AST SpaceMobile Earnings Just Reminded Investors How Risky Space Can Be

Key Points

• AST SpaceMobile missed Q2 earnings and revenue estimates as spending rose sharply to support its satellite buildout.
• The company reaffirmed its 2026 revenue outlook and reported a backlog of about $1.3 billion, keeping the long-term growth thesis intact.
• Recent BlueBird launches, more than 60 mobile network partnerships and a planned D2D consumer beta give investors progress to watch, but execution risk remains high.

After last week’s successful launch of its three newest BlueBird satellites, investors entered the week with hopes that space-based cellular broadband network provider AST SpaceMobile NASDAQ: ASTS could continue that momentum when it reported Q2 earnings on Monday, Aug. 10.

However, the report dashed those hopes when the Midland, Texas-based direct-to-device (D2D) SpaceX NASDAQ: SPCX rival announced disappointing financials after the market closed.

Shares initially slipped after the report, and have now fallen more than 48% from their all-time high on May 28.

AST SpaceMobile’s Q2 Miss Highlights the Cost of Expansion

Failing to improve upon Q1’s galactic earnings miss, AST SpaceMobile reported Q2 earnings per share (EPS) of -77 cents, well off from analysts’ consensus estimate of -32 cents, with quarterly revenue of $31.52 million also missing the analyst forecast of $34.98 million.

Beyond EPS and revenue, there are other causes for concern. Capital expenditures (CapEx) surged from nearly $257 million to more than $610 million. While that jump isn’t surprising for a company that boasts vertical integration of 95% and is rapidly scaling towards its goal of putting 45 BlueBirds into low Earth orbit by early 2027, a more than 137% increase in CapEx underscores the substantial cash required to build out the constellation.

Adjusted operating expenses showed a more than 205% year-over-year (YOY) increase in engineering services costs, up to $87.28 million in Q2 from $28.59 million in the same quarter a year prior. Total adjusted operating costs surged more than 130% YOY, to over $119 million from $51.7 million.

Management expects Q3 adjusted operating expenses, excluding adjusted cost of revenues, to increase to $105 million to $115 million, while the company’s 2026 revenue plan remains highly dependent on successful satellite launches, gateway deliveries, and contract milestones. AST SpaceMobile has now beaten EPS expectations in just two of the past 10 quarters.

The Silver Lining: Reaffirmed Guidance as Partnerships Keep AST SpaceMobile on Track

AST SpaceMobile’s growing pains are symptomatic of a rapidly scaling company, but the Q2 report was not without its highlights. Management reaffirmed that it is on track to achieve 2026 full-year revenue guidance in the range of $150 million to $200 million, as the D2D total addressable market continues to expand.

In Q2, the company received a preliminary selection for Japan’s J-LEO project, which could provide up to approximately $1 billion in non-dilutive, non-debt government capital, while expanding opportunities in radar, secure government communications, emergency response, IoT, and AI edge computing.

AST SpaceMobile also noted that it now has more than 60 mobile network partnerships in place with companies including telecom giants AT&T NYSE: T, Verizon Communications NYSE: VZ, Vodafone Group NASDAQ: VOD, and Tokyo-based internet services company Rakuten OTCMKTS: RKUNY. AST also maintains broader strategic relationships with companies including real estate investment trust American Tower NYSE: AMT, Alphabet NASDAQ: GOOGL, and the U.S. federal government.

Among those strategic partnerships, the company’s commercial deployment continues to advance, with more than 3 billion subscribers and approximately 50 gateways across 20 markets. Encouragingly, management is targeting the availability of the D2D consumer beta later in 2026.

AST SpaceMobile also reported a revenue backlog of around $1.3 billion and more than $3.7 billion of pro forma cash, cash equivalents, and restricted cash. It also announced three U.S. government contract awards with more than $100 million of funded value expected in 2026 and 2027, while saying that government revenue could become a recurring multibillion-dollar annual opportunity beginning in 2027.

In his earnings call comments, CEO Abel Avellan said that “BlueBird 14 to 16 are undergoing final testing as their manufacturing assembly is nearly completed,” adding that “the recent launch of BlueBird 11 to 13 demonstrated our ability to rapidly and repeatedly build, launch, and deploy the largest phased array in low-Earth orbit using advanced composite material for lighter and even bigger satellites.”

Despite Volatility, Shares Could Be Trading at a Discount

Investors have grown accustomed to AST SpaceMobile’s ups and downs.

Peak to trough and vice versa, the stock has experienced 20 double-digit gains and losses this year alone. AST SpaceMobile currently has a beta of about 2.7, reflecting significantly greater sensitivity to market moves than the broader market.

Still, over the trailing 12 months, the stock has rewarded long-term shareholders with a nearly 50% gain. At the same time, institutional investors have continued their buying spree, with approximately $2.4 billion of inflows in the past year compared to less than $470 million in outflows.

Investors may also want to continue monitoring the current short interest of more than 19% of the float. For those looking for a potential entry point, ASTS put in its year-to-date low on July 29 and, despite the current slide, remains well above that low.

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