Due Diligence Capital Notes

On February 10, 2026, AST SpaceMobile successfully deployed the phased array antenna on its BB6 satellite — a structure roughly the size of a two-car garage floating in low-Earth orbit. It is the largest commercial phased array ever deployed in LEO (Low Earth Orbit, the band of space between roughly 200 and 2,000 kilometers above Earth's surface). The company's stock had already run dramatically from its 2024 lows, and by almost any conventional valuation measure, a company with precisely $0 in revenue from its core business should not command an $11 billion market capitalization.

And yet, if ASTS's thesis plays out — even partially — the company's current valuation may one day look quaint. This is a bet not on a product already in market, but on an infrastructure layer that does not yet exist at commercial scale: a cellular broadband network built in space, accessible by the ordinary smartphones already in 5.8 billion people's pockets.

What Is Direct-to-Device Satellite Broadband?

Before we can evaluate ASTS as an investment, we need to understand what it is actually building, because it is genuinely different from anything that exists today.

Traditional satellite internet services — think early-generation Starlink, HughesNet, or VSAT systems — require a specialized dish or terminal. The satellite is broadcasting to a receiver engineered specifically to talk back to it. That limits the market to customers willing to buy additional hardware.

AST SpaceMobile is attempting something structurally different: using very large satellite antennas in LEO to beam a cellular signal powerful enough for an ordinary smartphone — the kind already in your pocket, unmodified — to receive directly. The satellite effectively acts as a cell tower in the sky. If it works at commercial scale, it stitches the world's existing mobile networks together across the gaps — remote coastlines, mountain ranges, rural interiors, oceans — without requiring the user to do anything differently.

The key word is "if." But the engineering evidence is accumulating.

The Block 1 Proof-of-Concept

ASTS launched five Block 1 BlueBird (BB) satellites on September 12, 2024. These were proof-of-concept hardware — smaller, lower bandwidth, never intended to be the commercial product. What matters is what happened with them. All five participated in voice, video, and data tests using standard, unmodified smartphones connected to networks operated by AT&T, Verizon, Vodafone, Rakuten, and Bell Canada. These were not lab experiments — they were real-world demonstrations with real carrier partners using consumer handsets.

That achievement answered the foundational engineering question: can a satellite antenna in LEO create a signal strong enough for a phone to receive? The answer appears to be yes. The remaining question — the hard one — is whether the company can deploy enough satellites fast enough, at low enough cost, to build a commercially viable network.

The Block 2 Architecture: Why BB6 Matters

The Block 1 satellites were the science project. The Block 2 satellites are the business.

BB6, launched December 23, 2025, is the first Block 2 BlueBird satellite. Its phased array — a flat, electronically steerable antenna surface that can direct beams toward individual users on the ground — measures approximately 2,400 square feet. That is more than three times the size of the Block 1 arrays. Size matters here because a larger phased array can concentrate more signal power onto a small area, and can serve more users simultaneously.

According to AST SpaceMobile's FY2025 10-K filing with the SEC, the Block 2 satellites are designed for up to 10× the bandwidth capacity of Block 1. The company's custom AST5000 ASIC chip (an Application-Specific Integrated Circuit — a purpose-built processor designed for one task rather than a general-purpose chip) targets 120 Mbps peak data rates per beam using 40 MHz of spectrum, and up to 10,000 MHz of processing bandwidth per satellite. That is a significant step toward the kind of throughput that would make satellite broadband genuinely competitive with terrestrial LTE in underserved areas.

The array deployed successfully on February 10, 2026, confirming the mechanical deployment worked. In-orbit performance testing was ongoing at the time of the 10-K filing.

The Commercial Stack: Who Is Already Signed Up

Here is the part of the ASTS thesis that does not get enough attention. The company has spent years pre-signing its customers — the mobile network operators (MNOs) who already have the subscriber relationships, the billing infrastructure, and critically, the regulatory licenses to operate in their home markets.

The structure of ASTS's business model is worth spelling out clearly:

AST SpaceMobile builds and operates the satellite network. It is the wholesale infrastructure provider, not the consumer-facing brand.
MNOs (AT&T, Verizon, Vodafone, etc.) sell connectivity to their existing subscribers. A Verizon customer in a rural dead zone would see "Verizon" on their phone screen, not "SpaceMobile." They pay Verizon. Verizon pays AST.
This is an asset-light model for the carriers and an asset-heavy model for AST. The carriers take virtually no balance-sheet risk; AST carries all of it.

As of the 10-K:

Definitive commercial agreements (the binding kind) have been signed with AT&T, Verizon (announced October 8, 2025), Vodafone/SatCo (December 18, 2025), and Saudi Telecom Company (a ten-year deal announced October 29, 2025).
Over 50 MNO partnerships are in place, covering nearly 3 billion subscribers globally.
The critical caveat: roughly 46 of those 50 relationships remain at the MOU (Memorandum of Understanding) stage — a non-binding letter of intent, not a signed commercial contract. Only four carriers have crossed the line into binding agreements.

That distinction matters enormously when assessing risk.

Spectrum: The Invisible Asset

A satellite network is only as good as the radio spectrum it has permission to use. Spectrum — the specific radio frequencies allocated for different types of communication — is licensed by governments and governed internationally by the ITU (International Telecommunication Union). Acquiring spectrum rights is slow, bureaucratic, expensive, and non-replicable. It is also a genuine moat.

In 2025, AST made two significant spectrum moves:

Ligado spectrum acquisition: Approved by the U.S. Bankruptcy Court on June 23, 2025. This gives ASTS up to 45 MHz of lower mid-band satellite spectrum covering the U.S. and Canada — prime real estate for direct-to-device broadband.
S-Band ITU priority rights: Closed September 25, 2025, adding up to 60 MHz of mid-band spectrum globally. ITU priority rights effectively mean that ASTS has first-in-line status in international spectrum coordination — a meaningful advantage in markets where other operators might later seek similar frequencies.

Combined with its approximately 3,850 patent and patent-pending claims, AST is building a defensive IP and spectrum position that would be genuinely difficult for a competitor to replicate quickly.

The Deployment Math

Now for the numbers that actually drive whether this business can reach escape velocity.

The 10-K lays out a clear progression:

25 total BB satellites (5 existing Block 1 + 20 new Block 2): noncontinuous service capability — users can connect when a satellite happens to be overhead.
45–60 total BB satellites: continuous coverage in key markets such as the U.S., Europe, and Japan.
~90 total BB satellites: global continuous coverage in all targeted markets.

The company plans to launch approximately 45–60 Block 2 satellites by the end of 2026, at roughly one launch every one to two months. Their assembly, integration, and testing (AIT) facility is targeting a manufacturing cadence of 6 BB satellites per month, operating out of a global facility footprint of approximately 450,000 square feet as of December 31, 2025.

If that schedule holds, ASTS could enter 2027 with continuous coverage capability in the U.S. and Europe — the markets where AT&T, Verizon, and Vodafone operate — and begin generating commercial revenue at scale for the first time. To be precise: SpaceMobile Service revenue for FY2025 was $0. The company does have some government contract revenue — a $43 million SDA (Space Development Agency) testing agreement via a prime contractor and approximately a $30 million Europa Track 2 contract — but the core commercial service has not launched.

The 2026 launch cadence is the single most important operational variable in this thesis.

What Could Break This Thesis

This is the section I want to be direct about, because the risk in ASTS is substantial and multi-layered.

The service has never generated a dollar of revenue. Everything in the commercial thesis — the MNO agreements, the addressable market of 3.4 billion people with no cellular broadband, the 5.8 billion subscribers moving in and out of coverage — is forward-looking. Revenue depends on launching enough satellites, securing regulatory approval in each individual country, and converting MOU-stage carrier relationships into signed contracts. Any one of those three steps failing in a major market materially delays the business case.
Capital requirements are enormous and unrelenting. The $550 million Sound Point Credit Facility (a non-recourse senior-secured delayed-draw term loan — meaning creditors can only claim the specific project assets as collateral, not the entire company) closed July 15, 2025, and represents significant leverage on a company with no operating revenue. The 10-K explicitly warns that additional capital may not be available "on terms acceptable to us, or at all." The share count — 292,637,039 Class A shares, 11,215,111 Class B shares, and 78,163,078 Class C shares as of February 26, 2026 — will almost certainly continue growing as the company funds itself through equity offerings and convertible notes.
Launch schedule execution risk is severe. Deploying 45–60 satellites in roughly 12 months requires coordination of complex supply chains, some with sole-source suppliers (meaning there is only one vendor for a given component), plus third-party launch vehicle availability and environmental testing. A single major supply chain disruption or launch delay could push continuous coverage capability into 2027 or beyond, deferring revenue by a year or more and increasing cash burn.
Regulatory and spectrum risk does not end with U.S. approvals. ASTS must obtain country-by-country regulatory clearance before it can commercially launch SpaceMobile Service in each market. The Ligado spectrum rights, while court-approved, remain contingent on further regulatory steps. Changes in U.S. trade policy could complicate international partnerships. In any market where regulatory approval is denied or delayed, the carrier agreement covering that market is effectively worthless until the clearance is obtained.

Where This Leaves Me

AST SpaceMobile is not a conventional equity analysis. It is closer to evaluating a capital-intensive infrastructure project at the critical transition point between construction and operation — the moment when years of spending either crystallize into a durable business or collapse under their own weight.

What I find genuinely compelling is the structural position the company has assembled: the largest phased array ever deployed in LEO, a spectrum portfolio that took years to acquire and cannot be replicated quickly, binding commercial agreements with four of the world's largest mobile carriers, and a manufacturing operation targeting six satellites per month. The quote from the 10-K captures the ambition cleanly: "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."

Whether that ambition is achievable at the planned timeline and capital cost is a question that 2026's launch cadence will begin to answer definitively. If ASTS exits 2026 with 45+ Block 2 satellites in orbit and the first commercial revenue agreements converting to actual cash flows, the current valuation may look reasonable in retrospect. If the launch schedule slips, capital markets tighten, or a key MNO relationship fails to convert from MOU to contract, the company faces a much harder path.

For my own position, the 2026 launch cadence is the scoreboard I am watching. The engineering has been demonstrated. The commercial stack is taking shape. What remains is execution — and in infrastructure at this scale, execution is everything.

All financial data and operational metrics cited in this post are sourced from AST SpaceMobile's FY2025 10-K Annual Report filed with the SEC on March 2, 2026. Filing index available via SEC EDGAR.