NEXTNAV INC. Q2 FY2024 earnings call

• FCC issued a public notice seeking comments on NextNav's petition for rulemaking, which is a step in the longer term FCC rulemaking process for an innovative spectrum solution in the lower 900 megahertz band.
• DOT awarded NextNav a $1.9 million purchase order to test 3D PNT technology, a terrestrial solution as a complement and backup to GPS, with funding to be around $1.9 million and the program aligning with NextNav's technology and spectrum path with the FCC.
• Nikki Palmer joined the NextNav Board of Directors, bringing expertise in 5G technology ecosystem development.
• NextNav restructured its internal workforce, resulting in roughly a 20% reduction in headcount, primarily from the software engineering team.
• Made strategic hires, including a new COO, Sanyogita Shamsunder, to advance the strategic vision.

In Q2 2024, NextNav's revenue was $1.1 million, a $0.3 million increase from $0.8 million in the prior year period. For the first half of 2024, revenue was $2.1 million, up from $1.6 million in 2023. The increase in revenue was driven by an increase in service revenue from technology and services contracts with commercial customers. Additionally, NextNav was awarded a $1.9 million purchase order from the DOT starting in July 2024, with revenue impact expected in the third quarter. Revenue contribution details weren't specified in absolute terms beyond the given figures.

• The $1.9 million DOT purchase order started in July 2024, with revenue impact expected in the third quarter.
• In Q2 2024, $21 million in cash was received from the exercise of additional warrants.
• Following the quarter, an additional $2.3 million was raised from warrant exercises through July 31, 2024, bringing in an additional $5 million in proceeds.

Q: Can you give some color on where NextNav is at regarding the assignment of the additional 4 megahertz of spectrum licenses acquired from Telesaurus and Skybridge? Has the FCC made a decision yet to approve, deny, or defer this assignment?

A: Hi, yes. Thanks for the question. So the FCC did put the PN out on the application, and that was released through an automated process. And we are actually at this point waiting for the FCC to make a decision on it. But we have not received any further updates so far.

Q: Regarding yesterday's filing, in the petition, there's a list of unlicensed users and users that might pose maybe an up objection to the plan. I mean, are you anticipating working, what are the plans? So let's say, like the amateur radio or the license as far as maybe creating an obstacle for the company? I mean, are you going -- I know that according to the file, you're going to work with this plan. I mean, how does that work? Do you guys have a different part of the, like, lower sideband or upper sideband section you're going to have to share or make is it encrypted?

A: Yes. Thanks. Hi, Jamie. Actually, we're not going to speculate on comments with respect to the PM, right? We're going to wait to see the comments. We're going to read them really carefully, and we're going to reply to all the comments. That's our plan right now. We intend to and we've done reach outs. We intend to work with all the parties and the stakeholders where it's reasonable and appropriate to work with them. And we look forward to the dialogue and working with them through the process.

Q: The DOT con project. What's the time frame on that? It says, it's might be a while, but also what are the metrics or the benchmarks, the DOT is sort of looking at?

A: Well, they selected first of all, they've awarded about nine in the testing phase. They have a plan out on what the phases are going to be. I think that, Chris, maybe you can share some of the details. If not we can get you that offline on what exactly their phases are. Chris Gates: Yes, Jamie, we'll come back to you on some of that kind of inside the contract detail.