NextNav Q1 2025 Earnings Report

NextNav EPS Results

• Actual EPS: -$0.15
• Consensus EPS: -$0.14
• Beat/Miss: Missed by -$0.01
• One Year Ago EPS: N/A

NextNav Revenue Results

• Actual Revenue: $1.54 million
• Expected Revenue: $1.87 million
• Beat/Miss: Missed by -$330.00 thousand
• YoY Revenue Growth: N/A

NextNav Announcement Details

• Quarter: Q1 2025
• Date: 5/9/2025
• Time: Before Market Opens
• Conference Call Date: Friday, May 9, 2025
• Conference Call Time: 9:00AM ET

NextNav (NASDAQ:NN) provides next generation positioning, navigation, and timing (PNT) solutions in the United States. It offers Pinnacle, a dedicated vertical positioning network to cover entire metropolitan areas including devices equipped with a barometric pressure sensor with the highest quality wide-area altitude service. The company also provides TerraPoiNT, an 3D PNT system, provides positioning, navigation and timing services provided by GPS through a land-based GPS satellite constellation. It serves Wi-Fi, telecom, public safety, gaming and location apps, and critical infrastructure applications. NextNav Inc. was founded in 2007 and is headquartered in McLean, Virginia.

NextNav Q1 2025 Earnings Call Transcript

Key Takeaways

• NextNav is developing a terrestrial backup for GPS, leveraging its licensed 900 MHz spectrum and 5G infrastructure to provide accurate PNT indoors and in urban canyons at no cost to taxpayers.
• The FCC unanimously advanced a Notice of Inquiry on resilient Positioning, Navigation, and Timing technologies, specifically citing NextNav’s proposal and endorsing a system-of-systems approach.
• First-quarter revenue increased to $1.5 million from $1.0 million a year ago, driven by government and commercial contracts, while net loss widened to $58.6 million due to derivative liability and debt extinguishment charges.
• NextNav closed $190 million of 5% redeemable senior secured convertible notes, boosting its cash and equivalents to $188.4 million and strengthening its liquidity through 2025 and beyond.
• The company added Rear Admirals H. Wyman Howard and Lauren Selby to its board, bringing veteran military and national security expertise to support its PNT resiliency mission.

Presentation

[Operator]

Ladies and gentlemen, thank you for standing by. My name is Desiree, and I will be your conference operator today. At this time, I would like to welcome everyone to the NexNav First Quarter twenty twenty five Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer I would now like to turn the conference over to Nevin Riley. You may begin.

[Nevin Reilly, Senior Managing Director at Sloane & Company]

Good morning, everyone, and welcome to NextNav's first quarter conference call. Participating on today's call are Mariam Saran, NextNav's Chief Executive Officer and Chris Gate, 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 NexNAV's forecast of future results, future prospects, developments and business strategies are subject to known and unknown risks, uncertainties and assumptions, many of which are outside NexNAV's control and could cause actual results to differ.

[Nevin Reilly, Senior Managing Director at Sloane & Company]

In particular, such forward looking statements include the achievements of certain SEC related milestones and SEC approvals, NextNav's projections, plans, objectives and expectations and NextNav's future business strategies and competitive position. These statements are based on management's current expectations and beliefs as well as a 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 NextDev undertakes no commitment to update or revise the forward looking statements except as required by law. For additional information regarding risks and uncertainties, please refer to the risk factors and other disclosures contained in the company's filings with the SEC. Following prepared remarks, the company will host an operator led question and answer session.

[Nevin Reilly, Senior Managing Director at Sloane & Company]

In addition, 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. Rand. Please go ahead, Maryam.

[Mariam Sorond, Chairman & CEO at NextNav]

Thank you, Nevan. 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. I will then pass it over to Chris to provide an update on our financials. At NetSnap, we're focused on solving a critical national security challenge, the vulnerabilities of GPS.

[Mariam Sorond, Chairman & CEO at NextNav]

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. And unlike China and Russia, The US currently has no domestic terrestrial backup in place for continuity if GPS fails. 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 five g infrastructure, and the five g equipment ecosystem, we've proposed a reliable accurate positioning, navigation, and timing or PMT solution to the FCC.

[Mariam Sorond, Chairman & CEO at NextNav]

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 we structured 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. As FCC chairman, Brendan Carr recently put it, while GPS may be indispensable, it is not infallible.

[Mariam Sorond, Chairman & CEO at NextNav]

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 and T solutions. 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 complements. The unanimous vote demonstrates a clear recognition of the urgent national security and public safety need for resilient P and T. Backed by bipartisan and public support, the NOI advances efforts to develop terrestrial P and T solutions that add critical redundancy to America's infrastructure.

[Mariam Sorond, Chairman & CEO at NextNav]

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. We saw 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 the 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 system a systems approach. Many commenters also agree that a terrestrial solution is critical and that it should be wide scale and available for incorporation and end user devices.

[Mariam Sorond, Chairman & CEO at NextNav]

In addition, first responder organizations have urged the FCC to support deployment of resilient P and T and a number of key public safety organizations as well as other commenters have supported further action by the FCC with respect to NextMap's proposal. While the NOI was a general proceeding, NexNAV 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 NexNAB'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.

[Mariam Sorond, Chairman & CEO at NextNav]

In terms of the FCC's ongoing consideration, we did not see any surprises or showstoppers from the NOI that would prevent the FCC from taking action with respect to next steps. We believe PMT 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 NexNAV will continue to work collaboratively with the FCC and industry to deliver on this administration's priority. Now as 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.

[Mariam Sorond, Chairman & CEO at NextNav]

The first claims that there are superior terrestrial alternatives to NexNAV and PNT. But we believe the FCC is interested in a system of systems approach requiring multiple terrestrial technologies, and NexNAV's part is a wide scale terrestrial solution that can be incorporated in consumer devices without the need for taxpayer funding. The second type of opposition claims that modifying the technical rules for the ban would cause interference issues to other current licensees in the ban and to a variety of unlicensed devices that currently and successfully coexist 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.

[Mariam Sorond, Chairman & CEO at NextNav]

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 cost of retuning license incumbent systems or replacing equipment if required. In addition, a technical analysis we filed with the SEC in late February showed that NEXNAT's proposed five g operations would not cause unacceptable interference to unlicensed devices in the band. 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. Earlier this week, I presented at the Milton Institute global conference on a panel regarding America's lack of preparation for future warfare.

[Mariam Sorond, Chairman & CEO at NextNav]

There was a wide recognition that building resiliency in vulnerable systems is important for deterrence and also for regaining our leadership in critical technologies. 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. Looking ahead, NextNav is committed to strengthening PNT resiliency in support of national security, public safety and the economy.

[Mariam Sorond, Chairman & CEO at NextNav]

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

[Christian Gates, Chief Financial Officer at NextNav]

Thanks, Mary, and good morning, everyone. I'll address our financial performance for the first quarter of twenty twenty five and provide details on the strategic financing we closed in March. Beginning with the top line, NexNAV's revenue in the first quarter was $1,500,000 a $500,000 increase from $1,000,000 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 $18,500,000 up approximately $1,300,000 versus the same period last year.

[Christian Gates, Chief Financial Officer at NextNav]

Operating expenses included $1,500,000 in depreciation and amortization and $4,300,000 in equity compensation compared to $1,300,000 in depreciation and amortization and $4,200,000 in equity compensation in the first quarter of twenty twenty four. Net loss for the first quarter was $58,600,000 which included a $24,500,000 loss associated with the change in the fair value of derivative liability and $14,400,000 of debt extinguishment loss. This is compared to a net loss of $31,600,000 in the first quarter of twenty twenty four, which included a loss in the change of the fair value of our warrant liability of $13,200,000 Turning now to our balance sheet and liquidity. We finished the quarter with $188,400,000 in cash, cash equivalents and short term investments. This reflects the closing during the quarter of the previously announced $190,000,000 of 5% redeemable senior secured convertible notes due 2028 issued in a private placement to lead investors MCORE Capital, Fortress and other new and existing investors.

[Christian Gates, Chief Financial Officer at NextNav]

As part of the closing of the notes, a portion of the net proceeds were used to redeem our previously issued $70,000,000 10 percent 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. 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. 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. And our first question comes from the line of Ryan Kunz with Needham. Your line is open.

[Ryan Koontz, Senior Analyst at Needham & Company]

Great. 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 how it involves incumbent mobile operators and their spectrum and how your services would mesh with, with their infrastructure and, and their their wireless services? Thanks.

[Mariam Sorond, Chairman & CEO at NextNav]

Yeah. Hi, Ryan. Basically, our proposal is the technology is embedded in five g. It's it's completely standards based. Right?

[Mariam Sorond, Chairman & CEO at NextNav]

Five g 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 the spectrum to their, existing 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 when it's when it's completed deployment, they turn on the PRS, and and we get to go.

[Ryan Koontz, Senior Analyst at Needham & Company]

And so you'd use their their towers, their backhaul, and their kind of core infrastructure to route your signals?

[Mariam Sorond, Chairman & CEO at NextNav]

Yeah. The signal is embedded in the five g. So it's it's already whatever routing mechanism, the same equipment that you use for five g broadband is is is is actually going to turn on the signal, which same routing mechanisms, and then we actually detect and derive the signal within an end user device. It's five g based. That's why we talk about the wide scale availability and convenience in end user devices.

[Mariam Sorond, Chairman & CEO at NextNav]

And our solution is just software. It extracts that information and derives the positioning and timing.

[Ryan Koontz, Senior Analyst at Needham & Company]

Right. And what would be their motivation for rolling this out? It's commercial agreement.

[Mariam Sorond, Chairman & CEO at NextNav]

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 for the reason of the spectrum need.

[Ryan Koontz, Senior Analyst at Needham & Company]

Got it. So they'll operate their own traffic over your 900 megahertz spectrum?

[Mariam Sorond, Chairman & CEO at NextNav]

Exactly. 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.

[Mariam Sorond, Chairman & CEO at NextNav]

So therefore, we could then derive the PNT signal from it.

[Ryan Koontz, Senior Analyst at Needham & Company]

How about on the client side? What are you gonna do there? Obviously, you need you need new new new chips and kinda RF capabilities in the end devices to process this?

[Mariam Sorond, Chairman & CEO at NextNav]

So just like any spectrum today that an operator adds. Right? And and they're gonna continue to do this because they need spectrum. They're gonna add spectrum to their networks. Devices would have the road maps, whether that's on the front end or whether that's the software, to to include a new band.

[Mariam Sorond, Chairman & CEO at NextNav]

It's the same process, no different than any other spectrum that they would add.

[Ryan Koontz, Senior Analyst at Needham & Company]

And in terms of the client, processing capability to derive the signals, is it does it run-in software, or do you need another chip to process the

[Mariam Sorond, Chairman & CEO at NextNav]

No. Just software. Our solution is 100% software based for extracting the positioning, yes.

[Ryan Koontz, Senior Analyst at Needham & Company]

Interesting. Great. That's all I've got. Thanks for the questions.

[Mariam Sorond, Chairman & CEO at NextNav]

Thank you.

[Operator]

Our next question comes from the line of Tim Horan with Oppenheimer. Your line is open.

[Timothy Horan, Managing Director at Oppenheimer & Co. Inc.]

Thanks guys. Just following up on that question, how expensive would this be to deploy for an MNO if it's software based? And why wouldn't they all deploy this maybe on existing spectrum now you know, if it's feasible just to, you know, add in?

[Mariam Sorond, Chairman & CEO at NextNav]

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 gonna continue to to spend the money to add spectrum to their networks. As far as whether it's expensive to add our software, no. But, again, playing over a software layer is is not at all. It's it's not a hardware modification.

[Mariam Sorond, Chairman & CEO at NextNav]

It's not an additional equipment, which makes which would then make it additional cost to what they routinely do to add spectrum, so we don't have any of those. And you ask a really good question on why wouldn't they do this now if it's if it's there? They can. They can actually turn on the PRS signal or in a five g network or CRS signal on a four g network. But it is a 5% capacity hit to their networks.

[Mariam Sorond, Chairman & CEO at NextNav]

So, basically, they would be giving up 5% of of their capacity, which is generating mobile broadband revenue. That 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, 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.

[Timothy Horan, Managing Director at Oppenheimer & Co. Inc.]

Got it. Got it. 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 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?

[Mariam Sorond, Chairman & CEO at NextNav]

So it would be we don't 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 is critical in providing accuracy. Capacity is a completely different layer, and that five percent is from the bits per second perspective, not the megahertz perspective perspective.

[Mariam Sorond, Chairman & CEO at NextNav]

And it's the same. It it the overhead associated with TRS, whether it's in this band or whether and it's in another band, is is gonna be about two to 5%. I'm taking the upper edge of things depending on many configuration parameters. Did I answer your question?

[Timothy Horan, Managing Director at Oppenheimer & Co. Inc.]

Oh, I 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?

[Mariam Sorond, Chairman & CEO at NextNav]

Yep. Yeah.

[Timothy Horan, Managing Director at Oppenheimer & Co. Inc.]

Okay. Got it. Got it. And, you know, Iridium has they're pushing pretty hard of P and T standard using their low earth orbiting satellites that will be kind of global and they claim it's 100 times the signal of what you get for GPS. 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.

[Mariam Sorond, Chairman & CEO at NextNav]

Yeah. We see that as very complementary. I mean, satellites are play satellites are providing GPS today, which 4,000,000,000 users nationwide worldwide depend on it. Satellites are really critical. They're gonna continue to be needed.

[Mariam Sorond, Chairman & CEO at NextNav]

The satellite commenters or or we we we think they have a definitely an important place to play in this whole system of systems. And, whether it's in the backup or any other, solutions they're bringing to the table, they bring an important part of the solution to the table. What we're doing is we're coming over an vulnerability of a satellite. So whether that's a GPS satellite or another operators, LEO or MEO or GEO satellite, it's still a satellite and it's vulnerable. They're vulnerable to their space based.

[Mariam Sorond, Chairman & CEO at NextNav]

Right? I mean, Milken was all about the future of warfare that's going space based and how easy it is to go after satellites. They're very far in the sky, so their signals are weak when they get down to Earth. They get jammed. They get spoofed.

[Mariam Sorond, Chairman & CEO at NextNav]

Those are the vulnerabilities, and that's a gap and are part of the solution that we're bringing to the table. And they will continue to play an important role where their strengths are.

[Timothy Horan, Managing Director at Oppenheimer & Co. Inc.]

Got it. Very, very helpful. Thank you.

[Mariam Sorond, Chairman & CEO at NextNav]

And

[Operator]

our last question comes from the line of Mike Crawford with B. Riley Securities. Your line is open.

[Mike Crawford, SMD & Head of Discovery Group at B.Riley Securities]

Thank you. In your comments filed, in the PMT NOI, you essentially are urging the commission to issue an NPRM on your parallel petition. Is is there is is there a way for you to get is that the 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 to use the rest of the of a of of five g waveform besides just the the timing positioning signal that you'd be transmitting along with it or your your partner would be transmitting?

[Mariam Sorond, Chairman & CEO at NextNav]

So the FCC time, Mike, the FCC can, 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 on the The NPRM can be issued, on the NOI. So either way that they see this, we're it's fine as long as we get to an NPRM process.

[Mariam Sorond, Chairman & CEO at NextNav]

You do need an NPRM to change rules. There's notice of proposal rule making changes and and then eventually a report in order. There is no other mechanism, that, 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 they would like to get to the final edition of a report and order ultimately.

[Mike Crawford, SMD & Head of Discovery Group at B.Riley Securities]

Okay. Great. Thank you very much.

[Mariam Sorond, Chairman & CEO at NextNav]

Sure.

[Operator]

That concludes the question and answer session. I would now like to turn the call back over to management for closing remarks.

[Mariam Sorond, Chairman & CEO at NextNav]

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 PMT resiliency for national security, public safety and the economy. And we're excited as our momentum propels us forward. We're looking forward to connecting with you all next quarter.

[Operator]

Ladies and gentlemen, this concludes today's conference call. Thank you all for joining, and you may now disconnect.

Participants

Executives

• Mariam Sorond, Chairman & CEO
• Christian Gates, Chief Financial Officer

Analysts

• Nevin Reilly, Senior Managing Director at Sloane & Company
• Ryan Koontz, Senior Analyst at Needham & Company
• Timothy Horan, Managing Director at Oppenheimer & Co. Inc.
• Mike Crawford, SMD & Head of Discovery Group at B.Riley Securities