NEXTNAV INC. Q1 FY2025 earnings call

Key Points - NextNav Inc. is focused on providing a terrestrial backup and complement to GPS to address national security vulnerabilities in GPS, which can be jammed or spoofed. - The FCC unanimously voted in March to advance a notice of inquiry on positioning, navigation, and timing (PNT) solutions, highlighting the urgent need for resilient PNT. - The company welcomed Rear Admirals H. Wyman Howard and Lauren Selby to its board, leveraging their military and national security leadership experience. - Financially, the company closed a $190 million convertible notes offering, enhancing its financial flexibility and providing strategic support for future objectives.

NextNav Inc.'s revenue in the first quarter of 2025 was $1.5 million, a $500,000 increase from $1 million in the prior year period. The increase was primarily driven by growth in service revenue from technology and services contracts with government and commercial customers. Operating expenses for the first quarter were $18.5 million, up approximately $1.3 million from the same period last year. Net loss for the first quarter was $58.6 million, which included a $24.5 million loss related to the change in fair value of derivative liability and a $14.4 million debt extinguishment loss. The company ended the quarter with $188.4 million in cash, cash equivalents, and short-term investments after closing a $190 million 5% redeemable senior secured convertible notes offering in March.

Forward-Looking Statements - The capital from the convertible notes offering is expected to provide additional financial flexibility and strategic support as NextNav Inc. pursues its objectives through 2025 and beyond. - The company will continue to take a prudent long-term approach to liquidity and carefully manage its use of capital.

Risks - Forward-looking statements are subject to known and unknown risks, uncertainties, and assumptions, including potential differences between actual results and projections. - Risks related to FCC-related milestones, SEC approvals, and interference claims or opposition that could impact the FCC's decision-making process are highlighted as potential factors affecting actual outcomes.

Q: With regards to your kind of proposed network deployment model, can you maybe walk us through that a little bit as it, you know, how it involves incumbent mobile operators and their spectrum and how your services would mesh with their infrastructure and their wireless services?

A: Our proposal is technology embedded in 5G, standards-based. Using PRS (positioning reference signal) in 5G, which doesn't require modification to equipment. Partners like MNOs would add our spectrum to their existing network, turn on PRS, and we derive positioning timing from it.

Q: And so you'd use their towers, their backhaul, and their kind of core infrastructure to route your signals?

A: Yeah. The signal is embedded in 5G, using the same routing mechanism as 5G broadband, and our software extracts positioning and timing from the signal.

Q: How about on the client side? What are you going to do there? Obviously, you'd need new chips and kind of RF capabilities in the end devices to process this?

A: Just like adding any spectrum, devices would have roadmaps to include the new band, either through front-end changes or software, as it's 100% software-based for extracting positioning.

Q: In your comments filed the PNT NOI, you essentially are urging the commission to issue NPRM on your parallel petition. Is there a way for you to get is that the only path, or is there any shortcut path maybe if this PNT action moves more quickly that you could get essentially what you want with the ability to use the rest of the 5G waveform besides just the timing positioning signal that you'd be transmitting along with it? Or your partner would be transmitting?

A: The FCC can decide next steps. We'd like an NPRM. An NPRM can be issued on the NOI, and an NPRM is needed for rule change; there's no other mechanism for rule change, but the FCC can use other processes in the interim.