remaining focused on the critical near-term objectives like revenue generation, partner ecosystem and scaled network deployment. I'm now happy to pass the call over to Andy to walk through our financial update. Andrew Johnson: Thanks, Scott, and good afternoon, everyone. During the first quarter of 2026, we began executing against our annual revenue plan we continued our manufacturing expansion across our growing facilities in Texas and beyond. And importantly, as discussed on our 2025 year-end call in March, we took significant steps to raise critical capital to enable funding our constellation in support of our bold objectives in the months ahead. Revenue in Q1 came in consistent with our internal plans. We expect revenue to build sequentially each quarter during 2026 with contributions from both commercial gateway revenue and U.S. government contracts, which I will discuss further in just a moment. Importantly, we remain on track to meet our full year 2026 revenue guidance of $150 million to $200 million. With respect to manufacturing, we continue to progress toward the achievement of our goals to support our active escalating launch schedule through the end of this year and beyond. We currently have Bluebird 11 to Bluebird 33 in advanced stages of assembly with phased arrays completed through Bluebird 28. Our manufacturing progress positions us well to support our launch target of approximately 45 Bluebird satellites in orbit by the end of 2026. The strength of our balance sheet positions us to complete the full buildout and launch of a constellation of over 100 Bluebird satellites to provide worldwide space mobile service while also funding 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 United States reducing our higher interest debt and pursuing opportunistic investments to accelerate our space mobile services and capabilities. AST SpaceMobile is proud to be the creator and leader in the direct-to-device industry, and we continue making investments to move quickly and responsibly to bring space-based cellular broadband connectivity and directly to unmodified smartphones. Our intentional focus on investing in operational growth led to higher adjusted operating expenses in Q1 of 2026 consistent with our expectations previously communicated during our fourth quarter and full year 2025 earnings call. Moving to the operating and capital metrics slide, let's review the key metrics for the first quarter in more detail. On the first chart, for the first quarter of 2026, we incurred non-GAAP adjusted operating expenses of $91.2 million versus $95.7 million in the fourth quarter of 2025. As a reminder, non-GAAP adjusted operating expenses exclude noncash operating costs, including depreciation and amortization and stock-based compensation. The quarter-over-quarter decrease of $4.5 million resulted primarily from a $17.6 million decrease in adjusted cost of revenues due to lower revenue in the quarter together with a $1.9 million decrease in R&D costs, partially offset by a $9.2 million increase in adjusted engineering services costs and a $5.8 million increase in adjusted general and administrative costs. Our Q1 2026 adjusted operating expenses, excluding adjusted cost of revenues were $79.8 million compared to $66.8 million in Q4 of 2025, which is within the $70 million to $80 million guidance for adjusted operating expenses previously provided. The primary drivers of the increase versus the prior quarter were growth in our workforce, including contractors and consultants, our expanded production facilities and other professional fees including legal fees related to our spectrum usage rights transactions and regulatory initiatives. Turning towards the second chart on this slide. Our capital expenditures for the first quarter of 2026 were approximately $257 million versus approximately $407 million for the fourth quarter of 2025. This figure was made up primarily of capitalized direct materials and labor for our Block II bluebird satellites with the balance relating to facility and production equipment expenditures. This amount was below the quarterly guidance of $350 million to $425 million that I provided during our last earnings call due to a change in the timing of launch contract payments, which will now be reflected in our Q2 guidance. For the second quarter of 2026, we estimate that our adjusted operating expenses, excluding adjusted cost of revenues will increase to the range of approximately $85 million to $95 million as we further absorbed the full quarter cost of our recently expanded workforce and continued growing talent across our organization to scale our efforts to design, manufacture launch and operate our growing satellite constellation as well as pursue the monetization of our L and S-band spectrum usage rights. We expect our capital expenditures to increase in Q2 of 2026 to a range of $575 million to $650 million, primarily driven by the timing of launch payments related to our near-term launches which, as I previously explained, vary from quarter-to-quarter. To put this quarterly increase in capital expenditures into context, had the launch payments been made in Q1 like we originally planned instead of making them in Q2, our guidance for Q2 capital expenditures would have remained in the same general range as Q1. Importantly, our continued spend on growth-related CapEx reflects our increasing satellite production in active orbital launch plans. We continue to estimate that the average capital costs, including direct materials and launch costs for our constellation of over 90 Block 2 Bluebird satellites will fall in the range of $21 million to $23 million per satellite, excluding certain initial satellites that are used to validate performance and operations. Our cost per satellite estimates are subject to fluctuations based on dynamic geopolitical factors that could impact our costs. As a reminder, the timing of the changes in our adjusted operating expenses and capital expenditures, as I have just described, could be delayed or may not be realized due to a variety of factors. In the first quarter, we recognized revenue of $14.7 million, primarily driven by commercial gateway deliveries and various U.S. government service milestone achievements. Our revenue declined during the first quarter as we expected due to the timing of gateway deployment to our commercial customers and the timing of completion of certain government contract milestones. With respect to revenue generation, we believe we can enable continuous SpaceMobile service across key markets such as the United States, Europe, Japan and other strategic markets with the launch and operation of approximately 45 to 60 bluebird satellites and additional strategic worldwide markets with the launch and operation of approximately 90 bluebird satellites. Further, as we continue to launch and deploy our constellation, we will continue to support U.S. government applications currently ongoing and accelerating as our constellation grows. As we discussed in our Q4 2025 earnings call, we expect to generate full year 2026 revenue in the range of $150 million to $200 million. We managed the top line with a focus on full year performance given the quarterly variability inherent in our business including the timing of contract signings, equipment sales and milestone achievements. As a result, we believe our revenue performance is best evaluated on a full year basis. As we continue advancing our launch and network activation initiatives, we expect revenue to grow meaningfully each subsequent quarter this year. We expect revenue to continue to be driven by gateway deliveries, achievement of contracted milestones for the U.S. government, MNO consulting services with potential upside related to the recognition of initial commercial service revenue. Quarterly revenue will likely vary significantly depending on achievement of milestones and the timing of customer activities. I'd like to remind you that we believe that approximately half of the revenue opportunity within our commercial pipeline this year, is already booked or contracted. The remaining portion consists of a combination of advanced stage opportunities that have not yet been signed as well as net new business we expect to secure over the course of this year. The achievement of our revenue plan remains subject to several contingencies, including the successful launch and deployment of Block II bluebird satellites related to U.S. government applications contractual milestone achievements. Critical gateway equipment sales to our MNO partners in support of their anticipated commercialization efforts of Space Mobile Service and service revenues in connection with the activation of our commercial service provided by our existing and planned deployed and operational satellites. Finally, on the final chart on the slide, our cash, cash equivalents and restricted cash as of March 31, 2026, and was approximately $3.5 billion, inclusive of cash raised in February via the convertible notes offering with a 2.25% 10-year coupon at an effective strike price of $116.30 per share. Our balance sheet continues to provide us with financial flexibility to make further investments to expedite the timing of and augment the capabilities of our space mobile service. Consistent with our last update, we do not have any plans to pursue additional convertible debt in 2026. In closing, we're off to a solid start to the year at AST Space Mobile and critically, our 2026 objectives fully remain in place. With full recognition of a significant amount of hard work ahead of us, revenue is in a plan and satellite manufacturing is increasing to support our orbital launch campaign. We look forward to sharing successful launch milestones with you in Q2 and throughout the second half of 2026. Thank you for your continued support as we continue the hard work of connecting the unconnected at AST Space Mobile. And with that, this completes the presentation component of our business update call, and I'll pass it back to Scott. Scott Wisniewski: Thank you, Andy. Before we go to the queue of analyst questions, I would like to address a few of the questions submitted by our investors. Operator, could you please start us off with the first question? . Operator: Scott from Indiana asked. Historically, guidance for Block 2 Bluebird has targeted peak download speeds of 120 megabits for a second, presumably requiring your proprietary basic chips. In the last quarterly update, it was stated that FMI, which does not have this ASIC chip is expected to greatly exceed 120 megabits peak download speeds. Can you clarify current expectations on how FM1 versus ASIC enabled bluebirds are expected to perform. Abel Avellan: Thank you, Scott, for the question. Well, this morning, we did announce that from the middle of nowhere in the middle of the ocean. On international water, we did achieve big data rates, very close to 100 megabits per second. As we into standard device without any modification to the device. Neither require any firmware or software upgrade to the device. This device as is today. With the BB6, which is already in orbit and BB8, 9 and 10, we expect to nearly double that capacity. We think that this, in addition to AI features that we will implement into the satellites, large block of spectrum that we'll be adding to the network, particularly the L-band and the S-band MSS spectrum that -- we plan to add into the constellation. And AI spectrum management features that help us to multiply deeper set performance of the network make this a complete change of what is possible, far, far ahead of any other technology that is attempted to enter the market. Operator: Andrew is from New York S. You have repeatedly emphasized that you are in a race against yourself in the field of D2C broadband technology, given the increasing attempts by other companies to enter the market, is this still true? And what leads do you currently see over your competitors? What role do your patents play in keeping the competition at bay. Abel Avellan: Thank you, Andrew. That's a great question. What we always from the very, very beginning, have focused on delivering cellular broadband and for which you need a very large array you need spectrum and you need the ability to integrate that to partners MNOs. On that end, we have a very unique position we had access through our MNO partners to around 3 billion subscribers. We are delivering broadband capacity provided, obviously, there is enough spectrum attached to the satellites today with in orbit satellites. As I said earlier, we are on the hundreds of megabits already. We plan to nearly double that we continue to activate 8, 9 and 10, and we launch them in the next few weeks. And then when you put in perspective that -- when you combine a very, very large satellite array with significant block of spectrum, there are a combination between IMT, MNO partner provider spectrum with our own MSS. We have access to more spectrum than anybody else also. So we believe that -- as of today, we are the only technology that have a space-based cellular broadband capability, given the size and our architecture on the 3,900 patent and patent pending claims that we have around our technology. Operator: Ben from Virginia. Can you update us on your composite readiness specifically? Are you now manufacturing all structural carbon fiber reinforced polymer components and reflector is entirely in-house? And if not, is the plan to? Abel Avellan: Thank you, Ben, for the question. Listen, the way that we stack the satellites is think about to accounts where you put 3 of them one on top of another on the Falcon 9 up to 8 of them on the Blue Origin and New gland rocket or up to 5 of them in the Balkan ULA rocket. So that structure is our design. It was a very, very difficult design to achieve because everything that you have in terms of mask and multiplied by the of the rocket. So you have an extraordinary amount of forces that get applied to the bolt-on satellites in the stack. But the answer is yes. We are now producing the rate. We own all the IP or how this is done. We are extending -- we did grow -- we have over 1,000 people dedicated to build these composite structures all across our satellites. And we are now also extending and automating and robotizing how we do these structures in Midland. All of this to achieve and keep our 6 satellite per month fully assembled every month, where the composite structure, it is a very, very important aspect of what we needed to do. So we are fully vertically integrated. We own the IP, we control the manufacturing of everything on our satellites around 95% of the bill of material from the composite structures, the new composite structures. How you see that the -- in the pictures of the manufacturing, they turn from aluminum structures to composite than what they look back. And then but we also own and control everything down to our ASIC in the supply chain of how we build and produce our satellites. Operator: Scott from Indiana also asked, any perspective you can share on progress made related to Golden Dome, Halo Europa or other government contracts? Scott Wisniewski: I'll take that one. So as I said in my remarks, the backdrop for U.S. government contracts is -- continues to be really strong. We most recently saw budget request for the space force of over $70 billion, which was by far the largest, and there was a heavy emphasis on space activities. So it's a good environment for our capability to be maturing. And we've been doing a lot of both communications and noncommunications with the agencies who are the big buyers right now of space capabilities. So this is the right backdrop. We have the right capability. Remember, we're currently deploying the largest ever phased raise in low earth orbit, and that gives us really an unprecedented capability to go to regular, small, low-profile handsets as well as do RADAR capabilities. And when you look at the backdrop of awards and budgets over the last 3 to 6 months, there's been a real strong uptick as expected in the space force budget and in allocations related to golden dome. And specifically, we're in a stage now where RFPs are being issued, awards are being made for key elements of Golden Dome that will relate to us, things that you see that are space-based rate are and others. So this is a really big moment for us. You're going to see some revenue coming in through U.S. government that's going to be a big contributor to our 2026 revenue. And for 2027 those awards that we'll receive or expect to receive over the next 6 months are going to be very significant to that effort. And with that, I'd like to thank our shareholders for submitting those questions. Operator, let's open up the call to analyst questions now. Operator: [Operator Instructions] Our first question comes from the line of Chris Schoell with UBS. Christopher Schoell: Great. Now that you've had a few weeks to digest, can you just walk us through what happened with Bluebird 7 and what gives you comfort this will not repeat going forward and that New Glen can scale accordingly? And last quarter, you mentioned you began to integrate your satellites with another heavy launch vehicle. And I believe I heard you say ULA earlier. Where does the integration process stand? And could we see you rely upon them this year is this more a consideration for '27 and beyond? Scott Wisniewski: Chris, I'll dive in. So we were pretty open on bluebird 7, the day of. We knew what happened immediately and we were very open on what it is. And at the end of the day, remember, we have 3033 satellites in advanced stage of production at the factory. So it was a loss, we're on to the next. So yes, I would say that we're working closely with blue. They're working through the investigation in upper stage anomaly like this is not uncommon early in programs and we feel optimistic about them getting back to the pad soon. And when you look at their cadence for the year, we all know that they landed the booster, which was a great milestone for the cadence and now they have 2 boosters sitting in their integration facility ready to get into the cycle. So we think the outlook there looks good. And like I said, we're optimistic. And on the second part of the question, we mentioned that we have contracts with SpaceX and Blue Origin and others. We're also doing some integration activities in there with others to get ready for potential launches. And so listen, we've designed the rocket, as you know, in our business strategy to be launched vehicle agnostic, and we're buyers of launch across the entire heavy launcher. Footprint. So we were prepared for this years ago with our strategy. We think we selected the right partners, and we've got good partners on top of that we're working with. Operator: Our next question comes from the line of Scott Searle Capital Partners. Scott Searle: Maybe just a quick follow-up. Is there a time line associated with the FAA investigation on when you would expect that to be concluded? And then looking to the expected commercial launch of services at the end of this year, how many MNOs are you expecting to be live at launch? And what are you guys thinking about in terms of the ground station number that we should be expecting by the end of calendar '26? Andrew Johnson: So Scott, to the first part of the question on blue, no, there hasn't been a publicly disclosed time line. But like I said, these sorts of investigations are pretty commonplace. And there's been some good track record recently. So with other launches we've had similar issues. So listen, we think -- we're really focused on our next launch, obviously, with Falcon 9 and the next 3 bluebirds. But like I said, we're optimistic with Blue Origin and I think we'll be in a good position there. But as you know, we have a multi launcher strategy. That's been the strategy from the get-go. And in terms of -- what was the second question again, Scott? Scott just in terms of the number of MNOs you would expect to be live with provided you got 45 satellites up in the sky in the fourth quarter. How many carriers -- how many covered subs should we be thinking about in terms of -- that are addressable from day one of launch. Well, it's a global network, as you know. So we put a lot more disclosure in our remarks today about the regions we're focused on and the countries we're focused on. So all in all, where we are currently doing ground integration efforts, some of which are quite advanced like in the United States and other countries in Europe. Some others that are getting started. It's a pipeline. There's a lot of countries to focus on. But just on the countries listed in our deck, you see a population coverage of about $2.9 billion. So in terms of how we prioritize amongst that, you've heard from us before, key markets like the U.S., Canada, U.K., Japan, Saudi. So we're looking at that list, and it's growing every day, but we want to give a little bit more incremental detail today with that in our deck and in our remarks on the other countries we're focused on. Operator: Our next question comes from the line of Michael Funk with Bank of America. Michael Funk: Yes. Great. Thank you for the question. So I want to go back to sort of launch target. I think you talked last quarter about stacking up to 8 satellites per launch. And so just wondering about the hurdles authorizations required to get to the -- and then Abel, earlier in the call, you mentioned deploying AI edge computing features, I think, the next generation of satellite. And I want to get a better understanding of how that's going to improve the efficiency or performance of next-generation satellites? Abel Avellan: Yes. Let me answer for the first question. As I explained earlier in the call, we do have now the technology that we are manufacturing that at rate. which is basically the technology to be able to stack multiple launches, multiple satellite in a single launch. The way that we do it is basically -- on New gland, we can stack up to 8. In Balkan, we can stack up to 5. And in Falcon, we can stack up to 3. And this is self-contained structurally full composite. It is manufactured under on IP. We are also growing. We have over 1,000 people yet dedicated to build these structures where they are very, very difficult to build and test. But we are now very close to getting 6 of them every month and being able to stack it with each of the different launch partners. To your second question about AI, we are not in the play of hyperscaler systems in space. But what we are incorporating to our satellites, which you will start seeing in the production batches towards the end of the year is the ability to edge compute and load AI capabilities on board that can be very efficiently integrated also to the US for a variety of users around AI. And is it related to AI spectrum management, basically a Hu-fly,you have resources to do to administrate dynamically basically power and spectrum. As you know, we can tuned within 1,100 megahertz of spectrum, and then we have blocks of spectrum with our MNO partners that's called IMT spectrum that we can tune country by country, location by location. And also, we had our MSS. And the AI spectrum management is a system behind all of that basically predict traffic, [indiscernible] predict location, predict where people are and then allocate that very, very intelligently. Remember, on a satellite, you have 200 square kilometers of view of what's going on, on the need AI basically has the ability to predict where the traffic will be as the satellites move and dynamically allocate resources into this outlet. That's typically the power or spectrum. And the end result of that is that we perceived user perception of what amount of spectrum it is use of how efficient it is. It is a multiple because you basically can't play with the whole field of view in how you allocate dynamically the spectrum a square kilometer by square kilometer. Operator: Our next question comes from the line of Mike Crawford with B. Riley Securities. Michael Crawford: To clarify, with the AST 5000 ASIC, has been expected to enable 120 megabit per second peak data speeds, but is it the AI spectrum management that gets you up closer to 200 megabits per second by year-end? And then also on the noncommunications capabilities that you're developing in conjunction with the FDA. Would I be -- would we be correct in assuming we're talking about mid-band military radars. So that's something that we're not going to see with the initial blue birds that are launching now, but once you incorporate L-band and into the satellites? Abel Avellan: Yes. Let me talk with the defense capability. I will not be able to describe it on this forum, but basically, is a noncommunication capability that use the same hardware that we use on our commercial satellites. And that's been in use today. And as Scott mentioned, the use today, they plan to extend drastically how they use it, and that is a noncommunication application for defense purposes. Unknown Executive: And before we leave that topic, Mike, it's important to note that, that does not require mid-band spectrum. That's something we can do with low-band spectrum, which we've deployed today, right. Abel Avellan: Correct. Then as you relate to the ASIC, the ACE is complete. It's been incorporated into the production line. The ASIC basically allowed us to upgrade the amount of bandwidth, we can manage with the for each satellite. So on the FPGA satellites, we had around 1 gigahertz of spectrum with the ASIC that we have 10 gigahertz of spectrum. So it's a factor increase on number of gigahertz that can be constantly used per satellite. The big data rates are actually not dependent on the or ASIC. That's how many of those connections you can have simultaneously and do not rely on the in order to get to the 100 megabits per second that we have satellites that are actually the smaller initial satellites, and we expect to double the 98 megabit per second that we have. If we are using the BB, which is an already orbit and the 9 and 10 that we will launch here very quickly. That do not require the ASIC or the AI [indiscernible] pure big data rate per cell. The AI management is basically when you -- is a way to intelligently distribute that big pipe of 10 gigahertz or 1 gigahertz depending on the version of the satellite intelligently where the users are and predicting where the users are going to be in order to allocate a slide of that 10 gigahertz where the traffic is needed and do it dynamically and proactively using an AI agent of our own. Operator: Our next question comes from the line of Brian Kraft with Deutsche Bank. Bryan Kraft: Apologies for the multipart kind of long question, but I really had a few questions I wanted to ask you around launch. I guess first, do you have contracted launch capacity to do an average of basically one longer month from June through December because I think that's what you need to do in order to get close to that 45% number, and then how diversified is the launch mix? And what if you can only do, say, one more New Glen launch this year? Could you still get close to that [indiscernible] 5 million I don't know, this is the first time I think you've mentioned Vulcan. So I was wondering how much launch you were able to secure there. And if that could fill that gap in. And then it sounds like you've made great progress on the manufacturing side. With 11 through 33 in production, is the next batch of satellites going to be ready to ship per se, a July launch -- and then the last thing I wanted to ask you about is on the stacking, do you sort of need to work your way up to the max of those ranges? In other words, on the next new Glen, can you go right to 8%? Or do you have to -- or would you prefer to say, do 3 or 4 to make sure it goes moly and then 5 to 6 and then go to 7% to 8%? Or are you just going to kind of fill these things up going forward? Scott Wisniewski: Brian. So yes, we do have contracted launch capacity to meet our target for 2026. And the way to think about it is basically a handful of login launches and a handful of SpaceX or equivalent launches, and that's what gets us to the approximately $45 million we know that Blue Origin just suffered an anomaly, right, but we're optimistic about the return of the pad. And the fact that they land -- they have 2 boosters is a massive support for the cadence that we have always expected and then we have contracted. So that's how we think about the mix and how we get to that $45 million number. On the manufacturing side, we definitely we have capacity to keep knocking out launches one after another. absolutely. You can see that on the page in the deck. So given where we are, we expect to have more satellites each month to be ready for launch. And we'll, of course, as we have update the public 30 to 60, 90 days ahead of launch as those are down selected and confirmed. And then on stacking, I think you pretty much captured it, Bryan. I mean we expect on the next New Glen, we'll launch 4 satellites. Part of that is kind of ramping into the stacking capability and also, of course, managing where they are in the program. But we're very mature now in the 3 stack, and we're going to be doing that very shortly and the 4 stack likely shortly thereafter. And then that's how we get to our constellation size, right? That's why we've selected the vehicles we have and plan to make use of as much of the capacity of each of the rockets. As we have available. Bryan Kraft: That's very helpful, Scott. If I could just ask one follow-up. Where does ULA fit into that? You mentioned a handful of large and handful of SpaceX is Vulcan sort of the backup or are you going to use them as well? Just curious why that came into the conversation today. Christopher Schoell: Well, our strategy has always been to have many launch providers, right? And so I put that in that category. We've been developing other heavy launch providers for some time, and we'll have more updates as appropriate. But right now, we plan to use Blue Origin and SpaceX and equivalents to the MAX. Operator: Our next question comes from the line of Louis DiPalma with William Blair. Unknown Analyst: Abel, Scott and Andy, what do you view as the impact of Amazon's acquisition of Globalstar. And do you view any potential partnership opportunities with Amazon as they seem to be very much in the early stages of entering this industry. Abel Avellan: Listen, we do a complicated transaction in the sense that capacity and the capability, it is already on the phones through the iPhones. And basically, we see that capability as an SOS emergency system. Our -- and we also see that here really at the end of the day to provide broadband, you need to have hundreds of megahertz of spectrum allocated. So we're obviously here talking about, in the case of Globalstar on a very small fraction of that. So we don't see that changing dramatically in the foreseeable future of what the capability is today. And we don't see any real change of the landscape at least for the next 7 years. When you think about some of our partners, and you combine their spectrum, IMT-3GPP already on the phone spectrum that they are allocated to us, plus our 50 megahertz of spectrum either on the L-band and the brand you're talking about, in some cases, with some partners all the way up to 100 megahertz of allocated spectrum. So our focus is broadband. Our focus is -- of course, the broadband will come as we enable spectrum in a combination of our partner spectrum in L-band and then later, our mid-band low-band spectrum in the L-band, we see that as a complete different proposition and different and quite frankly, nobody is nowhere close into the capability that we have technically to deliver hundreds of megabits directly to a phone from something that is flying at 70 per hour 500 kilometers above you. And that competitive advantage of the capability is unique, and that's we make available to our MNO partners. Unknown Analyst: Great. And another question, I'm following up on the trial that was announced this morning that generated the peak downlink of 99 megabits per second, do you have a sense of what the average downlink would look like for Block 2 satellites when you -- and your partners launch the trials later this year? Abel Avellan: Yes. I think the -- talk about peak and average is tricky because also it depends on what is transiting through the applications on the phone. So that's what we tend to focus about peak. But the big data rate for our larger B6, which is in orbit and 9 and 10, it is approximately double of what we disclosed this morning. So you're talking about closer to the 200-megawatt per second. And that peak. And on average, it depends what you're transiting the small packages or larger packages and how you interact. But in term of network capacity is pretty most global of what we disclosed this morning around double of what we called this morning. Operator: Our next question comes from the line of Chris Quilty with Quilty Space. Christopher Quilty: I just wanted to do a quick follow-up on the -- excuse me, the noncommunication satellite effort on the defense side, since your satellites were specifically designed as a communication platform -- does that imply that you're going to have to do large redesign of satellites and adding things like optical cross-links and onboard processing and pointing mechanisms or -- and if so, is that something that would be customer and refunded or something that you're putting the capital for? Abel Avellan: Chris, I mean, we are -- we didn't start working with our department award this year, not even last year. This has been many, many years in the coming -- so all the capabilities that they require are already built in, in what we are producing on the line. There will be additions after the request and are not permitted to discuss. But basically, the core capability of what they're using, it was incorporated many years back. Christopher Quilty: Great. And speaking of government defense budgets, assuming the administration gets through this reconciliation package, there's a huge generational budget increase, can you name the specific programs where you think ASP has an opportunity to target? Or are you expecting that most of your opportunities are going to be on the classified side. Abel Avellan: It is a combination, and a lot have to allow related as the government has made a public by themselves around the golden done. But we are basically in all aspects of government usage were present from FirstNet from the classified to all the way to the golden dog. So for communications and for communication and no communication capabilities. We see ourselves as a very important asset. To our government, [indiscernible And as I said, this is -- have been years developing for them. They're using it today and we expect a very significant growth in revenue and opportunity in all aspects of worm and usage of our technology. Operator: Our next question comes from the line of Greg Pendy with Clear Street. Gregory Pendy: Just a real quick one. When you do hit 45 satellites on the launch side, what is the commissioning time period we should be thinking about until sort of the activation with service with MNOs? Abel Avellan: Yes. Currently, we do it on the first satellite. I mean, these sales are the largest satellites, phase and rates apres ever deploy. So it took longer than it will take on the coming satellite. So the target is 45 days that's what we are planning with the MNOs. Every time that we launch in 45 days, we should be using either 5G or 4G connectivity through them. But as we keep launching, we plan to reduce that time frame for 45. All the way down to 2 weeks, we don't want to promise that in the early batches of satellites. Gregory Pendy: Great. And then just one more. As you're looking at this multi-launch strategy plan and adding new launch partners, any thoughts if Neutron from Roget Labs is available in 2027 on what type of capacity and if that would be a potential other partner in the launch strategy? Scott Wisniewski: We're not going to comment on other launch providers, but you've heard our commentary today about who we're looking at. But we're -- we like launch providers. We like to launch with them satellites are designed to fit in all the standard 5-meter faring and larger ones as well. So we -- I think that's what we'll say at this time. Operator: Thank you. And we have reached the end of the question-and-answer session. I would now like to turn the floor back over to Scott Wisniewski for closing remarks. Scott Wisniewski: Thank you, operator. We want to thank all of our shareholders and research analysts for joining the call. Really appreciate it. Have a great week. Operator: Thank you. And this concludes today's conference, and you may disconnect your lines at this time. We thank you for your participation.