Anterix(US:ATEX)2021-08-12 00:21Financial Data and Key Metrics Changes - The prospective customer pipeline now includes over 50 utilities with a total potential prepaid contract value of about $3 billion, indicating significant growth in contract value expectations [8][9] - The company forecasts signing contracts with proceeds over $200 million by the end of the fiscal year, with an expectation to collect approximately $300 million to $500 million in cash proceeds by fiscal year-end 2024 [9][19] - The company anticipates that the majority of contracts will be prepaid in full over the first 3 to 5 years, leading to earlier cash flow than previously expected [8][9] Business Line Data and Key Metrics Changes - The company has seen an increase in demand for its 900 megahertz low band spectrum, with additional companies applying for experimental licenses, including Tampa Electric and technology leaders like Ericsson [11][12] - The Anterix Active Ecosystem program has grown to over 50 technology leaders, indicating a robust collaborative effort to support private LTE networks [14] Market Data and Key Metrics Changes - The Senate's passage of the Infrastructure Investment and Jobs Act is expected to act as a catalyst for securing utilities' interest in Anterix's offerings, with billions earmarked to support broadband communications [17][18] - The FCC has granted the first broadband licenses for several counties of the initial customer, Ameren, marking a significant milestone for the company [19] Company Strategy and Development Direction - Anterix aims to become the de facto private wireless broadband solution provider to the utility and critical infrastructure sectors, focusing on modernizing America's electric grid [19] - The company is exploring low capital-intensive ways to build incremental value for shareholders, leveraging relationships within the ecosystem [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing momentum and tailwinds from policymakers, emphasizing the importance of education and awareness in the utility sector regarding private LTE [18][19] - The company is optimistic about the future, with expectations of continued growth and the ability to monetize remaining spectrum value [9][19] Other Important Information - The company is actively working with utilities to explore use cases for private LTE networks, including applications for wildfire mitigation [66][67] - The relationship with Federated Wireless is seen as a strategic move to enhance the value proposition of Anterix's offerings [15][46] Q&A Session Summary Question: How do you count the $200 million of contract value? - The $200 million represents incremental contracts intended to be signed through the end of the fiscal year, with a diverse pipeline of over 50 utilities [21][22] Question: Update on Ameren and SDG&E? - Both Ameren and SDG&E are progressing well, with Ameren's first licenses granted by the FCC and ongoing planning for deployment [32][33] Question: Will utilities participate in upcoming auctions? - There is currently no significant interest from utilities in the upcoming auction, but the company remains open to future developments [38][39] Question: Details on the Federated deal? - The relationship with Federated is aimed at creating a complementary offering for utilities, enhancing the overall solution set [44][46] Question: Opportunities for Motorola Solutions beyond utilities? - While the primary focus remains on utilities, there is potential for complementary use cases in other critical infrastructure sectors [51][52] Question: Thoughts on rural broadband opportunities? - The company sees rural broadband as a complementary opportunity, leveraging existing utility infrastructure to support third-party communications networks [56][57] Question: Will the company consider becoming a REIT? - The company is examining the possibility of converting to a REIT, considering its federal NOLs and the potential for capital returns [70][72] Question: Reaction to the Canadian spectrum auction? - The company views the Canadian auction as a positive data point but emphasizes that it does not change the utility buying process [73][76] Question: Were utilities driving the Federated agreement? - The relationship with Federated was driven by Anterix's long-standing connection and the complementary nature of their offerings [78][80] Question: Will the company consider leveraging to accelerate capital returns? - The company is exploring various financial strategies, including the potential use of leverage, to optimize returns for shareholders [81][82]