Q1 2025 Nextnav Inc Earnings Call
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Operator: Ladies and gentlemen, thank you for standing by.
Ladies and gentlemen, thank you for standing by my name is does rain I will be your conference operator today at this time I would like to welcome everyone to the next now first quarter was 2025 earnings call.
Operator: My name is Desiree and I will be your conference operator today.
Operator: At this time, I would like to welcome everyone to the Nextnav first quarter 2025 earnings call. All lines have been placed on mute to prevent any background noise.
All lines have been placed on mute to prevent any background noise. After just because your remarks, there will be a question and answer session.
Operator: After this speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question again, press the star 1.
You would like to ask a question. During this time simply press star followed by the number one on your telephone keypad.
If you would like to withdraw your question again press the star one.
Nevin Reilly: I would now like to turn the conference over to Nevin Reilly. You may begin.
Devin Riley: Now I'd like to turn the conference over to Devin Riley you may begin.
Mariam Sorond: Good morning, everyone. Welcome to Nextnav's first quarter conference call.
Devin Riley: Good morning, everyone and welcome to the next best first quarter Conference call.
Nevin Reilly: Participating on today's call are Mariam Sorond, Nextnav's Chief Executive Officer, and Chris Gates, Nextnav's Chief Financial Officer. Before we begin, let me remind everyone that this call will include certain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. forward looking statements may be identified by use of the words may anticipate, believe, expect, intend, should, could, and similar expressions. Such forward-looking statements, which may relate to Nextnav's forecast of future results, future prospects, developments in business strategies, are subject to known and unknown risks, uncertainties, and assumptions, many of which are outside Nextnav's control and could cause actual results to differ.
Speaker Change: On todays call are Mary I'm, Sarath, <unk>, Chief Executive Officer, and Christine <unk>, Chief Financial Officer before we begin let me remind everyone that this call will include certain statements that constitute forward looking statements within the meaning of the private Securities Litigation Reform Act of 95.
Speaker Change: Forward looking statements maybe identified by use of the words may anticipate believe expect intend should could and similar expressions.
Speaker Change: Such forward looking statements, which may relate to next nats forecasts of future results. Please your prospect development and business strategy are subject to known and unknown risks uncertainties and assumptions many of which are outside <unk> control that could cause actual results to differ.
Nevin Reilly: In particular, such forelooking statements include the achievement of certain FTC-related milestones and FTC approvals, Nextnav's projections, plans, objectives, and expectations, and Nextnav's future business strategies and competitive pivot. These statements are based on management's current expectations and beliefs, as well as the number of assumptions concerning future events. You are cautioned not to place undue reliance upon the forward-looking statements, which speak only as of the date made, and Nextnav undertakes no commitment to update or revise the forward-looking statements, except as required by law.
Speaker Change: In particular, such forward looking statements include the achievement of certain FCC related milestones and FCC approval next asked projections plans objectives, and expectations and SaaS future business strategies and competitive position.
Speaker Change: These statements are based on management's current expectations and beliefs as well as a number of assumptions concerning future events.
Speaker Change: Cautioned not to place undue reliance on the forward looking statements, which speak only as of the date made and next time undertakes no commitment to update or revise the forward looking statements except as required by law.
Nevin Reilly: For additional information regarding risks and uncertainties, please refer to the risk factors and other disclosures contained in the company's filings with the FDA.
Speaker Change: Information regarding risks and uncertainties. Please refer to the risk factors and other disclosures contained in the company's filings with the SEC.
Nevin Reilly: Following prepared remarks, the company will host an operator led question and answer. In addition, a replay of our discussion will be posted to the company's investor relations website.
Speaker Change: Following our prepared remarks, the company will host an operator last question and answer session.
Speaker Change: A replay of our discussion will be posted to the company's investor Relations website I'd now like to turn the call over to Mr. Ron. Please go ahead and area.
Nevin Reilly: I'd now like to turn the call over to Mr. Sorond. Please go ahead, Mariam.
Mariam Sorond: Thank you, Nevin. Good morning, and thank you all for joining us today.
Ron: Thank you Devin good morning, and thank you all for joining us today before drilling down on business milestones and momentum I'd like to begin with a snapshot of who we are and discuss why our solution has never been more important.
Mariam Sorond: Before drilling down on business milestones and momentum, I'd like to begin with a snapshot of who we are, and discuss why our solution has never been more important.
Mariam Sorond: I will then pass it over to Chris to provide an update on our financial. At Nextnav, we're focused on solving a critical national security challenge, the vulnerabilities of GPS. GPS is critical in nearly every part of modern life, from national defense and aviation, to emergency response, power grids, telecommunications, and financial systems. However, GPS can be jammed or spoofed with low cost equipment.
Ron: Then pass it over to Chris to provide an update on our financials.
Ron: And that's we're focused on solving a critical national security challenge the vulnerability of GPS.
Ron: GBS is critical in nearly every part of modern life from National Defense and aviation to emergency response.
Ron: Grid telecommunications and financial systems power.
Ron: However, GPS can be jammed or spoofed with low cost equipment, and unlike China and Russia. The U S. Currently has no domestic terrestrial backup in place for continuity if GPS sales.
Mariam Sorond: And unlike China and Russia, the US currently has no domestic terrestrial backup in place for continuity if GPS fails.
Mariam Sorond: That's where Nextnav comes in. We're proposing a vital layer of resilience by delivering a terrestrial complement and backup to GPS. Using our licensed low band 900 megahertz spectrum, the scale of 5G infrastructure, and the 5G equipment ecosystem, we've proposed a reliable, accurate positioning, navigation, and timing or PNT solution to the FCC.
Ron: That's where next now comes in.
Ron: Moving to vital layer of resilience by delivering a terrestrial complement and backup to GPS using our licensed slope at 900 megahertz spectrum, the scale of <unk> infrastructure and the <unk> equipment ecosystem, we've proposed a reliable accurate positioning navigate.
Ron: <unk> and tiny or PNT solutions to the FCC.
Mariam Sorond: Our system can provide a critical backup to GPS and complements it indoor and in urban canyons where GPS signals are often limited or not available. This is essential for first responders and critical infrastructure and restructured our solution to be deployable at no cost to taxpayers. We're actively working with the FCC and key stakeholders to integrate our solution as part of a broader system of systems approach to national PNT resiliency. While we've been talking about this for over a decade, we're excited to see the increased urgency from the current administration.
Ron: Our system can provide a critical backup to GPS and complemented indoor and urban canyons, where GPS signals are also limited or not available.
Ron: It is essential for first responders and critical infrastructure and restructured our solution to be deployable at no cost to taxpayers.
Ron: to integrate our solution as part of a broader system of systems approach to national P&T resiliency. While we've been talking about this for over a decade, we're excited to see the increased urgency from the current administration.
Mariam Sorond: As FCC Chairman Brendan Carr recently put it, while GPS may be indispensable, it is not infallible. Disruptions to GPS have the potential to undermine the nation's economic and national security. During the first quarter, the FCC demonstrated meaningful progress with fast movement under Chairman Carr to advance space-based and terrestrial P&T solutions.
Ron: As FCC chairman, Brendan Carr recently put it, while GPS may be indispensable, it is not insoluble. Disruptions to GPS have the potential to undermine the nation's economic and national security.
Ron: During the first quarter, the FCC demonstrated meaningful progress with fast movement under Chairman Carr to advance space-based and terrestrial P&T solutions. On March 27th, the FCC unanimously voted to advance a notice of inquiry or NOI titled Promoting the Development of Positioning Navigation and Timing Technologies and Solutions to explore how the FCC may foster GPS backups and compliments.
Mariam Sorond: On March 27, the FCC unanimously voted to advance a Notice of Inquiry, or NOI, titled Promoting the Development of Positioning, Navigation, and Timing Technologies and Solutions to Explore How the FCC May Foster GPS Backups and Composites. The unanimous vote demonstrates a clear recognition of the urgent national security and public safety need for resilient PNT. Backed by bipartisan and public support, the NOI advances efforts to develop terrestrial PNT solutions that add critical redundancy to America's infrastructure. We were pleased with the NOI and applaud the FCC's engagement with stakeholders across government and industry, and for its interest in a system of systems approach, an approach that includes both space and terrestrial-based technologies to build redundancy into America's critical infrastructure.
Ron: The unanimous vote demonstrates a clear recognition of the urgent national security and public safety need for resilient PNT.
Ron: We were pleased with the NLI and applauded the SEC's engagement with stakeholders across government and industry and for its interest in a system of systems approach, an approach that includes both space and terrestrial-based technologies to build redundancy into America's critical infrastructure.
Mariam Sorond: We feel unanimous support for the NOI and a framework for moving quickly by the FCC as indicated by its expedited NOI comment period. Chairman Carr brought to light a critical issue for the industry, with a vast majority of commenters supporting the need for a backup and complement to GPS. There was a broad consensus in the NOI comments regarding the importance of enhanced national PNT infrastructure and mitigating GPS vulnerabilities via a systems approach. Many commenters also agreed that a terrestrial solution is critical and that it should be large-scale and available for incorporation in end-user devices. In addition, first responder organizations have urged the FCC to support deployment of resilient TNT and a number of key public safety organizations as well as other commenters have supported further action by the FCC with respect to Nextnav's proposal.
Ron: We sell unanimous supports for the NOI in a framework for moving quickly by the FCC as indicated by its expedited NOI comment periods.
Ron: Chairman Carr brought to light a critical issue for the industry with a vast majority of commenters supporting the need for a backup and complement to GPS.
Ron: There was a broad consensus in the NOI comments regarding the importance of enhanced national PNT infrastructure and mitigating GPS vulnerabilities via a system's approach.
Ron: Many commenters also agree that a torusional solution is critical and that it should be wide-scale and available for incorporation and end-user devices.
Speaker Change: In addition, first responder organizations have urged the FCC to support deployment of resilient PNT and a number of key public safety organizations as well as other commenters have supported further action by the FCC with respect to Nextnav's proposal.
Mariam Sorond: While the NOI was a general proceeding, Nextnav was specifically described by the FCC in the NOI, which underscores the interest in our wide scale technology proven across the public and private sectors. The discussion in the NOI references Nextnav's demonstrated performance. Moreover, the language of the NOI closely echoes the foundational points of our separately filed FCC petition for rule change, repeatedly emphasizing the necessity for a system of systems, including a terrestrial component and the need for a backup and complement to GPS to address vulnerabilities and limitations in GPS. It is critical for the FCC to enable at least one future proof solution that relies on market forces to deliver a terrestrial wide scale PNT solution that is broadly available to critical infrastructure, public safety, and consumers, and has a clear path to incorporation in end user devices.
Speaker Change: While the NOI was a general proceeding, Nextnav was specifically described by the FCC and the NOI, which underscores the interest in our wide-scale technology, proven across the public and private sectors.
The discussion in the NOI references Nextnav's demonstrated performance. More over.
Speaker Change: The language of the NOI closely echoes the foundational points of our separately filed
Speaker Change: Repeatedly emphasizing the necessity for a system of systems, including a terrestrial component and the need for a backup and complement to GPS to address vulnerabilities and limitations in GPS.
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It is critical for the FCC to enable.
Speaker Change: At least one future-proof solution that relies on market forces to deliver a terrestrial wide-scale P&T solution that is broadly available to critical infrastructure, public safety and consumers, and have a clear path to incorporation in end-user devices.
Mariam Sorond: In terms of the FCC's ongoing consideration, we did not see any surprises or show-stoppers from the NOI that would prevent the FCC from taking action with respect to next steps. We believe PNC resiliency is an urgent national security objective and are encouraged by the FCC's swift action thus far. We hope the FCC maintains this pace and Nextnav will continue to work collaboratively with the FCC and industry to deliver on this administration's priority.
Speaker Change: We hope the FCC maintains this piece and that's how we'll continue to work collaboratively with the FCC and industry to deliver on this administration's priority.
Mariam Sorond: Now, as a brief aside, while we are proud of the support and record both for Nextnav and for the objective of a wide scale terrestrial backup and complement, we wanted to touch on the recent opposition and why we think it is unlikely to be persuasive at the FCC. There are generally two types of arguments. The first claims that there are superior terrestrial alternatives to Nextnav and PNT. But we believe the FCC is interested in a system of systems approach requiring multiple terrestrial technologies. And Nextnav's part is a wide scale terrestrial solution that can be incorporated in consumer devices without the need for taxpayer funding.
Speaker Change: Now as a brief aside while we are proud of the support and record both for next up and for the objectives of Widescale terrestrial backup in complement we wanted to touch on the recent our position and why we think it is unlikely to be persuasive at the FCC.
There are generally two types of arguments. The first claims that are superior terrestrial alternatives to next novel PNT, but we believe the FCC. The interested any system of systems approach requiring multiple terrestrial technologies and Nexstar part is he widescale terrestrial solution that can be incorporated.
Speaker Change: And consumer devices without the need for taxpayer funding.
Mariam Sorond: The second type of opposition claims that modifying the technical rules for the band would cause interference issues to other current licensees in the band and to a variety of unlicensed devices that currently and successfully co-exist in the band. Thus far, none of these interference claims are supported by technical analysis. We continue to reach out to incumbents in the band for engineer to engineer dialogue. And we are confident that the staff at the FCC will be able to assess the technical arguments fairly and completely. We continue to believe that the benefits of implementing Nextnav's proposal in terms of addressing a critical national security vulnerability will far outweigh any costs of retuning license incumbent systems or replacing equipment if required.
Speaker Change: The second type of opposition claims is modifying the technical rules for the band would cause interference issues to other current licensees and the bad and to a variety of unlicensed devices that currently has successfully coexist in the bed thus.
Speaker Change: Thus far none of these interference claims are supported by technical analysis.
Speaker Change: We continue to reach out to incumbents in the band for engineer to engineer a dialogue and we are confident that the staff at the FCC will be able to assess the tactical arguments fairly and completely.
Speaker Change: We continue to believe that the benefits of implementing next slots proposal in terms of addressing a critical national security vulnerability will far outweigh any cause of retuning license incumbent systems or replacing equipment if required.
Mariam Sorond: In addition, a technical analysis was filed at the FCC in late February showed that Nextnav's proposed 5G operations would not cause unacceptable interference on licensed devices in the band.
Speaker Change: In addition, a technical analysis, we felt that the FCC in late February show up at next month's proposed five G operations would not cause unacceptable interference unlicensed devices in the band.
Mariam Sorond: The recognition of the urgent national security and public safety needs at hand is not just a topic of policy, it is an imperative from a number of audiences in the broader global markets that are bringing attention to this now.
Speaker Change: The recognition of the urgent national security and public safety needs at hand is not just a topic of policy. It is an imperative from a number of audiences and the broader global markets that are bringing attention to this now.
Mariam Sorond: Earlier this week, I presented at the Milken Institute Global Conference on a panel regarding America's lack of preparation for future warfare. There was a wide recognition that building resiliency in vulnerable systems is important for deterrence, and also for regaining our leadership in critical technology.
Speaker Change: Earlier this week I presented at the Milken Institute Global Conference on a panel regarding America's lack of preparation for future warfare.
Speaker Change: There was a wide recognition that building resiliency and vulnerable system is important for deterrence and also for regaining our leadership in critical technologies.
Mariam Sorond: Further, it was recognized that the private sector can help address national security concerns by accelerating the availability of these resilient systems. Additionally, as we execute on our goal of providing a terrestrial backup and complement to GPS to address a major national security threat, we are pleased to welcome two esteemed individuals to our Board of Directors, Rear Admirals H. Wyman Howard and Lauren Selby. Their extensive military and national security leadership experience in technology, research and development, and management capabilities will be invaluable to Nextnav and will help drive our agenda.
Speaker Change: It was recognized that the private sector can help address national security concerns by accelerating the availability of these resilient systems.
Speaker Change: Additionally, as we execute on our goal of providing a terrestrial backup in complement to GPS to address a major national security threat.
Speaker Change: We're pleased to welcome two esteemed individuals to our board of directors rear Admiral H Wyman, Howard and Lawrence Sophie.
Speaker Change: Their extensive military and national security leadership experience and technology research and development and management capabilities will be invaluable to Nexstar and will help drive our agenda.
Mariam Sorond: Looking ahead, Nextnav is committed to strengthening TNT resiliency in support of national security, public safety and the economy. With increasing recognition of the need for a terrestrial GPS backup evidenced by the bipartisan NOI vote in March and strong national security focus from the new administration, we are well positioned for continued momentum. We remain focused on executing on our strategic roadmap and driving innovation in geolocation technology.
Speaker Change: Looking ahead <unk> is committed to strengthening TNT resiliency and support of National security public safety and the economy.
Speaker Change: With increasing recognition of the need for each rostral GTS backup.
Speaker Change: Evidenced by the bipartisan NOI vote in March and strong National security focus from the New administration, we are well positioned for continued momentum we remain focused on executing on our strategic roadmap and driving innovation and geolocation.
Speaker Change: Technology.
Chris Gates: With that, let me turn things over to Chris for a review of our financials. Chris.
With that let me turn things over to Chris for a review of our financials Chris.
Chris Gates: Thanks, Mariam.
Chris: Thanks, Barry and good morning, everyone I'll address our financial performance for the first quarter of 2025, we provide details on the strategic financing we closed in March.
Chris Gates: Good morning, everyone. I'll address our financial performance for the first quarter of 2025 and provide details on the strategic financing in closed remarks. Beginning with the top line, Nextnav's revenue in the first quarter was $1.5 million, a $.5 million increase from $1.0 million in the prior year period. The year-over-year increase in the period was driven primarily by an increase in service revenue from technology and services contracts with government and commercial customers. Operating expenses for the first quarter were $18.5 million, up approximately $1.3 million versus the same period last year. Operating expenses included $1.5 million in depreciation and amortization and $4.3 million in equity compensation, compared to $1.3 million in depreciation and amortization and $4.2 million in equity compensation in the first quarter of 2024.
Speaker Change: Beginning with the top line net.
Chris: Revenue in the first quarter was $1 $5 million.
Chris: $5 million increase from 1.0 million in the prior year period.
Chris: The year over year increase in the period was driven primarily by an increase in service revenue from technology and services contracts with government and commercial customers.
Chris: Operating expenses for the first quarter were $18 5 million up approximately $1 3 million versus the same period last year operating.
Chris: Operating expenses included $1 5 million, and depreciation and amortization and $4 3 million of equity compensation compared to $1 3 million and depreciation and amortization and $4 2 million and equity compensation in the first quarter of 2024.
Chris Gates: Net loss for the first quarter was $58.6 million, which included a $24.5 million loss associated with the change in the fair value of derivative liability and $14.4 million of debt extinguishment loss. This is compared to a net loss of $31.6 million in the first quarter of 2024, which included a loss in the change of the fair value of our warrant liability of $13.2 million.
Chris: Net loss for the first quarter was $58 6 million, which included a $24 $5 billion loss associated with the change in the fair value of derivative liability and $14 $4 million.
Chris: Debt extinguishment loss. This is compared to a net loss of $31 6 million in the first quarter of 2024, which included a loss from the change of the fair value of our warrant liability of $13 $2 million.
Chris Gates: Turning now to our balance sheet of liquidity, we finished the quarter with $188.4 million in cash, cash equivalents and short-term investments. This reflects the closing during the quarter of the previously announced $190 million of 5% redeemable Senior Secured Convertible Notes due 2028, issued in a private placement to lead investors in Core Capital, Fortress, and other new and existing investors. As part of the closing of the notes, a portion of the net proceeds were used to redeem our previously issued $70 million, 10% senior secured notes due 2026, along with accrued interest. As noted, we were pleased to welcome new strategic investors while deepening our relationship with existing investors and enhancing the liquidity of our balance sheet on attractive terms. We believe this capital will provide additional financial flexibility and strategic support as we pursue our objectives through 2025 and beyond.
Chris: Turning now to our balance sheet and liquidity, we finished the quarter with $188 $4 million in cash cash equivalents and short term investments. This reflects the closing during the quarter. The previously announced $190 million of 5% redeemable senior secured convertible notes due 2028 issued in a private placement to REIT investors and core capital.
Chris: Fortress and other new and existing investors as part of the closing of the notes a portion of the net proceeds were used to redeem our previously issued $70 million, 10% senior secured notes due 2026, along with accrued interest.
Chris: As noted we were pleased to welcome new strategic investors, while deepening our relationship with existing investors and enhancing the liquidity of our balance sheet unattractive terms. We believe this capital will provide additional financial flexibility and strategic support as we pursue our objectives through 2025 and beyond.
Chris Gates: As we have mentioned in the past, we take a prudent long-term approach to liquidity and continue to carefully manage our use of capital.
Chris: We have mentioned in the past, we take a prudent long term approach to liquidity and continue to carefully manage our use of capital with that I'll turn the call back over to the operator for questions operator.
Operator: With that, I'll turn the call back over to the operator for questions.
Operator: Operator. Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again.
Speaker Change: Thank you we will now begin the question and answer session. If you have dialed in and would like to ask a question. Please press star one on your telephone keypad to raise your hand and trying to queue. If he would like give me try your question simply press Star one again.
Ryan Coons: If you are called upon to ask your question in a listening via speakerphone on your device, please pick up your handset to ensure that your phone is not on mute when asking your Again, press star 1 to join And our first question comes from the line of Ryan Coons with Needham. Thanks for the question. With regards to your kind of proposed network deployment model, can you maybe walk us through that a little bit, as, you know, how it involves incumbent mobile operators?
Speaker Change: All called upon to ask you a question in a listening via speaker phone or device. Please pick up your handset to ensure that your phone is not on mute when asking a question again press star one to join the queue.
Speaker Change: And our first question comes from the line of Ryan Koontz with Needham Your line is open.
Ryan Koontz: Great. Thanks for the question.
Speaker Change: With regards to your kind of proposed.
Speaker Change: Work deployment model can you maybe walk us through that a little bit how it involves incumbent mobile operators and their spectrum and how your services with mesh with with their.
Speaker Change: Restructure and and their wireless services.
Ryan Koontz: Yeah, Hi, Ryan.
Mariam Sorond: Yeah, hi, Ryan. Basically, our proposal is the technology is embedded in 5G. It's completely standards-based, right? 5G has an existing standards-based signaling mechanism called PRS, or the positioning reference signal that doesn't need any modification or anything to the equipment. And basically, you turn it on, it provides a beacon, and then our software derives positioning timing from that beacon. So basically, what this means is that when our spectrum, and we've said this in the past, that basically the spectrum will be deployed by our partner, most likely an MNO, they will add this spectrum to their existing network like they do any other spectrum for capacity purposes or coverage purposes.
Speaker Change: Basically our proposal is in the technology is embedded in <unk>, it's completely standards based right <unk>.
Speaker Change: Has an existing standards based signaling mechanism called Prs or the positioning reference signal.
Speaker Change: That doesn't need any modification or anything to the equipment and basically you turn it on it provides a beacon and then our software does.
Speaker Change: Raj positioning timing from that Beacon.
Speaker Change: So basically what this means is that when our spectrum and we've said this in the past basically the spectrum will be deployed by our partner most.
Speaker Change: Most likely in <unk> they.
Speaker Change: They will add the spectrum two there.
Speaker Change: Listing network like they do any other spectrum for capacity purposes or coverage purposes, and and they go through the same same routine as they would and so and then when it's when it's complete.
Mariam Sorond: And they go through the same routine as they would. And so, and then when it's completed deployment, they turn on the PRS and we get to go. So you'd use their towers, their back hall. Yeah, the signal is embedded in the 5G. So it's already whatever routing mechanism, the same equipment that you use for 5G broadband is actually going to turn on the signal, which is the same routing mechanism. And then we actually detect and derive the signal within an end-user device. It's 5G-based. That's why we talk about the wide-scale availability and convenience in end-user devices.
Speaker Change: Completed deployment, they turn on the Prs and we get to go.
Speaker Change: And so you'd use there their towers their backhaul and their kind of core infrastructure to route your.
Speaker Change: So it goes.
Speaker Change: Yeah. The signal was embedded in the five G. So it's already whatever rocket routing mechanism. The same equipment that you use for five G broadband.
Speaker Change: Is is is is actually going to turn on the signal, which same routing mechanism and then we actually detect and derive the signal was in an end user devices. Five G base. That's why we talk about the wide scale availability in convenience and end user devices and our solution is just software and extra.
Mariam Sorond: And our solution is just software. It extracts that information and derives the positioning and timing.
Speaker Change: <unk> that information and derives the positioning and timing.
Mariam Sorond: Ryan, what would be their motivation for rolling this out? They, their motivation will be that they need spectrum, specifically also low band spectrum, which is scarce these days for coverage or capacity enhancements. They will deploy it for the reason of the spectrum needs. Got to still operate their own traffic over your... Exactly.
Speaker Change: Right and what would be their motivation for almost out.
Speaker Change: It's commercial.
Speaker Change: They their motivation will be that they need spectrum, specifically also low band spectrum, which is.
Speaker Change: Uh-huh scarce these days for coverage or capacity enhancement, they will deploy it for the for the reason of the spectrum need.
Speaker Change: Got it so operate their own traffic over your 900 megahertz spectrum.
Mariam Sorond: This is this is the solution we came up this for this to be an economically innovative solution, right. And in past, we've talked about how deploying just a beacon for PNT is not economical. So this is how we came up with a solution to say the spectrum is what what the operators would be interested in.
Speaker Change: Exactly. This is this is a solution that we came up this for this to be an economically innovative solution right.
Speaker Change: <unk>, we've talked about how deploying a just a beacon for PNT Ah is not economical. So this is how we came up with a solution to say the spectrum is what with the operators would be interested in so therefore, we could then derive the PNT signal from it.
Mariam Sorond: So therefore, we could then derive the PNT signal from How about on the client side? Chips and RF capabilities in the end device. So just like any spectrum today that an operator adds, right, and they're going to continue to do this because they need spectrum, they're going to add spectrum to their networks.
Speaker Change: About in the client side, where you can do there obviously you need you need a new.
Speaker Change: New chips and kind of RF capabilities.
Speaker Change: Capabilities and devices to our processes.
Speaker Change: So just like any spectrum today, and operator of ads right and they're going to continue to do this because they need spectrum, they're gonna add spectrum to their networks.
Mariam Sorond: Devices would have the roadmaps, whether that's on the front end or whether that's the software to include a new band. It's the same process, no different than any other spectrum that they would add. In terms of the client processing capability to derive. software. process? No, just software.
Speaker Change: <unk> devices would have the roadmaps, whether that's on the front end or whether that's a software two to include a new band Ah. It's the same process no different than any other spectrum that they would add.
Speaker Change: And in terms of the client processing capability to derive the signals.
Speaker Change: Is it running software or do you need another chip to process.
Speaker Change: <unk> just saw for our solution is 100% software based.
Mariam Sorond: Our solution is 100% software based. for extracting the positioning.
Speaker Change: For extracting the positioning yep.
Speaker Change: Alright, Thats all I got thanks for the questions.
Mariam Sorond: That's all I've got. Thanks for questions. Thank you.
Speaker Change: Thank you.
Tim Horan: Our next question comes from the line of Tim Horan with Oppenheimer. Thanks, guys.
Speaker Change: Our next question comes from the line of Tim Horan with Oppenheimer. Your line is open.
Mariam Sorond: Um, following up on that question, you know, how expensive Nextnav Acqsn, Erica Bartsch, Mariam Sorond, Nextnav Acqsn, Mariam Sorond, Nextnav Acqsn, So, so the CapEx or any addition would be similar to any other spectrum, which they do all the time, because we're exactly not going opposite direction on the need for more capacity or coverage. They're going to continue to spend the money to add spectrum to their network. As far as whether it's expensive to add our software, no. Again, laying over a software layer is not at all. It's not a hardware modification. It's not an additional equipment, which would then make it additional cost to what they routinely do to add spectrum.
Speaker Change: Scott.
Speaker Change: Following up on that question you know how expenses went to speak to deploy for an M. In our software base.
Speaker Change: And.
Speaker Change: Why wouldn't they all deploy this may be an existing spectrum now.
Speaker Change: If it's feasible.
Speaker Change: Ed.
Speaker Change: Yeah. So.
Speaker Change: So the Capex or any addition would be similar to any other spectrum, which they do all the time, because we're exactly not going opposite direction on the need for more capacity of coverage, they're going to continue to spend the money to add spectrum to their networks.
Speaker Change: As far as whether it's expensive to add our sulfur no again, playing over our software layers is not at all it's it's not a hardware modifications and some additional equipment, which makes which would then make it.
Speaker Change: Additional cost what they routinely do to add spectrum. So we don't have any of those.
Mariam Sorond: So, we don't have any of those.
Mariam Sorond: And you asked a really good question on why wouldn't they do this now if it's there. They can. They can actually turn on the PRS signal in a 5G network or a CRS signal in a 4G network. But it is a 5% capacity hit to their networks. So, basically, they would be giving up 5% of their capacity, which is generating mobile broadband revenue. That's one problem.
And you have really good question on why wouldn't they do this now.
Speaker Change: If it's there they can.
Speaker Change: They can actually turn on the Prs Sigma or in a <unk> network or a C or a signal on a <unk> network.
Speaker Change: But it is a 5% capacity to their networks. So basically there would be giving up 5% of.
Speaker Change: <unk> of their capacity, which is generating mobile broadband revenue. That's one that's one problem. The second problem is just turning on the signal is not enough you have to kind of then have you know that <unk> has the expertise the licensing the IP the software to be able to then take that signal and converted to positioning and timing.
Mariam Sorond: The second problem is just turning on the signal is not enough. You have to kind of then have, you know, Nextnav has the expertise, the licensing, the IP, the software to be able to then take that signal and convert it to positioning and timing. Unknown Speaker 06. Thank you. Got it, got it.
Speaker Change: Okay.
Speaker Change:
Speaker Change: Got it got it.
Mariam Sorond: So Is there anything else about your technology or intellectual property that I thought you only needed a couple of megahertz of the, of your spectrum to kind of run this? And I think, you know, the carriers are up to like 300 megahertz on average now, or, you know, why would it take 5% of their capacity and for you would be much lower amount? So we actually have put an analysis early on about this needs a broad bandwidth. So we do need the 10 megahertz downlink. So this is 10 plus 15 configuration that we're proposing. The 10 megahertz, the depth of the spectrum is critical in providing accuracy.
Speaker Change: So.
Speaker Change: Is there anything else about your technology or intellectual property that I thought you were only needed a couple of megahertz of the of your spectrum to kind of run. This one I think carriers are up to like 300 megahertz on average now or.
Speaker Change: Why would it take 5% of their capacity and to you would be much lower amount.
Speaker Change: So it would be we don't.
Speaker Change: So we actually have put an analysis early on about this needs a broad bandwidth. So we do need the 10 megahertz downlink. So this is a 10 plus 15 configuration that we're proposing.
Speaker Change: 10 megahertz of depth of the spectrum is critical in providing accuracy.
Mariam Sorond: Capacity is a completely different layer, and that 5% is from the bits per second perspective, not the megahertz perspective. And it's the same. The overhead associated with PRS, whether it's in this band or whether it's in another band, is going to be about 2 to 5%. I'm taking the upper edge of things, depending on many configuration parameters. Did I answer your question? I got it. So it's 5% of the 10% that you're that you're 5% of the 10 megahertz that you're using. Yeah. Got it.
Speaker Change: Capacity is a completely different layer and that 5% is from the bits per second perspective, not the megahertz perspective perspective, and it's the same as it was the overhead associated with Trs whether its in this band or whether it's in another band is going to be about 2% to 5% I'm, taking the upper edge of things.
Speaker Change: Lending on many configuration parameters.
Speaker Change: Did I answer your question I got it so it's 5% of the 10% that you are.
Speaker Change: Some of the 10 megahertz that youre using yeah, Yeah got it got it.
Mariam Sorond: And, you know, Iridium has been pushing pretty hard TNT standard using their low earth orbiting, you know, satellites, it'll be kind of global and they, you know, claim it's 100 times the signal of what you get for GPS.
Speaker Change: And iridium has.
Speaker Change: Pushing pretty hard.
Speaker Change: Standard using their low earth orbiting satellites there'll be kind of a global one claim it is 100 times.
Speaker Change: No.
Speaker Change: Of what you get for GPS I know Youre talking about assistance assistance and so clearly there's still a need for terrestrial, but do you see that as a competitor or complementary and theres a bunch of other satellite because some people are looking to do something similar.
Mariam Sorond: I know you're talking about a systems to systems and clearly there's still a need for terrestrial but do you see that as a competitor or complementary and you know there's a bunch of other satellite systems that are looking to do something similar? Got it. Very, very, very helpful. Thank you.
Speaker Change: Yes, we see that as very complementary I mean satellites are placed highlights are providing GPS today with 4 billion users nationwide worldview.
Speaker Change: Worldwide.
Speaker Change: It depend on it satellites are really critical theyre going to continue to be needed the satellite commenters or oh.
Speaker Change: We think they have a definitely an important place.
Speaker Change: To play in this whole system of systems.
Speaker Change: And whether it's in the backup or any other solutions that we're bringing to the table. They bring an important part of the solution to the table.
Speaker Change: What we're doing is we're coming over in a vulnerability of a satellite.
Speaker Change: So whether that's the GPS satellite or another operator's, Leo and MEO or Geo satellite, it's still a satellite and its vulnerable.
Speaker Change: They're vulnerable they're space space right Milton was all about the future of warfare, that's going space based and how easy. It is to go after solid they're very far in the sky. So their signals a week when they get down to Earth. They get jammed. It gets spoofed those are the vulnerabilities and that's a gap in our part of the solution that we.
Speaker Change: We're bringing to the table.
Speaker Change: And they will continue to play an important role where their strengths are.
Speaker Change: Got it.
Speaker Change: Very very helpful. Thank you.
Speaker Change: Oh.
Mike Crawford: And our last question comes from the line of Mike Crawford with BRID Securities. Your line is open. Um, thank you.
Mike Crawford: And our last question comes from the line of Mike Crawford with B Riley Securities. Your line is open.
Mike Crawford: Thank you and your comments filed and.
Mariam Sorond: In your comments filed in the PMT NOI, you essentially are urging the commission to. issue NPRM on your Parallel petition is Is there is is there a way for you to get.
Mike Crawford: In the PMT NOI.
Mike Crawford: U SS.
Mike Crawford: Essentially urging the commission to.
Mike Crawford: Issue of N P. R M on your.
Mike Crawford: Parallel petition is.
Mike Crawford: Is there.
Mike Crawford: Is there a way for you to get.
Mariam Sorond: Is that the only path, or is there any shortcut path, maybe, if this PMT action moves more quickly, that you could get essentially what you want, with the ability to use the rest of a 5G waveform, besides just the timing, positioning signal that you'd be transmitting along with it, or your partner would be transmitting? So the FCC can decide what it wants to do in the next steps. We would like to see an NPRM. And an NPRM, it doesn't have to be on the earlier petition. The NPRM can be issued on the NOI. So either way that they see this, it's fine as long as we get to an NPRM process.
Mike Crawford: Is that is that the only path or was there any shortcut path, maybe if there's PNT.
Mike Crawford: Action moves more quickly that you could get.
Mike Crawford: Essentially what you want with the ability to.
Mike Crawford: She is the rest of the.
Mike Crawford: <unk> way for them. Besides just the timing positioning signaled that you'd be transmitting along with it.
Mike Crawford: Your partner would be transmitted.
Mike Crawford: So the S. T T time like the FCC can can decide what it wants to do in the next steps are.
Mike Crawford: We would like to see it NPR and then N. P. R. I mean, it doesn't have to be on the earlier petition the NPR and can be issues are on.
Mike Crawford: On the NOI.
Mike Crawford: So either way that they see this its fine as long as we get to and then Purion process.
Mariam Sorond: You do need an NPRM to change rules. There's notice of proposal, rulemaking changes, and then eventually a report and order. There is no other mechanism that gets you to a rule change. Now, but of course, in the interim, they could do many other processes in the toolbox and that they would like to get to the final vision of a report and order ultimately.
Mike Crawford: You do need an MPR to change rules. This notice of proposal rulemaking changes and then eventually a report and order.
Mike Crawford: There is no other mechanism that are that gets you to a rule change now but of course in the interim they can do many other processes in the toolbox and that they would like to get to the final edition of a report and order ultimately.
Speaker Change: Okay, great. Thank you very much sure.
Mariam Sorond: Okay, great, thank you very much.
Mike Crawford: Yeah.
Mariam Sorond: That concludes the question and answer session. I would now like to turn the call back over to management for closing remarks. Thank you all for joining us today. We're very excited by the pace of momentum we're seeing on the regulatory front with the FCC. And as we look ahead, we are committed to advancing geolocation services that will enhance P&T resiliency for national security, public safety and the economy. And we're excited as our momentum propels us forward.
Speaker Change: That concludes the question and answer session I would now like to turn the call back over to management for closing remarks.
Mike Crawford: Yeah.
Speaker Change: Thank you all for joining us today I'm very excited by the papers momentum we're seeing on the regulatory front with the FCC and as we look ahead. We are committed to advancing geolocation services that one has PMT resiliency for national security public safety and the economy and we're excited.
Speaker Change: As our momentum proposals forward, we're looking forward to connecting with you all next quarter.
Mariam Sorond: We're looking forward to connecting with you all next quarter.