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NI

NEXTNAV INC. (NN)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $1.9M, up from $1.2M YoY, driven by service revenue and a one-time license fee; operating loss improved to $14.8M, but net loss widened to $32.3M largely due to a $14.9M non-cash loss from warrant and Telesaurus liability fair value changes .
  • Versus S&P Global consensus, Q4 revenue beat ($1.91M actual vs $1.73M estimate*), while EPS missed (-$0.25 actual* vs -$0.145 estimate*) and EBITDA missed (-$13.23M actual* vs -$9.39M estimate*). Bold: revenue beat; EPS and EBITDA miss. Values retrieved from S&P Global.
  • Strategic catalysts: FCC’s compressed PNT Notice of Inquiry (NOI) under Chairman Carr, successful 5G PRS-based PNT lab and field demonstrations, and a signed $190M 5% senior secured convertible notes deal to redeem 10% notes and extend liquidity (conversion price $12.56; warrants issued to lead investors) .
  • No quantitative financial guidance was provided; management emphasized regulatory progress, technology validation, and capital structure optimization as near-term drivers .

What Went Well and What Went Wrong

What Went Well

  • Successful validation of 5G PRS-based PNT in lab and field tests, establishing a technical foundation for terrestrial 3D PNT commercialization: “These successful demonstrations validate the effectiveness of NextNav's 5G PRS-based PNT solutions and paves the way…” .
  • Regulatory momentum: FCC PNT NOI with compressed comment cycle; management: “This early focus is a significant win for the prospects of a terrestrial complement and backup to GPS…” .
  • Liquidity enhancement: signed $190M 5% senior secured convertible notes to redeem existing 10% notes and extend maturities to 2028, supporting long-term flexibility .

What Went Wrong

  • EPS and EBITDA missed S&P Global consensus in Q4; EBITDA remained materially negative despite operating loss improvements (actual EPS -$0.25* vs -$0.145*; EBITDA -$13.23M* vs -$9.39M*). Values retrieved from S&P Global.
  • Net loss widened to $32.3M due to non-cash fair value losses on warrants and Telesaurus liability; prior year Q4 net loss was $16.4M with a warrant fair value gain .
  • No quantitative revenue/margin guidance, leaving uncertainty for near-term financial trajectory despite regulatory and technical milestones .

Financial Results

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$1.105 $1.607 $1.900
EPS ($USD)-$0.21 -$0.11 -$0.25*
EBIT ($USD Millions)-$15.3 -$13.9 -$14.8
EBITDA ($USD Millions)-$14.622*-$12.820*-$13.228*
Net Loss ($USD Millions)-$24.4 -$13.6 -$32.3
EBITDA Margin %n/an/an/a
EBIT Margin %n/an/an/a
Net Income Margin %n/an/an/a

Values with asterisks (*) retrieved from S&P Global.

Actual vs S&P Global Consensus (quarterly):

MetricQ2 2024 Estimate*Q2 2024 ActualQ3 2024 Estimate*Q3 2024 ActualQ4 2024 Estimate*Q4 2024 Actual
Revenue ($USD)$1.6245M$1.105M $1.105M$1.607M $1.726M$1.911M
EPS ($USD)-$0.145-$0.21 -$0.15-$0.11 -$0.145-$0.25*
EBITDA ($USD)-$10.587M-$14.622M*-$11.294M-$12.820M*-$9.390M-$13.228M*

Values with asterisks (*) retrieved from S&P Global.

Liquidity KPIs:

MetricQ2 2024Q3 2024Q4 2024
Cash, Cash Equivalents & ST Investments ($USD Millions)$86.3 $86.8 $80.1
Debt (net of discount) ($USD Millions)$51.4 $53.0 $54.6

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Financial guidance (revenue, margins, EPS)FY/Q1 2025 onwardn/an/aNone provided; management focused on regulatory/technology milestones rather than quantitative guidance

Earnings Call Themes & Trends

TopicQ2 2024 (Prior-2)Q3 2024 (Prior-1)Q4 2024 (Current)Trend
Regulatory/legal (FCC)FCC issued Public Notice seeking comments on NextNav’s petition (Lower 900 MHz) Continued filings and support; Brattle report economic case FCC PNT NOI with compressed comment cycle; Chairman Carr’s action-oriented stance Accelerating momentum
Technology initiatives (5G PRS-based PNT)DOT award to test terrestrial PNT as GPS complement/backup Continued stakeholder engagement Successful lab/field demonstrations; over-the-air 5G PRS demo network agreements Validation and commercialization prep
Capital structure/liquidityCash/notes outstanding disclosed Cash/notes trending; warrant exercises Signed $190M 5% senior secured convertible notes; redeem 10% notes; warrants to investors Enhanced flexibility, reduced cost
Government engagementDOT Volpe Action Plan alignment Continued public safety/government support Bipartisan public polling; literature review underscoring national security risks Broadening advocacy
Commercial modelNot deploying network themselvesn/aReiterated partnering with 5G operators; software on existing infrastructure Capital-light deployment approach

Management Commentary

  • “This early focus is a significant win for the prospects of a terrestrial complement and backup to GPS…” — Mariam Sorond on FCC NOI .
  • “These successful demonstrations validate the effectiveness of NextNav's 5G PRS-based PNT solutions…” — on NextGen technology validation .
  • “We… signed a note purchase agreement for a private offering of $190 million… [5%] senior secured convertible notes… conversion price of $12.56 per share… proceeds will redeem existing 10% notes due 2026.” — Christian Gates .
  • “Our solution is software sitting on top of [operators’] standards-based 5G PRS; we don’t see major incremental capex beyond normal 5G deployments.” — Mariam Sorond .
  • “Our business plan continues to not require the deployment of a network by ourselves… partner with third parties.” — Christian Gates .

Q&A Highlights

  • 5G deployment capex burden: Management expects 5G operators to bear normal spectrum-add deployment costs; NextNav’s standards-based PRS software sits atop existing 5G infrastructure .
  • Capital uses and liquidity: New notes extend maturities to 2028, enhance flexibility; company not provisioning for a self-built network capex program .
  • Clarifications on redemption and warrants: Conditional redemption of 10% notes at 101% upon closing; warrants issued to lead investors at $20, $17, and $12.56 strikes (each) .

Estimates Context

  • Q4 2024 vs S&P Global: Revenue beat ($1.911M vs $1.726M*), EPS missed (-$0.25* vs -$0.145*), EBITDA missed (-$13.228M* vs -$9.390M*). Values retrieved from S&P Global.
  • Trajectory: Q2 missed on revenue/EPS/EBITDA; Q3 beat revenue/EPS but missed EBITDA; Q4 revenue strength aided by service contracts and a one-time license fee while profitability lagged on non-cash fair value impacts and continued operating investment .
  • Estimate revisions likely to reflect stronger revenue execution but continued negative EBITDA absent near-term commercialization ramp. Values retrieved from S&P Global.

Key Takeaways for Investors

  • Regulatory tailwind: FCC’s compressed NOI timeline and Chairman Carr’s stance increase probability of timely action on terrestrial PNT; foundational for medium-term commercialization .
  • Technical validation: Successful 5G PRS PNT demos reduce execution risk and support operator-partner model leveraging existing 5G infrastructure .
  • Capital structure de-risking: $190M 5% notes to redeem 10% notes, extend maturity to 2028, and add flexibility; conversion premium signals investor confidence .
  • Revenue cadence improving: Q4 revenue rose to $1.9M on service contracts and a one-time license fee; watch for sustainability of non-recurring items .
  • Profitability still a concern: Negative EBITDA and widened net loss (driven by warrant/Telesaurus liability fair value) underscore need for scale and regulatory progress before margin inflection .
  • Model remains capital-light: No self-built network; plan to partner with 5G operators suggests lower capex and faster deployment if spectrum path advances .
  • Near-term catalysts: FCC NOI comment cycle outcomes, further demos and operator collaborations, and closing of the notes transaction around March 31, 2025 .