NextNav(NN) - 2024 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - NextNav's revenue in Q3 2024 was $1.6 million, an increase of$0.6 million from $1.0 million in the prior year period [24] - For the nine-month period, revenue was$3.8 million, up $1.1 million from$2.7 million in 2023 [24] - Operating expenses for Q3 were $15.5 million, down approximately$0.1 million compared to the same period last year [24] - Net loss for Q3 was $13.6 million, compared to a net loss of$23.2 million in Q3 2023 [25] Business Line Data and Key Metrics Changes - The increase in revenue for both the three and nine-month periods was driven by an increase in service revenue from technology and services contracts with government and commercial customers [24] Market Data and Key Metrics Changes - The Brattle Group's analysis indicated that a 1-day global GPS outage could cost the American economy $1.6 billion, while NextNav's proposal could prevent a loss of$663 million [19] - For a 30-day outage, the loss could reach $58.2 billion, but NextNav's proposal could prevent nearly$31.9 billion of net loss [19] Company Strategy and Development Direction - NextNav is focused on advancing its strategic vision to provide a terrestrial complement and backup to GPS, addressing national security needs [8][9] - The company is engaged in ongoing discussions with stakeholders, including railroads and tolling operators, to minimize disruptions and ensure coexistence with existing licensed operations [12][13] - The company aims to leverage its unique position as the only viable wide-scale terrestrial PNT proposal [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the FCC's understanding of the urgency for a terrestrial PNT solution, highlighting the importance of their proposal for national security [9][10] - The company does not anticipate an NPRM (Notice of Proposed Rulemaking) in 2024, but is prepared for further engagement with the FCC [21][35] Other Important Information - NextNav finished the quarter with $86.8 million in cash, cash equivalents, and short-term investments, benefiting from$6.9 million in proceeds from additional warrant exercises [27] - The company is committed to a disciplined approach to capital management [27] Q&A Session Summary Question: Any updates on discussions with stakeholders like Edison Electric Institute or NTIA? - Management confirmed ongoing dialogue with over 110 stakeholders, emphasizing the importance of fact-based discussions [30] Question: Will the NTIA's recommendation for short-term experimental licenses lead to testing? - Management views the NTIA's call for testing as a helpful procedural tool to encourage engagement from incumbents [31] Question: How does NextNav view the development of resilient LEO space-based PNT? - Management agrees that a system of systems approach, including both satellite and terrestrial elements, is essential for comprehensive solutions [33] Question: What is the timeline for the NPRM and subsequent events? - Management stated that the timeline for an NPRM or report is uncertain and will depend on the FCC's actions [39] Question: What are the vulnerabilities of satellite signals compared to terrestrial networks? - Management explained that terrestrial networks provide more resilience against spoofing and jamming, which are easier to execute on weaker satellite signals [41] Question: How does the federal government use the spectrum? - Management clarified that federal use of the spectrum is primary, with military applications being a significant focus [55]