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Income Taxes | 12 Months Ended
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Dec. 31, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | 12. Income Taxes The Company, organized as a C corporation, owns an equity interest in AST LLC in what is commonly referred to as an “Up-C” structure. For U.S. federal and state income tax purposes, AST LLC has elected to be treated as a partnership and does not pay any income taxes since its income and losses are included in the returns of the members. The portion of the Company’s taxable income or loss attributable to the noncontrolling interests of AST LLC is taxed directly to such members. Consequently, no provision for income taxes has been included in the financial statements related to this portion of taxable income. Certain foreign wholly-owned entities are taxed as corporations in the jurisdictions in which they operate, and accruals for such taxes are included in the consolidated financial statements. The Company has operations in India, the United Kingdom (“U.K.”), Spain and Israel with tax filings in each foreign jurisdiction. Income Tax Expense The components of income (loss) before income taxes were as follows (in thousands):
| Year ended December 31, |
| 2025 |  |  | 2024 |  |  | 2023 |
United States | $ | (463,858 | ) |  | $ | (529,258 | ) |  | $ | (230,487 | )
Foreign |  | 6,745 |  |  |  | 4,256 |  |  |  | 9,491 |
Total | $ | (457,113 | ) |  | $ | (525,002 | ) |  | $ | (220,996 | )
The income tax expense was as follows (in thousands):
| Year ended December 31, |
| 2025 |  |  | 2024 |  |  | 2023 |
Current: |  |  |  |  |  |  |  |
Federal | $ | - |  |  | $ | - |  |  | $ | - |
State |  | - |  |  |  | - |  |  |  | - |
Foreign |  | 6,453 |  |  |  | 1,997 |  |  |  | 2,576 |
Total current |  | 6,453 |  |  |  | 1,997 |  |  |  | 2,576 |
Deferred: |  |  |  |  |  |  |  |
Federal |  | - |  |  |  | - |  |  |  | - |
State |  | - |  |  |  | - |  |  |  | - |
Foreign |  | (2,555 | ) |  |  | (669 | ) |  |  | (895 | )
Total deferred |  | (2,555 | ) |  |  | (669 | ) |  |  | (895 | )
Total income tax provision | $ | 3,898 |  |  | $ | 1,328 |  |  | $ | 1,681 |
The differences between the effective income tax rate and the statutory U.S. federal income tax rate for the year ended December 31, 2025 are as follows (dollars in thousands):
| Year ended December 31, 2025 |
| Amount |  |  | Percent |
U.S. federal statutory tax rate |  | (95,994 | ) |  |  | 21 | %
State and local income tax, net of federal (national) income tax effect(1) |  | (11 | ) |  |  | 0 | %
Foreign tax effects |  | 2,481 |  |  |  | (1 | %)
Effect of cross-border tax laws |  | 1,296 |  |  |  | 0 | %
Tax credits |  |  |  |  |
Research and development tax credit |  | (11,162 | ) |  |  | 2 | %
Changes in valuation allowances |  | 66,265 |  |  |  | (14 | %)
Nontaxable or non-deductible items |  |  |  |  |
Changes in fair value of warrant liability |  | 14,312 |  |  |  | (3 | %)
Non-controlling interest |  | 21,154 |  |  |  | (5 | %)
Non-deductible compensation |  | 5,557 |  |  |  | (1 | %)
Effective tax rate |  | 3,898 |  |  |  | (1 | %)
(1) State taxes in California and Massachusetts make up the majority (greater than 50 percent) of the tax effect in this category. The differences between the effective income tax rate and the statutory U.S. federal income tax rate for years ended December 31, 2024 and 2023 are as follows:
| Year ended December 31, |
| 2024 |  |  | 2023 |
Statutory U.S. federal income tax rate |  | 21 | % |  |  | 21 | %
Income (loss) attributable to noncontrolling interest and non taxable income (loss) |  | (4 | %) |  |  | (13 | %)
Changes in fair value of warrant liabilities |  | (11 | %) |  |  | 1 | %
Change in valuation allowance |  | (7 | %) |  |  | (10 | %)
Research and development credit |  | 1 | % |  |  | 1 | %
Other |  | 0 | % |  |  | (1 | %)
Effective income tax rate |  | 0 | % |  |  | (1 | %)
Income taxes paid for the year ended December 31, 2025 are as follows (in thousands):
| 2025 |
Federal | $ | - |
State |  | - |
Foreign |  |
Saudi Arabia |  | 4,000 |
Foreign other |  | 2,798 |
Total cash paid for income taxes (net of refunds) | $ | 6,798 |
Deferred Tax Assets and Liabilities Deferred income taxes reflect the net tax effects of tax carryovers and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the balances for income tax purposes. Significant components of deferred tax assets and liabilities are as follows (in thousands):
| As of December 31, |
| 2025 |  |  | 2024 |
Deferred tax assets: |  |  |  |  |
Net operating loss carryforwards | $ | 125,765 |  |  | $ | 56,006 |
Basis difference in the equity of AST LLC |  | 457,008 |  |  |  | 140,668 |
Research and development credit |  | 25,243 |  |  |  | 13,223 |
Other |  | 14,578 |  |  |  | 3,829 |
Total gross deferred tax assets |  | 622,594 |  |  |  | 213,726 |
Less valuation allowance: |  | (618,440 | ) |  |  | (212,127 | )
Net deferred tax assets |  | 4,154 |  |  |  | 1,599 |
Deferred tax liabilities: |  |  |  |  |
Intangibles |  | (14,902 | ) |  |  | - |
Total gross deferred tax liabilities |  | (14,902 | ) |  |  | - |
Net deferred tax (liabilities) assets | $ | (10,748 | ) |  | $ | 1,599 |
As of December 31, 2025 the Company had unused federal net operating loss carryforwards (gross) for federal income tax purposes of approxim ately $503.2 million, which can be carried forward indefinitely and may be used to offset future taxable income. In addition, the Company had unused net operating loss carryforwards (gross) for state income tax purposes of approximately $164.0 million, $93.9 million of which expire in 2041 to 2045. The remaining $70.1 million net operating loss carryforwards (gross) for state income tax can be carried forward indefinitely. The Company also had unused net operating loss carryforwards (gross) for foreign income tax purposes of approximately $4.5 million, which can be carried forward indefinitely. Management assesses the need for a valuation allowance in each tax paying component or jurisdiction based upon the available positive and negative evidence to estimate whether sufficient taxable income will exist to permit realization of the deferred tax assets. On the basis of this evaluation, as of December 31, 2025 and 2024 the Company's valuation allowance was $618.4 million and $212.1 million, respectively. The change from December 31, 2024 to December 31, 2025 was primarily driven by the basis difference in the equity of AST LLC, an increase in the net operating loss carryforward in the U.S. jurisdiction, and an increase in the state blended rate. The change from December 31, 2023 to December 31, 2024 was primarily driven by the basis difference in the equity of AST LLC and an increase in the net operating loss carryforward in the U.S. jurisdiction. As of December 31, 2025, the Company had deferred tax assets in Germany, Israel, and Spain of $4.2 million and as of December 31, 2024, the Company had deferred tax assets in Germany, Israel, Spain, and the U.K. of $1.6 million. No valuation allowance was recorded against these deferred tax assets, as it was more likely than not that they would be fully realized. As of December 31, 2025, the U.K. was in a net deferred tax liability position of $14.9 million and therefore, no valuation allowance was recorded in that jurisdiction. The foreign deferred tax asset is subject to foreign exchange risk, which could reduce the amount the Company may ultimately realize. Additionally, future changes in tax laws or interpretations of such tax laws may limit the Company’s ability to fully utilize the foreign net operating loss carryforwards. Unrecognized Tax Benefits There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2025. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. Tax Receivable Agreement In connection with the closing of the Business Combination, the Company entered into the Tax Receivable Agreement (the “Tax Receivable Agreement”). Pursuant to the Tax Receivable Agreement, the Company is generally required to pay the TRA Holders (as defined in the Tax Receivable Agreement) 85.0% of the amount of savings, if any, in U.S. federal, state, local, and foreign taxes that are based on, or measured with respect to, net income or profits, and any interest related thereto that the Company and any applicable consolidated, unitary, or combined Subsidiaries (the “Tax Group”) realize, or are deemed to realize, as a result of certain “Tax Attributes,” which include: • existing tax basis in certain assets of AST LLC and certain of its direct or indirect Subsidiaries, including assets that will eventually be subject to depreciation or amortization, once placed in service, attributable to AST LLC Common Units acquired by the Company from a TRA Holder (including AST LLC Common Units held by a Blocker Corporation acquired by us in a Reorganization Transaction (as defined in the Tax Receivable Agreement)), each as determined at the time of the relevant acquisition; • tax basis adjustments resulting from taxable exchanges of AST LLC Common Units (including any such adjustments resulting from certain payments made by us under the Tax Receivable Agreement) acquired by the Company from a TRA Holder pursuant to the terms of the A&R Operating Agreement; • tax deductions in respect of portions of certain payments made under the Tax Receivable Agreement; and • certain tax attributes of Blocker Corporations holding AST LLC Common Units that are acquired directly or indirectly by the Company pursuant to a Reorganization Transaction. Some circumstances, such as the Company’s election to terminate early the Tax Receivable Agreement or certain changes of control of the Company or AST LLC (as described in the A&R Operating Agreement), may require the Company to make lump-sum cash payments based on certain assumptions to all the TRA Holders equal to the present value of all forecasted future payments that would have otherwise been made under the Tax Receivable Agreement. Payments under the Tax Receivable Agreement will be the obligations of the Company and not obligations of AST LLC. Any payments made by the Company under the Tax Receivable Agreement will generally reduce the amount of overall cash flow that might have otherwise been available to the Company. As of December 31, 2025, there have been no Tax Receivable Agreement liabilities recorded. U.S. federal income tax returns for tax years 2022 and forward remain open to examination. The Company and its subsidiaries are also subject to income tax in multiple state, local and foreign jurisdictions. Substantially all significant state and local income tax returns for the years 2022 and forward are open to examination. Substantially all significant foreign income tax returns for the years 2021 and forward are open to examination.

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