NEXTNAV INC. Q1 FY2024 earnings call

• Mariam Sorond discussed the strategic vision of leveraging lower 900 MHz spectrum for terrestrial PNT complementing GPS, including filing with the FCC on April 16 and receiving court approval for spectrum acquisition. • Announced Dr. Sano Gita Shamsundar joining as Chief Operating Officer. • Chris Gates reviewed financials, including revenue, operating expenses, net loss, and balance sheet details.

First quarter revenue was $1 million, a $200,000 increase compared to $830,000 in the prior year period. Operating expenses for the quarter were $17.2 million, up from $14.8 million in the same period last year. Net loss for the first quarter of 2024 was $31.6 million. Finished the quarter with $79.2 million in cash, cash equivalents and short-term investments. Balance sheet showed $49.9 million in debt, net of unamortized discount.

• Currently focused on partnering and FCC approval to unleash 15 MHz of broadband spectrum for 5G build, which is expected to be attractive to potential partners. • Since the end of the first quarter, $7.7 million of warrants were exercised for $16.6 million in cash.

• Forward-looking statements are subject to known and unknown risks, uncertainties, assumptions, and other factors outside NextNav's control that could cause actual results to differ materially from forward-looking statements. See Part 2 Item 1A Risk Factors of quarterly reports on Form 10-Q and Part 1 Item 1A, Risk Factors of annual report on Form 10-K for relevant risk details.

Q: So, first off, there was a time not too long ago where the CapEx expectations for NextNav were a lot higher than they are now when you were contemplating deploying TerraPointe and Pinnacle. Can you give us a better sense of what your expectations are today for the CapEx requirements of the business going forward given this new vision you're beginning to lay out?

A: Thanks Griffin for the question. Currently, our task is to partner, and we believe that what we're presenting is the SVP and upon approval, will actually unleash 15 megahertz of broadband spectrum for 5G build. And we believe that this is attractive to potential partners who can incorporate this platform into their networks. So, yes, you are correct that the CapEx is very different than what we have previously mentioned about a stand-alone PNT network, which we have highlighted that it is not feasible earlier in our comments.

Q: The $1 million of revenue. I know it's not clever point, but I mean, is it all Pinnacle? I know it seems like this change of strategy going away from the commercial initiative when you first came out at. Could you give a little bit more color on any further commercial initiatives you have?

A: So, basically, we have only recently filed with the FCC, and are taking this process or a step at a time. And as we move through the process, we'll keep the market updated as the timeline and the key milestones or any revenues associated with it. It would be premature to talk about it right now, we are focusing on the plan, and we're looking at a situation where the FCC has an opportunity to deliver an innovative special solution in the lower 900 megahertz spend, right? So, we're focused on the plan. We're very optimistic around our goals and path forward, and we will take this a step at a time.

Q: I had a question on liquidity and kind of how you see that working out over the course of the next year or so. Your cash burn during the quarter was close with $8.5 million to $9 million, and then you spent another $2.5 million in cash after the end of the quarter. So, just kind of how do you look at that? Is that the right burn rate to think about on a quarterly basis going forward in the near term?

A: Yes, I'll go ahead and address that question. Yes, historically, we haven't provided forward-looking guidance. However, I can offer a few remarks about, number one, the strength of our balance sheet. As we've seen, we've attempted to structure transactions that have a favorable liquidity profile for us. For example, our [Indiscernible] transaction is intended to be paid substantially in stock. We've made the cash payment associated with that. And with respect to our operating expenses, we're constantly looking at the ability to refine those expenses in line with the achievement of our objectives. I think if you look at last year in terms of what our OpEx and kind of cash burn looks like for that year, I think that's a reasonable place to start. But in terms of forward guidance on expenses, again, that's something that's something that we haven't historically provided.