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 NextNav Inc. First Quarter 2025 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 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 star one. I would now like to turn the conference over to Nevin Riley. You may begin. Good morning, everyone. And welcome to NextNav Inc.'s first quarter conference call. Participating on today's call are Mariam Sorond, NextNav Inc.'s Chief Executive Officer, and Chris Gates, NextNav Inc.'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 the use of the words may, anticipate, believe, expect, intend, should, could, similar expressions. Such forward-looking statements, which may relate to NextNav Inc.'s forecast future results, future prospects, developments, and business strategy, are subject to known and unknown risks, uncertainties, and assumptions, many of which are outside NextNav Inc.'s control and could cause actual results to differ. In particular, such forward-looking statements include the achievements of certain FCC-related milestones, and SEC approvals, NextNav Inc.'s projections, plans, objectives, expectations, and NextNav Inc.'s future business strategies 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 NextNav Inc. 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. 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 Mariam Sorond. Please go ahead, Mariam.

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 NextNav Inc., we are 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, and unlike China and Russia, the US currently has no domestic terrestrial backup in place for continuity if GPS fails. That's where NextNav Inc. comes in. We are 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. The system can provide a critical backup to GPS and complements it indoors 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 are 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. And as FCC Chairman Brendan Carr recently put it, while GPS may be indispensable, it is not infallible. Disruptions to GPS have the potential…

Thanks, Mariam, and good morning, everyone. I'll address our financial performance for the first quarter of 2025 and provide details on the strategic financing that closed in March. Beginning with the top line, NextNav Inc.'s revenue in the first quarter was $1.5 million, a $500,000 increase from $1 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. 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. 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 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. 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?

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 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press 1 again. If you are called upon to ask your question and are listening via speakerphone on your device, pick up your handset to ensure that your phone is not on mute when asking your question. Again, press 1 to join the queue. And our first question comes from the line of Ryan Koontz with Needham. Your line is open.

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

Hi, Ryan. Basically, our proposal is 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 the spectrum to their existing network like they do any other spectrum. For capacity purposes or coverage purposes. And then when it's completed deployment, they turn on the PRS, and we get to go.

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

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 this signal, which 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, and our solution is just software. It extracts that information and derives the positioning and timing.

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

Their motivation will be that they need spectrum, specifically also low-band spectrum, which is scarce these days for coverage or capacity enhancement. They will deploy it for the reason of the spectrum need.

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

Exactly. This is the solution we came up with for this to be an economically innovative solution. Right? And in the 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 the operators would be interested in. So, therefore, we could then derive the PNT signal from it.

How about on the client side? What are you going to do there? Obviously, you'd need new chips and kind of RF capabilities in the end devices to process this.

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. 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.

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

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

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

Thank you.

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

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

So the CapEx or any addition would be similar to any other spectrum. 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 networks. As far as whether it's expensive to add our software, no. But, again, playing over a software layer is not at all. It's not a hardware modification. It's not an additional equipment, which makes it additional cost to what they routinely do to add spectrums. We don't have any of those. 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 or in a 5G network or CRS signal in a 4G network. But it is a 5% capacity hit to their network. So, basically, they would be giving up 5% of their capacity, which is generating mobile broadband revenue. 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 Inc. has the expertise, the licensing, the IP, the software, to be able to then take that signal and convert it to positioning and timing.

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 your spectrum to kind of run this? I think, you know, the carriers are up to like 300 megahertz on average now. Or why would it take 5% of their capacity and for you it would be much lower amount?

So we actually have put an analysis early on about this needs broad bandwidth. So we do need the 10 megahertz downlink. So this is a 10 plus 15 configuration that we're proposing. The 10 megahertz, the depth of the spectrum is critical in providing accuracy. Capacity is a completely different layer, and that 5% is from the mid 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 two to 5%. I'm taking the upper edge of things, depending on many configuration parameters. Did I answer your question?

Oh, I got it. So it's 5% of the 10% that you're using?

Yep.

Yeah. Okay. Got it. Got it. And, you know, Iridium has they're pushing pretty hard of PNT 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 system of systems, and clearly, there's still a need for terrestrial. But do you see that as a competitor or complementary? And there's a bunch of other satellites that are looking to do something similar.

Yeah. We see that as very complementary. I mean, satellites are providing GPS today, which 4 billion users worldwide depend on it. Satellites are really critical. They're going to continue to be needed. The satellite commenters or 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 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 a vulnerability of a satellite. So whether that's a GPS satellite or another operator's LEO or MEO or GEO satellite, it's still a satellite, and it's vulnerable. They're vulnerable to their space-based. Right? I mean, Milken was all about the future of warfare 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. 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.

Got it. Very, very, very helpful. Thank you.

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

Thank you. In your comments, filed the PNT NOI, you essentially are urging the commission to issue NPRM on your parallel petition. Is there a way for you to get is that the only path, or is there any shortcut path maybe if this PNT action moves more quickly that you could get essentially what you want with the ability to use the rest of the 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 time, like, 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. You do need an NPRM to change rules. There's notice of proposal rulemaking changes and then eventually a report in 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 that they would like to get to the final vision of a report and order ultimately.

Okay. Great. Thank you very much.

Sure.

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 PNT 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.

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