AST SpaceMobile (ASTS) Q3 2026 earnings review
AST SpaceMobile's sales almost tripled, but it delayed satellites again
AST SpaceMobile, which builds a satellite network for ordinary smartphones, earned more from government work but delayed its satellites again. Revenue almost tripled from a year ago to $42 million. By our math, the unchanged full-year outlook needs at least $61 million in the fourth quarter, which would be a record.
| Revenue | $42.3M +187% from a year ago; +34% from last quarter |
|---|---|
| Full-year revenue outlook | Unchanged $150–200M; by our math it needs $61–111M in the fourth quarter |
| Target date for about 45 satellites in orbit | Middle of 2027 early 2027 three months ago; 12 in orbit today |
| Debt minus cash | $859M $249M three months earlier, by our math |
⚖️ Verdict: 🔴 Bearish
The story got worse because AST moved its main satellite target a second time, from early next year to the middle of that year. Paid phone service cannot start at scale before then. The good news: Japan agreed to fund about $1 billion of satellites, and the US Space Force awarded a contract worth about $100 million.
The question now is whether AST can launch enough satellites to start paid service before its cash runs short. Either rockets fly every few weeks from early next year, or the date moves a third time. The launch date for three satellites waiting in Florida will tell first.
🐂 Bull Case
Services Revenue Tripled on Government Milestones
AST SpaceMobile reports two revenue lines. Products are mainly gateways, the ground equipment that links its satellites to phone networks. Services include milestone payments on US government contracts.
Services did the work. That line tripled from the previous quarter to $21.8 million, while product sales fell 16%. So services passed half of total revenue for the first time this year, at 51.4%.
This matters because government work pays AST before its phone service exists. A new US Space Force sensing contract carries about $100 million of revenue. But customers pay on milestones, so the revenue can jump or drop sharply between quarters.
What to watch: services revenue in the fourth quarter, which AST reports with its annual results. Another quarter near this level would show that the contracts pay steadily.
Japan Agrees to Fund $1 Billion of Satellites
J-LEO is a satellite constellation that AST plans to build for Japan with its partner Rakuten. Three months ago Japan's communications ministry had made only a preliminary selection.
Now the company reports an agreement that "features approximately $1.0 billion in non-dilutive funding" to make and launch satellites. Non-dilutive means AST issues no new shares for the money. It also listed a pipeline of about $1.2 billion in US quasi-governmental financing for 2027.
That matters because notes and share sales have paid for the build so far. But the release gives no payment dates, and the grant sets a timeline that AST must meet.
What to watch: the first J-LEO cash on the balance sheet. Money received would mean the next satellites need less new borrowing.
Launch Contracts Now Cover Over 100 Satellites
Rockets, not factories, decide how fast AST can deploy. Its Texas plants are already working on BlueBird 51, far ahead of the phone-service satellites it has launched.
This quarter AST said its agreements with "SpaceX, Blue Origin and others" cover over 100 BlueBirds across 2027 and 2028. It also secured a US priority rating under DPAS, the Defense Priorities and Allocations System.
That matters because every launch delay postpones paid service. But a contract reserves a rocket and does not fix a date, and the next flight still has none.
What to watch: launches in the first quarter of 2027, when AST expects a Blue Origin flight and its first DPAS-rated ones. Flights on schedule would show that reserved capacity becomes satellites in orbit.
🐻 Bear Case
The 45-Satellite Date Moved a Second Time
The release says "BlueBirds are on the move". BlueBirds are AST's phone-service satellites, and its deployment plan targets about 45 of them in orbit. The target date moved back instead, for the second time this year.
- Target date at first-quarter results: the end of 2026
- Target date at second-quarter results: early 2027
- Target date now: the middle of 2027
- In orbit today: 12 BlueBirds, none launched since August
The release does not call this a delay. It says three satellites reached Cape Canaveral in September and are "awaiting SpaceX launch date confirmation". Three more should ship by the end of November for a Blue Origin launch.
Chief executive Abel Avellan pointed to the factory instead. "We expect to achieve a production rate of six ASIC satellites per month in December of this year," he said. ASIC is AST's own chip. But a faster factory adds nothing to coverage while finished satellites wait for a rocket.
What to watch: the launch date for the three Florida satellites, and the count in orbit in late March. A count far below the named launches would point to a third move.
AST Sold Its Gateways Below Cost
Gateways are the ground equipment that links AST's satellites to a phone operator's network. They make up most of its product sales, and until this quarter those sales earned a small profit.
This quarter the hardware cost more than AST charged. Product revenue was $20.6 million, and those products cost $22.5 million.
- Product costs: 109.1% of product revenue, up 17.4 percentage points from last quarter
- A year ago: 71.1%
The loss matters because gateway sales are the revenue AST can earn before phone service starts. Total gross margin still rose to 40.2%, but only because services grew. The release gives no reason for the loss.
What to watch: product costs against product revenue next quarter. A second quarter below cost would mean hardware sales add to AST's cash outflow.
AST Now Owes More Than It Holds
The release describes a "Fortress balance sheet" with about $3.2 billion of cash. That cash comes from repeated note sales, including $1.15 billion in July. Debt now stands at $4.1 billion, so AST owes more than it holds.
- Debt minus cash: $859 million by our math, up from $249 million three months earlier
- Cash spent on operations and equipment: $464 million in the quarter, by our math
- Interest expense: $30.3 million, above interest income for the first time this year
- Stock-based pay: $52.3 million, more than the quarter's revenue
This matters because AST earns nothing from phone service yet, so borrowed money pays for each satellite. Its operating costs excluding share awards, depreciation and cost of revenues rose 76% from a year ago. The company has now added a rocket programme to its spending plans.
What to watch: debt minus cash at year-end, and whether government money from Japan arrives by then. A gap that keeps widening at this rate would point to more borrowing next year.
Risks this quarter didn't answer
Five standing concerns got no new numbers in the release or the slides. The quarterly filing and the call may answer some of them.
- Contracted revenue: the release does not repeat last quarter's $1.3 billion figure; the filing's contract note will show it.
- The goal of about $1 billion in yearly revenue: AST once tied it to 2027 and gives no date now.
- Paid phone service: no operator pays for service yet; the first service revenue from an operator would move this.
- Ligado spectrum: AST advanced $100 million this year, and the release is silent on approval and on the Inmarsat court case.
- Rivals: AST expects to work with all major US and European operators but names no new contract; rivals such as Starlink pursue the same operators.
👓 Other Themes
AST Plans to Build Its Own Rocket
AST announced Blacklift, a reusable 20-ton rocket of its own, with launches starting in late 2028. Chief executive Abel Avellan said it should give "greater control over launch availability, deployment schedules, and attractive ownership economics". Each flight would carry up to five BlueBirds, the company's satellites. The release gives no cost, and it lists "proposed transactions with Firefly Aerospace, Inc." and licensed engines among the risks.
Brazil Authorises AST's Commercial Service
Brazil granted AST authorisation for commercial service with a combined 50 MHz of spectrum, the radio frequencies its satellites use to reach phones. The company also described a partnership strategy built on spectrum allocations "in markets like Brazil and Colombia". In the US it still targets about 100 MHz, the same goal as last quarter. A licence brings no revenue until satellites cover the country.
💲 Other KPIs
The share count is rising more slowly. It grew 10.0% from a year ago. Three quarters earlier the pace was 42.6%. AST funded this quarter with notes instead of new shares, so existing holders gave up less of the company while debt rose.
Customer prepayments fell for the first time in a year. Contract liabilities are cash customers have paid for service AST has not yet delivered. They slipped $3.6 million from last quarter, after climbing from $66.6 million a year ago. So no large new prepayment arrived in the quarter.
Inventory almost tripled in three months, from $28.4 million. It stood at $12.0 million at the start of the year. The release does not say what AST is stocking. That build-up came in the same quarter in which products cost more than they sold for.
Customers owe AST more than it has recorded as revenue all year. Unpaid bills rose 31% in three months to $104.1 million. Nine-month revenue was $88.6 million. The release does not break the balance down, so the reason is not visible yet.
🔮 Guidance
Unchanged. The plan still has revenue at least doubling from last year's $70.9 million, and AST now adds "with upside based on recent contract signatures". By our math, that leaves $61–111 million for the fourth quarter, against $42.3 million this quarter. Even the bottom of that range would be a record. The company has kept this range since it first gave it two quarters ago.
Cut. The date moved back by about a quarter, the second move this year. AST has 12 BlueBirds in orbit, so it needs 33 more by the middle of next year. By our math, the launches it named would bring the fleet to 24 by the end of March. That leaves 21 for the three months after, almost double today's fleet.
Unchanged. AST still plans to switch on service this year in the US, Canada, Japan, Saudi Arabia and the UK. Intermittent means a phone connects only while a satellite passes overhead. An earlier plan put the US step at the end of 2025. The release does not say when operators start paying.
Cut. AST first aimed for this rate a year earlier. It now says two Texas factories run full shifts, and that its own chip goes into every satellite from BlueBird 34. The earlier plan started the chip at BlueBird 50. Six a month equals 18 a quarter, by our math, against three satellites launched in the latest quarter.
New. AST says its launch agreements now reach a total of over 100 BlueBirds across 2027 and 2028. With 12 in orbit today, that means at least 88 more, by our math. The company gave no split between the two years and no cost for the launches.
❓ Key Questions
How much of the $1.3 billion backlog is commercial?
Last quarter AST added government awards to a figure that used to count only phone operators. The release gives no update. That split shows whether operators have committed more money since late 2025.
Which launches take the fleet from 12 to 45?
The named flights reach 24 satellites by the end of March, by our math. AST has not said which rockets carry the other 21, or when SpaceX will fly the three already in Florida.
What will the Blacklift rocket cost, and who pays?
AST gave a payload, an engine choice and a first-launch date, but no budget. The answer decides whether $3.2 billion of cash still covers the satellite build.
Is the $1 billion revenue goal still a 2027 goal?
Management once described a 2027 revenue opportunity approaching $1 billion. With 45 satellites now due in the middle of 2027, a full year of service cannot fit inside that year.
Why did gateways cost more than AST charged?
Product costs passed product revenue this quarter, after three quarters of shrinking margins. Readers need to know whether this reflects early units, pricing to win operators, or a one-time charge.