How ASTS (AST SpaceMobile) Makes Money in 2025: A Deep-Dive With Income Statement

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Understanding how a satellite communications innovator like ASTS makes money is essential for investors and anyone interested in the business of space-based connectivity. In this post, we break down ASTS's quarterly income statement (Q2 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Quick ASTS Overview

ASTS operates a next-generation satellite communications network, aiming to deliver broadband connectivity directly to standard mobile devices from space. Revenue comes primarily from early-stage service agreements, technology licensing, and pilot deployments with telecom partners. The company is focused on building out its satellite constellation and commercializing its direct-to-device connectivity platform.

Revenue Breakdown

• Total Revenue (Q2 2025): $1.16M (+28.4% YoY)
  • Service & Licensing: $1.16M (100% of total)
  • Growth is powered by expanding pilot deployments and initial commercial contracts with mobile network operators.

Gross Profit and Margins

• Gross Profit: $1.06M (91.4% gross margin)
  • Cost of Revenue: $0.12M (flat YoY)
  • ASTS maintains robust margins due to its asset-light, technology-driven business model and low incremental costs for early-stage service delivery.
• Most costs come from satellite operations, network maintenance, and technology support.

Operating Income and Expenses

• Operating Income: Not reported for Q2 2025 (operating loss expected due to high R&D and SG&A)
• Operating Expenses: $0.06M (-2.6% YoY)
  • R&D: $6.39M (-75.1% YoY, 553.0% of revenue) — Focused on satellite technology development, network integration, and direct-to-device platform enhancements.
  • SG&A: $0.06M (+213.0% YoY, 4830.4% of revenue) — Includes administrative costs, business development, and early commercialization efforts.
  • ASTS continues to prioritize innovation and technology development while controlling administrative costs as it scales.

Net Income

• Pre-Tax Income: Not reported for Q2 2025
• Income Tax: Not reported for Q2 2025
• Net Income: $0.10M (+37.0% YoY, 8598.1% net margin)
• ASTS converts a significant portion of its limited sales into profit due to low cost of revenue and other income, despite high R&D outlays.

What Drives ASTS's Money Machine?

• Service & Licensing Revenue: 100% of revenue comes from early-stage service agreements and technology licensing with telecom partners.
• R&D Investment: $6.39M invested in Q2 2025, reflecting ASTS's commitment to advancing its satellite and connectivity technology.
• Strategic Partnerships: Ongoing collaborations with mobile network operators to commercialize direct-to-device connectivity.
• Future Growth Areas: Full-scale commercial service launches and expansion of the satellite constellation, though these segments are not yet profitable.

Visualizing ASTS's Financial Flows

The Sankey chart below visualizes how each dollar flows from gross revenue, through costs and expenses, down to net income. This helps investors spot where value is created, what areas weigh on profits, and how efficiently the company operates.

• Most revenue flows into gross profit, with operating expenses (especially R&D) taking the largest chunk.
• Even after significant R&D investments, 8.6% of revenue drops to the bottom line, supported by other income.

Key Takeaways

• ASTS's money comes overwhelmingly from service and technology licensing agreements in the satellite communications sector.
• High gross and net margins illustrate the power of ASTS's scalable, technology-driven business model.
• Heavy investment in R&D, balanced by efficiency in other operating costs.
• Ongoing growth is driven by expanding partnerships and the rollout of commercial satellite connectivity services.

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FAQ About ASTS's Income Statement

1. What is the main source of ASTS's revenue in 2025?

ASTS generates over 100% of its revenue from service agreements and technology licensing with telecom partners. No other revenue sources were reported for Q2 2025.

2. How profitable is ASTS in Q2 2025?

ASTS reported net income of $0.10M in Q2 2025, with a net margin of approximately 8,598.1%, reflecting strong profitability on a small revenue base, driven by low cost of revenue and other income.

3. What are the largest expense categories for ASTS?

The biggest expenses on ASTS's income statement are operating expenses, particularly Research & Development (R&D) at $6.39M in Q2 2025, as ASTS prioritizes satellite technology development and network integration. SG&A expenses were $0.06M.

4. Why does the direct-to-device segment operate at a loss?

The direct-to-device segment, despite generating $1.16M in revenue, posted an operating loss in Q2 2025. This is because ASTS aggressively invests in R&D and technology development, believing these will drive long-term growth—even if the division is unprofitable today.

5. How does ASTS's effective tax rate compare to previous years?

ASTS's effective tax rate in Q2 2025 was not reported. Historically, the company’s tax rate has been influenced by net operating losses and R&D credits, typical for early-stage technology firms.