Q2 2025 Anterix Inc Earnings Call
Good morning, and welcome to the enteric fiscal year 2025 second quarter earnings call all participants will be in listen only mode.
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Speaker Change: I would like now to turn the conference over to Natasha Vecchiarelli Vice President of Investor Relations. Please go ahead. Thank you operator, and good morning, everyone and Natasha Vecchiarelli, Vice President of Investor Relations and corporate communications.
I welcome you to our second quarter fiscal year, 'twenty, five investor update call.
Speaker Change: Joining us today are Scott Lang, our newly appointed President and CEO.
Speaker Change: Tim Gray, our CFO, Ryan Gerbrandt, CLO, and Chris, Scotland, Mickey Chief regulatory and Communications Officer.
Before turning the call over to Scott I'd like to remind everyone that during this conference call. We may discuss forward looking statements related to our commercial outlook future operations and expected performance.
Speaker Change: These statements are based on our current expectations and assumptions, but they do carry inherent risks and uncertainty.
Speaker Change: We advise investors not to place undue reliance on these forward looking statements.
Speaker Change: We encourage you to review our S T SEC filings, including our Form 10-K, and 10-Q, which outlines specific risk factors that could cause actual results to differ materially from those discussed today.
Speaker Change: These documents are available on our website.
Speaker Change: Please note that we do not undertake any obligation to update these forward looking statements.
Scott Lang: With that I will turn the call over to Scott.
Scott Lang: Good morning, everyone and thank you all for joining us today for our second quarter fiscal year 2025 earnings call.
Speaker Change: Today marks a special milestone in my professional career as this is my first earnings call as the newly appointed President and CEO of Terex.
Speaker Change: It is truly an honor to be leading this great organization and I'm excited with all that lies ahead for the company.
Speaker Change: Since taking the helm in early October I've enjoyed getting to know our team and getting an in depth depreciation for our company our product and our offering.
Speaker Change: I've also had the pleasure of meeting with a number of investors and analysts.
Speaker Change: The new faces and some that I have worked with before as well as a range of current and future customers.
On today's call I want to focus on two of the recurring questions I've been asked throughout these conversations which I think will provide all of you with a picture of an tariffs as I see the company and the opportunity.
Speaker Change: The first question is.
Speaker Change: Why am I excited to take this job.
Speaker Change: And the second is why would the board chose me.
Speaker Change: Let's start with the why I would take this job.
Speaker Change: About it.
Speaker Change: It yourself in my shoes.
Speaker Change: I am taking over a company that has established itself as a pre eminent technology solution for the utility sector.
Speaker Change: It has zero debt.
Speaker Change: A great balance sheet.
Speaker Change: And expansive 3 billion dollar pipeline of customer opportunities.
Speaker Change: A seasoned thought leadership position.
Speaker Change: Exceptionally talented and committed team.
Speaker Change: And we're just getting started.
Speaker Change: Dig a little deeper and it gets even more clear as to why I or anyone would want this job.
Speaker Change: First off it's really about our customers theyre going from the lab to actual deployments that are driving real results validating our product offering.
And they are becoming our greatest advocates as we witnessed again last week at the utility broadband Alliance event.
Speaker Change: Next it's about our spectrum asset.
We have managed to enhance the value by making it five G capable.
Speaker Change: And have jointly filed with nine other organizations a petition with the FCC to expand our offering from three by three megahertz.
Speaker Change: To five by five megahertz.
Speaker Change: And regarding our market positioning.
Speaker Change: A M I became a movement that nearly touches every home and business with advanced technology.
Speaker Change: It unlocked ways for utilities to deliver a better experience.
Speaker Change: And more value to every customer in the United States.
Speaker Change: There is a similar movement underway that we will look back on.
Speaker Change: Fueled by artificial intelligence and edge computing.
Speaker Change: That wont only touch every home and business.
Speaker Change: But also every device that controls monitors or protect the flow of power across the United States.
Speaker Change: The powerful connectivity that and Terex provides will enable this movement to happen.
Speaker Change: Well the totality of what I see is incredible.
Speaker Change: All of this with a market capitalization that I believe it's far below the value of what this company has achieved.
Speaker Change: The opportunities that are in front of us to drive growth.
Speaker Change: And enhance shareholder value are significant.
It was an easy decision for me to say, yes to the board.
Speaker Change: So why me.
Speaker Change: Without founding boastful I believe I am uniquely qualified.
I've been here before.
Speaker Change: I understand the complexities of working with the utilities sector.
Speaker Change: But also recognize the incredible opportunities that this sector can deliver for our customers for our partners for our company and absolutely for our shareholders.
Speaker Change: And I know how to run a company that is driving technology change.
Speaker Change: The experiences and relationships that I have cultivated over my career I have allowed me to step into this role with a roadmap and a vision for success.
Speaker Change: I have been working around the energy and telecom space for over 30 years.
Speaker Change: During my tenure as CEO and executive Chairman of Silver Spring networks I Hope guide the development of the Smart grid network evolution for utilities and create a deep long lasting relationships within the sector.
Speaker Change: Ultimately this led to successfully positioning silver spring as an innovative leader within the utilities sector, placing advanced wireless metering into more than 50 million homes and businesses across the country, while working with almost every utility in the nation.
Silver Spring went public in 2013 and was subsequently purchased by <unk> in 2018.
Speaker Change: With the technology still being used today.
Speaker Change: We have moved from the smart meter to the smart grid.
And terex is perfectly positioned to enable this smarter future.
Speaker Change: Just this week the Wall Street Journal featured an article about the need for this smarter future.
Speaker Change: And for me highlighted the opportunity it presents for Terex.
Speaker Change: Bottom line.
The reason I'm here is because I see significant opportunities for in terex for the utility sector and for our shareholders.
Speaker Change: As I outlined my near term priorities for the coming months I want to share a few key areas of focus.
Speaker Change: I've worked very closely with our sales team to understand the current position of our pipeline.
Speaker Change: It is incredible to think about the success, we've had and yet recognize the amazing opportunity still in front of us.
Speaker Change: So what is next turning to my top near term priorities.
Speaker Change: First we are going to be laser focused on driving spectrum transactions.
Speaker Change: We are revisiting every element of our sales process.
Speaker Change: Key priority of mine is to expand relationships with both existing and prospective customers.
Our strong customer base represents a powerful opportunity to advocate for our technology and enhance our brand visibility within the industry.
Speaker Change: Next I've asked Tim to review, our operating budget to identify opportunities for efficiencies and reduced our overall annual cash spend.
We're then going to execute on these findings.
Speaker Change: And as we continue to focus on the task of driving contracts and reducing spending where it makes sense I see an opportunity to increase our share buyback effort.
Speaker Change: We have a robust buyback plan in place.
Speaker Change: Wanted to make sure that we pursue every opportunity to put that plan to work.
Speaker Change: At the current share price I believe this is a great use of our contracted proceeds and can help drive significant shareholder value.
Speaker Change: Before I wrap up I wanted to share that these last two weeks alone confirmed everything I thought about the company what I said, yes to this opportunity.
Speaker Change: The other summit took place last week, where leading utilities and the industry ecosystem come together with a specific and valuable focus of sharing experiences use cases and plans to build private wireless broadband networks.
Speaker Change: This year ever G and then Terry customer hosted this dynamic sold out event, which took place in Kansas City with over 600 participants in place.
Speaker Change: Including representatives from more than 30 utilities and increased C level participation.
Speaker Change: To put it in perspective, the utilities that were in attendance represented more than 60% of our spectrum value.
Speaker Change: The summit featured insightful discussions on the vital role of private networks with many of our customers sharing their journeys and adopting 900 megahertz private wireless broadband as the backbone of their network deployments.
Speaker Change: Our booth highlighted several mission critical use cases, reinforcing our leadership position in this space the.
Speaker Change: The event was invaluable and provided a platform for collaboration and innovation.
Speaker Change: Adding the stage for our future growth.
Speaker Change: And earlier this week I attended the Edison Electric Institute Financial Conference in Florida.
Speaker Change: It was awesome to be there and to visit with many of the utilities and people that I have worked with throughout my career.
Speaker Change: In these conversations we discussed how and Terex is perfectly suited to meet the challenge that they now have in front of them to help them continue to deliver secure reliable cost effective service for every customer in the United States.
Speaker Change: And so when I said earlier that these events confirmed everything that I believe about this opportunity.
Speaker Change: It is these personal conversations that reinforced my excitement to.
Speaker Change: To be leading the Ann Terex team.
With that I will turn over to Tim and then will rejoin to share some closing remarks.
Tim Gray: Thanks Scott.
Tim Gray: Before I begin I want to share that I've had the opportunity to get to know Scott over the course of the past few weeks and I am truly looking forward to working with him as we execute on the priorities that he outlined.
Tim Gray: It's also important to note that our balance sheet and our future incoming proceeds will continue to provide the opportunity for us to enhance shareholder value.
Tim Gray: Turning to our results.
<unk> concluded its second quarter of fiscal year 'twenty five in a strong financial position.
Tim Gray: We detail these results in our 10-Q, which was filed yesterday.
Tim Gray: Available on our website.
Tim Gray: I will spend a few moments you're reviewing some of the key highlights from this quarter.
Tim Gray: We ended our second quarter of fiscal year, 2025, with more than $43 million in cash and no debt on our balance sheet.
Tim Gray: We continue to strongly believe to be get free is a significant advantage French eric's.
Tim Gray: It is also important to note that we sold more than $168 million in contracted proceeds to be received over the next several years related to sign contracts with roughly $110 million to be received by the end of our fiscal 2026.
Tim Gray: This positions us to continue to return value to our shareholders.
Tim Gray: Turning to some of the priorities that Scott mentioned with regards to our share repurchase program.
Tim Gray: We will be pursuing additional opportunities to increase cash flow to fund additional buybacks in the near term.
Tim Gray: One example of this is that our team is actively working with certain customers at their request to deliver spectrum earlier than contractually required which will help accelerate payment timing into this fiscal year.
Tim Gray: In addition.
Tim Gray: We're also taking a hard look at our operating expenses to drive efficiencies.
Tim Gray: They have more to share on these initiatives on our next quarterly call.
Let me conclude by reiterating that with the cash on our balance sheet and roughly a $168 million in contracted payments to be received over the next several years, we're clearly in a solid financial position.
Tim Gray: With that.
Speaker Change: I'll turn it back over to Scott.
Scott Lang: Thanks, Tim with the right people strong partnerships and innovative solutions, we are committed to supporting our nations utilities.
Scott Lang: And their electric grid modernization efforts.
Scott Lang: We take great pride in our accomplishments to date.
Scott Lang: And are excited about the opportunities that lie ahead.
Scott Lang: I look forward to sharing more insights with you on our upcoming discussions with that well now open the call to questions.
Scott Lang: Ryan and Chris will also be joining Tim and I to provide additional perspectives as well.
Scott Lang: Operator, please open the call for questions.
Speaker Change: We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad, you will hear a tone acknowledging your request if youre using a speakerphone. Please pick up your handset before pressing any keys to withdraw your question. Please press Star then two we will pause momentarily to assemble.
Speaker Change: Our roster.
Our first question comes from George Sutton of Craig Hallum.
Speaker Change: Please go ahead.
Thank you our first Scott are welcome and our in our intro call. One of the points you made I thought was helpful and I I'd like you to go into a little more detail is it silver spring you were working with a lot of these same utilities, who had no tech at that time, you were providing them. Some initial tech you were.
Speaker Change: We're now in a position to take old technology and deliver to those same customers New technology can you just talk about the the differences in those two.
Hey, George Thanks for that I appreciate it.
Speaker Change: It's great to be here, yes, I remember the conversation we had and.
Speaker Change: Back in 'twenty.
Speaker Change: One year. It was 20 years ago, sometimes it's hard to imagine it was 20 years ago.
Speaker Change: We truly pushed the limit of technology that was available to us we leverage the unlicensed spectrum of 900 to 928.
Speaker Change: And that technology still in use today, it's tough start as I had mentioned in the prepared remarks more than 50 million homes and businesses across the United States and.
Speaker Change: The movement we saw.
Speaker Change: It's very real and now we're seeing even more demand.
Speaker Change: More use cases.
Speaker Change: Higher level, a higher bar that customer was half of what they expect from the utilities and the solutions that we have now to extend that to make it more secure more robust.
Speaker Change: Sure.
Really unlocked with the bandwidth.
Speaker Change: SaaS and our five G capability that was not available 20 years ago. So when I've started these conversations in having these conversations with our current clients with prospective clients. The light goes on and I think that the challenges that we faced.
Speaker Change: Getting the utility the momentum to move from very low technology prior to 2004 to embracing change and crossing I used to think of what is crossing the bridge.
Speaker Change: Never crossed the bridge was connectivity to their point of sale device.
Speaker Change: I couldn't imagine back then ever running a business that you weren't connected other than a monthly manual read to your point of sale device that changed now the bar has gotten higher.
Speaker Change: And their needs and the demands for customers to protect the grid is.
Speaker Change: Much more valuable and it has a higher risk today.
Speaker Change: What's available in the market solutions available in the market can be unlocked with the kind of capability.
Speaker Change: Eric Springs to the table with five G connection.
Speaker Change: I think that's trying to capture some of the conversations you and I had George and since then that was weak one about a month ago.
Speaker Change: Since then.
Speaker Change: Conversations have become real conversations just earlier this week on the back of the EI and I believe it is a natural progression that they really understand that.
Speaker Change: Super.
Speaker Change: My other question is for Tim.
Speaker Change: And you know I.
I will I have been on record as a believer that a more aggressive share buyback program makes sense. So I'm I'm interested in hearing about the delivery of spectrum earlier than contracted just can you walk through the economic logic behind that.
Speaker Change: Is it is it much different and just wanted to make sure we fully appreciated. This this concept.
Speaker Change: Yeah, George it's really being driven by the customer and their desire to move their networks along faster deploy the spectrum faster.
So we've had customers proactively asked us to deliver faster than what's contractually obligated, which will result in cash flow coming in earlier. So right now our current projection is that in our <unk>.
Speaker Change: Fourth quarter. This current fiscal year, we will receive another roughly $35 million that we had planned on to come in next fiscal year, so with that.
So cash flow in this fiscal year.
Speaker Change: We feel strongly that we can be much more aggressive with the buyback program in the near term and I think you'll see those results bear out as we release.
Our numbers going forward over the next few quarters.
Hey, Hey, George it's Chris.
Speaker Change: And Tim referenced this but.
And I know you know this but one of the things that makes our offering so unique is the ability to do exactly what Tim just just described right the ability to be flexible.
Speaker Change: Turn on a dime, if if a customer wants to accelerate or evolve their their delivery decisions and it's you know it's one of the things that that that again makes our offering unique is the ability to match.
What would be delivered to what the utility directly needs.
Speaker Change: Beautiful I'll turn it over others. Thank you.
Speaker Change: Thanks George.
Speaker Change: As a reminder, if you have a question. Please press Star then one on.
Speaker Change: Our next question comes from Mike Crawford from B Riley.
Speaker Change: Please go ahead.
Speaker Change: Thank you just a follow up on that Tim.
That's $35 million, you're talking about in our fiscal Q4 is that.
Speaker Change: Plus the 10 million that had been expecting in that quarter or 35 million altogether in that quarter.
Speaker Change: So it's 35 million altogether in that quarter, Mike. So we've already received about $18 million. This year and the 35 will put us in the low fifties for the fiscal year on what we know based on contracts that we sign we will be receiving this fiscal year.
Speaker Change: Okay excellent and then.
Speaker Change:
Speaker Change: Scott.
Speaker Change: Can you share any low hanging fruit that you've identified as you revisit.
Revisit your sales process.
Speaker Change: What was the first part of the question Mike.
Speaker Change: You know revisiting every all of the element of your sales process. So as you embark upon this investigation of your sales process is there anything that you have identified already that.
Speaker Change: Thank you Kim.
Speaker Change: To improve upon.
Speaker Change: Yes. There is one thing that comes to mind is when we we met.
Speaker Change: As an entire group a couple of weeks ago, and we were going around the room and the testimonials I was hearing them talk about with our current clients and our prospects.
Speaker Change: While they were good.
Speaker Change: I hoped on that.
Speaker Change: The real story started to come out as we layer that back.
Speaker Change: So why was it fantastic what was unique about us and we started to come up with a very long examples of why at Terex with uniquely position that nobody could offer the kind of security the kind of ubiquity to kind of control and protection that terex has with our <unk>.
Speaker Change: Platform.
Speaker Change: It reminded me of many of the things that are challenges, we faced at silver spring 20 years ago. When everybody thought this would just be a carrier led solution.
Speaker Change: And the fact is utilities love to own their private networks, they love to be able to call up on that connectivity when they need it the most and carriers cannot offer that and carries cannot offer the flexibility of pricing that we can offer. So those were some of the things Mike as we started to get into it and.
Speaker Change: Get into the details of the use cases, the benefits the value that antero has.
Speaker Change: And and so that was the that was really something that stands out to me.
Speaker Change: We are going to work on and taken to the market and then that builds upon the getting our clients to be our biggest advocates.
Speaker Change: And I've seen this movie before you know utilities.
Speaker Change: They don't necessarily compete with each other.
Speaker Change: But they really do like to use each other's reference and brag about the things that they're doing and this company has a great opportunity to put our customers on stage, explaining how theyre, taking this from the lab to actual deployment, which we saw last week at Elba and I'm going to.
Speaker Change: Ask Ryan was there we had a lot of folks there may be why do you want to add a couple of those.
Speaker Change: Sorry is that you've heard from other yeah I'd be happy to good morning, Mike Yeah. I mean, as you guys know we've been tracking for a while trade organization that we found it with you know with some like minded partners. You know several years ago. Now you know what I will then turn it over as a nonprofit with a utility run board that just continue.
Speaker Change: It should be a real remarkable organization, where the entire lifecycle of this just this conversation and the ability for utilities to share their testimonials their experiences their lessons learned frankly, it's been fantastic and last week in Kansas City was no exception.
Speaker Change: If anything the organization has really evolved with the lifecycle as we've seen these deployments played out so conversations that we're having two years ago were really about understanding technology. This year I got to stay the focus was really on trying to learn and experience. The successes that so many different customers are having by having their networks.
<unk> deployed having devices in the field and getting my applications on boarded.
Speaker Change: <unk> is the host utility you'll get a remarkable job really sharing their experiences and the key applications that they saw.
Speaker Change: They had a they had a booth on display that everybody was surrounding and able to engage with and talk to them about showcasing real applications that they're already taking value of at 900 megahertz LTE was able to lock in these these fall in the domain, Mike of things like scale fluids or what's his fault.
Speaker Change: This in isolation and service restoration really in advance kind of grid application. They were showing security cameras device management pull tilt sensors, you know different line sensors. These are kind of the building blocks of the bread and butter of what we think about when we when we articulate smart technology that needs to get enabled on the grid.
Speaker Change: And there will be thousands and thousands of these kinds of devices.
The grid continues to modernize and utilities put them on it and that that's just one example of the many conversations we had over three days in Kansas City, but I'm excited by Scotts idea as well it I've said it before there is no better salesperson in the industry that your past customer who's raising your successes and our ability to capture that excitement you know get that voice out.
Speaker Change: They're in front of the next in line is going to be a very powerful tool for us.
Speaker Change: To lean into.
Speaker Change: And Mike I'll just pile on.
Speaker Change: Some of the exciting use cases that are now.
Speaker Change: Going in in the lab and will ultimately be deployed are around AI and intelligence at the last mile of the grid and what is exciting for me to say is the technology, we deployed unlocked Emmanuel occasional data point to hundreds and thousands.
Speaker Change: Dozens of data points per day the a.
Speaker Change: AI chips that are being tested at the endpoint that we enable because of our spectrum and our security and that connectivity takes it to millions and the amount of information that unlocks the value that that brings the security of the way utilities can now protects their grid is very exciting and I think.
Speaker Change: But.
Speaker Change: We will continue to see that deployed and tested and talked about as the utilities start to embrace it.
Speaker Change: And the and their deployments.
Speaker Change: Thank you one last question for me.
Speaker Change: Any change.
Speaker Change: Changes in perspective.
From the FCC under potentially of Brendan Cartledge administration as you look to seek approval to.
Speaker Change: Offered five by five LTE and sort of just three by three.
Scott Lang: Chris Chris and I've had some great conversations with it and he and his team are doing a terrific job, Chris why don't you respond to that yeah, yeah, yeah. Thanks Scott.
Scott Lang: And Hey, Mike.
Scott Lang: I think the first thing to recall is our initial three by three was five O vote and one of the commissioners voted for it was a it was commissioner car. So I don't see anything about our multi party petition that is political in nature.
Scott Lang: And and I'm excited to you know to see the the the movement of the of the petition through the process and I believe we will we will very likely get the supportive Commission a car.
Scott Lang: If he moves into the the acting chair and ultimately the chair.
Speaker Change: Our role so Joe I'm excited he and his team have been strong supporters.
Speaker Change: <unk> of what we were able to do if you could just go back to his his statement.
Speaker Change: Four or five years ago, where he said you know this band is small, but we at the FCC can help make it Mighty I think we've delivered on that so so you know as as the evolution happens.
Speaker Change: You know on January 20th I think we're well positioned not just and tariffs, but you know our nine co petitioners to help move this forward.
Speaker Change: Great. Thank you very much.
Speaker Change: Thanks, Mike.
Speaker Change: This concludes our question and answer session I would like to turn the conference back over to Mr. Scott Lang for any closing remarks.
Scott Lang: I would like to conclude today with thanking all of you for your support and stay.
Scott Lang: Stay tuned we're excited to be here I'm excited to be here and look forward to following up with many of you over the coming weeks have a great rest of your week everybody.
Scott Lang: Yeah.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Speaker Change: [music].