Ladies and gentlemen, thank you for standing by. My name is Krista, and I will be your conference operator today. At this time, I would like to welcome everyone to the NextNav Second Quarter 2025 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Nevin Reilly, Investor Relations at Sloan. Please begin.

Good afternoon, everyone, and welcome to NextNav's Second Quarter 2025 Earnings Conference Call. 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 and 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. In particular, such forward-looking statements include the achievement of certain FCC-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 NextNav 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 Ms. Sorond. Please go ahead, Mariam.

Thank you, Nevin. Good afternoon, and thank you all for joining us today. We led an eventful and impactful second quarter marked by the May 13 conclusion of the comment period in response to the FCC's Notice of Inquiry, or NOI, titled Promoting the Development of Positioning, Navigation and Timing Technologies and Solutions. NextNav continues to advance our FCC advocacy with a sense of urgency. Since we filed our NOI comments and reply comments, we have filed additional technical, economic and operational data and analysis, laying a strong foundation for the FCC to act on our proposal. We are encouraged by the FCC's actions to date and believe that this effort is a sustained priority for the FCC Chairman as suggested by the issuance of the NOI. A terrestrial complement and backup to GPS is an urgent national security priority, and we will continue to advocate for the FCC to promptly issue a notice of proposed rulemaking or NPRM that would enable a terrestrial complement and backup to GPS without the need for multibillion-dollar taxpayer expenditures. We were also excited to see that the FCC granted its consent for licenses to be assigned to NextNav. As we announced in March 2024, NextNav entered into an asset purchase agreement to acquire the remaining 128 active M-LMS licenses in the lower 900 megahertz A Block, and we filed an assignment application with the FCC in April 2024, concurrent with our petition for rulemaking. On June 20, 2025, the FCC issued an order granting its consent to the assignment of these licenses to NextNav. The licenses already held by NextNav in the lower 900 megahertz band are in the B and C blocks. Significantly, in addition to a grant, the order included a waiver of an FCC rule that forbids one licensee from…

Thanks, Mariam, and good afternoon, everyone. I'll address our financial performance for the second quarter of 2025 in addition to our balance sheet and liquidity. Beginning with the top line, NextNav's revenue for the second quarter was $1.2 million compared to $1.1 million in the prior year period. For the 6 months ended June 30, 2025, revenue was $2.7 million as compared to $2.2 million for the prior year period. The increase in both 3 and 6 months ended June 30, 2025, was primarily driven by an increase in service revenue from technology and services contracts with government and commercial customers. Operating expenses for the second quarter were $18.4 million, up approximately $2 million versus the same period last year. Operating expenses included $1.4 million in depreciation and amortization and $3.7 million in equity compensation compared to $1.3 million in depreciation and amortization and $3.7 million in equity compensation in the prior year period. For the first half of 2025, operating expenses were $37 million as compared to $33.6 million in 2024. Operating expenses included $2.8 million in depreciation and amortization and $8 million in equity compensation compared to $2.6 million in depreciation and amortization and $7.9 million in equity compensation in the prior year period. Net loss for the second quarter was $63.2 million, which included a $39.5 million loss associated with the change in the fair value of derivative liability and warrants. This is compared to a net loss of $24.4 million in the prior year period, which included a loss on the change of the fair value of our warrant liability of $8.5 million. For the 6-month period, net loss was $121.8 million, which included a $58 million loss associated with the change in the fair value of derivative and warrant liabilities and $14.4 million loss associated with debt extinguishment. This is compared to a net loss of $56 million in the prior year period, which included a loss in the change to the fair value of our warrant liability of $21.7 million. Turning now to our balance sheet and liquidity. We finished the second quarter with $176.1 million in cash, cash equivalents and short-term investments. 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 as we work to advance our business. With that, I'll turn the call back over to the operator for questions. Operator?

[Operator Instructions] Your first question comes from Mike Crawford with B. Riley Securities.

What are your next steps in the FCC process on the progression towards hope for NPRM? Is it more technical studies that you might introduce to the record to help achieve more consensus building? Or is it just wait and see at this point?

Mike, thanks for the question. We have completed a rigorous and robust analysis, right? We did the August 1 filing that addressed the tolls and coexistence with the tolls and in July. And prior months, meaning February, we filed 2 unlicensed studies that basically showed that we can coexist with unlicensed. So at this point, we have submitted a complete, rigorous and complete analysis to the FCC for them to move forward with the NPRM from our perspective. Now we continue to advocate for our position. We continue to bring a sense of urgency, but we believe that we have completed the record sufficiently enough for the FCC to move to NPRM.

Okay. Great. And then my one follow-up question relates to any progress or other developments in conjunction with you cooperating or offering some kind of complementary service with other space-based alternatives, such as Xona Space Systems, which is trying to build a 258 PNT constellation in LEO. So any updates on that front?

I mean we continue to believe in the system of systems. We just recently announced some partnerships, right, on the system of systems. We continue to talk to the industry beyond just terrestrial and to the satellite players to actually bring together and make this system of systems a reality. And at this point, we don't have any updates on any satellite-related discussions to share with you. But if -- when those are available, we will share.

Your next question comes from Dan McDermott with Oppenheimer.

Dan on for Tim Horan. Just the one. You mentioned in your prepared remarks, you have multiple partnership opportunities, and we saw the Adtran and Oscilloquartz announcement from last week. Can you maybe just discuss how that fits into your plans in a little more detail?

Yes. Thank you for the question. Actually, we're super excited about the Adtran and Oscilloquartz announcement. I mean you've heard me talk about system of systems many times and how this would enable a very cohesive PNT complement and backup solution that ensures a few things: service continuity, accuracy and coverage, right? I mean we all need to come together to be able to do these goals. Now this is an initial embodiment of that, that you're seeing right now. We're going to use our technology, our next-gen technology to integrate it into this multisource timing receiver with them, and we're going to demonstrate improved resiliency through 5G-based timing. So these partnerships are going to provide us with a great and a valuable opportunity to bring together multiple non-GPS sources to enable resilient PNT solutions.

Your next question comes from the line of Peter Supino with Wolfe Research.

This is Ron on for Peter. First, following the technical filings that you recently made, do you anticipate participating in field testing for either unlicensed operations or the tolls?

Yes. At this time, we don't believe that any additional testing, including field testing, joint testing, is required for the FCC to move forward with an NPRM.

Got it. And as a follow-up, just considering like retuning, do you anticipate there's any significant costs associated with retuning tools?

So if you saw our August 1 study and also The Brattle Group report, in the August 1 study, we showed that 5G can coexist, that it would -- that some subset might require retuning. There is no replacement of toll transponders, any of these things that are needed. And these subset of retunings are a minimal cost, as it's highlighted in The Brattle Report. So -- and we've continuously said we're committed to reasonable accommodations, including financial that are reasonable, that have been brought in good faith to ensure that there's a smooth transition to a very optimized lower 900 megahertz band, that enables us to solve this national security problem, it enables the tolls to continue their operations, so minimal cost, minimal retuning.

Your next question comes from the line of Brendan Lynch with Barclays.

As part of the One Big Beautiful Bill, auction authority was returned to the FCC. How do you think that will impact your process with the government going forward?

Yes. Thank you for the question. I don't see a significant impact to what we're trying to achieve, and there's a few reasons for that. First of all, the most important one is, obviously, not all spectrum is the same. Our spectrum in the low band that has incredible coverage characteristics, that is solving the PNT problem and making broadband available is below 1 gigahertz. The One Big Beautiful Bill is really looking at higher frequencies. It's above 1.3 gigahertz all the way to 10.5 gigahertz. That's the range that they're looking at. So we follow in the lower range, and we obviously are or obviously having a PNT element to solve a national security problem. There's also a second reason. There's a timing perspective. So the FCC does have general auction authority, but one key directive in the bill is that then the NTIA needs to identify the spectrum first from existing federal users. So this is going to take some time. And of course, there's a process after the identification of it. Our spectrum is currently licensed and available, and we're proposing to optimize it through minimal retuning.

Okay. That's helpful. And then you touched on this a little bit already, but can you summarize some of the differences in the economic analysis findings of The Brattle Group versus the report filed by E-ZPass and its partners?

Sure. I mean in general, we identified all the flaws with the report that was done. And there was no value given to -- at all what we bring, which is potentially billions of dollars of GPS resiliency, 0 value given to it. There was an outrageous value given to the retuning and the swap of toll readers, of transponders, which our report just demonstrated that is not necessary. It's minimal retuning and minimal cost. It also assumed outrageous numbers with respect to unlicensed. We're not asking the unlicensed operations to swap out of the band. They continue to enjoy the benefits that they have under their unlicensed regime to continue operating in this band. We're not asking them to vacate. There's no reason to -- associated cost for vacating any of them. And as our technical report that we filed, 2 of them show that we're not putting out any more emissions than the current licenses that we hold. So there should be no change to the environment that they're operating in, and there is no reason for them to retune. There is no reason for them -- they're not losing spectrum. There's not a percentage decrease on their spectrum. So we've made all of these valid technical assumptions in the reports and analysis that we have provided to the FCC. And we don't believe that the economic report took into consideration any of these fact-based data and analysis and made incorrect assumptions.

Your next question comes from the line of Mike Latimore with Northland Capital Markets.

This is [ Vijay Devar ] for Michael Latimore. One quick question, please. Can you address how resilient PNT fits into AI?

Yes, of course, and thank you for the question. I think you need to think of resilient PNT as a backbone to AI. One of the things that a lot of the AI use cases and I'll talk about some of them, rely on -- is actually accurate, real-time data. And so for example, autonomous vehicle, critical infrastructure. And if you don't have accurate PNT data, a lot of these applications fail. So basically, for example, if you need real-world, precise location and timing to make some of these decisions that AI needs to make and the PNT data is wrong, the outcomes will be extremely misguided, very dangerous and mission failing. So that is -- it's really important to have PNT as this backbone and partner with AI. The critical infrastructure, it relies a lot on timing synchronizations. And so if you get faulty AI predictions, if you get uncoordinated sort of systems and security vulnerabilities, I mean you're talking about a failure of power grids and financial systems. So AI really needs real-time, accurate data. And I also -- there's a whole sort of defense and security application that we're talking about. When you're talking about drone swarms, when you're talking about targeting systems, guided munitions, all of them rely on positioning data. And so if that positioning data is not accurate, then what's the use of an AI-driven drone, right, or any of that. So it's extremely -- it's an extremely important element. We've been looking into it. We've been looking at how we can create partnerships around this, and we will have more as they become available. Thank you for the question.

And that concludes our question-and-answer session. And I will now turn the conference back over to Mariam Sorond, CEO, for closing comments.

Thank you. As I mentioned in the beginning of our call, we're pleased with the progress we made in the second quarter. We are confident in our approach. Though we can't speculate about when the FCC will issue an NPRM, we will continue to drive the urgency with our proposal and look forward to continuing to support the FCC's work as we seek to enable a wide-scale, future-proof complement and backup to GPS as quickly as possible. Thank you, everyone.

Ladies and gentlemen, this does conclude today's conference call. Thank you for your participation, and you may now disconnect.