NextNav (NN) 22 Mar 232022 Q4 Earnings call transcript

Good afternoon, everyone, and welcome to NextNav's Fourth Quarter 2022 Earnings Conference Call. Participating on today's call are Gary Parsons, NextNav's Chairman; Ganesh Pattabiraman, NextNav's Co-Founder and CEO; and Chris Gates, NextNav's Chief Financial Officer.

Before we begin, please note that during today's presentation, the company may make forward-looking statements either in our prepared remarks or in the associated question-and-answer session. These statements, which involve risks and uncertainties relate to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable and may also relate to NextNav's future prospects, developments, and business strategies.

In particular, such forward-looking statements include statements about NextNav's position to drive growth in its 3D geolocation businesses and expansion of its next-generation GPS platform, the business plans, objectives, expectations, and intentions of NextNav, NextNav's partnerships, and the potential success thereof in NextNav's estimated and future business strategies, competitive position, industry environment and potential growth opportunities.

differ on subject or uncertainties to cause results based are that that are actual or certain certain to statements current belief expectations there may These materially. risks and statements. to from Such forward-looking and important in the actual control results many factors, results and NextNav's forward-looking risks, which outside could uncertainties, discussed other are known of that statements assumptions, unknown to subject are cause differ the material

XXX the ability These and assumptions, to, are other U.S. not the network, gain and and ability factors internationally; customers, and with to important with its to grow and the partners, markets, but partners, NextNav risks, both include, manage Pinnacle growth of traction and within suppliers, and uncertainties, respect solution and of platforms maintain with key continue to relationships ability TerraPoiNT the profitably, including NextNav limited in NextNav's notable to the and in factors, maintain its may management retain to by possibility the that affected other balance documents key be capital and/or competitive deploy with ability in from effectively and Exchange NextNav adversely COVID-XX flexibility employees; by uncertainties other including economic indicated time-to-time ongoing sheet line impact of strategies; and the and filed Securities NextNav. coronavirus to business and business its with pandemic; Commission the generate risks

us. for uncertainties New affect and predict to us impossible events from these risks how is arise may and it or they time-to-time,

Risk identified whether performance may place our result undue or no the that new update not as our upon commitment SEC You of undertakes statements, in date filings. impact are or future speak events, of the to are most NextNav as forward-looking a revise recent otherwise. information, statements, And factors cautioned reliance forward-looking which made. only to

question-and-answer session. our remarks, operator-led host the company prepared an Following will

the on be In Relations of conclusion discussion company's a replay the call, of posted our at today's Investor addition, will website.

Parsons. Chairman, I'll sir. go over to Please the ahead, call With NextNav's turn Gary that,

welcome and and to earnings everyone, afternoon, year XXXX Good operator. much, call. full quarter NextNav's very you Thank fourth

Pattabiraman; and the me As indicated, Chris joining operator CFO, NextNav's NextNav’s CEO, Gates. Ganesh today are

XXXX was a established foundation standpoint. a guided solid momentum the and our each leader from And this navigation reminder, before, both we've At from a in NextNav we're operational positioning, for on by the or and year three step, a in technology a being our we these reminder, resilient industry capabilities XXXX. priorities. product PNT. as Transaction Go-Public expanded as are: strategic We strong but first, and said priorities timing building a

Difficulty] of and Next, leveraging our [Technical abilities global significant Assets; finally, our expanding Spectrum reach. recent our Nestwave to acquisition

milestone Nestwave, quarter in was privately Now a in our fourth achieved major each a acquisition with XXXX of in leader low-power priorities global of held these geolocation. of the

detail preparing initial later, last is of to other France, public later engineering combined NextNav launch PNT way following allows technologies we intellectual spring. this early teams the or infrastructure, the incorporate named unique sectors. that now safety of needs rapidly the meet resilience critical the and we growing government's to will Ganesh late property integration As are Nestwave, year, of With implementations by which us

licenses modifications intention also to forms. wave and to and acquisition as efficiency us underlying XG of various integration filed indicated dramatically and The And now our testing our implementation those we've spectral for LTE XG existing Assets, final NextNav include will in configurations. for tech LTE utilizing prior Spectrum and enable our calls, has improve in experimental

to TerraPoiNT population. it also only technology our expected compares spectrum, licensee that capabilities, Nestwave total significantly Now capacity recall operating enhances data-carrying which We capital the of the approximately of combined of and X.X megahertz spectrum own and we NextNav a of network U.S. are deployment future megahertz reduce sole billion From with our a spectrum. but pops, the X the contiguous the XX% expenditures technology. technical of associated certainly not of standpoint, low-band

XG LTE facilitates unique integration XGPP for existing provides into spectrum, which band mobile advantages. in Assets Spectrum significant fit operational Our and handsets and

week, comment in Biden the announced just telecom is on and the its Administration be On NTIA, broadband That seeking or included being the Commerce public by should the the related what long-awaited strategy. within Administration, front, spectrum led Information agency National spectrum Telecommunications last effort national a Department.

to repurposing, broadband strategic to expanded broadband examine for The decade a the X,XXX expressly request feedback identify effort on purpose of The seeking is for three plan coming over availability. is pillars. last megahertz up this potential old to and of national spectrum seeks

should government spectrum commercial what for broadband up the use. First, of try to free type

best Secondly, do how to long-term spectrum planning.

technology improve management inform how thirdly, of can new sharing. models and spectrum And spectrum

critical, already without carriage is has consistent to provide services and improve believe other technology that and these efficiency interfering public capabilities broadband nearby deliver proven its the services. to governmental objectives. ability enhancing safety overarching valuable spectral broadband We government's with NextNav's with

technology. to turning location Now Pinnacle our vertical

We launch EXXX work led sector. several our with our is notable in One emergency our Verizon device to the and a technology by Verizon. EXXX advance signed with Public to Pinnacle first Tier agreement carrier continue We in XXXX, Safety calling. the contracts for

thus announce implementations during promising trend. this forward executing far look has to with you the digital year. progress meaningful to more Overall, our year. priorities against this us strategic make expect I continued later and XXXX We saw sharing XXXX this

deeper turn well me provide to into let and dive milestones. it initiatives, operational over as that, a Ganesh? to current Ganesh our customer with as And

NextNav for acquisition thanks, can the XXXX We our for NextNav. was at places with and unleash at in our solution of call significantly resilient France, Spectrum a make this underlying scale of PNT available and more potential the execution made afternoon. Pinnacle a we Gary, solution cost, available year lower everyone Asset. joining a us the at of Thanks, and

is well. integration As Gary the noted, of NextNav France progressing

Popper engineering Since our team. November, we operations worked to complete integration Ambroise the alongside and have of

LTE and us, PNT resilient create accurate TerraPoiNT the network, XG existing highly behind with the integration overall in cellular the can locations need. on greatest highly integration and transmitters technology. implementation networks, TerraPoiNT the focused utilizing our we and combining synchronized now technology only With with By we're a of

for implementations the second combined expect of technologies Based to in have our to on ready internal quarter. progress date, testing initial the we

several occurring expect We by integration trials the to of year. run for the end the months with full those technology

as us greater to XG to the drive we integration our and Additionally, we efficiency enable to Spectrum TerraPoiNT the to noted, us harmonize from spectral with expect allowing LTE underlying wave forms. Assets, system

an earlier As noted, we just today. license Gary filed experimental

these not With we but resilient on also may data PNT be spectrum. believe meet our carrying able implementations, to support only needs, capabilities we

in integration is of As we indicated right value full a priority and moves for the the direction. us fall, spectrum last us, our strategic this unleashing technology

exciting the in future. more have to on news expect front this We near

available to we a some the establish ConveyXXX few. announced industry's leading of January, we Verizon our of a phone, frontline is Pinnacle, customers. to Verizon Pinnacle players, In which customer to milestone now Pinnacle One XXX all This flip Regarding continue purposes. service Tier is Prepared, Sonim Verizon our technology is as Sonim's launch relationship significant Technologies including first to and for with integration the with and into name XPXplus the provider

of VPN secure communications a February, leader for intelligence. capabilities solution our that be additional technology We're One beginning mission-critical by year. IP, in in expect carriers devices, its additional announced location Safety to enabled Public Radio with mobile application. we importantly, with its NextNav's to utilizing see other throughout also In Pinnacle’s z-axis industrial-leading EXXX the empower integration technology to including Pinnacle Tier z-axis More

we we implementations As see coming more move through online. of to expect XXXX, these

advance recognized and the cyber released characterizing Shifting continue Order PNT. in latest vulnerability vulnerabilities. on in agencies outlined to PNT PNT XXXXX DHS the as to we a and discussions to language security discussions be in departments Executive federal side, government procurement best working And they're its Next will continuing that We PNT have were We're to as the coming believe to we resilient to see pleased modifications with revision various held how as the with Nest profile. towards months.

This ago was is DOT as the conducted Omnibus and to enables Act, $XX PNT a following XXXX. Appropriations as important be Jobs bill passed year that DOT awarded resilience. in for The of available that for part in to recommendations funds the several made resilience Congress, testing infrastructure the of million as they XXXX the with Congress cybersecurity trillion it $X bill PNT and implement

new direct-to-infrastructure later feel funding. state a with of and part significant conversations energized state we're Interestingly, to the now best confident classification, with inroads several having these now leverage Nest and how We're make cybersecurity early we is this year. additional local the discussions by officials around stage we'll

its support recently work support for NASA and in for area We selected an agency NASA. in network Virginia. Center been collaboration the Mountain to The our TerraPoiNT drone of PNT builds Research program AMES NextNav of Research View, services on leverages in to existing Another California. Center in relationship which the expanded operation at deliver its at having is Langley the agreement between certain urban us our momentum

new will Under NASA relationship our PNT collision navigation, with support TerraPoiNT understanding the conduct of GPS-denied in network to be better in avoidance detection environments. drone and NASA, of utilizing

visible in line leverage beyond of for that Area the visual allowing in range will pilot. region, the drones the Bay network a outside have already tests TerraPoiNT the Initial we operating present testing of for sight

have support to forward to new NASA developed work future. identifying such relationship thrilled in are to strong look the and a We opportunities their with

on The technologies the the alternate -- from evaluation Union GNSS. tested front, European different of today address to companies published technologies results service and ability their to vulnerabilities back global the the seven On of testing. the PNT demonstrations up

solution NextNAV's as benchmarks or findings, layer of solution JRC recognized GNSS part mature TerraPoiNT resilient a relevant a exceeds technology. As to the as the all to serve meets that

taking tests be Transportation spectrum for The recommends system needs to also in with This Spectrum recall to applicable PNT of partner, JV PNT similar Japanese JRC is cases. use identified You by recommends consistent Department to approach systems only U.S. to found alternative And is meet allocated mitigate DOT commercial government vulnerabilities. the be the will report also terrestrial all to that the the of EU. within MetCom. JRC provide to TerraPoiNT GNSS the resilience a actions NextNav's the the recommendations,

to of We're upcoming priorities, we'll findings many plan facing GNSS quickly use solution. same be their speaking policy before to also advantage these serious look outage. consequences encouraging makers of officials to European Pinnacle ahead develop to As a radio act navigation the the load as European these our infrastructure about them of start and a the

Pinnacle possible significant hosted our these feeling of as recently we're upcoming launch from a Japan, additional months. from we hopeful trials European country lead now trials. commercial the will are a interest We delegation in technology conversations coming additional it in advance, the countries. And to that Following regarding

thrilled ahead and excited lies are we with our of in by what us. Overall, progress XXXX

companies to reality. PNT a closely alike with We are make governments resilience working and make help --

things turn to me Chris? Chris a numbers. for let the that, of With over review

Good Ganesh. Thanks, afternoon, everyone.

results. XXXX with both respectively. the $XX,XXX line revenue year $X.X year we'll go commercial quarter services in $XXX,XXX year including of million, by the $XXX,XXX full and Beginning through and driven fourth in The XXXX, the the with increased revenue Now was and from XXXX quarter our to was fourth technology full contracts fourth quarter and in fiscal year top compared quarter customers. and increase

Operating to quarter approximately the $XX million expenses million, expenses of $XXX,XXX our for XXXX and quarter, were the which approximately period Nestwave. fourth for in million the transaction in related in fourth year $XX.X compares acquisition included of million prior $XX $XX.X in XXXX. including This

also amortization compensation million million in included site XXXX expenses depreciation expense XXXX. and to in million Operating in warrant expenses Operating of $X.X included our XXXX respectively $X.X million expenses and arrangement. and posting $X million, of equity of with fiscal AT&T $XX.X associated $X.X year compared

in in compared included amortization and in quarter the quarter equity $X.X to $X.X $XXX,XXX expense fourth quarter included of -- respectively XXXX. of the million million and for the and Operating $XXX,XXX, depreciation expenses compensation

fourth million Our in compared fourth respectively. million net related a the XXXX, including gain of Net for of the as to was $XX.X quarter change $XXX.X and full $XX.X year XXXX year and full to million warrants. fair included loss quarter loss in million $XX.X $XX.X in of the million value

and with and cash substantial cash sheet. short-term investments balance We flexibility equivalents on capital continue million $XX.X in maintain our to

and costs customers balance products Going service. forward, sheet bring as managing new into revenue our continue to we focus on our

and our while noted allow our us the required call, CapEx as in TerraPoiNT quarter significantly the previously, improve on third OpEx highlighted Spectrum the to Assets. capital expansion. as broad global network And we by substantially reduce deployment acquisition U.S., a to Gary our And Nestwave is facilitating our earnings for future expected needs decreasing

operator the turn I'll over that, Operator? With the to call for questions.

very We'll Gates. you of Mike our much, take Thank B. Securities. this first question Mr. from [Operator Crawford Riley afternoon Instructions] Mr.

Thank you.

in you do what more the cash of we're QX? way revenue Given usage XX% and visibility than through have first the into quarter,

Great question, pick that I Mike, and think I up. can

our don't earlier stages as ramping Now remain business. we as the guidance in of you know, provide revenue we

with some existing For initiatives. growth, XXXX we potentially international emerge as work And EXXX from optimism we some albeit into opportunities for a towards as bring lumpiness may revenue that service. and Public whole, customers agreements Safety hold larger government

towards on are We managing work focused strategic our use our we major cash objectives. as of

average past, And -- usage a dramatic cash our while $XX the work actually I of of in guidance, some wouldn't as an in I little as we've And expect we I approximately $XX $XX.X in providing modest million, expect kind but amounts increase I cash may we increases think kind been cautious per through quarter. about use million year. in spent usage, XXXX we've the of cash think said we of XXXX, of with think

in Spectrum Assets debt second quarter? on sheet you we -- balance Should back Okay. to the assets some the put expect

Because expense we market balance growth on costs, as tight very a indicated, is maintain strong with to good That right see and managing us provides question. flexibility we just a decent sheet, focus pretty which of now. navigate conditions the amount and of I our

believe we the and past, have strong base, attractive secure financing enable we us we've at the to a will do time. that said As right in asset

course supporting growing constitute licenses the in minimizing as that equity low-band from the Ganesh focus, In of and spectrum in a property by large and the of intellectual our event rare capital, spectrum, Our importance our bolstered heard raise past. we've a recent base internationally. portfolio U.S. swath pretty are growing do discussed which as capabilities, PNT have high-value, we is in the leveraging we core JRC dilution asset regarding report the as we obviously,

we how think directionally that's would it. think I about So

Okay.

of don't ask Public EXXX but just in one the spectrum, mind, most would about expect you XXXX you to the say If that Safety you the revenue one more question about verticals? and relates I'll and business

[Multiple Speakers] take I can that. Hey, Yeah. Mike.

a lot we're opportunities for we mature, Safety year. where opportunities market in the mean, I Public yeah, and potentially obviously see looking EXXX materialize. different but governmental-related pursuing think, that at in we momentum many and opportunities do greatest U.S. the and I see So some of them certainly as we emerging things desire have for capabilities But be international will some vigorously our also may the

in see So occurring the I think of certainly, what possible year. we some in realm certainly of the those and potentially are

question with you NextNav then have named what France. Okay. is, you've final Thank capabilities you. now And given the now

or have Just you contiguous of to of excess have, amount capability addition excess signal? backup timing like capabilities like, to terrestrial how could data do much so, potentially or what to enable you with authorizations have on got data alternative signal in X megahertz low-band signal, if GPS spectrum would LTE that carrying the you proper that ride propagating XG do you

want Yes, I at it, can to take a and may Gary, here. some stab you color add

of that's PNT we excess it resilience and we a say would portion of some carrying portion at paradigm original technologies maximum maybe to looked as I we better are used say data think, would for as So and synergize being for potential. capacity the Mike, another them I and I the understanding have had we that, paradigm spectrum can not where reach think -- leverage the maximum gotten at how I their looking for probably

for sense the at megahertz an combination certainly X remainder what with really can sending it's meet burst you're a view band, current our similar signals PNT the can timing signals think the data of that not LTE carrying we band in of that, short time, you to requirements it structure it's that do for portion. a but either/or, full our timing think capabilities look we may you then is of it's such I with, as if the within may where

PNT where So there in across requirements we to our come carrying and a fashion. that, spectrum of framework the is will evaluating. that's into are license that And But coordinated both potentially play. configurations to data are be like the support experimental our I think entire really going

Okay. much. Thank very you

Sure.

Thanks.

We go Horan you. at now Timothy Thank next to Oppenheimer.

guys. Thanks,

on timing feel on XX% the following I And the do be that use data spectrum, color you're saying around to you're it, from sorry, this on more both other on you or same timing just transport Biden So finding for would time, Administration what plans great? of would with their the any like the or hoping then are spectrum? here or know that, the at that early broadband for stages wireless with wanted basically, up basically capacity

I stab for take mean, that think how our signal of the that -- that's Yeah. can I on timing year. portion would the I finalized work what answer a planned think we to question data your so we first one. versus piece. of what the part -- Tim, I have I then haven't there, portion carrying, be think, at And

look are or so at is, PNT capacity. experimenting And we PRS -- for but certainly whatever ability period further send LTE, or XX send is to data deliver that that -- milliseconds, quality for in XX, to a will because in you waveform type but an slightly X high ability those to to if to different that time the XG a be, in capability be the addition example mandate I into good carrying are think might and unlocking spectrum available, potentially to is constructs resilient our it there's

exact framework So we an don't yet. have

XGPP but to think as us that's the models those evaluate. serve are for I work would existing done in -- been good

or approval that the to you're need on more describing ,what do FCC right change license then wouldn't And point, from in just probably now. any so a you

that? go probably ahead do could You just and

FCC available, to But to experimental as are evaluate I have we go commercially of we an experimenting right we earlier, sort it approval, file configurations. these FCC final make mentioned to will get to And process. license the will did approval, we an but through to -- get We’ve now. No. need

you the [indiscernible]? spectrum Got plan wireless hoping Okay. it. or broadband are then, And what from

do I you take think as... to lost may I'll Gary. stab I'm you mean, us? want I at have a Gary, take sure. not one? hear that Okay. Can You it.

again, these No, type unfortunately through frame. one cellphone Yeah. a up, remember been. the administration bipartisan plan I'll spectrum the of FCC definitely was lot XXXX, the I'm occurred has and It that you used my out Once the effort. And did that. gosh, that back, fortunately broadband at sorry, laid always administrations. if XXXX a take of activities -- last and multiple Ganesh, throughout time I done, very it's have nationwide

So now, has the dramatically growth of for just broadband the need escalated.

you a eventually broadband would now situation capability. it. Everybody definitely find have So get where doing knew they got you've to around that to more

So but identify it was spectrum they amount process wasn't like through to unexpected, that let's significant candid. see pleasant try to be it formally was a out finally to of going it because are repurposed

around sitting just isn't unused. lot spectrum a There of

to is what the of other proven the out over these is, shift XX nature the come we already have that we're it this positive or users thing adjacent to governmental that years And You real things able with services, quite provide from we have spectrum other assets. expect our through use uses. candidly, to government spectrum and of last without interfering one value is,

you child do kind of we're be So how able the of it. to poster should

low-hanging you identify now believe do -- is, a What fruit as a spectrum. we of for probably the want going multiyear And to want them to grab to what first. effort you will you're that about lot be

conclusively will to ours is we is our through low-hanging an fruit use capability believe proven a that has spectrum, also off if can and it government. capabilities, pick which the doesn't that show So broadband interfere, for able testing easy be to provide shared

going is receive these it we positive that and carry were spectrum large So identify the knew if whether program very we needed. it's it hadn't broadband additional view because FCC what more a to broadband, doing that services providing desperately would fact all also of of not were at a occurred, for which Even they likely or can repurposing. that about the is PNT

going So forward. the from greater continuity leverages with or wanted that to it do just government standpoint, what

that's little bit and the think uses just you highest about is value And do for maybe that. And Can the can you the points on secondly, be -- other Gary, then most created think what talk two you where spectrum? a the a business the for? But there's just sounds best like services both same know spectrum I think use what parts do would the you lot time. the it the and model you moving at be in well, highest is and of now? -- best can monetize your

I carriage of value that. just economic if -- spectrum think at intending we and megahertz for having spectrum of it, that look technologies is the of way The from about any that massively anybody from that it work the once valuable. about available a to as them that proving to it. standpoint, mean we the clearly, low-band subject understands broadband see working subject positive we're we the going expect again testing can to I you it, go an X integration valuation does do to

all don't Safety, exist, critical still of market XG and (ph) that bases to You that the infrastructure, basic megahertz contracts, X terms lose also capture low-band but protecting capturing, you're capability signal. PNT you're of of able all broadband those EXXX, government resilient Public

point? value Great. to shareholder it's primary And do think way the at you create this

the enhancer need And clearly, that will to the something revenues, able at you're on action XXX nearer because immediate more build what that well-known the to bring then place PNT next to a if it over broadband is capacity, you'll you -- way, those this takes do is look and the more in nature. is say, countries that, or clearly, we year term and more Pinnacle revenues obviously, we move government for see quickest more grow other more services but fund that and and probably value able and if utilize the can show for time. a of we're if Well, value resilient if this, probably as time, over to

can about get Great. I'm the of current you sure talk more for to maybe kind not cash plan And need have, much you funding Can business you'll last you if to that positive? it. how Thanks. flow free or just answer Chris

Yeah.

this I is think -- Chris.

that category. into kind the of think falls I again, the guidance

we've it's to been so provide. hesitant else that And again, something

I leave now. that it think I'd at for

Yeah. And value. the one raised just to question, you about sort address actually, Tim, of

in for services. that towards allocating report out just PNT European spectrum a think out terrestrial the Union's I there call today came was specific

And the so the would Gary's we look capabilities could point, think become provide believe capabilities countries I of carrying PNT or combination to that we as being... provide and template different at PNT, update we could

a probably good point. That's pretty Yeah.

very I think in some expect countries for of partner for over the will established available the the some said, our we've our that prior calls, we've approaches. looking government MetCom. said, written we've spectrum evidence we've allocated need pointed at first doing formal we is and to there to megahertz And what is look the with terrestrial Japanese always other now PNT. similar the is solid whole time to But this EU gotten have X

deploy And use such make the spectrum. that being who would people kind and partner want technology to of a candid, of of for choice we're

partner recommendation allocations subject that could normally that, that ourselves, been Japan. So that it EU's whether to heightens we a on with carrier that takes than we want very important trying seeing very were pattern. did get overt worldwide. to a our a report We've view spectrum or what a work to quicker our certainly, hasn't in But the to cooperating like develop process it be from tended

lot a Thanks guys.

RF Perez Jamie of Thank next now go Laporte. to you. We

asked everybody. been My have you. day, and Thank questions answered. Good

Jaime. Great, All right.

afternoon. like appears And for to turn no further the to we you this conference closing I'd questions it have any Mr. comments. back Parsons,

call. thanks, Great. and Thanks very for much, joining us on everybody the

the to to sometimes spectrum think sometimes customer services sometimes something think that's for as we've repurposing. people we that's new of do in there, what or just at happening now indications expect really forward sometimes time I able a different are acquisitions, to a and that that long said to we're encourages a announcements, them perspective, in be and with spectrum overall there or progress ecosystem look telecom utilize our we

that that, to we was still in while spectrum that carriage, our if a to resilient showing able it And government think Safety, for are call the licensed of for for. to use milestone objective. originally need we company. significant do XXXX a because Public spectrum that we year spectrum will the very think intend for also fact, LTE But services EXXX, I that's essential PNT, watershed XG value progress we valuable all repurposing enhancer be providing the towards

very speaking on you we thank look much, and that, our With again quarter forward you to first to call.

you, Mr. that conclude great and so quarter fourth wish you for gentlemen, conference Thank thank to much Parsons. earnings joining Again all ladies XXXX Goodbye. you your all Again, remainder like and us NextNav’s a I'd call. does of day.