NEXTNAV INC. Q3 FY2024 earnings call

• NextNav submitted formal comments and reply comments to the FCC regarding reconfiguring the lower 900 megahertz band, highlighting the need for a terrestrial PNT backup to GPS.
• Over 1,800 filings were submitted to the FCC in response to the public notice, with support from stakeholders like fire chiefs associations and opposition from some unlicensed operators.
• NextNav engaged in engineer-to-engineer dialogue with stakeholders such as toll companies, railroads, and others, and filed an economic analysis by Brattle Group showing the potential financial impact of a GPS outage.
• The Flex Association supported NextNav's proposal, emphasizing the role of enhanced geolocation technology in the rideshare and delivery industry.
• The company continues to focus on executing its strategic vision and addressing the critical need for a terrestrial PNT solution.

In the third quarter of 2024, NextNav's revenue was $1.6 million, a $0.6 million increase from the prior year period. For the nine-month period, revenue was $3.8 million, up from $2.7 million in 2023. Operating expenses in the third quarter were $15.5 million, down slightly from the same period last year. Net loss for the third quarter was $13.6 million. The balance sheet showed $86.8 million in cash, cash equivalents, and short-term investments at the end of the quarter, with $53 million in debt net of unamortized discount.

No specific upward/downward revision mentioned. The company remains focused on continuing engineer-to-engineer dialogues with stakeholders and progressing through the FCC's review process of comments, with no specific forward-looking targets set beyond ongoing engagement.

• Uncertainties in the FCC's approval process for reconfiguring the spectrum.
• Potential opposition from stakeholders that could delay or complicate the spectrum reconfiguration.
• Technical challenges in ensuring coexistence with existing licensed operations and minimizing interference.
• Risks associated with the uncertainty of achieving FCC-related milestones and approvals.

Q: Any note on discussions with Edison Electric Institute or NTIA?

A: NextNav has contacted over 110 stakeholders, including tolls, railroads, unlicensed users, and amateurs, and is committed to continuing fact-based, engineer-to-engineer dialogue.

Q: Thoughts on NTIA recommending short-term experimental license for field testing?

A: NTIA's call for testing is seen as a helpful procedural tool to induce incumbents to engage, and NextNav is in a phase of collaborative analysis including such dialogue.

Q: Thoughts on LEO space-based PNT and complementarity with NextNav's service?

A: A system of systems is needed, with NextNav's terrestrial proposal being the only viable wide-scale terrestrial PNT solution on the table.

Q: Timeline for NPRM and subsequent events?

A: The FCC could issue an NPRM or ask for more data, but timing of NPRM and subsequent reports/orders is not speculated on at this point.

Q: Reason for needing terrestrial base?

A: Terrestrial base is needed for in-building penetration, backup when satellites are out, and to address spoofing and jamming issues as satellites have weak signals.

Q: Comments from Brendan Carr on NextNav's proposal?

A: To date, no public comments from Brendan Carr on the proposal, but there have been recent comments from FCC commissioners focusing on national security.

Q: Highest and best use of spectrum?

A: Focus remains on solving national security, economic, and public safety needs as a complement and backup to GPS, while also unleashing spectrum for 5G broadband.

Q: Description of swapping bands and required equipment/software?

A: It's not a swap but tweaking rules for spectrum viability, requiring new infrastructure like radios on towers and devices accommodating the spectrum, with focus on partnering with an MNO or industry partner.

Q: Interference with toll collection vehicle signals?

A: No conceded interference from tolls to NextNav's systems as tolls are in licensed spectrum with no current overlap.

Q: Role of federal government in spectrum use?

A: Federal use of the spectrum is primary, with NextNav's service potentially being a use case for federal agencies for PNT solutions.