Q3 2025 Anterix Inc Earnings Call
Good day, and thank you for standing by welcome to the enteric fiscal third quarter 2025, Investor update call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During this session you will need to.
Press Star one on your telephone you there.
Speaker Change: And here automated message advising you had as race to withdraw your question. Please press star. One again, please be advised that today's conference is being recorded I would now like to hand, the conference over to your first speaker today Natasha Vecchiarelli. Please go ahead.
Speaker Change: Thank you operator, and good morning, everyone I'm, Natasha Vecchiarelli, Vice President of Investor Relations and corporate communication and I'd like to welcome you to our third quarter fiscal year 'twenty five investor update call.
Speaker Change: Joining me today are Scott Lang, our president and CEO.
Speaker Change: Ryan Gerbrandt, our C O L. Tim Gray, our CFO and Chris got many Kim our chief regulatory and Communications Officer.
Speaker Change: Before I turn the call over to Scott I'd like to remind everyone that during this call. We may discuss forward looking statements regarding our commercial outlook future operation and expected performance.
Speaker Change: These statements are based on our current expectations and assumptions, but they involve risks and uncertainties that could cause actual results to differ materially.
Speaker Change: We encourage investors to review, our SEC filings, including our Form 10-K, and 10-Q for a detailed discussion of the risk factors that could impact our results.
Speaker Change: These documents are available on our website.
Speaker Change: Finally, please note that we do not undertake any obligation to update these forward looking statements.
Scott Lang: With that I'll now turn the call over to Scott.
Scott Lang: Good morning, everyone and thank you for joining us today for our third quarter fiscal year 2025 earnings call.
Speaker Change: I have now for four months into the job and I have a solid idea of who we are as a company what works well and where we can improve.
Speaker Change: Today I'm going to share with you my thoughts about what we have accomplished where we are going and how we are going to get there.
Speaker Change: First what we have accomplished just a few weeks ago, we had the great opportunity to announce at $13 5 million dollar expansion agreement with the lower Colorado River authority and existing customer.
Speaker Change: LCR as additional broadband licenses will extend its broadband coverage to 102 counties in Texas.
Speaker Change: When their coverages combined with our partnerships with other Texas based utilities, 93% of the counties in the state of Texas will now be covered by our 900 megahertz broadband spectrum.
Speaker Change: Total coverage across the 15 states, where we have contracted with utilities now make us larger than U S. Cellular.
Speaker Change: This gives you a sense of the incredible scale of 900 megahertz private LTE deployments.
Speaker Change: We also had a fantastic movement on the five by five megahertz joint petition we filed at the FCC with nine other organizations, including seven utilities fix.
Speaker Change: Six of which are already experiencing the benefits of our bread broadband solutions.
Speaker Change: Under the leadership of Chairman car and former chairwoman Rosen Warsaw, along with Commissioner Symington. The FCC adopted a notice of proposed rulemaking moving the 900 megahertz band closer to a five by five offering.
Speaker Change: While three by three can satisfy the demands of utilities today and for years to come. This five by five expansion will give utilities, a roadmap to even greater capabilities over the decades that followed.
Speaker Change: Additionally, we have identified key areas, where we can immediately achieve significant cost reductions of approximately 20% annually without compromising operational efficiency.
These measures not only lead to immediate savings, but also position us for long term financial strength, ensuring that we can continue to deliver value to shareholders and customers, while improving the bottom line.
Speaker Change: Finally in line with our commitment to delivering value to shareholders. We have returned roughly $4 million back to shareholders through our share repurchase program and our third quarter.
Speaker Change: This decision reflects our confidence in the company's business strategy, our belief that our stock is currently undervalued in the market.
Speaker Change: For example, our market capitalization reflects a fraction of the rate at which we have sold our spectrum to date.
Speaker Change: This fuels our belief that we can and will be aggressive on pricing and focused on winning new contracts with the scale and proven ecosystem that we have developed.
Speaker Change: But the picture of what we have done is much greater than the quarter alone with our seven customers deploying across 15 States 900 megahertz private LTE has moved from the lab to the field.
Speaker Change: These utility leaders are deploying solutions and seeing measurable results developed by our 120 plus member ecosystem.
Speaker Change: Our customers our partners and our team have placed the yen terex name at the forefront of utility innovation working with leading organizations such as <unk> the National Labs, the department of energy and more we.
Speaker Change: We clearly are the market leader in driving advanced broadband spectrum solutions across the utility sector.
Speaker Change: And that leads me to my second area of focus where we are going.
Speaker Change: First I would like to share my thoughts on where we the industry are going and secondly, where we and tariffs are going.
Speaker Change: The industry has been delivering more intelligence to the edge of the grid for decades I saw this personally during the nation's movement to cross the bridge. They had never crossed with Ami that is connected nearly every home and business.
Speaker Change: Silver spring networks, where I was the CEO prior to and Terex became the leader in this movement, because we thought network first device second.
Speaker Change: We distributed the most powerful intelligence that was possible to the edge of the grid.
Speaker Change: Two day nearly 20 years later, the intelligence and demands at the edge of the grid have advance the need of utilities to drive more innovation to the edge has never been greater.
Speaker Change: As an example will require even more edge devices to deliver more critical information that must be connected faster more securely.
Speaker Change: And even more ubiquitously than ever before.
Speaker Change: Private wireless networks are at the forefront of providing the digital foundation to continue to deliver.
Speaker Change: Critical intelligence to the edge of the grid.
Speaker Change: And Terex has prepared for this moment.
Speaker Change: We are the de facto private broadband wireless network leader, we will engage our vast ecosystem of 120, plus companies and our scale with seven of the leading utilities that are demonstrating successful use cases today.
Speaker Change: It is our integrated offering not just our spectrum that is driving this evolution.
Speaker Change: We're bringing a village of technology partners service providers policymakers and utility partners to join us.
Speaker Change: We will take this experience of best practices use cases deployments and partnerships to ensure every utility has a successful and timely path to value.
Speaker Change: As I highlighted earlier with the LCR a deal we have 93% of Texas under contract.
Speaker Change: Those utilities will reap the benefit of 900 megahertz broadband starting now.
Speaker Change: This multi utility regional deployment will serve as a powerful example of what this village can deliver and be a template for other regions across the country.
Speaker Change: Our goal is to enable scale scope and solution benefits from region to region throughout the entire country.
Speaker Change: So how are we going to get there.
Speaker Change: Im excited to further elaborate on two significant initiatives, which we announced yesterday. The first initiative is with the village that I referred to earlier as.
Speaker Change: As the recognized market leader in private wireless broadband for utilities and Terex. This week has launched a new industry engagement initiatives to address and shorten the time to value for utilities.
Speaker Change: The next wave of utilities that are ready to move forward or joining current customers and multiple key vendors of the antares ecosystem to learn from our collective experience and plan for the successful implementation of private 900 megahertz broadband wireless networks.
Speaker Change: This initiative will include an aggressive review of pricing.
Speaker Change: Payment terms collaboration on additional products and services with our ecosystem and more.
Speaker Change: I am pleased with the significant early reception of the industry's participation in this initiative.
Speaker Change: Convening this group of utilities and solution providers to understand their needs.
Speaker Change: And then evolving our product offering to match those needs.
Speaker Change: Isn't and valuable and unique offering.
Speaker Change: Only <unk> can provide.
Speaker Change: And so this leads me to the second initiative.
Speaker Change: The work we have done over the last 10 years has created a great deal of interest in private LTE.
Speaker Change: Not surprisingly we have had some inbound strategic interest to participate with us in our efforts.
Accordingly, we have launched a strategic review process, we have turned to Morgan Stanley. The leaders in this field to consider all potential opportunities that will accelerate our efforts.
Speaker Change: To date, we have built a great company that is positioned to drive growth.
Speaker Change: Executing on nearly $400 million of contracts to deploy 900 megahertz private wireless broadband networks.
Speaker Change: Zero debt.
Speaker Change: Approximately $150 million of proceeds still to collect from the signed contracts a strong pipeline of opportunities and a very modest yet efficient expense base that has dialed in to drive our growth and performance.
Speaker Change: With Morgan Stanley, we will examine these opportunities carefully with our goal to deliver strong performance and results for our shareholders and for our customers IMAX.
Speaker Change: Im excited for what we have accomplished where we are going and how we are going to get there with that I'll now turn it over to Chris.
Speaker Change: Alright, good morning, everyone.
Chris: Thank you Scott.
Speaker Change: Exciting day.
Speaker Change: I'm going to turn to an update on our activity with the FCC I am very pleased to share with you. The significant progress that we've made on the five by five joint petition that was filed with the FCC.
Speaker Change: On January 15th the FCC issued a notice of proposed rulemaking that proposes to expand the 900 megahertz broadband segment from its current three by three configuration to a more robust five megahertz by five megahertz configuration.
Speaker Change: To provide context the FCC have previously considered this expansion in its original 2020 rulemaking, we deemed it premature at that time.
Speaker Change: While theres still has work to do to move the proceeding to a report and order the FCC's decision to adopt this <unk> is a powerful endorsement of not only the 900 megahertz private utility broadband movements, but also the critical role that advanced grid communications play and our economy.
Speaker Change: The proposed five by five expansion marks a major milestone for both <unk> and our utility customers.
Speaker Change: It will open up new opportunities for utility broadband users and use cases as well as strengthen our partnerships with our ecosystem.
Speaker Change: It will also provide greater flexibility to meet the growing demand for secure private wireless networks, not only for utilities, but for other critical infrastructure and enterprise businesses across the country.
Scott Lang: You just heard Scott highlight our role as a utility partner.
Scott Lang: We see the work that we do with the global standards bodies, the module and chipset manufacturers and this work at the FCC has an embodiment of our long term partner approach.
Scott Lang: At <unk>, we are committed to serving as the steward of the 900 megahertz band ensuring it continues to serve the evolving needs of utilities and the critical infrastructure sector for years to come.
Speaker Change: Looking ahead, the FCC will seek public comment on the NPM within 60 days after publication in the Federal Register and then reply comments 30 days after that.
Speaker Change: We will continue to work with the more than 30 organizations that filed comments in support of the petition to engage in this important process and proceeding and we look forward to providing you with updates as they develop.
Speaker Change: Now I'll turn the floor over to Tim to review, our quarterly financial performance.
Tim: Thanks, Chris and good morning, everyone.
Tim: <unk> third quarter results for fiscal year, 'twenty five reflect our solid financial position.
Tim: We've provided a comprehensive overview in our 10-Q filing which was filed yesterday and is available on our website.
Tim: I will now briefly highlight some of the key takeaways from this quarter's performance and some developments of note following the conclusion of the quarter.
Tim: As a result of strategic initiatives with select customers aimed at accelerating delivery ahead of contract timelines, we successfully delivered to a customer. The next tranche of spectrum ahead of our initial contracted delivery date.
Tim: This has led to an incremental cash increase of $34 million, which was received at the end of January.
Tim: Combined with the approximately $29 million in cash on our balance sheet as of December 31, 24, we remain well positioned and well capitalized.
Tim: It is important to note that of the approximately $150 million in uncollected contract proceeds we are scheduled to receive roughly $80 million during our fiscal year ending March 31 2026.
These incoming proceeds not only support our ongoing operations, but also position us to continue returning value to shareholders.
Tim: On the cost side, we have successfully identified and operational expense run rate reduction of approximately 20% from our annualized run rate from our second quarter This fiscal year.
Tim: Which will further enhance our efficiency and increase our cash flows.
Tim: These reductions have already impacted our third quarter results and our general and administrative expenses.
Tim: These cost savings are associated mainly with significant reductions in consultant and professional services spend.
Tim: Regarding our share repurchase program, we have returned approximately $6 $5 million to shareholders year to date in fiscal 'twenty five.
Tim: Including $4 $4 million in the third quarter.
Tim: As we've previously mentioned our approach to share repurchases remains opportunistic and we will continue to calibrate the amount of buybacks based on cash flow and market conditions.
Tim: With our current cash position and substantial contracted proceeds outstanding and Terex remains in a strong financial position to execute on our strategic priorities and continue returning value to our shareholders.
Scott Lang: With that I'll turn it back over to Scott.
Scott Lang: Thanks, Tim I look forward to addressing any questions you might have on these topics with that we will now open the call for questions. Operator, Please open the call for questions.
Speaker Change: Thank you as a reminder to ask a question you will need to press star one one on your telephone and wait for your name to be announced.
Speaker Change: To withdraw your question. Please press star one again.
Speaker Change: <unk> by while we compile the Q&A roster.
Speaker Change: <unk> for the first question.
Speaker Change: And our first question will come from the line of George Sutton.
Speaker Change: Craig Hallum. Your line is open.
Speaker Change: Thanks.
Speaker Change: Good morning so.
Speaker Change: Interesting obviously to receive the interest from the outside I just.
Speaker Change: I wanted to look at it from the lens of the fact, we're moving closer to $5 five from $3 three.
Speaker Change: Our equity value really hadn't changed much at all and you also look at it as a fraction currently.
Speaker Change: Where you are selling your spectrum. So obviously that suggests significant discounts to the ultimate value as that.
Speaker Change: Where you think the Genesis of this interest has come from.
Speaker Change: Aye.
Speaker Change: Thanks for the question George I think it comes from that and I also think it comes from a question of.
Speaker Change: The the fact that we have built such a large ecosystem.
Speaker Change: We have seven customers that have moved from lab to the field and are talking very publicly about the performance and the use cases of what they can do with private broadband 900 megahertz spectrum.
I think it comes from the pipeline and so I think it comes from our industry strength and the 10 years of what we've done.
Speaker Change: And the fact.
Speaker Change: We've got this pathway to five by five.
Speaker Change: Even though three by three as I mentioned in my remarks.
Speaker Change: More than satisfies everything that they do to possibly do for years. The five by five is just one more step further along and so when I look at the and I'll just jump in front of the question I am sure. There is on peoples mind and then.
Speaker Change: Been getting and we're going to get is what kind of companies and they really range from financial to strategic there is no. One common theme of the interest that we've had.
Speaker Change: But the common interest.
Speaker Change: Is the fact that.
Speaker Change: We have.
Speaker Change: Becomes such a market leader.
Speaker Change: And a big.
Speaker Change: Cast in a leadership and influence.
Speaker Change: Right.
Speaker Change: It's embraced wireless broadband networks, and then you combine that obviously with our financial position.
Speaker Change: Signing $400 million of contracts.
Speaker Change: There's $150 million of proceeds left to come there is no debt.
Speaker Change: The pipeline is good.
Speaker Change: I think all of those things when you look at the market cap of where this company has been yes, I think that is.
Speaker Change: Combination of all those things is what spurred the.
Speaker Change: External interest.
Speaker Change: So one other thing on your industry initiative I can certainly are pursuing it has been a very.
Speaker Change: Slow moving utility market that we serve.
Speaker Change: I'm not really clear the motivations for the utilities to move quicker.
Speaker Change: From this initiative are what is spurring this.
Speaker Change: That's just not really clear about that.
Speaker Change: Is the question what is spurring us to do this now or what.
Speaker Change: <unk>.
Speaker Change: What im trying to just make sure I'm trying to think from a position of a utility who naturally moves very slow.
Speaker Change: We are through the single shift trying to get them to move more rapidly.
Speaker Change: Trying to understand what's going to drive them to do so from this initiative.
Speaker Change: I only can speak from my own experience.
Speaker Change: When.
Speaker Change: I referred back to the silver spring networks time.
Speaker Change: And in the first several years it was really hard to get those first one or two companies up and going but once we did and they were able to communicate the performance and the power of distributing intelligence at the edge and speaking more broadly about that there're became a wave of.
Speaker Change: Most utilities Scott on board with it.
Speaker Change: And I think we're seeing that some of that now we've now gone from the lab to the field and it's been in the field in some cases for close to a year and those utilities are getting more vocal and more clear about the use cases and the performance of this spectrum of what it's delivering in the field and I think thats being hurt.
Speaker Change: I came four months ago.
Speaker Change: And I will just tell you there is a sense of urgency when I look at the executives around this table with me right now and our board and the fact that I.
Speaker Change: It didn't come here to build up another 15 or 20 year career, but we came here to deliver on this position that where we currently are.
Speaker Change: And I am seeing a pretty strong interest of the next wave of utilities. As an example, we reached out to a number of utilities that are next up in the pipeline.
Speaker Change: There was near immediate responses, yes, I want to participate in this.
Speaker Change: And I've directed in supporting this team to be as aggressive as we need to be on price creativity. The ecosystem, we bring to the table and making sure we get them.
Speaker Change: As frictionless as possible way to come onboard and catch up with the first seven that have already signed up and in some cases are two and three years ahead.
Speaker Change: So that is a combination of all of that I think is what has gotten us to the point, where now's the time to go get started.
Speaker Change: Perfect well I appreciate the thoughts that's it for me. Thanks, guys. Okay. Thank you very much George.
Speaker Change: One moment for our next question.
Speaker Change: Okay.
Speaker Change: Our next question will come from the line of Mike Crawford from B Riley Securities. Your line is open.
Speaker Change: Thank you.
Speaker Change: Remember the.
Speaker Change: Come a lot also and finally got approval for its rate case wins.
Speaker Change: How long would that typically what would be the timeframe, where it typically take for them to move from that to actual spectrum license.
Speaker Change: I'm going to ask Brian sitting here with me to jump in yeah. Good morning, Mike.
Speaker Change: Frankly, frankly, I wouldn't say, there's necessarily a single outcome that I've seen kind of over time, what's kind of help utilities proceed obviously getting regulatory support.
Speaker Change: It was a big step and it is for a lot of utilities that go down that path to be able to get moving.
Speaker Change: Then they can go a variety of different paths.
Speaker Change: In terms of how they ultimately go forward the different options that they are exploring how they ultimately support driving procurement. So unfortunately don't have a crystal ball to give a precise answer in terms of timing.
Speaker Change: Like any other utility look at the bigger picture in terms of clearly as Scott laid out the growing market demand is something that is driving I would say the overwhelming support and initiatives that we're seeing across the entire market is in a completely different join us from the program that we're rolling out capture that moment in time with a lot of.
Speaker Change: Utilities, there is theres, so many external influences that youre driving their need and urgency and as they've been seeing and measuring the successes of the previous utilities are positive reasons why hopefully we continue to see that grow continuing while we're tracking what what's going on with the excellent.
Speaker Change: Okay.
Speaker Change: And then just more broadly.
Speaker Change: I think you've already.
Speaker Change: John deals covering close to 43 million population in the U S.
Speaker Change: At.
Speaker Change: By our calculations about dollars 52, a megahertz pop in aggregate on the eight deals to date.
Speaker Change: And can you just remind us.
Speaker Change: Or inform us what.
Speaker Change: The kind of goalposts would be between the prior two auctions that you've used to may be in for some of these discussions.
Speaker Change: For the remaining.
Speaker Change: $236 million or whatever pops.
Speaker Change: That you cover and potentially could reach with respect to them.
Speaker Change: I wanted to make sure we answer.
Speaker Change: Can you what's the specific question that you've got.
Speaker Change: So initially when enteric youre about right by the way on the on the on average per pop I'd say, that's pretty close to what our Matthews.
Speaker Change: <unk>.
Speaker Change: And.
Speaker Change: Yes.
Speaker Change: And but.
Speaker Change: Obviously rural Texas.
Speaker Change: Theres, a low has a low fair market value for that service area, but.
Speaker Change: Downtown Midtown.
Speaker Change: Midtown Manhattan would be have a high area. So if you take all of that remaining population of the country like what would be the goalposts.
Speaker Change: <unk> been working towards.
Speaker Change: Maybe frame than prior AWS, three and 600 megahertz auction or we're discussing here today.
Chris: Hey, Mike It's Chris.
Chris: Those are the goalposts right those are the logical comparables.
Chris: And then and then and then we put into play.
Speaker Change: What are more recent transactions and things like that I think I think what is new is what Scott referenced which is we have room.
Speaker Change: When you look at our current market cap and the market pricing of our of our stock.
Speaker Change: <unk>.
Speaker Change: Interplay extrapolate that back or forward are interpolated back to two to our current price per megahertz pop for that market cap. We've got a lot of room to be creative in pricing and still drive extraordinary value both to our shareholders, but also to the utility sector and so yes those.
Speaker Change: The goalposts that we use when we talk about fair market value.
Speaker Change: And.
Speaker Change: And yes, Youre actually obviously very very correct.
Speaker Change: And using sort of the real estate analogy right.
Speaker Change: Manhattan, New York has a different price point.
Speaker Change: Manhattan, Texas or Manhattan, Kansas So.
Speaker Change: Right.
Speaker Change: What what Scott has.
Speaker Change: As authorized and it is pushing us to do is to be.
Speaker Change: As creative as we can be with our offering in order to make the move I think the word Scott you just used was frictionless make the move for utilities frictionless.
Speaker Change: Okay. Thank you maybe I'll just try one last question so.
Speaker Change: Yes.
Speaker Change: If not if and when can you get a.
Speaker Change: And our ability to.
Speaker Change: Or five by five solution there is certain.
Speaker Change: Markets were.
Speaker Change: Your spectrum holdings I think already.
Speaker Change: Would make you very able to do that and others.
Speaker Change: Where would be more difficult. So is there any way you could.
Speaker Change: Trying to bifurcate.
Speaker Change: Uh huh.
Areas like I don't know like Boston, where other people have spectrum holdings or different markets, where you are in a position would be in a position to move quickly.
Speaker Change: Kind of frame that for us at all.
Speaker Change: Yes, Mike, it's Chris I'll take it.
Speaker Change: For a very significant percentage of the country from accounting perspective, we could move forward pretty pretty quickly.
Speaker Change: And then for the rest of the markets, we're going to take it opportunity by opportunity. So as a utility wants to it first of all obviously.
Speaker Change: Lot of work between now and a five by five report and order, but if that were to happen to the benefit of I would say spectrum policy.
Speaker Change: The utility sector.
Speaker Change: We would we would enlist our fantastic spectrum teams, who have already cleared more than 70% of the incumbents in the three by three.
Speaker Change: And they.
Speaker Change: They would get to work on unclear for the five by five we're very comfortable that our team has that capability.
Speaker Change: And.
Speaker Change: They have the authority to.
Speaker Change: The deals that we will ultimately need to cut to get us to five by five <unk>.
Speaker Change: As we have.
Speaker Change: Contracts in place.
Speaker Change: Whether utility wants to go to $5.
Speaker Change: One of the things that makes our offering really unique.
The ability for utilities to do this incrementally alright, they can start with three by three hopefully fingers crossed ultimately they can go to five by size.
Speaker Change: Can pay us in a in a way that matches there.
Speaker Change: They are budget.
Speaker Change: With zero debt.
Speaker Change: We're able to be flexible on how to structure these contracts.
Speaker Change: And Ryan and our sales team have been very successful in creating a bespoke deal for each utility.
Speaker Change: And then just adding five by five to the mix gives us even.
Speaker Change: Of greater opportunity to be flexible and to be creative with our with our customers.
Speaker Change: Okay. Thank you very much.
Speaker Change: Thank you Mike.
Speaker Change: Thank you one moment for our next question.
Speaker Change: Our next question will come from the line of Jonathan Chaplin from New Street Research. Your line is open.
Speaker Change: Hey, Jonathan Thanks.
Speaker Change: Thanks for taking the question.
Speaker Change: A couple of actually so for the.
Speaker Change: So the economy is where you've already signed deals on the three by three.
Speaker Change: With the with those customers get access to the five by five once it sort of delivered automatically or what they would you expect incremental payments from them to get access to that.
Speaker Change: Ed.
Speaker Change: Would it be on the sort of ethane megahertz pop basis is as the deals that they've already signed.
Speaker Change: I'll take the I'll take that and then I might ask Chris or Tim can jump in but I would say that yes, I would say there would be demand.
Speaker Change: For them to gobble up to five by five just to have it for future strategic reasons over the decades to come I would say, yes, there would be a.
Speaker Change: Value is associated with that five by five that we would be looking to negotiate and that they would be very interested to be at the table with us negotiating that.
Speaker Change: Specifically regarding the pricing for that it's too early to say, we need to do some work on it we need we would we will deal with that when that time comes and I do believe it's when that time will come we will sit down with it in and make sure. It's the right value pricing.
Speaker Change: Encourage utilities to expand their their availability to the side by sides.
Speaker Change: Yes.
Speaker Change: I get that you still haven't had any of these negotiations yet and thats, a really difficult to know, but as youre thinking that the utility of a five by five is so much greater.
Speaker Change: The incremental too.
Speaker Change: Mega hubs to get a higher price than what you've already done or is it what can the opposite way, where if you've already bought three.
Speaker Change: You get a volume discount on the incremental too.
Speaker Change: I would say it's not.
Speaker Change: Volume discount or your words, I don't think they're necessarily mine, but I would say more spectrum is better than less spectrum. The three by three.
Speaker Change: Certainly with our seven customers the number of testimonials and use cases, they are blown away by the fraction of the bandwidth. They are using in the three by three that's what gives us confidence that there is years of bandwidth there that's left.
Speaker Change: But.
But the five by five is valuable and I think they would they would want that so there'd be a price to pay for that.
Speaker Change: And I think we would love for them to have it.
Speaker Change: And I think it's just that.
Speaker Change: Answers your question fully but there's a lot there that.
Speaker Change: We don't want to get ahead of ourselves as Chris said, there is some work to be done.
Speaker Change: We are very pleased with the speed at which the with the JD is going through the process right. Now we anticipate we will continue to go well, it's hard for us to predict if that's going to be.
Speaker Change: In the near term or medium term and when that time comes as it gets closer we will be able to communicate more.
With all of you regarding what that means to us in updating your models.
Speaker Change: And is there any way to is there anyone else in those markets that might be interested in the two by two is there any way to create bidding tension.
Speaker Change: For the for the incremental piece.
Speaker Change: Yes.
Speaker Change: Hey, Jonathan it's Chris.
Speaker Change: The the way the rules are proposed right now the structure for applying is the same right. So so in the.
Overwhelming 90, plus 90% 95 plus percent of the counties that will be <unk>.
Speaker Change: And.
Speaker Change: But I'm going to take your question, it's sort of a different way.
Speaker Change: We are we are laser focused on the utility sector that doesn't mean that there are not inbounds from oil and oil and gas and pipeline.
Speaker Change: Other users and use cases in.
Speaker Change: In fact, one of our utility customers.
Speaker Change: Their goals specifically as to serve other users within their footprint.
Speaker Change: Whether it would be.
Speaker Change: No.
Speaker Change: Similarly, situated utilities.
Speaker Change: Things like that and so this additional capacity will give them that capability and so thats, where we see it but with regard to sort of apply.
Speaker Change: Applying for the for the <unk>.
Speaker Change: Spanned from the three by three to five by five.
Speaker Change: We have to wait for the proceeding to come to fruition, but the way. It's set up right. Now is the entity that has more than half of the spectrum in the market license is the entity that gets to move forward.
Speaker Change: For the majority overwhelming majority of counties that would be an <unk>.
Speaker Change: Vast vast vast majority.
Speaker Change: And Thats how it works.
Speaker Change: That's how we look at this as our evergreen.
Speaker Change: Commitment to the utility marketplace and also to this block of spectrum.
Speaker Change: Okay.
Speaker Change: Last question on this would you be expected to pay the FCC anything for the remaining two by two.
Speaker Change: Jonathan I'll say that again.
Speaker Change: Would you be expected to pay for the.
Speaker Change: The incremental spectrum, and what would be the cost of it.
Speaker Change: And so the way.
Speaker Change: Again, the rules proposed to continue the same structure and under the current three by three structure.
Speaker Change: Theres, an unjust enrichment payment that the licensee and Terex makes.
Speaker Change: It is based on 600 megahertz.
Speaker Change: <unk> prices and they proposed to to continue that in the next phase so any spectrum that comes off the shelf.
Speaker Change: That's the payment so there is no.
Speaker Change: We purposefully structured this to make it.
Speaker Change: Easy for the FCC to move forward to give them another tool in their toolbox for spectrum planning and spectrum.
Speaker Change: Allocation and assignment and that includes making sure that there is no windfall no unjust enrichment.
Speaker Change: Got it thanks, guys I really appreciate all the questions.
Speaker Change: Yes. Thanks, Thanks, John Good question.
Speaker Change: Thank you.
Speaker Change: As a reminder that star one for questions are one one.
Speaker Change: Our next question comes from the line of Jerome Darling from Jpmorgan. Your line is open.
Speaker Change: Hello Jerome.
Jerome Darling: Hey, guys. Thanks for taking the question and congrats on the quarter.
Speaker Change: I'd like to see.
Speaker Change: Cost controls here, the 20% reduction for fiscal year 'twenty six is encouraging how should we think about capex booked in fiscal <unk> and for 2026, and then I guess on the five by five perhaps asking the question a little bit differently, how should investors kind of think about the value of the entire deal pipeline, assuming five by fiber pool you guys.
Speaker Change: In the past I've spoken about 60, plus customers valued at $3 billion, assuming five by five gets fully approved one key served more than that 60, plus customers and do you see a value in the pipeline of greater than $3 billion. Thank you.
Speaker Change: Tim.
Speaker Change: You want to take that.
Speaker Change: First one regarding the Opex and the Capex. Please.
Speaker Change: Yes, sure Scott and Jerome Thanks for the question.
Speaker Change: Just so you know the immediate savings that I talked about quarter to quarter, We've got 1 million $5 with the majority of that coming out of G&A expenses as I discussed and.
And we expect to see continued savings as we move forward on the Opex side.
Speaker Change: Capex.
Speaker Change: Hearing.
Speaker Change: We will remain consistent next year, probably in that $15 million to $20 million range.
Speaker Change: Dependent on timing of customers' timing of spectrum delivery et cetera, but that's our current view.
Speaker Change: And I would expect this quarter that we're currently in to be about $5 million, maybe a little less than that.
Speaker Change: For for what we're going to spend on clearing.
Speaker Change: Alright.
Speaker Change: Paul.
Speaker Change: Yes, Okay, yes regarding that I would say no.
Speaker Change: The 400 million that we've signed to date.
Speaker Change: Represents call it 15%.
Speaker Change: Of the total value when we look at the total value of remaining pops across the United States.
Speaker Change: It's a very large number five by five makes that number larger.
Speaker Change: And between those two things, which is why im so emphatic on recognizing that as the market leader, we have a responsibility with our existing customers and those end up customers that are next to drive that leadership position and bring this aggressively into the.
Speaker Change: Market.
Speaker Change: So.
Speaker Change: Where that lands I am not prepared to give you an exact number today other than to say, it's a very large number.
Speaker Change: It's right there at our fingertips and anything we can do to help. This next wave of utilities move faster, we are going to do it and we have a lot of room to be able to do that.
Speaker Change: And just one last comment on that and I'm kind of looking at across the table at that Ryan our COO.
Speaker Change: We decided to launch this just over the last few days.
Speaker Change: And we reached out to some of the largest most respected utilities really in the industry that are up next that have shown an interest that we've been talking with and.
Speaker Change: And we put this out there in front of them a formal process, where they get to really learn about the use cases, the deployments of what utilities are doing so far with three by three.
Speaker Change: And whatever we can do to take it off the table of what's holding them up of helping them understand both sides of the spectrum decision.
Speaker Change: Our pricing.
Speaker Change: As one on commercial structure amongst your flexibility is another.
Speaker Change: And I was I think we were both really we were optimistic that people would want to participate in this but it was near immediate yes responses to put the time and the best talent at the table to work with our team and our best talent.
Speaker Change: And that process is going to show us a lot over the next few months.
Speaker Change: Where this is and I think we have the room, we have the flexibility to be aggressive on pricing as I said, our market cap is still a fraction of what we've seen even the lowest prices that we've had to go to and if that's what it takes and we're going to drive that value into the market.
Speaker Change: And see some performance from it Brian do you want to add anything to that I think it's a big part.
Speaker Change: Is it like just your own kind of the reaction that we've gotten the interest we've gotten immediately to be able to participate is highly related to kind of the demand side and where we've seen the accumulation of all the activities and the shared experiences, including the seven customers and their success story is hitting the market over the last four to five years.
Speaker Change: You just can't underestimate the importance that utilities, who have been in this process for a while going through their understanding of the use cases spending time at organizations like the utility broadband alliance getting prepared to go to distribute Jack who understand at a very deep level that broadband and its importance are critical.
Speaker Change: As they look towards the future of either securing their grid enhancing reliability resiliency connecting to like.
Speaker Change: The point earlier was $40 million tops represent 20 million actual people their homes right.
Speaker Change: The consumers at this energy provides and their interest in participating I take is very encouraging.
Speaker Change: They want to engage with us directly in a more formal way under the under the context of this program to be able to explore not just the three by three but the journey to the 505 and that will educate us a lot more in terms of how we make sure we're meeting them where they are.
Speaker Change: Optimize the offering for for everybody's interest and value creation for all shareholders.
Speaker Change: One thing.
Speaker Change: I just want to add right. So so Jonathan asked a question Mike asked the question Jerome you asked a question about five by five value.
Speaker Change: We worked hard with nine other organizations to put together a petition that that is a win win win win right and it was very purposeful. It is clearly valuable to antero.
Scott Lang: And Scott referenced that it could be an order of magnitude right, but it is clearly a valuable value to enter but it is also extremely valuable to our utilities and our utility customers as evidenced by.
Speaker Change: 30 entities filing in support.
Speaker Change: Let's not lose fact of the reality that it is valuable to the FCC in terms of really good spectrum policy, but it's also valuable to the U S Treasury.
Speaker Change: They're getting revenue for spectrum that sat on their books for the last 50 years and so when we look at this this is architected in a way that that makes it.
Speaker Change: A positive outcome for <unk>.
Speaker Change: All of the elements of the folks that are that are engaged and impacted by this and thats been our goal.
Speaker Change: Thank you.
Speaker Change: Thank you.
Operator: No further questions in the queue I would like to turn the call back over to our CEO Scott Lang for closing remarks.
Speaker Change: Thank you everyone for participating today I want to do a call out to our existing customers to the industry leaders that are.
Speaker Change: I was going to be joining our effort on the five by five and of the three by three move to broadband wireless networks for a call out to my team all of our partners I'm really fortunate to be here at this point in time.
<unk> and on the.
Speaker Change: On the back of the 10 years of investment and hard work that went into it by our team and our investors and the entire ecosystem to get US here when I look at this just four months in.
Speaker Change: There's a lot to like.
Speaker Change: Market leadership $400 million of contracts $150 million left to collect from those contracts no debt grew.
Speaker Change: Great customers Big advocates big pipeline strong partners and a path on $5 five that the innovation can continue to stay healthy for many decades.
Speaker Change: So it's a good place to be I appreciate everybody tuning in today, and we'll look forward to updating you and keeping you updated on our progress as we move forward and have a good day.
Speaker Change: Thank you for your participation in today's conference. This does conclude the program you may now disconnect everyone have a great day.
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