10-K: AST SpaceMobile Advances Global Satellite Network Amid Losses

AST SpaceMobile's 2025 annual report details significant progress in its direct-to-device satellite network, including satellite launches, successful testing, and key commercial agreements, alongside substantial capital raises and ongoing net losses.

Summary

• AST SpaceMobile is building the first global Cellular Broadband network in space, accessible directly by everyday smartphones (2G/4G-LTE/5G devices), for commercial and government use.
• The company has partnerships with over 50 Mobile Network Operators (MNOs), representing nearly 3 billion subscribers globally.
• Successful testing of the BlueWalker 3 (BW3) test satellite included two-way 5G voice calls to unmodified smartphones, download speeds above 21 megabits per second (Mbps), and spectral efficiency of approximately 3 bits per second per hertz.
• Five Block 1 BB satellites were launched on September 12, 2024, offering ten times higher throughput than the BW3 test satellite.
• Key testing milestones in 2025 included the first SpaceMobile video call with Vodafone (January), voice and video call tests with AT&T and Verizon (February), a two-way broadband video call with Rakuten (April), the first-ever Voice over LTE (VoLTE) call and short message service over satellite with AT&T (July 21), and Canada's first space-based 4G VoLTE call, data, and video streaming with Bell Canada (October 2).
• The first Block 2 BB satellite (BB6) was launched on December 23, 2025, and successfully deployed on February 10, 2026, featuring a 2,400 square feet phased array, designed to deliver up to 10 times the bandwidth capacity of Block 1 BB satellites.
• AST SpaceMobile acquired long-term access to up to 45 MHz of lower mid-band satellite spectrum in the United States and Canada through a transaction with Ligado Networks LLC, approved by the Bankruptcy Court on June 23, 2025.
• The company also acquired S-Band International Telecommunication Union (ITU) priority rights for up to 60 MHz of mid-band satellite spectrum globally on September 25, 2025.
• Definitive commercial agreements were signed with AT&T, Verizon, and Saudi Telecom Company (STC) for direct-to-cellular service, and a reseller agreement was established with SatCo (a joint venture with Vodafone) for European markets.
• Total revenues for the year ended December 31, 2025, increased significantly to $70.9 million, up from $4.4 million in 2024, primarily from sales of gateway equipment, software to MNOs, and services to the U.S. government.
• Net loss attributable to common stockholders increased to $341.9 million in 2025 from $300.1 million in 2024.
• Cash and cash equivalents and restricted cash on hand totaled $2.78 billion as of December 31, 2025.
• The company raised an additional $1.0575 billion in net proceeds from the issuance of 2036 2.25% Convertible Notes in February 2026.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this filing as cautiously optimistic. While the company demonstrates significant technological progress, successful testing, and strategic partnerships, the increasing net losses and substantial capital requirements, coupled with ongoing litigation and regulatory hurdles, present considerable financial and operational risks.

Positives

• Total revenues increased substantially to $70.9 million in 2025 from $4.4 million in 2024, driven by sales of gateway equipment, software, and government services.
• Successful deployment and extensive testing of BW3 and Block 1 BB satellites demonstrated key capabilities, including 5G voice calls, 21 Mbps download speeds, and video calls to unmodified smartphones.
• The launch and successful deployment of BB6, featuring the largest phased array ever deployed in LEO for commercial use (2,400 sq ft), is designed to deliver 10 times the bandwidth capacity of Block 1 BB satellites.
• Secured long-term access to up to 45 MHz of lower mid-band spectrum in the U.S. and Canada through the Ligado transaction, and up to 60 MHz of mid-band S-Band ITU priority rights globally, significantly enhancing network capabilities.
• Established definitive commercial agreements with major MNOs including AT&T, Verizon, Vodafone, and STC, providing access to key markets and a large subscriber base.
• Maintains a robust intellectual property portfolio with approximately 3,850 patent and patent pending claims worldwide, with about 1,900 granted or allowed.
• Completed planned investments to increase satellite assembly, integration, and testing capacity to six Block 2 BB satellites per month, accelerating production.
• Secured launch agreements for over 60 Block 2 BB satellites, supporting ambitious deployment plans.
• Strong liquidity position with $2.78 billion in cash and cash equivalents and restricted cash as of December 31, 2025, bolstered by recent capital raises.
• Management's assessment concluded that internal control over financial reporting was effective as of December 31, 2025, as audited by KPMG LLP.

Negatives

• Net loss attributable to common stockholders increased to $341.9 million in 2025 from $300.1 million in 2024, indicating a worsening financial performance in terms of profitability.
• The SpaceMobile Service has not yet generated any revenue, despite significant ongoing capital expenditures and operating costs.
• Total operating expenses increased by 45% to $358.6 million in 2025, with engineering services costs rising 52% and general and administrative costs increasing 65%.
• The company recognized an approximately $100.0 million induced conversion expense related to repurchases of convertible notes in 2025, contributing to the increased net loss.
• A loss on remeasurement of warrant liabilities of $68.2 million was recorded in 2025.
• The business is highly capital-intensive, requiring significant additional funds for future satellite design, assembly, and launch beyond the currently funded constellation size.
• Substantial debt outstanding, approximately $2.3 billion as of December 31, 2025, with associated interest expenses increasing by 93% in 2025.
• The Ligado Transaction is subject to ongoing litigation and regulatory approvals, with no assurance of consummation, posing a risk to anticipated benefits.
• Shareholders may experience significant dilution from future equity offerings, warrant exercises, and convertible note conversions, given the substantial capital needs.
• The company's multi-class stock structure concentrates voting power with the founder, limiting the influence of other investors.

Risks

• The SpaceMobile Service is in development and may not be completed on time or at all, with costs potentially exceeding expectations.
• Inability to raise additional funds for continued operations, SpaceMobile Service initiation, and the Ligado Transaction on favorable terms or at all.
• Significant future expenses and capital expenditures are required to execute the business plan, and the company may be unable to adequately forecast or control these expenses.
• The company has a history of losses and may never become profitable.
• Contracts with the U.S. government subject the company to risks including early termination, audits, investigations, sanctions, and penalties.
• Reliance on MNOs and regulatory approvals is critical to access the spectrum needed to provide Supplemental Coverage from Space (SCS) service.
• The company has a limited operating history in a rapidly evolving industry, making it difficult to evaluate its business and future prospects.
• Success of the business plan depends on factors outside of the company's control, such as market acceptance, regulatory compliance, and successful satellite launches.
• High dependence on Abel Avellan, the founder, Chairman, and Chief Executive Officer, and the ability to attract and retain other key employees.
• Rapid and significant technological changes could render the SpaceMobile Service obsolete and impair competitiveness.
• Failure to manage future growth effectively could materially adversely affect business, prospects, operating results, and financial condition.
• Increasing competition from companies in the wireless communications industry, including wireless and other satellite operators, and from the extension of land-based communications services or new technologies.
• Dependence on third parties for marketing and selling products and services, exposing the company to performance risks of commercial partners.
• Reliance on a limited number of third parties for the supply of equipment, satellite components, and launch services, with risks of failure, delays, or increased costs.
• Reliance on complex systems and components, which involve a significant degree of risk and uncertainty in terms of operational performance and costs.
• Substantial risks associated with international operations, including global economic conditions, exchange rate fluctuations, and varying legal/regulatory standards.
• Pursuing strategic transactions (acquisitions, joint ventures) could cause additional risks, including integration challenges and financial consequences.
• Covenants in debt instruments limit the company's ability to undertake certain types of transactions and adversely affect liquidity.
• Inability to launch satellites or operate them successfully after launch due to mechanical deployment failures, in-orbit problems, or failure to achieve desired altitudes.
• Launch insurance, even if available, may not fully cover the risks related to satellite launches, and does not cover lost revenue.
• Satellites may experience operational problems or premature failure, compromising network performance.
• Inability to protect intellectual property rights from unauthorized use by third parties.
• Intellectual property applications for registration may not be granted or registered, affecting the ability to prevent commercial exploitation by others.
• Potential claims that satellites or services violate the patent or intellectual property rights of others, which could be costly and disruptive.
• Customized hardware and software may be difficult and expensive to service, upgrade, or replace.
• Networks and those of third-party service providers and MNOs may be vulnerable to security risks and cyberattacks.
• Satellites may collide with space debris or another spacecraft, adversely affecting SpaceMobile Service performance.
• Extensive government regulation worldwide mandates how the business may operate and may increase costs or limit expansion into new markets.
• Adverse governmental regulatory actions could harm the ability to provide service to customers and generate revenues.
• Ability to offer services in important countries or regions could be limited due to regulatory requirements or geopolitical events.
• Uncertainty of regulatory approval for using frequencies not regularly allocated for mobile-satellite service in the U.S. and elsewhere.
• The Ligado Transaction may not be consummated and may be impacted by ongoing litigation, including an appeal by Inmarsat.
• Shareholders may experience additional dilution due to the consideration required to be paid in the Ligado Transaction.
• Failure to realize the anticipated benefits of the Ligado Transaction due to integration, technology, or regulatory risks.
• Debt financing raised in connection with the Ligado Transaction poses risks, including significant debt service and restrictive covenants.
• Regulatory, technological, and adoption risks with respect to use and access to Ligado's spectrum once the transaction closes.
• The multi-class structure of common stock concentrates voting power with the founder, limiting investor influence.
• The Tax Receivable Agreement requires substantial cash payments to TRA Holders, which may be material and reduce available cash flow.
• Future dilution from equity offerings, exercise of penny warrants, and conversion of convertible notes may be substantial.
• Risk of the independent registered public accounting firm or management expressing substantial doubt about the ability to continue as a going concern if unable to raise additional capital.
• Anti-takeover provisions in organizational documents could delay or prevent a change of control.
• Provisions in organizational documents and certain regulatory rules may discourage lawsuits against directors and officers.
• The market price and trading volume of securities may be volatile.
• Information available in public media published by third parties may be unreliable or inaccurate, potentially impacting stock price.
• Subject to litigation, including securities class action litigation or other claims.
• Changes in U.S. trade policy, including tariffs, may have a material adverse effect on business, prospects, financial condition, or operating results.
• Acquisitions, investments, partnerships, joint ventures, and other strategic transactions involve inherent risks, including integration challenges and failure to realize anticipated benefits.

Future Outlook

The company plans to launch approximately 45 to 60 Block 2 BB satellites by the end of 2026, at a cadence of one launch every one to two months on average, to enable continuous SpaceMobile Service coverage across key markets such as the United States, Europe, and Japan, and to facilitate U.S. government applications. They aim for noncontinuous service in targeted markets with a total of 25 BB satellites (five Block 1 and 20 Block 2) and continuous service in key markets with 45-60 BB satellites, ultimately reaching all targeted geographical markets with approximately 90 BB satellites. The company expects to introduce its proprietary AST5000 Application Specific Integrated Circuit (ASIC) chip in Block 2 BB satellites to achieve materially greater throughput capacity, higher peak data rates, and lower unit costs.

Management Comments

• "We are building the first and only global Cellular Broadband network in space to be accessible directly by everyday smartphones (2G/4G-LTE/5G devices) for commercial use, and for other applications for government use utilizing our extensive intellectual property (IP) and patent portfolio."
• "Our vision is that users will not need to subscribe to the SpaceMobile Service directly through us, nor will they need to purchase any new or additional equipment."
• "We intend to seek to use a revenue-sharing business model for the SpaceMobile Service in our agreements with MNOs."
• "We believe our planned SpaceMobile Service will have the following competitive advantages: Large Addressable Market; Delivery of Cellular Broadband Coverage at a Competitive Cost; Definitive Commercial Agreements with MNOs Enabling Access to Key Markets and Potentially Large Number of Subscribers; Cellular Broadband Directly to Unmodified Devices; Satellites Designed for Great Functionality, Power and Redundancy; Cost Advantages due to Greater Control of our Manufacturing; Capability to Support Both Commercial and Government Applications on the Same Satellite or on a Singular Infrastructure."
• "We believe we are fully funded for our costs necessary to manufacture and launch a constellation of approximately 90 BB satellites."
• "We believe our existing cash and cash equivalents as of December 31, 2025 will be sufficient to meet our current working capital needs, planned operating expenses and capital expenditures for a period of the next 12 months from the date of this Annual Report."

Industry Context

StockSavvy.ai notes that AST SpaceMobile is positioning itself as a leader in the emerging direct-to-device satellite connectivity market, a segment attracting significant interest from both established telecommunications players and new space ventures. The company's strategy of partnering with Mobile Network Operators (MNOs) and leveraging existing unmodified smartphones directly addresses a key market need for ubiquitous cellular coverage, differentiating it from traditional satellite services requiring specialized equipment. The rapid pace of satellite launches and successful testing, including 5G voice and video calls, indicates strong execution in a highly competitive and capital-intensive industry where other players like SpaceX's Starlink are also developing direct-to-device capabilities. The acquisition of significant spectrum rights further solidifies its competitive position.

Comparison to Industry Standards

• AST SpaceMobile's successful two-way 5G voice calls and download speeds above 21 Mbps to standard unmodified smartphones demonstrate a significant advancement compared to many existing mobile satellite services (MSS) LEOs, which are often designed for low data rate applications like SOS (e.g., Globalstar, Iridium Communications, Skylo).
• The deployment of BB6 with a 2,400 square feet phased array is highlighted as the "largest phased array ever deployed in a LEO for commercial use," suggesting a technological lead in antenna size and capacity compared to current commercial LEO satellite designs.
• The company's strategy to provide direct-to-unmodified-device cellular broadband contrasts with traditional satellite phone services (e.g., Inmarsat, Thuraya) that require specialized, often expensive, handsets.
• The estimated average capital costs of $21.0 million to $23.0 million per Block 2 BB satellite for a constellation of over 90 satellites are presented as optimized costs, implying a competitive cost structure for mass production compared to bespoke satellite manufacturing.

Corporate Governance

Legal Proceedings

• The company is subject to various legal proceedings and claims in the ordinary course of business, which management believes will not have a material adverse effect.
• Ongoing litigation with Inmarsat Global Limited related to the Ligado Transaction. Inmarsat filed an action in New York State Supreme Court in December 2025.
• In January 2026, the Bankruptcy Court granted motions compelling Inmarsat to dismiss the New York State Action and comply with its regulatory support obligations under the Mediated Agreement.
• Inmarsat has appealed the Bankruptcy Court's ruling to the United States District Court for the District of Delaware, which could materially impair the company's ability to obtain regulatory approval for the Ligado Transaction if overturned.

Related Party Transactions

• Related party revenues of $2.091 million were recognized for the year ended December 31, 2025.
• Related party cost of revenues of $1.329 million was recognized for the year ended December 31, 2025.
• Related party interest income of $0.564 million was recognized for the year ended December 31, 2025.
• A loan receivable from SatCo, a jointly-owned European satellite service business with Vodafone, amounted to $18.187 million as of December 31, 2025.
• Abel Avellan, the company's founder, Chairman, and Chief Executive Officer, and his permitted transferees control approximately 72.0% of the combined voting power of the Common Stock.
• The Tax Receivable Agreement requires the company to make cash payments to TRA Holders (including existing equityholders like Avellan) in respect of certain tax benefits.

Stakeholder Impact

• Shareholders face potential significant dilution from future equity offerings, warrant exercises, and convertible note conversions. The concentrated voting power with the founder limits their influence on corporate decisions. There is also a risk of a 'going concern' qualification if additional capital cannot be raised, which could negatively impact stock price.
• Employees benefit from the company's focus on attracting, developing, and retaining top talent through competitive compensation, comprehensive benefits (e.g., 401(k), health insurance, paid leave), and long-term incentive programs like stock-based compensation.
• Customers, including Mobile Network Operators (MNOs) and their end-users, stand to gain from the SpaceMobile Service's aim to provide cost-effective, high-speed cellular broadband to unserved or underserved areas, enhancing MNOs' service offerings and potentially increasing average revenue per user. The direct-to-unmodified-device approach is a key benefit for end-users.
• Suppliers and creditors are impacted by the company's reliance on a limited number of suppliers and launch providers, which creates dependency. Debt agreements contain restrictive covenants that could affect the company's financial flexibility and ability to meet its obligations.
• Government entities, particularly the U.S. government, are stakeholders through agreements for non-communication and communication applications. Regulatory approvals are critical for the company's operations and expansion.

Next Steps

• Continue testing capabilities of the BW3 test satellite with cellular service providers and the U.S. government.
• Continue testing for SpaceMobile Service automation, including beta testing, prior to rollout of initial noncontinuous SpaceMobile Service in select markets (U.S., Europe, Japan, other strategic markets).
• Introduce AST5000 Application Specific Integrated Circuit (ASIC) chip in Block 2 BB satellites to achieve materially greater throughput capacity and lower unit cost.
• Manufacture and launch Block 2 BB satellites based on FPGA chip until the ASIC chip is introduced.
• Initiate a limited, noncontinuous SpaceMobile Service in targeted geographical markets, including the United States.
• Obtain regulatory approvals in each jurisdiction where SpaceMobile Service will be provided.
• Enter into definitive commercial agreements with MNOs relating to the offering of SpaceMobile Service.
• Expand efforts on ground infrastructure development for commercial readiness and integrate SpaceMobile Service into MNOs' infrastructure.
• Launch approximately 45 to 60 Block 2 BB satellites by the end of 2026, at a cadence of one launch approximately every one to two months on average.
• Enable Continuous SpaceMobile Service coverage across key markets (U.S., Europe, Japan, other strategic markets) with the launch and operation of a total of approximately 45 to 60 BB satellites.
• Achieve Continuous SpaceMobile Service in all targeted geographical markets to meet long-term business goals with the launch and operation of a total of approximately 90 BB satellites.
• Anticipate launching and deploying additional satellites beyond the initial 90 BB satellites to enhance coverage and system capacity in response to incremental market demand.
• Continue to build and leverage relationships with wireless infrastructure providers for in-country ground infrastructure and telecom facilities.
• Maintain focus on technology and innovation, including investments in expanding capability, capacity, and automation (e.g., use of Artificial Intelligence in component manufacturing).
• Expand supply chain and supplier base, and increase vertical integration for manufacturing BB satellites to reduce dependency and control costs.
• Develop strategic relationships with additional launch vehicle providers both in and outside the United States for cost-effective future launches.
• Explore opportunities for a variety of applications in the government sector, including entering into other similar agreements with the U.S. government or prime contractors.
• Make a $100.0 million payment to Ligado for the benefit of Inmarsat on March 31, 2026.
• Make a $15.0 million payment to Ligado for the benefit of Inmarsat upon receipt of specified regulatory approvals and the closing of the Ligado Transaction.
• Make the remaining $15.0 million payment directly to Ligado upon closing of the Ligado Transaction.
• Account for the recent repurchases of 2032 4.25% Convertible Notes and 2032 2.375% Convertible Notes as induced conversions in the first quarter of 2026.

Key Dates

Recommendation

AST SpaceMobile is making substantial technological and commercial progress in a high-growth, high-risk sector, securing significant partnerships and demonstrating key capabilities. However, the company continues to incur substantial losses, requires significant ongoing capital, and faces considerable execution, regulatory, and competitive risks. The recent large capital raises provide liquidity but also introduce dilution. A "hold" recommendation reflects the promising long-term potential balanced against the significant near-term uncertainties and financial challenges.

Keywords

satellite broadband, SpaceMobile, LEO constellation, direct-to-device, 5G connectivity, MNO partnerships, telecommunications, space technology, cellular broadband, ASTS, SEC filing, 10-K, Abel Avellan, Ligado, Vodafone, AT&T, Verizon, Rakuten, Bell Canada, STC, BlueBird satellites, BB6, spectrum rights, convertible notes, capital raise, intellectual property, corporate governance, risk factors