Anterix Q4 2025 Earnings Call Transcript

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June 25, 2025

Key Takeaways

  • The Accelerator program is oversubscribed as utilities actively negotiate for the $250 million of 900 MHz LTE spectrum, demonstrating strong demand and partner engagement.
  • Onterex closed Q4 with $47 million in cash, zero debt, and $150 million of binding contracted proceeds (including $80 million expected in FY '26), marking its best year with $116 million of new deal signings.
  • Targeted cost‐structure changes cut the operating expense run rate by approximately $4 million from the first half of FY '25, improving efficiency and cash flow without hindering customer service.
  • The FCC's rulemaking to enable 5 × 5 MHz in the 900 MHz band has strong industry support and is progressing through comment phases, positioning Onterex to lead future smart‐grid and private network deployments.
  • A strategic review led by Morgan Stanley is underway with no predetermined outcome, leveraging Onterex’s zero‐debt balance sheet, $3 billion pipeline and disciplined cost structure.
AI Generated. May Contain Errors.
Earnings Conference Call
Anterix Q4 2025
00:00 / 00:00

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Operator

Good day, and thank you for standing by. Welcome to Onterex Fiscal Fourth Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer Please note that today's conference may be recorded. I will now hand the conference over to your first speaker host, Natasha Please go ahead.

Natasha Vecchiarelli
Natasha Vecchiarelli
VP - Investor Relations & Corporate Communications at Anterix

Thank you, operator, and good morning, everyone. I'm Natasha Beccarelli, Vice President of Investor Relations and Corporate Communications. Welcome to our fiscal twenty twenty five fourth quarter investor update call. Joining me today are Scott Lang, President and CEO Tim Gray, CFO Chris Gutman McCabe, Chief Regulatory and Communications Officer and Ryan Gerbrandt, COO. Before we begin, please note that today's discussion may include forward looking statements regarding our outlook, operations and expected performance.

Natasha Vecchiarelli
Natasha Vecchiarelli
VP - Investor Relations & Corporate Communications at Anterix

These are based on current assumptions and subject to risks and uncertainties. We do not undertake any obligation to update forward looking statements. We encourage you to review our SEC filings, including Forms 10 ks and 10 Q, for a detailed discussion of these risks, which are available on our website. With that, I'll turn the call over to Scott.

Scott Lang
Scott Lang
CEO & President at Anterix

Good morning, everyone. I am excited to give you a brief update on the progress we've made since our last earnings call, where we announced three important initiatives to drive growth for Enterix that will return value to our shareholders, our employees, and deliver great benefits to our customers. First, we committed to focus on optimizing our cost structure and streamlining our operations. We are already seeing these benefits that Tim will cover in detail shortly. Second, we launched Anterix Accelerator, designed to test the correlation between price and action in the industry.

Scott Lang
Scott Lang
CEO & President at Anterix

We are very pleased with how this initiative has ramped up during the quarter. As of today, we are oversubscribed with utilities that are in active discussions and negotiations for the $250,000,000 of spectrum we made available as part of the program. What we are seeing is clear. The demand for 900 megahertz LTE continues to be strong. And finally, the strategic review process that Morgan Stanley is leading has been active and continues.

Scott Lang
Scott Lang
CEO & President at Anterix

We entered it from a position of strength with zero debt, nearly $150,000,000 in outstanding contracted proceeds, a $3,000,000,000 pipeline, a proven deployment model, and a disciplined cost structure. We have no predetermined outcome, particularly at our current market cap. This initiative continues, and we will keep you updated as appropriate. Before I introduce Chris to give us an update on the FCC process, I want to address a question that we have been asked about other spectrum choices that may become available to the utility industry. One of those that might be more well known is at 800 megahertz.

Scott Lang
Scott Lang
CEO & President at Anterix

We are confident that our economics, along with our market leadership of actual deployments and our long term commitment to the industry will continue to be the utility's preferred choice. To reinforce this, our current three by three offering is being deployed at scale and is already delivering the robust and powerful bandwidth that utilities need to meet today's demands and support virtually any use case well into the future. But as we have said before, we are not standing still. We are pushing forward. Our momentum toward a five by five future is accelerating, unlocking even greater potential for the digital grid.

Scott Lang
Scott Lang
CEO & President at Anterix

We are in a strong position as the market leader. We will continue to be aggressive to drive value for this company, and I am excited for our future. With that, I will hand it over to Chris.

Chris Guttman-McCabe
Chris Guttman-McCabe
Chief Regulatory and Communications Officer at Anterix

Thank you, Scott, and good morning, everyone. I'm excited about the momentum we've seen since the last investor call. To recap, earlier in 2025, the FCC developed and adopted a notice of proposed rulemaking to modify the 900 megahertz rules to allow for a five by five megahertz opportunity. Since our last call, both the initial comment period and the reply comment period have now officially closed. What came through loud and clear in those filings was a course of support from multiple utilities, 20 technology companies like Ericsson, GE, Nokia and more, as well as multiple industry associations, all calling for an evolution of the band to support the growing demand for private, secure, dedicated wireless networks.

Chris Guttman-McCabe
Chris Guttman-McCabe
Chief Regulatory and Communications Officer at Anterix

Again, we're excited about the current status of the proceeding and believe there is a real opportunity to cement The United States as a global leader in smart grid communications, as well as private network deployments by authorizing this next phase of broadband innovation. The case has been made, the record is strong, and we're optimistic about a forward looking outcome. As stewards of the 900 megahertz band, we will continue to engage with the FCC and with stakeholders in the proceeding in this final stage of the process, urging a timely and favorable outcome. We thank Chairman Carr for his leadership and the Commission for its hard work to date, and we look forward to updating you as this proceeding moves towards a conclusion. With that, I'll turn it over to Tim to walk through our financial performance.

Timothy Gray
Timothy Gray
CFO at Anterix

Thanks, Chris, and good morning, all. As a reminder, in our fiscal 'twenty five, we executed key spectrum sales agreements with Encore and LCRA, two critical steps in expanding 900 megahertz broadband coverage across Texas. We've now contracted spectrum that covers 93% of Texas counties, creating a powerful regional deployment model that can be replicated nationwide. In addition, these deals for a combined 116,000,000 represent our best year of contracted proceeds. We also received milestone payments of $44,000,000 from Encore and $8,500,000 from Ameren, and successfully accelerated delivery of Spectrum to a customer ahead of schedule, resulting in an additional $34,000,000 in cash received at the January.

Timothy Gray
Timothy Gray
CFO at Anterix

We closed the fourth quarter of fiscal year 'twenty five with over $47,000,000 in cash and no debt, a position we view as a meaningful strategic advantage. Additionally, we have approximately $150,000,000 of contracted proceeds outstanding, with $80,000,000 expected in fiscal 'twenty six. These are not potential deals. They're binding commitments that provide clear visibility and confidence in our future cash flow. As Scott mentioned, we undertook a thorough review of our cost structure and implemented targeted changes to strengthen our long term financial discipline.

Timothy Gray
Timothy Gray
CFO at Anterix

These efforts resulted in roughly a $4,000,000 reduction to our operating expense run rate from the first half of fiscal 'twenty five, enhancing both efficiency and cash flow. Importantly, we achieved these savings without impacting our ability to serve our customers or advance strategic priorities. We're now operating leaner and continue to be well positioned to execute. As we look toward FY '26, we are entering the year with a healthy cash position, dollars 80,000,000 in contracted payments expected during the fiscal year, a streamlined cost structure that enhances cash generation, and a capital light model, where customer funded deployments allow us to scale without incurring significant CapEx. We will continue to focus on monetizing our pipeline, expanding our customer base, and delivering value through both strategic execution and financial discipline. With that, let's open the line for questions.

Operator

Thank you. First question coming from the line of George Sun from Craig Hallum. Your line is now open.

George Sutton
Partner & Senior Research Analyst at Craig-Hallum Capital Group LLC

Thank you. I think the real meaningful update is the fact that you're oversubscribed on the $250,000,000 accelerator program. Can you just give us a sense of what are the incentives? I assume there's multiple players involved. Is this a first come, first served scenario?

George Sutton
Partner & Senior Research Analyst at Craig-Hallum Capital Group LLC

Can you just walk through how these customers are thinking of it?

Scott Lang
Scott Lang
CEO & President at Anterix

Hey, George. Good to hear from you. It's Scott here. Yeah, we launched this, and we've been at the last quarterly earnings call, we've been very pleased with the energy this has picked up. And there's a number of players involved.

Scott Lang
Scott Lang
CEO & President at Anterix

The negotiations are very active and we couldn't be really more pleased. There were just to give you an idea, there were well over a dozen utilities that participated in it, and the demand for private LTE 900 megahertz was very strong. And we learned a tremendous amount. And I would also say every one of those utilities have continued to stay engaged and in active conversations. And then a large number of them have continued all the way through to where we're actually negotiating.

Scott Lang
Scott Lang
CEO & President at Anterix

And you can imagine to see that kind of a ramp up in one quarter in the utility industry, I think is pretty well in my entire career nearly unheard of. One quarter for the utility industry to rally and get behind the demand. And as we said in the prepared remarks, testing this correlation between economics and action. And we couldn't feel better about the position that we're in with the economics we can bring to the table and the powerful results that we're seeing with our existing customers and how much robustness that they're seeing from the network. So it's been active.

Scott Lang
Scott Lang
CEO & President at Anterix

We've been very pleased. The conversations and the negotiations are very active, and we're pleased with where we're at.

George Sutton
Partner & Senior Research Analyst at Craig-Hallum Capital Group LLC

So you have a partner program in addition to your program that is part of the accelerator program. Have some of these utilities begun to engage with some of the partners as a result? And is that part of the negotiations?

Scott Lang
Scott Lang
CEO & President at Anterix

There have been other companies that have participated the Accelerator program. I'll let Ryan speak to a couple of those in a moment. I would tell you we're not going to get into exactly which ones or where they're at in their own negotiations. But I will tell you that the consistent theme is the c level exposure of the importance of making network first decision really tees up the additional players that are getting involved with bringing these holistic solutions live and standing these networks up. Ryan, do want to talk about a couple of specific companies that have jumped in and been part of the program?

Ryan Gerbrandt
Ryan Gerbrandt
COO at Anterix

Yeah, hey, I'd be happy to. Good morning, George. And yeah, what you're noting is we have recognized kind of as we initiated the accelerator program, consistent with what we've said before is that spectrum still is just one part of the overall decision making that we're really trying to bring utilities through where spectrum is the first of several that they have to make. And it was critical, as we were contemplating how to help them through that process, to encompass as much of the larger technology partners as necessary to help facilitate that. And we were delighted to have Ericsson, Nokia, and GE jump in, as you saw in the announcement, who defined really what were bespoke products to this project, to this program, meaning that they were unique, that these were unique packages specifically targeted to provide a level of support and acceleration to these utilities, and is part of the conversations across the overarching aspects of the accelerator program.

George Sutton
Partner & Senior Research Analyst at Craig-Hallum Capital Group LLC

Super. One last question. So I'm curious how the five by five could, potentially slow some of those who are requiring that as sort of their launch thought process. So for hypothetically, if I'm a potential customer, I want to take advantage of this program, but I also know that five by five is really my requirement. Can I still be involved in this program, or how does that work?

Scott Lang
Scott Lang
CEO & President at Anterix

George, great question. We haven't seen any hesitation from utilities to jump in with 3x3 when they're seeing the results coming from our existing deployments and how much power that is still remaining in these current deployments that are being pushed and there's still room. And having said that, I would say they're all excited about our five by five plan. And the more they learn about it, they're they're it makes them even more comfortable that three by three is more than enough bandwidth for the many years ahead that they see of any use case they can throw at it. But the trajectory to five by five is very powerful for us.

Scott Lang
Scott Lang
CEO & President at Anterix

But we haven't seen anybody hesitate of a concern with with the just three by three at this point in time.

George Sutton
Partner & Senior Research Analyst at Craig-Hallum Capital Group LLC

Okay. Thanks, guys.

Scott Lang
Scott Lang
CEO & President at Anterix

Thank you, George.

Operator

Thank you. Our next question coming from the line of Mike Crawford from B. Riley Securities. Your line is now open.

Scott Lang
Scott Lang
CEO & President at Anterix

Hello, Mike.

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

Morning. Thank you. We who else has recently joined your enterics active ecosystem besides Digi International, which put out some news in that regard a couple days ago?

Scott Lang
Scott Lang
CEO & President at Anterix

Brian, do you want to take that?

Ryan Gerbrandt
Ryan Gerbrandt
COO at Anterix

Yeah, I can speak a little bit to it. Don't have the full list of kind of who joined recently. I mean, he's probably noticing, Mike, we've continued to focus on, in partnership with our advisory board, under their direction of utility executives, of what is necessary as we continue to strategically grow that. And so anticipate we're going to continue to see a handful of new come in. I think we're somewhere 140, 140 plus of total participants in the program right now.

Ryan Gerbrandt
Ryan Gerbrandt
COO at Anterix

The Digi announcement you saw was actually a product offering that they put out, specifically an IoT edge gateway that was capable of supporting some edge computing capacity. A great innovation. I I think this is where we're going to continue to see the intersection of a lot of the AI kind of edge conversation and what we're trying to do. It's, you know, it's just it's it's a natural evolution of these use cases where connectivity really provides data and real time access to enable those kinds of more sophisticated solutions as we see it start playing out in the market. So seeing those product lines come in natively, kind of off the shelf supporting 900 is exactly what we would expect to see with a growing ecosystem and ultimately being able to put whole things in. So we're pretty excited about it overall.

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

Okay. Thank you. And then if and if if Grain Management acquires this 800 megahertz spectrum and targets utilities, what what would what would happen if if that entity negotiated a deal with the utility in a region where you have spectrum? And what would what would be what would you try what would be the fallback, I guess, strategy to deploy your spectrum in a region where an instance like that might occur?

Scott Lang
Scott Lang
CEO & President at Anterix

Well, there were a lot of ifs there. The more spectrum, the better. We like where we are positioned with 900 megahertz. We like where we are with our proven deployments. And when I talk about proven deployments, remember seven utilities, dollars 400,000,000 of contracts have now moved over the last few years from lab to field, and they are now providing references for these next wave of utilities that are in the queue and we're negotiating with to expand the 900.

Scott Lang
Scott Lang
CEO & President at Anterix

Our economics are extremely powerful of what we can bring to the table. When we look at current market cap and the accelerator program, we still have dry powder, and we're going to continue to be aggressive as the market leader to continue to show our market leadership across this industry. Regarding eight hundred, I think it could become an alternative. It could become a choice. But we think we're going to be in a great position to continue to be the preferred choice for utilities when they look at it holistically from what we're seeing in the field.

Scott Lang
Scott Lang
CEO & President at Anterix

But any use cases on the near term horizon and the economics that we bring to the table and the fact that our current three by three is very powerful, all the device manufacturers are completely behind it. There is no pause in our plan to get to five by five. And in fact, as Chris shared in our prepared remarks, we are very pleased with the progress of that. I guess that would be my hopefully that kind of starts to frame of how we're thinking about it, Mike.

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

Yeah. Thank you. And then just maybe final question for me is how it's nice that you have this, you know, $150,160,000,000 of of contracted proceeds coming in in the next couple of years. Do you have any goal for, you know, how how much you would like to to add to that in deals signed in the next, say, twelve to eighteen months?

Scott Lang
Scott Lang
CEO & President at Anterix

Tim, do you wanna talk a little bit about how we're looking at our next twelve months, the rest of this fiscal year, please?

Timothy Gray
Timothy Gray
CFO at Anterix

Sure. So Mike, our internal goals are to grow from the $116,000,000 that we had last year, which was the best year that we've had. We believe with the Accelerator program, we're going to be able to do that quite successfully. Not going to give any specific set of numbers, but we think we project that we will be able to grow a pretty significant percentage from the 116 that we did last year in contract proceeds.

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

Okay. All right. Thank you very much.

Scott Lang
Scott Lang
CEO & President at Anterix

Thanks for the question, Mike. Have a great day.

Operator

Thank you. And I will now turn the call back over to Mr. Scott Line for any closing remarks.

Scott Lang
Scott Lang
CEO & President at Anterix

I want to do a call out for our customers that are really teamed up with us in full partnership to drive this movement across the industry. I want to thank my team and the Centerix team that are continuing to drive great results that I have a pleasure of seeing every single day. All of our partners and the customers that we're in conversations with and negotiations with, we're excited to be great partners and great stewards in the industry, and I look forward to checking in with all of you in the next quarter or so when continue to share the progress that we're making in the company. And that's it for now, and I hope you all have a great day. Thank you.

Operator

This concludes today's conference call. Thank you for your participation, and you may now disconnect.

Executives
    • Natasha Vecchiarelli
      Natasha Vecchiarelli
      VP - Investor Relations & Corporate Communications
    • Scott Lang
      Scott Lang
      CEO & President
    • Chris Guttman-McCabe
      Chris Guttman-McCabe
      Chief Regulatory and Communications Officer
    • Timothy Gray
      Timothy Gray
      CFO
    • Ryan Gerbrandt
      Ryan Gerbrandt
      COO
Analysts
    • George Sutton
      Partner & Senior Research Analyst at Craig-Hallum Capital Group LLC
    • Mike Crawford
      SMD & Head of Discovery Group at B.Riley Securities
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