Anterix(ATEX) - 2026 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Consolidated Financial Statements The consolidated financial statements for the quarter ended June 30, 2025, show a significant shift to a net income of $25.2 million from a net loss of $15.5 million in the prior year's quarter, primarily driven by a non-cash gain of $33.9 million from the exchange of intangible assets Consolidated Balance Sheets As of June 30, 2025, total assets were $359.6 million, an increase from $333.1 million at March 31, 2025, primarily due to a rise in intangible assets from $229.0 million to $265.3 million Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | March 31, 2025 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $41,432 | $47,374 | | Intangible assets | $265,319 | $228,983 | | Total assets | $359,577 | $333,104 | | Liabilities & Equity | | | | Contingent liability | $23,311 | $23,429 | | Deferred revenue | $128,214 | $124,672 | | Total liabilities | $174,806 | $176,503 | | Total stockholders' equity | $184,771 | $156,601 | Consolidated Statements of Operations For the three months ended June 30, 2025, the company reported a net income of $25.2 million, a significant turnaround from a net loss of $15.5 million in the same period of 2024, primarily driven by a $33.9 million gain on the exchange of intangible assets Quarterly Statement of Operations (in thousands, except per share data) | Metric | Q1 2025 (ended Jun 30) | Q1 2024 (ended Jun 30) | | :--- | :--- | :--- | | Spectrum revenue | $1,418 | $1,525 | | Total operating expenses | $13,806 | $16,630 | | Gain on exchange of intangible assets, net | $33,916 | $93 | | Income (loss) from operations | $22,481 | ($15,012) | | Net income (loss) | $25,180 | ($15,524) | | Net income (loss) per share basic | $1.35 | ($0.84) | Consolidated Statements of Cash Flows For the three months ended June 30, 2025, net cash used in operating activities was $3.1 million, compared to $2.4 million in the prior-year period, with overall cash and cash equivalents decreasing by $6.4 million Quarterly Cash Flow Summary (in thousands) | Cash Flow Activity | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($3,140) | ($2,361) | | Net cash used in investing activities | ($2,665) | ($5,400) | | Net cash used in financing activities | ($642) | ($1,071) | | Net change in cash and cash equivalents | ($6,447) | ($8,832) | Notes to Unaudited Consolidated Financial Statements The notes detail the company's accounting policies and provide further information on financial statement items, including a $33.9 million gain on intangible asset exchange and $180.1 million in remaining performance obligations - The company operates as a single operating and reportable segment, focused on commercializing its 900 MHz spectrum assets in the United States to utility and critical infrastructure customers[25][36] - A significant non-cash gain of $33.9 million was recorded from exchanging narrowband licenses for new broadband licenses in 62 counties, which is the primary driver of the company's net income for the quarter[45] - As of June 30, 2025, the company had $180.1 million in remaining performance obligations from contracted revenue, which will be recognized over contract terms of up to 30 years[35] - The company has a share repurchase program with $227.7 million remaining as of June 30, 2025, and no shares were repurchased during the quarter[62][64] Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes the $40.7 million year-over-year increase in net income primarily to a $33.8 million increase in the non-monetary gain on the exchange of intangible assets and a $2.4 million decrease in general and administrative expenses Results of Operations The company's net income increased by $40.7 million to $25.2 million for the quarter ended June 30, 2025, compared to a net loss of $15.5 million in the prior-year period, mainly due to a $33.9 million gain on the exchange of intangible assets - The primary driver for the increase in net income was a $33.8 million increase in the gain on exchange of intangible assets, from $0.1 million in Q1 2024 to $33.9 million in Q1 2025[89] - General and administrative expenses decreased by $2.4 million (19%) due to lower headcount-related costs, stock compensation, and consulting fees[89] - Product development expenses decreased by $0.6 million (36%), primarily from lower contract consulting fees and IT-related costs[89] Liquidity and Capital Resources The company's liquidity is primarily sourced from its $41.4 million in cash and cash equivalents and customer contract proceeds, which management asserts are sufficient for at least the next 12 months - The company's principal source of liquidity is its cash and cash equivalents of $41.4 million as of June 30, 2025[88] - As of June 30, 2025, total estimated future payments for agreements with incumbents to acquire, retune, or swap wireless licenses are approximately $44.2 million[102] - The company has a guaranty agreement with Xcel Energy with a maximum potential liability of future undiscounted payments of approximately $61.2 million as of June 30, 2025[103] - The 2023 Share Repurchase Program has $227.7 million remaining available for repurchases through September 21, 2026[106] Quantitative and Qualitative Disclosures about Market Risk The company identifies its primary market risks as interest rate sensitivity and inflation, with interest rate risk considered immaterial and no exposure to foreign currency risk - The company's primary market risk is interest income sensitivity from changes in U.S. interest rates, but a 10% change is not expected to have a material impact[108] - The company has no exposure to foreign currency exchange rate fluctuations as all operations and transactions are denominated in U.S. dollars[109] - Inflationary factors are a risk, potentially increasing operating expenses and negatively impacting customers' businesses, which could harm commercialization efforts[110] Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the quarter - Management concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report (June 30, 2025)[112] - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal controls[113] PART II. OTHER INFORMATION Legal Proceedings The company reports that it is not currently involved in any material legal proceedings - The company is not involved in any material legal proceedings at this time[117] Risk Factors There have been no material changes from the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended March 31, 2025 - There have been no material changes from the risk factors as previously disclosed in the company's 2025 Annual Report[118] Unregistered Sales of Equity Securities and Use of Proceeds The company did not repurchase any of its common stock during the three months ended June 30, 2025, with approximately $227.7 million remaining available for future repurchases under the 2023 Share Repurchase Program Issuer Purchases of Equity Securities (Q1 2025) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Maximum Dollar Value that May Yet be Purchased ($ thousands) | | :--- | :--- | :--- | :--- | | April 2025 | — | $ — | $227,662 | | May 2025 | — | $ — | $227,662 | | June 2025 | — | $ — | $227,662 | | Total | — | $ — | $227,662 | Defaults Upon Senior Securities The company reports no defaults upon senior securities - None[122] Mine Safety Disclosures This item is not applicable to the company - Not applicable[124] Other Information During the quarter ended June 30, 2025, no director or executive officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangement - No director or officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[125] Exhibits This section lists the exhibits filed with the Form 10-Q, including certifications by the Principal Executive Officer and Principal Financial Officer as required by the Sarbanes-Oxley Act - Key exhibits filed include CEO and CFO certifications pursuant to Sarbanes-Oxley Sections 302 and 906[127] - Financial statements and notes are provided in Inline XBRL format as Exhibit 101[127]