It was a very good quarter for ASTS IMO, with revenue rising over 100% QoQ and over 2,600% YoY (primarily due to a tiny base). Last year, revenue ramped heavily towards Q4, and this will apparently be the case again this year as they reiterated their $150M-200M guidance, with only $46M being achieved so far. I’m curious if this is due to some of their government contract milestones being related to annual goals (achieved in Q4) vs. quarterly goals. Costs increased a great deal mostly due to “involuntary conversion” (Blue Origin screwing up their launch in Q1). Gross Margin actually ticked up from 21 to 25%. I’m curious where this nets out when they actually start service.
A few other positive developments from the release and call:
- They also for the first time gave the size of their revenue backlog, at $1.3B. They did not mention the timing on that in terms of contract length. They noted 3 new contract awards in the quarter.
- They also are on the verge of launching beta service in multiple countries, including Japan, Canada and the United States.
- They noted their TAM is growing, with opportunities opening up in “non-communications, USG secure communications, additional funded networks, Internet of Things (IoT), federal emergency, and AI edge compute”
- In the Q&A, their President noted that Government revenue “is going to start scaling up into a recurring multibillion dollar a year opportunity starting in 2027.”. That’s not very far away, and they are currently running at 1/5th of that in TOTAL revenue. The current $1.3B backlog was noted to be majority commercial, not government.
As long as they keep hitting their launches it seems as though the near future will be bright. I’ve been adding to them especially when they get beaten down, and I’m certainly considering more.