THIRD QUARTER 2025 BUSINESS UPDATE This communication contains "forward-looking statements" that are not historical facts, and involve risks and uncertainties that could cause actual results of AST SpaceMobile to differ materially from those expected and projected. These forward-looking statements can be identified by the use of forward-looking terminology, including the words "believes," "estimates," "anticipates," "expects," "intends," "plans," "may," "will," "would," "potential," "projects," "predicts," ...

Core Insights - AST SpaceMobile Inc. reported third-quarter earnings that missed analyst expectations on both revenue and losses [1][2] Financial Performance - The company reported a quarterly loss of 45 cents per share, which was worse than the analyst estimate of a 23-cent loss [2] - Quarterly revenue was $14.73 million, falling short of the consensus estimate of $19.93 million [2] - Adjusted operating expenses for the third quarter were $67.7 million, an increase of $16 million compared to $51.7 million in the second quarter of 2025 [3] - The increase in operating expenses was attributed to a $7.6 million rise in adjusted engineering services costs, a $5.5 million increase in the cost of gateway deliveries, and a $3.8 million rise in adjusted general and administrative costs [3] Company Outlook - The CEO of AST SpaceMobile, Abel Avellan, stated that the company continues to lead the direct-to-device space-based cellular broadband industry and noted a significant acceleration in commercial activity, indicating strong demand for their solutions [4] - The company reaffirmed its revenue guidance for the second half of 2025, projecting between $50 million and $75 million [4]

Space Network Development - The company is building the first global Cellular Broadband network in space, accessible by everyday smartphones, aiming to provide high-speed services to users outside terrestrial coverage [163]. - The Block 1 BB satellites launched on September 12, 2024, have ten times higher throughput than the previous test satellite, enabling successful voice and video calls using standard smartphones [172]. - The next generation of Block 2 BB satellites is designed to deliver up to 10 times the bandwidth capacity of the Block 1 BB satellites, featuring the largest communication array ever deployed in LEO for commercial use [179]. - The company anticipates that a constellation of approximately 45 to 60 BB satellites will enable Continuous SpaceMobile Service coverage across key markets [185]. - The company plans to launch over 60 Block 2 BB satellites during 2025 and 2026, with a launch cadence of approximately one launch every one to two months [181]. Partnerships and Agreements - The company has partnerships with over 50 Mobile Network Operators (MNOs), covering nearly 3 billion subscribers globally, and plans to use a revenue-sharing model for the SpaceMobile Service [166]. - A definitive agreement with Verizon was signed on October 8, 2025, to provide direct-to-cellular SpaceMobile service starting in 2026, and a ten-year agreement with Saudi Telecom Company was established for satellite connectivity across Saudi Arabia [176]. - In March 2025, the company entered into a Spectrum Usage Rights Transaction with Ligado, which includes long-term spectrum usage rights for up to 40 MHz of L-Band MSS spectrum in the U.S. and Canada [189]. Financial Performance - Revenues increased by $13.6 million to $14.7 million for the three months ended September 30, 2025, compared to $1.1 million for the same period in 2024, driven by a $7.7 million increase from gateway equipment and software resale and a $5.9 million increase from U.S. government contracts [220]. - Revenues increased by $14.1 million to $16.6 million for the nine months ended September 30, 2025, compared to $2.5 million for the same period in 2024, driven by an $8.1 million increase in gateway equipment sales and a $6.0 million increase from U.S. Government contracts [234]. - Net loss attributable to common stockholders improved by $49.1 million, or 29%, to $122.9 million for the three months ended September 30, 2025, compared to $171.9 million for the same period in 2024 [219]. - Net loss attributable to common stockholders was $267.9 million for the nine months ended September 30, 2025, compared to a loss of $264.2 million in the prior year, reflecting a slight increase of 1% [1]. Operating Expenses - Total operating expenses rose by $27.8 million, or 42%, to $94.4 million for the three months ended September 30, 2025, compared to $66.6 million for the same period in 2024 [219]. - Engineering services costs increased by $19.0 million, or 87%, to $40.8 million for the three months ended September 30, 2025, primarily due to higher payroll and employee-related costs [222]. - General and administrative costs rose by $14.3 million, or 92%, to $29.8 million for the three months ended September 30, 2025, largely driven by increased legal costs and payroll expenses [223]. - Research and development costs decreased by $9.2 million, or 62%, to $5.5 million for the three months ended September 30, 2025, mainly due to the completion of ASIC chip development [224]. Cash Flow and Financing - The company had $1,220.1 million in cash and cash equivalents as of September 30, 2025, including $15.8 million of restricted cash, and raised approximately $277.4 million from equity sales in October 2025 [248]. - Cash used in operating activities increased to $136.5 million for the nine months ended September 30, 2025, compared to $97.7 million for the same period in 2024, reflecting a $38.8 million increase in operational expenses [291]. - Cash provided by financing activities was $1,487.1 million for the nine months ended September 30, 2025, up from $620.4 million in 2024, driven by a $1,083.3 million increase in net proceeds from equity issuance [293]. - The company issued $1,150.0 million in convertible senior notes due 2036, bearing interest at 2.00% per year, with a maturity date of January 15, 2036 [194]. Regulatory and Operational Risks - The company is closely monitoring the impact of macroeconomic conditions and geopolitical conflicts on its operations and ability to raise additional capital [199]. - The company faces various operational risks, including technological difficulties, regulatory approvals, and launch delays [300]. - The Spectrum Usage Rights Transaction is subject to satisfactory regulatory approvals and other closing conditions [302]. Equity and Debt Management - The company entered into a new Equity Distribution Agreement on October 7, 2025, with an aggregate sale price of up to $800.0 million for Class A Common Stock [271]. - The company issued $460.0 million in 4.25% convertible senior notes due 2032, with net proceeds of $446.3 million after expenses, to be used for working capital and corporate purposes [281]. - The company drew a total of $32.5 million under an equipment financing facility with Trinity Capital, Inc., with a majority outstanding as of September 30, 2025 [305].

Financial Position - As of September 30, 2025, total cash and cash equivalents and restricted cash was approximately $1,220.1 million[7]. - The Company's total consolidated indebtedness for borrowed money was approximately $724.4 million, including $100.0 million of 4.25% senior convertible notes due 2032 and $575.0 million of 2.375% senior convertible notes due 2032[7]. Stock Offerings and Repurchases - The Company has sold approximately 3.2 million shares of its Class A common stock through the October 2025 ATM Program for aggregate net proceeds of approximately $277.4 million[8]. - The Company announced a proposed offering of $850.0 million of convertible senior notes due 2036[10]. - A concurrent repurchase of up to $50.0 million of 4.25% Convertible Notes is planned to be funded by the Registered Direct Offering of Class A common stock[10]. - The Company entered into an Equity Distribution Agreement to sell shares of its Class A common stock with an aggregate offering price of up to $800.0 million[8]. - The Company has agreed not to sell any shares under the October 2025 ATM Program until certain conditions are met[8]. Financial Results and Reporting - The financial results for the quarter ended September 30, 2025 are preliminary and subject to revision[7]. - The financial information provided is not audited and should not be relied upon without caution[7]. - The Company is classified as an emerging growth company under the Securities Act[5].

Earnings Reports Overview - The earnings season is slowing down, but several retail-favorite companies are set to report this week [1] - Key companies reporting include Barrick Mining Corp., Plug Power Inc., Oklo Inc., Cisco Systems Inc., Walt Disney Co., and Applied Materials Inc. [2][3][5][10][11] Company-Specific Insights - Barrick Mining Corp. reported its third-quarter results before the market opened on November 10 [2] - Plug Power Inc. is expected to report losses of 12 cents per share and revenue of $179.54 million, having missed earnings expectations for the last 18 quarters [3] - Oklo Inc. is anticipated to report losses of 13 cents per share and revenue of $17.01 billion, with stock volatility noted ahead of the report [5] - Cisco Systems Inc. is expected to be a focal point for investors, particularly regarding management's guidance and updates on AI and cybersecurity business momentum [10] - Walt Disney Co. and JD.com Inc. will release earnings reports before the market opens on November 13 [11] - Applied Materials Inc. is set to release its Q4 results after the market closes on November 13 [11] Additional Companies Reporting - Other companies reporting this week include Workhorse Group Inc., Beyond Meat Inc., Microvision Inc., and Virgin Galactic Holdings Inc. [4][6][12]

Core Viewpoint - AST SpaceMobile's stock experienced a significant decline, ending the week down 13.8%, despite a recovery on Friday [1][3]. Group 1: Stock Performance - AST SpaceMobile's share price fell as much as 22.9% during the week before recovering [1]. - The stock closed at $3.95 after a 6.05% increase on Friday [6]. - The company's market capitalization is currently $19 billion, with a 52-week range of $17.50 to $102.79 [6]. Group 2: Market Context - The broader market saw increased bearish sentiment, with the S&P 500 declining 1.6% and the Nasdaq Composite down 3% over the same week [2]. - A tech sell-off was triggered by concerns that AI stock valuations were in bubble territory, leading to a broader market pullback [3]. - AST SpaceMobile is indirectly affected by the tech sector's performance, as its satellite-based internet services are expected to be utilized in AI, robotics, and IoT applications [3]. Group 3: Economic Indicators - The tech sector faced heavy valuation contractions, influenced by news of over 153,000 layoffs in the U.S. and a decline in consumer sentiment to its lowest level since 2022 [4]. - The University of Michigan's consumer confidence index fell by approximately 6% since the last report, contributing to early trading pullbacks [6].

Core Viewpoint - AST SpaceMobile Inc is facing financial challenges despite a significant year-to-date stock increase, with upcoming earnings expected to show continued losses and high valuation metrics indicating potential overvaluation [1][2][3][5]. Financial Performance - The company is set to release its third-quarter earnings on November 10, 2025, with an expected earnings per share (EPS) of -$0.39 and projected revenue of approximately $22 million [1][5]. - The stock has recently declined by 5.3% to $66.68 after a record high of $102.79 on October 16, attributed to a $1 billion debt offering [2][5]. - Year-to-date, the stock has increased by 214.8%, indicating strong performance despite recent declines [2][5]. Valuation Metrics - AST SpaceMobile has a negative price-to-earnings (P/E) ratio of -47.44, reflecting a lack of profitability [3][5]. - The price-to-sales ratio is extremely high at 4,224.34, suggesting the stock is trading at a premium relative to its sales [3]. - The enterprise value to sales ratio stands at 4,040.25, indicating a high valuation compared to revenue [3][5]. Recent Developments - The company completed a $64.5 million acquisition of global S-Band spectrum rights, which may enhance its network reach [4]. - AST SpaceMobile faces challenges with high operating costs and macroeconomic pressures that could impact near-term margins [4]. - The debt-to-equity ratio is low at 0.02, indicating minimal reliance on debt financing, while the current ratio is strong at 8.23, suggesting solid liquidity to cover short-term liabilities [4].

Core Insights - The fund experienced a return of approximately -9% during Q3, leading to a year-to-date return of approximately -9% [2] - The portfolio lacks direct exposure to AI, focusing instead on companies that are integrating AI into their operations, which has affected short-term performance [3][5] - The investment strategy emphasizes long-term growth potential and durable competitive advantages rather than short-term market trends [5][8] Portfolio Analysis - The top five holdings include PAR Technologies, Cellebrite, KKR, LifeCore, and Burford, all of which have faced declines in share price year-to-date [7][32] - LifeCore's share price dropped over 10% following a shelf offering announcement, despite positive business developments [12][15] - Cellebrite's valuation has been impacted by a general decline in software multiples, with a 26% drop in Enterprise Value to Next 12 Months Revenue for medium growth companies [17][18] Company-Specific Developments - LifeCore is expected to ramp up revenues significantly by 2026, driven by new customer wins and favorable regulatory changes [13][15] - Cellebrite is positioned to benefit from AI advancements, with plans to release investigative AI tools in January 2026 [20][22] - KKR's diversified asset management approach remains robust, with significant growth in Fee Related Earnings and a focus on expanding its investor base [25][31] Market Trends and Challenges - The current market environment has led to a compression of software multiples, affecting companies like Cellebrite and PAR Technologies [18][46] - Concerns regarding traditional private equity and private credit have emerged, but KKR's diversified model mitigates some of these risks [24][30] - The investment landscape is characterized by volatility, with a disconnect between share prices and underlying business progress [10][42] Future Outlook - The fund's strategy focuses on long-term value realization, with expectations that current market conditions will eventually improve for the companies held [9][43] - There is potential for significant growth in companies like Hagerty and Kingsway, driven by strategic partnerships and management quality [33][35] - The outlook for PAR Technologies hinges on winning key contracts, which could substantially increase recurring revenue and growth rates [51][60]

Core Viewpoint - AST SpaceMobile's stock experienced significant momentum, driven by the completion of its Bluebird 6 satellite and a new agreement with Verizon Communications, leading to a 64% increase in stock price by the end of October [1][2]. Company Developments - The completion of the Bluebird 6 satellite assembly and testing was announced on September 30, resulting in a 16% stock price increase on October 1 and another 16% the following day [4]. - AST SpaceMobile plans to have 45-60 satellites in orbit by the end of 2026 [4]. - The company announced an equity distribution program to sell up to $800 million in stock, which briefly affected stock prices but did not prevent further gains [5]. - A commercial agreement with Verizon to provide direct-to-cellular services for Verizon customers starting in 2026 was also announced [5]. Stock Performance - The stock peaked on October 15 but faced a sharp decline after Barclays downgraded its rating from overweight to underweight on October 17, citing excessive valuation [6]. - On October 22, the stock dipped 9.2% following the announcement of a $1 billion convertible debt sale, indicating ongoing cash needs and potential dilution for existing shareholders [6]. Market Position and Financials - AST SpaceMobile's market cap is currently $25.7 billion, with only $4.9 million in revenue reported over the last four quarters [9]. - Analysts project revenue of $255 million for the next year, suggesting a long path to justify the current valuation [10]. - The company operates in a mature broadband market, with customers like Verizon having low valuations, which raises questions about the size of AST's addressable market [11].

Core Viewpoint - The article highlights the potential of space stocks, particularly AST SpaceMobile, amidst the rising interest in various technology themes [1] Company Summary - AST SpaceMobile is identified as a key player in satellite connectivity, which may be overlooked due to the focus on other technology sectors [1]