Q3 2022 Anterix Inc Earnings Call
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Speaker 2: Thank you for waiting.
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Speaker 4: Good afternoon ladies and gentlemen and welcome to the Interrog Third Quarter Investor Update call. At this time, all participants have been placed on a listen only mode and the floor will be open for your questions and comments following the presentation.
Good afternoon, ladies and gentlemen, and welcome to the <unk> third quarter Investor update call.
At this time, all participants have been placed on a listen only mode and the floor will be opened for your questions and comments following the presentation.
Speaker 4: It is now my pleasure to turn the floor over to your host, Tim Gray. Sir, the floor is yours.
It is now my pleasure to turn the floor over to your host Tim Gray, Sir the floor is yours.
Speaker 5: Good afternoon everyone and welcome to the Antares 3rd quarter fiscal year 2022 investing.
Good afternoon, everyone and welcome to the <unk> third quarter fiscal year 2022 investor call.
Speaker 5: I'm Tim Gray and Terriksa CFO . And I'm doing the introduction for today's call for Natasha Vicki-Relli, who is on maternity leave, following the recent birth of a baby girl.
Tim Gray <unk>, CFO and I'm doing the introduction for today's call pretty toxic Becky rally who is on maternity leave following the recent birth of a baby girl.
Joining me today are Rob Schwartz, our president and CEO .
Speaker 5: Joining me today are Rob Schwartz, our president and CEO , Ryan Gerbrandt, our COO, and Chris Gutman-McCabe, our chief regulatory and communications officer.
Ryan Gerbrandt, our CLO and Chris gotten into Cape our Chief regulatory and Communications Officer.
Speaker 5: Before we begin, please note that during today's presentation, we may make forward-looking statements, either in our prepared remarks, or in the associated question and answer.
Before we begin.
Please note that during today's presentation, we may make forward looking statements either in our prepared remarks or in the associated question and answer session.
Speaker 5: statements are based on current expectations or beliefs, and are subject to certain risks and uncertainties that may cause actual results to different material. Risk factors that may impact our performance are identified in our most recent SEC violence.
These statements are based on current expectations or beliefs and are subject to certain risks and uncertainties that may cause actual results to differ materially.
Risk factors that may impact our performance.
Alright identified in our most recent SEC filings.
Following our prepared remarks, we will have an operator like question and answer session.
Speaker 5: In addition, at the conclusion of today's call or replay and transcript of our discussion, we'll be posted to our investor relations.
In addition at the conclusion of today's call a replay and transcript of our discussion will be posted to our investor Relations website.
Speaker 5: With that, I'll turn the call over to Interox's president and CEO , Roger.
With that I'll turn the call over to <unk>, President and CEO , Rob Schwartz.
Speaker 6: Thanks Tim, good afternoon everyone and thank you for joining our third quarter investor call.
Thanks, Tim Good afternoon, everyone and thank you for joining our third quarter Investor call.
Speaker 6: With our March 31 fiscal year end approaching, I want to start by saying that we as a team are working non-stop in our effort to close deals.
With our March 31 fiscal year and approaching I want to start by saying that we as a team are working nonstop and our effort to close deals.
Speaker 6: toward a $200 million fiscal year in target and beyond.
Towards our $200 million fiscal yearend target and beyond.
Speaker 6: From my vantage point, in my direct interactions with the utilities we have in the expanding later stages of our sales process, I believe it's not a matter of if but rather when we close these countries.
From my Vantage point it my direct interactions with the utilities, we have an expanding later stages of our sales process I believe it's not a matter of if but rather when we close these contracts.
Speaker 6: And while we share in the frustration that the confidentiality required for these deals does not allow us to give specific details regarding the individual utilities, we can provide some color around the combined magnitude of the transactions that we're working through.
And while we share the frustration that the confidentiality required for these deals does not allow us to give specific details regarding the individual utilities. We can provide some color around the combined magnitude of the transactions that we're working through.
Speaker 6: As we've discussed, we break our customer pipeline into three phases, and we call it a third and final phase, the closing stage of the process.
As we've discussed we break our customer pipeline into three phases, and we call our third and final phase the closing stage of the process.
Speaker 6: And please to share that the number of utilities that are moved into this third phase has increased. With the total potential contracted proceeds now in excess of $400 million, including several larger deals.
I'm pleased to share that the number of utilities that have moved into this third phase has increased with the total potential contracted proceeds now in excess of $400 million, including several larger deals.
Speaker 6: Additionally, our total pipeline of customers in all three phases continues to mature and grow even since our last call. Now with more than 60 utilities, translating into potential total contract values well in excess of $3 billion.
Additionally, our total pipeline of customers in all three phases continues to mature and grow even since our last call now with more than 60 utilities translating into potential total contract values well in excess of $3 billion.
Speaker 6: Ryan and I with our team are driving these deals to completion and we remain steadfast in our belief that our continued efforts through fiscal year 2024 will result in approximately $1.8 billion of contracted proceeds with multiple paths to get.
Ryan and I with our team are driving these deals to completion and we remain steadfast in our belief that our continued efforts through fiscal year 2024 will result in approximately $1 $8 billion of contracted proceeds with multiple paths to get there.
Speaker 6: Our strategy has been to take a unique vertical approach to building the value of our specs.
Our strategy has been to take a unique vertical approach to building the value of our spectrum.
Speaker 6: We have the right target customer base, utilities with strong and growing needs for modernized private communications with ready access to capital and with top credit rating.
We have the right target customer base utilities with strong and growing needs for modernized private communications with ready access to capital and with top credit ratings.
Speaker 6: What comes with these powerful attributes, however, is a sector that moves at their own pace, cautiously and yes, sometimes slowly, to make these important multi-decade commitments.
What comes with these powerful attributes however is a sector that moves at their own pace cautiously and yes, sometimes slowly to make these important multi decade commitments.
Speaker 6: We believe the long-term benefit is well worth the wait and can drive significant shareholder value.
We believe the long term benefit is well worth the wait and can drive significant shareholder value.
As you may have seen in our 10-Q filed earlier today in our third fiscal quarter. We began to return the value of contracted proceeds to our shareholders through our previously announced share repurchase program.
Speaker 6: As you may have seen in our 10Q filed earlier today, in our third fiscal quarter, we began to return the value of contracted proceeds to our shareholders through our previously announced share repurchase program.
Speaker 6: going forward with our continued confidence in our near-term transactions and our pipeline. We target returning substantially all of the net proceeds from our future contracts to our shareholders through the expansion of our Repurchase Program or through other tax-efficient means.
Going forward with their continued confidence in our near term transactions and our pipeline we target returning substantially all of the net proceeds from our future contracts to our shareholders through the expansion of our repurchase program or through other tax efficient means.
Speaker 6: The driving motivation of the Interox team is to directly return this value to shareholders as our net proceeds continues to expand.
The driving motivation of the Terex team is to directly return this value to shareholders as our net proceeds continues to expand.
Speaker 6: While the pace of contract collection will dictate the pace of our potential return of net proceeds, our basic philosophy here is that our gross proceeds minus clearing costs and operating expenses, including any taxes, will determine the value we intend to return to our shareholders.
While the pace of contract collection will dictate the pace of our potential return of net proceeds our basic philosophy here is that our gross proceeds minus clearing costs and operating expenses, including any taxes will determine the value we intend to return to our shareholders.
Speaker 6: Based on the scale of the contracts in our pipeline, we anticipate that this can provide a continuing and significant return to our invest.
Based on the scale of the contracts in our pipeline, we anticipate that this can provide a continuing and significant return to our investors.
Speaker 6: As such, this should be viewed as a fundamental attribute of value for interic shareholders.
As such this should be viewed as a fundamental attributed value for <unk> shareholders.
In the eight years since we filed at the FCC.
Speaker 6: as a result of our efforts the narrative around private broad venue for utilities has changed dramatically as a result our interactions with the sector have evolved
As a result of our efforts the narrative around private broadband for utilities has changed dramatically and as a result, our interactions with the sector have evolved.
Speaker 6: We're witnessing an expanding list of critical use cases that's fueling market demand for private network.
We are witnessing an expanding list of critical use cases, that's fueling market demand for private networks, and we were having deeper engagements across these organizations with growing involvement from the C suites.
Speaker 6: We are having deeper engagements across these organizations with growing involvement from the CSW.
Speaker 6: We're helping them build compelling cases to justify to their boards and regulators that the substantial value that comes from modernized communication.
We're helping them build compelling cases to justify to their boards and regulators that the substantial value that comes from modernize communications.
Speaker 6: Our growing position in this valuable sector is also reflected in the continued development of our industry ecosystem as part of our nationwide platform.
Our growing position in this valuable sector is also reflected in the continued development of our industry ecosystem as part of our nationwide platform.
Speaker 6: As an example, just last week we released a joint white paper with Schweitzer engineering labs. A preeminent technology supplier to the utility sector documenting the success of their wildfire mitigation solution when deployed using an TERRICS 900 megahertz spec-
As an example, just last week, we released a joint White paper with Schweitzer Engineering labs, a preeminent technology supplier to the utility sector documenting the success of their wildfire mitigation solution when deployed using and Terex 900 megahertz spectrum.
Speaker 6: Their falling conductor solution deenergizes a broken electric line before it hits the ground, reducing the possibility of fire.
They're falling conductor solution D energizes, a broken electric line before it hits the ground, reducing the possibility of fire.
Speaker 6: This proactive approach to disaster mitigation is valuable for the growing regions of the country threatened by wildfires, as well as other universal threats like increasing storms and falling branches.
This proactive approach to disaster mitigation is valuable for the growing regions of the country threatened by wildfires as well as other universal threats like increasing storms and falling branches.
Speaker 6: This Schweitzer project, enabled by Interox's broadband, can truly be a game changer for the utility sector throughout the nation.
This schweitzer project enabled by <unk> broadband can truly be a game changer for the utility sector throughout the nation.
Speaker 6: The Interactive Ecosystem Program, like our pipeline, continues to grow.
The Terex active ecosystem program like our pipeline continues to grow.
Speaker 6: We just recently announced a collaboration with Cisco and we announced the introduction of additional 900 megahertz products from Sierra Wireless.
We just recently announced the collaboration with Cisco and we announced the introduction of additional 900 megahertz products from Sierra Wireless. We also recently launched within our ecosystem of cyber security collective with leading innovators focusing on the critical and growing security needs of the sector.
Speaker 6: We also recently launched within our ecosystem a cybersecurity collective with leading innovators focusing on the critical and growing security needs of the sector.
Speaker 6: These relationships will enable even more vital functionality and value for the users of our spec.
These relationships will enable even more vital functionality and value for the users of our spectrum.
Speaker 6: In less than a year, the Terrix Active ecosystem program has virtually doubled from 37 to 72 companies. We're developing solutions, equipment and services that continue to enhance the value of 900 megawatt's network.
In less than a year.
Terex active ecosystem program has virtually doubled from 37% to 72 companies, who are developing solutions equipment and services that continue to enhance the value of 900 megahertz networks.
Speaker 6: This rapid growth is a sign of the expanding scale of commercial interest in serving utilities needs as part of our powerful nationwide and ter?'s plan.
This rapid growth is assigned to the expanding scale of commercial interest in serving utilities needs as part of our powerful nationwide in terex platform.
It's meaningful to me and my team that all of these elements of our efforts are coming together.
Speaker 6: meaningful to me and my team that all of these elements of our efforts are coming together.
Speaker 5: to address an urgent national need, to foster and protect our nation's electric grid, and support the robust introduction of renewable energy resources to achieve our decarbonization goals. And with that, I'll turn it over to Tim. Thanks, Rob. Let me start with the significant analysis.
To address an urgent national need to foster and protect our nation's electric grid and support the robust introduction of renewable energy resources to achieve our de carbonization goals.
And with that I'll turn it over to Tim.
Thanks, Rob.
Let me start with the significant announcements for which we are very proud of.
For the first time in <unk> history, we yielded positive free cash flow from operations.
Speaker 5: and the third quarter free cash total roughly $27 million and was driven by the receipt of the full $30 million of contracted proceeds from averagey and a $17 million.
In the third quarter free cash totaled roughly $27 million and was driven by the receipt of the full $30 million of contracted proceeds from <unk> and.
And a $17 million payment from amarin.
Speaker 5: Our business plan continues to be fully funded and debt-free with approximately $128 million in cash on our balance sheet at December 31, 2021.
Our business plan continues to be fully funded and debt free with approximately $128 million in cash on our balance sheet at December 31 2021.
As you May recall in September 2021, our board approved a $50 million two year repurchase program.
Speaker 5: As you may recall in September , 2021, our board approved a $50 million two-year repurchase program.
Speaker 5: I am pleased to share that during our fiscal third quarter, we invested $12 million in Sherry.
I am pleased to share that during our fiscal third quarter, we invested $12 million in share repurchases associated with this program representing one quarter of the total program.
Speaker 5: associated with this program, representing one quarter of the total program.
Speaker 5: Further, underscoring our ongoing confidence in our ability to generate positive cash.
Further underscoring our ongoing confidence in our ability to generate positive cash flow.
Speaker 5: Turning to our fiscal year 24 forecast. Based on our market traction and current pipeline, we maintain our estimate of securing approximately $1.8 billion of contracted process.
Turning to our fiscal year 'twenty forecast based on our market traction and current pipeline, we maintain our estimate of securing approximately $1 $8 billion of contracted proceeds.
Speaker 5: We also maintain our forecast of receiving initial prepaid cash process.
We also maintain our forecast of receiving initial prepaid cash proceeds of $300 million to $500 million associated with these deals by the end of March 2024.
Speaker 5: 300 to 500 million dollars associated with these deals by the end of March 2024.
Speaker 5: With the remaining over 1 billion of contracted proceeds due from these contracts in fiscal year 25 and beyond.
With the remaining over 1 billion of contracted proceeds due from these contracts in fiscal year 'twenty five and beyond.
So far we've collected $73 million to date from our three initial contracts.
Speaker 5: So far, we've collected $73 million to date from our three initial countries.
Speaker 5: which total approximately $129 million.
Which total approximately $129 million.
Onto cash spend.
Speaker 5: As we've previously guided, we expect to spend roughly $70 million per year through fiscal year 24.
As we previously guided we expect to spend roughly $70 million per year through fiscal year 'twenty four include.
Speaker 5: including $40 million of op-x based on our lean operating cost structure. And.
Including $40 million of Opex based on our lean operating cost structure.
And $30 million and spectrum clearing costs.
Speaker 5: Through the third quarter of our current fiscal year, we have spent approximately 27 million out in OPEX and 15 million.
Through the third quarter of our current fiscal year, we have spent approximately $27 million and opex.
$15 million and clearing costs, which includes returning costs spectrum acquisitions and anti windfall payment.
Speaker 5: which includes returning costs, echo macquisitions, and anti-windfall.
Speaker 5: with an additional 10 million in committed funds to clear spectrum.
With an additional $10 million and committed funds to clear spectrum.
I would also like to point out.
Speaker 5: We restated our second quarter 10 queue, which we filed today for this fiscal year to include a $10 million non-monetary gain.
We restated our second quarter 10-Q, which we filed today for this fiscal year to include a $10 million non monetary gain.
Speaker 5: This gain is related to the exchange of 900 megahertz narrow band lights.
This gain is related to the exchange of 900 megahertz narrow band licenses for 900 megahertz broadband licenses with the SEC.
Speaker 5: for 900 megahertz broadband licenses with the FCC. Using the accounting.
Using the accounting guidance ASC 610.
Speaker 5: We have determined that NTERIC should have recorded recognized the difference between the cost of neuro-band licenses being returned to the FCC and the accounting basis of broadband-
We have determined that <unk> should have recorded recognized the difference between the cost of narrow band licenses being returned to the FCC and the accounting basis of broadband licenses being issued.
Going forward, we will report this accounting gain or loss upon the granted broadband county licenses by the FCC.
Speaker 5: Going forward, we report this accounting gainer loss upon the grant of broadband county licenses by the FCC. The gainer loss considers the cost of the Narrow Bend license. Clearing.
The gain or loss considers the cost of the narrow band license.
Clearing costs and any anti windfall payments.
Speaker 5: based on the anti-windfall pricing set by the FCC in the May 2020 report in order. We are using the 2017 600 megahertz auction prices as the accounting basis for nine.
Based on the anti windfall pricing set by the FCC in the May 2020 report and order. We are using the 2017 600 megahertz auction prices as the accounting basis for 900 megahertz broadband licenses we.
Speaker 5: We do expect that for all of our narrow ban to broadband license exchanges, we'll be games for Ontario.
We do expect that virtually all of our narrow band broadband license exchanges will be gains Grand Terex.
Speaker 5: Due to the unpredictable nature of the timing of these gains or losses, we will not be providing guidance on them on a quarterly or annual basis.
Due to the unpredictable nature of the timing of these gains or losses, we will not be providing guidance on them on a quarterly or annual basis.
The $10 million gain in our amended second quarter 10-Q relates to the first 12 900 megahertz broadband licenses, we received from the FCC in August .
Speaker 5: The $10 million gain in our amended second quarter 10Q relates to the first 1,900-megas broad band licenses we received from the FCC in August that were not marked up at the time.
Not marked up at the time.
Speaker 5: And we have therefore identified a material weakness in our internal control over financial reporting related solely to this.
And we have therefore identified a material weakness in our internal control over financial reporting related solely to this matter.
Speaker 5: Remediation efforts are well underway and more information can be found in our 10 cues.
Remediation efforts are well underway and more information can be found in our 10 Qs.
Today.
Speaker 5: I'll conclude by saying that Interix continues to be well positioned for continued.
I'll conclude by saying that <unk> continues to be well positioned for continued success, allowing us to be in a position to return significant value to shareholders.
Speaker 5: allowing us to be in a position to return significant value to share.
Speaker 5: We've probably achieved our first positive recast flow quarter, our fully funded, with a substantial cash balance, remain debt-free, and are poised for a growing balance sheet, stemming from our forecasted contracted proceeds. Now I will turn it over to the opera...
We proudly achieved our first positive free cash flow quarter are fully funded with a substantial cash balance remained debt free and are poised for a growing balance sheet stemming from our forecasted contracted proceeds.
Now I will turn it over to the operator for questions.
Speaker 7: Ladies and gentlemen, the floor is now open for questions. If you have any comments, please press star one on your phone now. We ask that we'll pose you your question. You please pick up your handset if listening on speaker phone to provide optimum sound quality. Once again, if you have any questions or comments, please press star one on your phone now. Please hold a moment while we pull for questions.
Ladies and gentlemen, the floor is now open for questions.
Yes.
Please press star one on your phone now.
I ask that will posing your question. Please pickup your handset if usnea on speaker phone to provide optimal sound quality. Once again, if you have any questions or comments. Please press star one on your phone now please hold them on that while we poll for questions.
Your first question is coming from Simon Flannery.
Your line is live.
Speaker 8: Right, thank you very much. Thanks for the commentary. I wanted to just, Tim, touch on the guidance. I know that Rob mentioned the $200 million for this year upfront, but are you removing that as part of your formal guide at this point?
Alright, Thank you very much seven previously taxed.
Thanks for the commentary I wanted to just touch on the guidance I know that Rob mentioned, the $200 million for this year upfront, but is that are you removing that as part of your formal guide at this point.
Yeah, Hi, Simon Raab powertrains.
Uh huh.
Speaker 9: And you guys are getting it? Yeah.
I'll get started.
But can.
Can you hear me okay, yes.
Speaker 6: So look on the guidance, we're confident we're going to get these good stuff. You know, might they conclude after 331? Yes, that's a possibility. I've got to say, we go a week.
Okay, great. So look up on the guidance, we're confident we're going to get into the stock.
Might be concluded for 331, yes, that's a possibility.
Got to say, it's going to come with global week.
Speaker 6: We're directly seeing the continued progress. And while there may be uncertainty on the precise timing, I believe there's certainty on the outcome. So we're really confident. We're going to close these deals and bring them the proceeds to enterics. I don't mind. Do you want any color to that?
We're directly see the continued progress at.
While there may be uncertainty on the precise timing I.
I believe there is certainty on the outcome. So we're really.
Confident that we're going to close these deals and bring them the proceeds to terex.
Ryan you want to add any color to that.
Yes, I'd be happy to Rob. Thank you and as you said definitely we are actively working a variety of deals here still before the end of the quarter Simon all hands on deck in there as we've talked about before kind of the complexity and how we engage with deals and as our teams interfacing across early a variety of the different touch points of his work.
Speaker 8: Yeah, I'd be happy to rub. Thank you. And as you said, definitely we're actively working a variety of deals here still before the end of the quarter time and all hands on deck. And as we've talked about before, the complexity and how we engage with these deals as our teams interfacing across really a variety of the different touch points of these organizations.
<unk>.
Speaker 8: In fact, you just shared some color and actually out in the field here today, with one of these potential customers, and that's been a nice change of pace to be able to be back out in the field, the building, some of the relationships that are extremely helpful and necessary as we continue to help them to get to close.
Just to share some color I'd actually out in the field here today with one of these potential customers and that's been a nice change of pace to be able to be back out in the field. The one building in some of the relationships that are extremely helpful and necessary as we continue to help them to get to close but just this is Rob Rob said.
Speaker 8: But just as Rob said, I'm also a realist. And while we're feeling confident, but where we're at, I feel good that the path we're on can absolutely lead us to the contracted proceeds. That gets us to the fiscal year 22, $200 million commitment that you're referenced. But as you said at the same time, we've seen already what can happen to the timing of these deals as we get the clothes and can't rule out the alternative of that. The agreements may push beyond March 31, either.
We're realists.
We're feeling confident about where we're at.
I feel good that the path, we're on Ken absolutely lead us to the contracted proceeds that gets us to the fiscal year 'twenty to $200 million commitment that you referenced but as we said at the same time, we've seen already what can happen and the timing of these deals as we get to the close and can't rule out the alternative that the agreements may push beyond March.
One either but overall you have referenced kind of what we've seen in the building at the phase III pipeline.
Speaker 8: But overall, your reference kind of what we've seen in the building, you know, at the Phase III pipeline, you know, which has increased to be more than $400 million, you know, a potential contract that proceeds the most phase alone, just to refresh, you know, what that phase is, the closing phase.
<unk> increased to be at more than $400 million potential contracted proceeds in this phase alone and just to refresh me on what that phase is the closing phase where we've got a.
Speaker 8: where we've got a relative established alignment with the customer. We have a certain level of commitment that are working towards the final agreements, but as we've seen, there's certainly still work that we have to be pushing on to be able to close.
Relative to establish the alignment with the customer we have a certain level of commitment and are working towards the final agreements, but as we've seen there's certainly still work that we have to be pushing on to be able to close them to give to give you a sense of the types of items that our teams are engaged across these different potential customers right now, we're really focusing in with them.
Speaker 8: to give you a sense of the types of items that our teams are engaged across these different potential customers right now. We're really focusing in with them. You know, again, under the premise that there's an alignment to do PLT, you know, in a general acceptance around the role of our spectrum in 900 megahertz.
Again under the premise that there is an alignment to <unk> LTE and.
General acceptance around the role of our spectrum in 900 megahertz, the work, where we really engaged with them and where a lot of our strength China has the ability to help them with their business plans or deployment plans stakeholder engagements executive positioning in paper of the agreements all activities.
Speaker 8: The work where we really engage with them, and where a lot of our strength shine is the ability to help them with the business plans or deployment plans, stakeholder engagement, executive positioning, and paper of the agreements. All activities that we're helping to guide them through, I'm gonna be able to address any roadblocks and stuff as they bring them all up.
That we're helping to guide them through that we'll be able to address any roadblocks and stuff as they bring them all up.
Speaker 10: Great, that's helpful. And I guess Tim just so you're great to see the buyback kicking in. I know you're able to share, did you do any buybacks since the quarter end?
Great that's helpful and I guess, Tim just for your great to see the buyback kicking in I don't know if you are able to share did you do any buyback since the quarter end.
Speaker 10: Yeah, Simon, we're not going to report on buybacks, kind of intra-quarter. We'll do that when we get to the end of the quarter and have grit in there. But as I've said before, we expect to be active throughout the life of the program. And we'll see value here at the stock price for us to. Do you have a grit in place like automatic or is it really discretionary?
Yes, Simon we're not going to report on buybacks kind of intra quarter, we'll do that when we get to the end of the quarter end.
In there but.
As I have said before.
We expect to be active throughout the life of the program.
And we'll see value here at this stock price for us to do you have a grid in place like automatic or is it really discretionary.
Speaker 5: We're using a little bit of both, discretionary and grid to be able to, you know, an automatic grid to be able to buy in the marketplace. So again, we continue to be active and we'll report on that at the end of each.
We're using a little bit of both discretionary and grid to be able to you know an automatic grid to be able to buy in the marketplace. So again, we continue we expect to continue to be active and we'll report on that at the end of each quarter.
Speaker 10: Great and I know Chris is on the line, it'd be great to just get some updated thoughts on the infrastructure funding You know and what to expect from the NTIA on this middle mile and how that might help the utilities etc
Great and I know Chris is on the line would be great to just get some updated thoughts on the infrastructure funding.
What to expect from the N T I, a homeless middle mile and how that might help the utilities et cetera.
Speaker 11: Sure Simon and great to talk to you. We um...
Sure Simon and great to talk to you.
Speaker 11: We've had great meetings with the Department of Energy and with NTIA. We're very happy with the language that came out of the infrastructure legislation and the opportunities for utilities, both the middle mile and the other sections of resiliency and grid flexibility sections and wildfire mitigation sections.
We've had great meetings with the department of energy and with NTIA, We're very happy with the language that came out of the infrastructure legislation and the opportunities for utilities, both the middle mile.
And the other sections of resiliency and grit flexibilities sections, and wildfire mitigation sections in the legislation and in total it approaches $10 billion in funding that utilities could go after two to support the modernization of the communications components. So so we're very excited both of.
Speaker 11: in the legislation and in total it approaches $10 billion in funding that the utilities could go after to support the modernization of the communications component. So we're very excited. Both of the agencies are moving forward with their processes and both of them have notice of inquiries out there asking questions.
The agencies are moving forward with their processes and.
Both of them have like notice of inquiries out there asking questions and and we're gonna be active throughout the process, both individually and with several of.
Speaker 11: and we're going to be active throughout the process, both individually and with several of the trade associates.
The trade associations. So when do you think that money starts to flow or is it like the broadband stuff in like.
Speaker 10: So when do you think that money starts to flow? Is it like the broadband stuff in like mid-23 or something like that?
Mid 'twenty, three or something like that.
Speaker 11: Yeah, Simon, I think we're all sort of be guessing to some extent, but I anticipate that we'll see money begin to flow.
Yes Simon.
Simon.
I think we're all we would all be guessing to some extent, but I anticipate that we'll see money begin to flow.
Speaker 11: You know, early fall, maybe late summer, but these sort of late summer early fall, potentially begin to flow out. You know, I think what the programs are looking for is transformational opportunities. And I think what we are advocating for and that the core of our business, I think we're perfectly aligned.
Early fall, maybe late summer, but we sort of late summer early fall potentially begin to flow out I think what the programs are looking for is transformational opportunities and I think what we are advocating for and that's the core of our business I think we're perfectly aligned with where.
Speaker 12: with where, you know, the administration and the departments and the agencies want to go. Great. Thanks for coming. Certainly.
And.
The administration and the departments in the agencies want to go.
Great. Thanks for the color.
Certainly.
Your next question is coming from Phil Cusick.
Your line is live.
Hi, This is more for Phil it looked like this quarter. The amarin deal up at about 200000 in revenue versus what we thought it would be like 500000 per quarter or is this more of a timing issue and what should ameren be contributing per quarter in revenues going forward.
Speaker 13: Hi, this is a mirror for Phil. It looks like this quarter, the Amarin deal added about 200,000 and revenue these verses. What we thought would be like 500,000 per quarter is this more of a timing issue. And what should Amarin be contributing per quarter and revenue is going forward?
Speaker 5: Yeah, remember there is a ramp up to get to full steady state. We were delivering a 1.4 before a 3.3 for a certain amount of county. So to get to steady state revenue will be a couple of years before we fully deliver all their spectrum. And then you see a straight line from there. So, you know, in the current set of quarters it'll be about 150 per quarter for the next four to six quarters.
Yes, remember there is a ramp up.
To get to full steady state.
We're delivering a $1 four before a $3 three for a certain amount of canny counties. So to get to a steady state revenue will be a couple of years before we fully deliver all their spectrum.
And then you see a straight line from there. So you know in the current set of quarters it'll be about 150 per quarter for the next four to six quarters.
Okay. That's helpful and I just wanted to make sure on the guidance.
Speaker 13: Okay, that's helpful. And I just wanted to make sure on the guidance of the previous guidance of 125 to 150 million and run rate revenues at getting fiscal year 2024, is that guide still in place?
As to guidance of $125 million to $150 million in run rate revenues.
In fiscal year 2024 is that guidance still in place.
Speaker 13: Or has that now been kind of replaced by the 200 model?
Or is that now been comment.
<unk> by the 200 level.
Yes.
Replacement.
Speaker 5: Yeah, I mean, we replaced that guidance that the investor day we had in June . That was based on 20 year payment streams of leases over time. And now that we've got the prepaid model, we've really kind of adjusted our guidance in what we've talked about to cash proceeds with a focus on free cash flow. So, we're not using that 125 to 150, but we're really looking at the 1.8 billion that we expect to sign by our fiscal 24. Rob, did you want to add something else?
I mean, he said we replace that guidance at the Investor Day, we had in June .
That was based on 20 year payment streams of leases over time and now that we've got the prepaid model really kind of adjusted our guidance and what we've talked about cash proceeds with a focus on free cash flow. So.
We're not using that $1 25 to 150, but really looking at the $1 8 billion that we expect to sign by our fiscal 'twenty four Rob did you want to add something else.
No Jim I think you've covered it well thank you.
Speaker 12: So well, thank you to this.
That's helpful. Thank you.
Your next question is coming from Walter Piecyk.
Your line is live.
Thank you.
Speaker 8: you. Rob, you've made some op-x investments in developing.
Rob you've made some opex investments in.
Developing I think a services business.
Speaker 8: There's been an ecosystem that's developed. You've had some announcement there. When you think about the 400 million of potential that's in phase three.
Been an ecosystem has developed you've had southern announcement there.
When you think about the $400 million of potential.
Then phase three.
Speaker 8: Is there going to be any, aside from the spectrum portion of those contracts? You anticipate?
Is there going to be any.
Side from the spectrum portion.
Of that of those contracts do you anticipate 2022 being the year, where youre going to start to see some notable service business associated with those contracts or Conversely.
Speaker 8: 2022 being the year where you're going to start to see some notable service business, you know, associated with those contracts or conversely.
Speaker 8: With your existing customers, has there been any movement in that direction in developing a services business on top of what you're doing on the spectrum contract side?
With your existing customers has there been any movement in that direction.
Helping our services business on top of what Youre doing on the.
The spectrum contract side.
Speaker 6: It's thanks for the question. I think a couple of things. You mentioned the...
And thanks, Paul for the question I think look a couple of things.
You mentioned the <unk>.
Speaker 6: investment that we're making. I look at really that investment two ways. First, it's really about continuing to position us and our company as the trusted advisor to these utilities. As we're working day to day in the pipeline customers that you mentioned, in that $4 million of that Phase 3, we're helping them.
Investment that we're making I look at really that investment two ways first it's really about continuing to position us and our company as the trusted adviser to these utilities as we're working day to day and the pipeline customers that you mentioned in that $400 million of that phase III, we're helping them think about.
Speaker 6: think about exactly how to approach this from their first understanding of what is broadband and LTE remember these are sophisticated customers that know electric networks well but really don't know a lot about broadband networks and so um... starting with what we did by launching of a
Exactly how to approach this from their first understanding of what is broadband in LTE I. Remember these are sophisticated customers that know electric networks, well, but really don't know a lot about broadband networks and so starting with what we did with launching of the.
Speaker 6: the utility broadband alliance and bringing them through the knowledge and sharing that goes on there. It's honestly one of our best marketing channels, the idea that we have the industry driving forward, educating each other about the value of broadband. We're investing in those things.
The utility broadband alliance and bringing them through the knowledge and sharing that goes on there. It's honestly one of our best marketing channels. The idea that we have the industry driving forward educating each other about the value of broadband.
We're investing in those things primarily initially because they they really drive demand and so for us the catalyst of the investment first.
Speaker 6: primarily initially because they really drive demand. And so for us, the catalyst of the investment first.
Speaker 6: of creating the demand side for our customers and helping them go through the, what's a complicated process from a standing start to having an operational model. A lot of the things we're doing, like the Anteric's Active ecosystem, I talked about now with over 70 companies there and a lot of notable companies, but a lot of companies also that are really innovators like the ones inside of the security collective, that's making the company
Creating the demand side for.
For our customers and helping them go through the what's a complicated process from a standing start to having an operational model.
A lot of the things we're doing like the <unk> active ecosystem I talked about now with over 70 companies there and a lot of notable companies, but a lot of companies and also that are really innovators like the ones that are cyber security collective that's making the compelling.
Speaker 6: elements of broadband that much more valuable. If utilities aren't buying technologies, they're buying the outcomes that the technologies bring, the application.
Elements of broadband that much more valuable these utilities arent buying technologies they are buying the outcomes of the technologies bring.
The application, so stopping wildfires being able to be more resilient in storms being able to stop the increasing cyber security events.
Speaker 6: stopping wildfires, being able to be more resilient in storms, being able to stop the increasing cyber security events.
Speaker 6: So that's really worth driving the visibility of those solutions that's the pre-utility. So in the front end, it's easier for them to make the cases to adopt these.
So that's really we're driving the visibility of those solution sets for utilities. So.
It's easier for them to make the cases to adopt these networks does that drive us further up the value chain. We believe so I think it's early for us to really predict what the impact of that is going to be but we are absolutely looking at ways in which we can continue to monetize beyond spectrum and today, we're working with utilities closely helping advise.
Speaker 6: Does that drive us further up the value chain? We believe so. I think it's early for us to really predict what the impact of that's gonna be, but we are absolutely looking at ways in which we can continue to monetize beyond spectrum. And today we're working with utilities closely, helping advise them, and through that process, we're getting to understand how they approach it and identify where we think these other opportunities are.
Them and through that process.
Process, we're getting to understand how they approach it and identify where we think these other opportunities are within the value chain, but I think it's probably a bit early for us to talk about the magnitude of that but we absolutely are focused on on developing those additional opportunities.
Speaker 6: within the value chain, but I think it's probably a bit early for us to talk about the magnitude of that, but we absolutely are focused on developing those additional opportunities.
Speaker 8: So at some point as 2022 or maybe 2023 progresses, and obviously there's some level of investment that helps in the sales cycle, right? As a service is almost a free service in order to continue to get sales closed.
So at some point as 2022, or maybe 2023 progresses and obviously there is some level of investment that helps in the sales cycle right. As a service is almost a free service in order to continue to get sales to close but there might be some incremental investment there.
Speaker 8: But there might be some incremental investment that was that you were hopeful perhaps historically to generate a services business. At what point is it not too early to consider cutting back on the investment in that area if you're not seeing incremental revenue?
That was that you were hopeful perhaps historically to generate a services business at what point is it not too early.
To consider cutting back on the investment.
In that area, if youre not seeing incremental revenue.
Speaker 6: I think we're very satisfied with the investment to date. I think Tim described as being our lean operating expenses.
I think we're very satisfied with the investment to date I think Tim described it as being a lean operating expenses, we've got a small but very effective team.
That's really developing those services today, we really have a model where we're leveraging partnerships right. The reason why we have over 70 companies is because it's their capabilities that are helping translate into into those valuable services can we make money from them selling services. We can we're a great channel into utilities and all of these big companies are joining in our ecosystem.
Speaker 6: money from them selling services we can. We're a great channel into utilities and all of these big companies are joining in our ecosystem to have great access to this very valuable customer base. And so I do think that translates into incremental economic value for us.
To have great access to this very valuable customer base and so I do think that translates into incremental economic value for us. So it's not that we're not investing we're doing it I think on a very prudent way with that we really believe we can bootstrap, our way into being accretive and in building that business opportunity.
Speaker 6: So it's not that we're not investing. We're doing it I think on a very prudent way with that We really believe we can bootstrap our way into being a creative in building that business
Speaker 8: Okay, and then in terms of the three phases,
Okay, and then in terms of the.
The three phases.
Speaker 8: I may have missed this in the prepared comments, but
I may have missed this in the prepared comments, but.
<unk>.
Speaker 8: Can you specify either in terms of number of utility companies or dollar size perhaps? Because I know you gave an aggregate dollar size of...
Can you just specify either in terms of number of utility companies or dollar size, perhaps because I know you gave the aggregate dollar size size of.
Speaker 8: Remember, I think it was 3 billion of potential value. How much of that, or how much increase if it all occurred in phase one, meaning like what new discussions have you had with utility companies that have entered phase one in terms of pipeline? Express it as dollars or a number of utilities however you want.
I can't remember I think it was $3 billion of potential value, how much of that or how much increase if it all occurred in phase one meaning like what new discussions have you had with utility companies that have entered phase one in terms of pipeline.
Expressed in us dollars or number of utilities. However, you want.
Speaker 6: Yeah, so I mean, I've started to let Ryan fill in, but we talked about a couple things. One is that we gave the scale of the increased phase one for after being $4 million, it's already phase three of our pipeline.
Yeah, So maybe I'll start there I'll, let Phil but we talked about a couple of things one is.
But we gave the scale of the increased phase one for us of being $400 million toward phase III of our pipeline.
Speaker 6: We did also talk about the increase of the number of utilities in the overall pipeline to 60 utilities. And that's an increase from where we previously talked about it. The overall scale has gotten bigger. As I mentioned, we're well in excess of that $3 billion now. And so for us, the size is great. And we've got the line share of the marketplace within that pipeline. Now it's about bringing it through the pipeline and seasoning those customers. And I was getting them through phase three to close as well.
We did also talk about the increase of the number of utilities and the overall pipeline to 60 utilities in that and that's an increase from where we previously talked about it.
The overall scale has gotten bigger.
Mentioned were well in excess of that $3 billion now.
And so for US it's it's not about the size is great.
The lion's share of the marketplace within that pipeline now, it's about bringing it through the pipeline and seasoning those customers and I was getting them through phase III to close as well.
And if you want to add.
Yes, I think your question is really focused on kind of the 10 that Rob talked about.
Speaker 14: And so I think what we're seeing there is certainly kind of new entrance to the conversation. And so through, a lot of this is a result of some of the other kind of market tailwinds as we call about it. And we talk about it. It's expanding the reach and the conversation that we're seeing in PLT, the ecosystem certainly draws in new participants where there's existing relationships.
And so I think what we're seeing there is certainly kind of new entrants to the conversation.
And so through a lot of us as a result of some of the other kind of market <unk> as we call about it you know we talk about it it is expanding the reach and the conversation that we are seeing a PLT. The ecosystem certainly drives in new participants were those existing relationships and think about the ecosystem from the perspective of every one of those companies, it's literally now and new marketing channels.
Speaker 14: Think about the ecosystem from the perspective of every one of those companies, you know, is literally now into marketing channel, driving the conversation and trying to push awareness.
Driving the conversation and trying to push awareness into their portfolio of customers around the potential role of PLT. We're also seeing kind of the increases of the voice that organizations like <unk>.
Speaker 14: into their portfolio of customers around the potential role of PLT.
And UTC have.
Have a much broader perspective in terms of the utility audience, but thats, where a lot of utilities recline, you'll go out to get their information and attract learnings around some of the new evolving things that we may just not have touched yet frankly through some of the direct sales relationships and the team that we've been able to build I'd say, so I think I think I understand I think I understand.
I think I understand all of those points, but what I was specifically trying to figure out or understand if you are available are making it available to us.
Specifically, how much it did increase in terms of new relationships into the kind of entered into what you define as phase one either in terms of number of utilities or dollar potential.
Speaker 4: in terms of new relationships into the kind of entered into what you define as phase one, either in terms of number of utilities or dollar potential. Yeah, that's the 10 utilities. Well, 10 new utilities. Got it. We're up to 16 in the right line. And I clearly miss that. I appreciate that. No problem. As a reminder, ladies and gentlemen, if you have any questions or comments, please press star one on your phone now. Your next question is coming from George
Speaker 8: in terms of new relationships into, they kind of entered into what you define as phase one, either in terms of number of utilities or dollar potential.
Speaker 8: Yeah, that's the 10 utilities. Well, 10 new utilities. Got a lot of time. We're up to 660 million. And I clearly miss that. I appreciate that. Thank you.
Yes, that's the 10 utilities well.
10, new utility it's got lots of Africa, we are up to 660, <unk> and I clearly may I quickly Miss that I appreciate it.
Yeah.
Speaker 4: As a reminder ladies and gentlemen, if you have any questions or comments, please press star one on your phone now. Your next question is coming from George-
As a reminder, ladies and gentlemen, if you have any questions or comments. Please press star one on your phone now.
Your next question is coming from George Sutton.
Your line is live.
Speaker 15: Hi, this is Adam Hunter, George. Thanks for taking my questions. Rob, we noticed the other week that Texas State was out with an announcement discussing the completion of their new facility in the beginning of testing about 100 use cases on 900 beggars. I would love to hear if there's any updates around that effort and project and if there are any new partners that you expect to join Texas State in the near future.
Hi, This is Adam on for George Thanks for taking my questions. Rob We notice the other week that the state was out with an announcement discussing the completion underneath facility in the beginning of testing about 100 use cases at 900 megahertz I would love to hear if there's any updates around that effort and project and if there are any new partners that you expect to join.
And Texas state in the near term.
Speaker 6: sure thank that I'm in I think I'll pass when to Ryan but just just quickly you know the text day program for us the cedar program is a great you know test bed of of various
Sure. Thanks, Adam I think I'll pass when Orion, but just just quickly the tech Ste program for US the Cedar program is a great.
Testbed of various.
Speaker 6: communications technologies, but also broader, you know, it's about the use cases for utilities and there's a vibrant ecosystem there that those licenses and the efforts they recommend, but Represent, but you want to add to that Ryan?
Communications technologies, but also broader.
It's about the use cases for utilities and theirs.
A vibrant ecosystem there that those licenses and the efforts they recommend but represent but you want to add to that Brian .
Yes happy to.
Speaker 14: Yeah, happy to. No, there's a lot of exciting things going on out there Adam. The one recently I think that triggered, you know, perhaps the announcement. One thing we're happy, this is kind of a general macro point too, kind of the advancement of what's being largely described as EMI or smart metering phase two. And one of the applications that Texas State was able to pull in leveraging the 900 megahertz was.
There's a lot of exciting things going on out there Adam.
One recently I think are triggered.
Perhaps the announcement.
Things are happening with kind of a general macro point too.
The advancement of what's being largely describe those EMI or smart metering phase two and one of the applications.
Texas State was able to pull in leveraging the 900 megahertz was.
A use case demonstration of kind of what the advanced next stage can be about really pulling LTE under the glass, it's called literally being and be able to embed in LTE chipset underneath the glass of meter, but theyre continuing to attract interest in terms of sponsorships and members into the program.
We do anticipate there'll be continued access to me their members through the Terex active ecosystem program or direct relationships with Texas Cedar that we're going to continue to see exercises there, but coming back to our goal for Cedar kind of why we wanted to get involved in the first place is see the university infrastructure and really what Texas is trying to drive is trying.
Speaker 15: that we're going to continue to see exercises there. But coming back to our goal for Cedar, kind of why we wanted to get involved in the first place is see the university infrastructure, really what Texas is trying to drive has trying to push really the cutting edge of getting out into the advanced applications in use cases. The ones that utilities might not be thinking about today to be able to really drive innovation and promote the next generation. Great. And one more for me. Any other additional videos you could share on the phase two, a component of the segment. Are you seeing people?
Speaker 14: see the university infrastructure really what Texas is trying to drive has trying to push really the cutting edge of getting out into the advanced applications in use cases. The ones that utilities might not be thinking about today to be able to really drive innovation and promote the next generation.
Push really the cutting edge of getting out into the advanced applications and use cases, the ones that utilities might not be thinking about today to be able to really drive innovation and promote the next generation.
Great and one more for me is there any other additional details you can share on the phase two component of this segment are you seeing people move faster through that or certain types of utilities begin to move with the sense of urgency for some reason.
Speaker 15: Great. And one more for me, is there any other additional videos you could share on the Phase 2 component of the segment? Are you seeing people move faster through that or certain type of utilities begin to move with a sense of urgency for some reason?
Yes, I can I can tackle that one Adam.
Speaker 14: Yeah, I can tackle that one Adam. Yeah, as we said, the prepared remarks, I mean, we've been seeing growth actually, or development, which it would translate to in all of the three phases. So while we've been seeing kind of the growing of the funnel, as we just mentioned, the additional 10 coming into the top end, we've been seeing equal kind of growth as we move through phase two, and also, as we noted, with a 400 million in phase three. So we're seeing all the right maturation, as we'd hope as customers start working their way through that process.
As we said in the prepared remarks, I mean, we haven't seen growth actually our development, which would translate to an all of the three basis. So while we've been seeing kind of the growing of the funnel.
You just mentioned the additional 10 coming into the top and we've been seeing equal kind of growth as we move through phase III and ultimately as we noted with the $400 million in phase III. So we're seeing all the right maturation as we'd hope as customers start working their way through that process and anticipate.
Speaker 14: anticipate, you know, continuing to be able to see that and hopefully the signs of some of the indicators that we're starting to sense the resources of acceleration as the year continues progress.
Continuing to be able to see that and hopefully the signs of some of the indicators that we're starting to sense in terms of sources of acceleration as the year continues its progress.
Great. Thanks.
Yeah.
Yeah.
Speaker 4: Once again ladies and gentlemen, if you have any questions or comments, please press star one on your phone now.
Once again, ladies and gentlemen, if you have any questions or comments. Please press star one on your phone now.
We have no further questions coming from the lines at this time.
Speaker 6: Thank you, Catherine. So just in summary, as you all heard, we strongly believe that Antaric says unique and valuable asset around which we built a unique opportunity.
Thank you Catherine.
So just.
In summary, as you all heard we strongly believe that <unk> is unique and valuable asset around which we built a unique opportunity.
Speaker 6: Our laser focus remains on capturing this value. We appreciate your patience as we do so, but we see the tremendous opportunity to return it to our shareholders. We believe we're on a great path to do so. So thanks everybody for joining us today.
Laser focus remains on capturing this value. We appreciate your patience as we do so but we see the.
Tremendous opportunity to return it to our shareholders and we believe we're on a great path to do so so thanks, everybody for joining us today.
Speaker 4: Thank you ladies and gentlemen. This concludes today's conference call. You may disconnect your phone lines at this time and ever wonderful day. Thank you for your participation.
Thank you ladies and gentlemen. This concludes today's conference call. You may disconnect. Your phone lines at this time and have a wonderful day. Thank you for your participation.