Anterix Inc. Common Stock 2027 Q1 Earnings Call

Please go ahead. Good morning, everyone.

Thank you for joining us today for Anterix's first quarter fiscal year 2027 investor update call. I am Natasha Vecchiarelli, Vice President of Investor Relations and Corporate Communications. Joining me today are Scott Lang, President and CEO, Chris Guttman-McCabe, Chief Regulatory and Communications Officer, and Elena Marquez, CFO. Please note that our first quarter financial results were issued yesterday afternoon and the related materials are available on our investor relations website. Today's call will begin with prepared remarks from management, followed by a question and answer session. We may also discuss our business outlook and make forward-looking statements. These statements are based on our current expectations and predictions. Actual events or results could differ materially due to risks and uncertainties described in our FCC filings, including our most recent Form 10-K and Form 10-Q. With that, I will turn the call over to Scott.

Thank you, Natasha, and good morning, everyone. When we last spoke in June, we shared the progress we were seeing across the business, including increasing customer engagement, active commercial discussions, and a broader recognition of the strategic importance of licensed spectrum. Over the last two months, that activity has continued and in many cases has accelerated. First, as I am sure many of you have seen, just yesterday, SpaceX filed an ex parte letter with the FCC across three separate dockets, including ours, advocating for inclusion of a new satellite build-out deployment option. Of note, two of the three bands referenced by SpaceX are still in the process of seeking a rulemaking where ours, as you know, has been finalized.

In response, yesterday, Anterix filed a letter in support of SpaceX's proposal, stating our belief that their request will enhance the optionality and the expanded use of our spectrum in the market. This filing validates what we have been saying all along. Access to low-band spectrum is extremely limited, and the demand for our nationwide 10 MHz footprint is increasing across all sectors. This is further reflected in close to a dozen spectrum-related initiatives involving wireless carriers, satellite, and space-based connectivity providers, along with the successful conclusion of the AWS-3 auction. That plays directly into the position we have built at Anterix. Our 900 MHz spectrum gives us multiple ways to create value through utility transactions, product revenue around the networks we enable, strategic opportunities, and new applications as the market evolves. The key point is this: we are not managing to one outcome. We have optionality. With a nationwide licensed low-band spectrum portfolio and increasing market recognition of what we own, that optionality puts us in a very strong position.

We continue to be disciplined on how we maximize this asset. We are pursuing the opportunities where value is most compelling and where we can create the best long-term outcome for customers and shareholders. The opportunity is significant and the market is moving in our direction. Turning to our utility pipeline, the last 2 months have been equally active and we were pleased with the amount of interest and engagement with nearly a dozen active opportunities. Before I turn the call over to Chris, I want to recognize the remarkable team at Anterix. The progress we are seeing today is a reflection of their hard work, commitment, and execution, and I am incredibly proud of what they continue to accomplish.

With that, I will turn the call over to Chris.

Thanks, Scott, and good morning, everyone. As Scott highlighted, we have optionality, which extends not only to how we monetize our spectrum, but also to how we advance it. Whether market-specific, regional, or national in scope, we can approach our clearing objectives in a way that aligns with customer demand and the opportunities in front of us. With the FCC's expansion to the full 10 MHz broadband configuration, our focus remains on advancing our nationwide footprint, building on the 40% of counties already cleared in the 10 MHz configuration. We also have the capability to move at the pace the opportunity requires. We believe our teams can effectuate nationwide clearing of the full 10 MHz configuration in a way that fully aligns with customer deployment requirements and the opportunities we see in the market.

We have consistently executed against our clearing commitments, meeting requested delivery schedules, and delivering broadband availability ahead of contracted timelines for the majority of our customers. That track record demonstrates the scalability of our approach and our ability to translate spectrum availability into customer and shareholder value. The progress we are making and the growing interest we see reflect the capabilities we have built, the strength of our relationships, and the significant opportunity that remains ahead. With that, I'll turn the call over to Elena.

Thank you, Chris. Anterix is entering this next phase from a position of financial strength. Our income statement has significantly improved over the last several quarters, with higher revenue and lower expenses. For the first quarter fiscal year 2027, our GAAP revenue is $2 million, and our operating expenses are $9.5 million, a level we have maintained with our disciplined cost structure. In addition, broadband license exchanges generated a gain of approximately $11 million during the quarter, further demonstrating our ability to actively manage and maximize the value of this unique asset. Turning to the balance sheet. We ended the quarter with approximately $116 million in cash and no debt. During the quarter, we received approximately $16 million in customer payments and $20 million from stock option exercises. We expect to receive approximately $10 million of additional contracted proceeds during the remainder of fiscal 2027.

We also continue to invest in clearing, with approximately $7 million allocated to spectrum clearing during the quarter. Our balance sheet is one of our greatest strengths. Our scarce low-band spectrum asset, combined with our robust cash balance, positions us to pursue attractive monetization opportunities as the market continues to evolve. We remain disciplined in managing expenses and thoughtful in how we allocate capital towards activities that increase the value and commercial availability of our spectrum. Importantly, as Scott discussed, the market environment surrounding spectrum transactions continues to provide greater transparency into the value of licensed spectrum ownership. We are seeing that through both our own commercial execution and broader market activity. Our executed utility spectrum transactions have averaged approximately $1.40 per MHz-POP, while the FCC's most recent AWS-3 auction averaged approximately $2.50 per MHz-POP.

We believe there is a strong upside opportunity both for existing and prospective investors when compared to our current market capitalization, which implies a spectrum valuation of approximately $0.60 per MHz-POP. We are also seeing continued strategic demand for spectrum across the communications ecosystem, with activity involving companies like Amazon and Globalstar, SpaceX and EchoStar, and Rocket Lab and Iridium. While these transactions reflect different spectrum characteristics and strategic objectives, together, they provide additional market reference points for the value of licensed spectrum. In our view, the market has more evidence than ever to value our asset, and Anterix has increasing ways to realize that value. That is an important distinction. We control a scarce, licensed, low-band spectrum at a time when demand for spectrum is increasing and supply remains constrained.

With no debt, a strong cash position, and a disciplined cost structure, we have the flexibility to be thoughtful about timing and remain firm on pricing as we monetize this asset. That matters because the majority of the value remains ahead of us. Across our nationwide footprint, approximately 3 billion MHz-POPs, representing about 85% of our total MHz-POPs, remain available to monetize, including many of the largest and most valuable metropolitan markets. In closing, we have the balance sheet to be patient, the discipline to invest where it matters, and significant value still ahead of us to capture. With that, I will turn the call back over to Scott.

Thanks, Elena. Before we open the call for questions, I want to leave you with one final thought. We believe Anterix is uniquely positioned at the intersection of two powerful forces, heightened demand for secure connectivity and a finite supply of high-quality licensed spectrum. We are excited about where we are and what lies ahead. Thank you, operator. We are ready for questions.