NEXTNAV INC. (NN)·Q2 2025 Earnings Summary

Executive Summary

• Q2 2025 revenue was $1.20M, up 8.8% year-over-year but down 21.9% sequentially; EPS was $(0.48), reflecting large non-cash losses from derivative and warrant revaluation; both revenue and EPS missed Wall Street consensus (Revenue: $1.59M*, EPS: $(0.135)) with EBITDA also below estimates (Actual: $(16.66)M vs $(11.68)M*) .
• FCC granted consent to assign 128 M‑LMS licenses to NextNav and waived rules preventing A/B/C block co‑ownership, strengthening spectrum position in Lower 900 MHz and supporting NPRM momentum for terrestrial PNT; management emphasized urgency and confidence in the regulatory path .
• Liquidity was bolstered by March financing; Q2 ended with $58.9M cash and $117.2M short‑term investments; net long‑term debt was $246.3M (incl. $93.8M derivative liability, net of $37.5M discount; $190M face value) .
• Public safety deployments and partnerships advanced in the quarter (NCT9‑1‑1 vertical location live; First Due integration), reinforcing commercial use cases alongside regulatory progress .
• Near‑term stock reaction catalysts: regulatory steps toward an NPRM (and associated filings), further technical and economic validation, and partnership updates; risks include timing uncertainty of FCC actions and continued non‑cash valuation volatility in derivatives/warrants .

What Went Well and What Went Wrong

What Went Well

• FCC consent to assign 128 active M‑LMS licenses and waiver enabling A/B/C block co‑ownership in the same area, strengthening spectrum position and perceived public interest benefits .
• Advancing the regulatory record with technical studies (unlicensed coexistence, tolling coexistence) and Brattle Group economic report supporting minimal costs and substantial national benefits; CEO: “We…substantiated…significant benefits and minimal costs of our proposal” .
• Public safety traction: NextNav’s 3D location live at select ECCs in North Central Texas with district‑wide rollout targeted “later this quarter”; First Due partnership enhances responder vertical accountability and 3D visualization .

What Went Wrong

• Missed consensus on key metrics: Revenue $1.20M vs $1.59M*, EPS $(0.48) vs $(0.135), EBITDA $(16.66)M vs $(11.68)M*; sequential revenue decline vs Q1 ($1.54M) .
• Larger net loss driven by non‑cash charges (change in fair value of derivative liability and warrants totaled $39.5M in Q2), amplifying GAAP losses and equity volatility .
• Operating loss widened to $(17.24)M (vs $(17.00)M in Q1 and $(15.33)M YoY) on higher professional services, payroll, non‑recurring engineering, and consulting expenses despite lower software/cloud costs .

Financial Results

Notes: Values marked with * retrieved from S&P Global.

EBITDA vs Estimates (Q2 2025):

Notes: Values marked with * retrieved from S&P Global.

KPIs and Operating Profile:

Segment breakdown: Not disclosed in earnings materials .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We appreciate the FCC’s order granting consent to the assignment of the Telesaurus licenses, further enhancing our spectrum position and operational leadership in the Lower 900MHz band…as we seek to enable a widescale, future‑proof complement and backup to GPS as quickly as possible.” — CEO Mariam Sorond (press release) .
• “We presented implementation and deployment details of our 5G‑based PNT solution to FCC staff…with swift FCC action, our solution could be available during this administration.” — CEO prepared remarks .
• “Net loss for the second quarter was $63.2M which included a $39.5M loss associated with the change in the fair value of derivative liability and warrants.” — CFO prepared remarks .
• “GPS vulnerabilities are not hypothetical…America must address this issue now. I’m confident that our solution will play a key role…without requiring taxpayer funding.” — CEO prepared remarks .

Q&A Highlights

• NPRM path and record sufficiency: Management believes the technical/economic record is complete for FCC to move to NPRM; continued advocacy will maintain urgency .
• Satellite complementarity: Engaging industry broadly; no specific satellite updates yet; position is “system‑of‑systems” with terrestrial and space‑based elements .
• Field testing/retuning costs: Management does not see additional field testing as required for NPRM; retuning for tolling operations would be minimal, with reasonable accommodations contemplated .
• Impact of auction authority legislation: Limited impact expected; NextNav operates in sub‑1 GHz spectrum with different timing and licensing dynamics than higher‑band focuses; spectrum is licensed and available for optimization .
• AI linkage: Resilient PNT is foundational for AI applications in autonomy and critical infrastructure, where inaccurate timing/location would yield dangerous outcomes .

Estimates Context

• Q2 2025 performance vs consensus: Revenue $1.202M vs $1.592M* (miss), EPS $(0.48) vs $(0.135)* (miss), EBITDA $(16.664)M* vs $(11.675)M* (miss) .
• Forward context: Q3 2025 consensus Revenue $1.131M*, EPS $(0.14), EBITDA $(12.60)M; limited coverage (2 estimates) suggests potential volatility in revisions post‑Q2 miss*.
• Implication: Street models likely to lower near‑term revenue/EBITDA and widen loss trajectory until clarity on FCC timing and deployment partnerships; non‑cash valuation items complicate GAAP EPS comparability*.

Consensus values marked with * retrieved from S&P Global.

Key Takeaways for Investors

• Regulatory momentum is tangible: FCC consent and waiver enhance spectrum control; NextNav’s comprehensive technical/economic filings strengthen the NPRM case and represent key upside optionality .
• Near‑term fundamentals remain sub‑scale: Sequential revenue decline and broader operating losses underscore dependence on regulatory/partnership milestones to unlock commercialization and scale .
• Expect Street estimate resets: Q2 misses on Revenue/EPS/EBITDA should drive near‑term estimate reductions and increase sensitivity to FCC developments and partnership disclosures*.
• Liquidity is adequate to fund advocacy and development: Cash/ST investments of $176.1M provide runway, though debt/derivative liabilities add balance sheet complexity .
• Non‑cash volatility persists: Derivative/warrant fair‑value swings materially impact GAAP results; focus on cash OpEx trajectory and operating milestones rather than GAAP EPS alone .
• Commercial traction in public safety: Live deployments and First Due integration validate use cases and could support demand narratives independent of FCC timing .
• Trading setup: Stock likely remains event‑driven; upside on NPRM issuance/partnership announcements; downside if regulatory timeline slips or if opposition gains traction — monitor FCC docket and NextNav filings closely .