NextNav Inc. Reports Fourth Quarter and Full Year 2023 Results
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Insights
The acquisition of additional spectrum licenses by NextNav is a strategic move that could significantly bolster its positioning in the telecommunications sector. Spectrum is a finite resource and is crucial for the delivery of wireless services. The additional 4 MHz in the lower 900 MHz band, increasing NextNav's total to 3.5 billion MHz-PoPs, enhances the company's capacity to provide robust and reliable services. This could potentially lead to new contracts and partnerships, particularly given the increasing demand for enhanced PNT and 3D geolocation services in both public and private sectors.
However, the financial commitment of up to $50 million for the additional spectrum needs to be weighed against the company's current financial position. With a reported net loss of $71.7 million in the twelve months ended December 31, 2023 and an operating loss of $63.5 million, there is pressure on NextNav to monetize this investment efficiently to reassure investors and improve its financial health.
From a financial perspective, the reported increase in revenue is a positive indicator, although it's important to note that the revenue growth is modest when compared to the operating and net losses. The reported operating loss and net loss in the recent financial results suggest that NextNav is still in a growth phase where it is investing heavily in its technology and market expansion. This is further evidenced by the significant expenses related to stock-based compensation and payroll, which are typical for companies aiming to attract and retain talent in competitive tech sectors.
Investors should consider the company's long-term strategy and the potential market for its services when evaluating the impact of these financial results. The cash position of $81.9 million provides some runway, but given the substantial losses, NextNav will need to demonstrate a clear path to profitability or continued growth in revenue to maintain investor confidence.
NextNav's focus on next generation PNT technology and its optimized use of the 900 MHz spectrum could position the company as an innovator in a niche market. The telecommunications industry is rapidly evolving, with an increasing focus on applications that require precise location and timing data, such as autonomous vehicles, IoT devices and smart city infrastructure. NextNav's expanded spectrum assets could give it a competitive edge in these markets.
However, the market will also be looking at how effectively NextNav can leverage its new CEO's experience and the strategic insights of its newly appointed board member to navigate the competitive landscape. The ability to convert technical capabilities into marketable solutions that address real-world problems will be key to NextNav's success and its impact on the stock market.
Announced Transaction to Acquire Additional 900 MHz Spectrum Licenses
Mariam Sorond Joins as NextNav CEO
MCLEAN, Va., March 13, 2024 (GLOBE NEWSWIRE) -- NextNav Inc. (NASDAQ: NN) (“NextNav” or the “Company”) a leader in next generation positioning, navigation, and timing (PNT) and 3D geolocation, today reported financial results for NextNav’s fourth quarter and full year ended December 31, 2023.
Mariam Sorond, NextNav CEO stated, “It’s been an incredible first 100 days as the CEO of NextNav. I have met directly with our team and partners and see the potential to explore options to enhance our next generation PNT technology through optimized use of our valuable spectrum asset. In line with this strategy, we recently signed an exciting agreement to acquire additional spectrum licenses covering 4 MHz in the lower 900 MHz band. Following close, this significant transaction will bring NextNav’s combined spectrum assets, including its existing 8MHz of contiguous 900 MHz spectrum, to a total of 3.5 billion MHz-PoPs of low band spectrum.
PNT powered by low-band spectrum with optimized use is a unique and powerful opportunity to help to address many of the challenges faced by both the public and private sectors, including national security and public safety. As we move forward, we are taking a fresh look at our entire offering and considering how best to take full advantage of our valuable spectrum assets to drive growth and long-term shareholder value.”
Recent Operational Highlights
- Acquires Additional 900 MHz Spectrum Licenses: On March 11, 2024, NextNav announced it had signed an agreement to acquire spectrum licenses covering an additional 4 MHz in the lower 900 MHz band for a total purchase price of up to
$50 million . Following close, NextNav’s combined spectrum assets, including its existing 8MHz of contiguous 900 MHz spectrum, will total 3.5 billion MHz-PoPs of low band spectrum. - Mariam Sorond Named New Chief Executive Officer: Mariam Sorond, a veteran industry leader, was appointed NextNav’s new Chief Executive Officer, effective November 29, 2023. Ms. Sorond joins NextNav with over 28 years of technical and strategy experience in the telecommunications industry, including extensive spectrum expertise and proven track record of evolving telecommunication technology and strategy.
- Appointed John Muleta to Board of Directors: NextNav announced the appointment of John Muleta to the Board of Directors, effective January 18, 2024. Mr. Muleta’s brings deep expertise in the development and implementation of wireless policies, particularly in spectrum allocation and public safety in both the private and public sectors, including previously serving as the Wireless Telecommunications Bureau Chief at the Federal Communications Commission.
Three and Twelve Months Ended December 31, 2023, Financial Highlights
- Revenue: was
$1.2 million in the three months ended December 31, 2023, as compared to$803,000 in the prior year period. The increase was primarily attributable to increased recurring service revenue in the current period from technology and services contracts with commercial customers. In the twelve months ended December 31, 2023, revenue was$3.9 million , and was flat with the prior year period. There was a decrease in integration revenue which was partially offset by increased recurring service revenue from technology and service contracts with commercial customers. - Operating Loss: was
$19.9 million in the three months ended December 31, 2023, as compared to an operating loss of$14.5 million in the prior year period, primarily driven by increases in stock-based compensation expense and payroll-related expenses. In the twelve months ended December 31, 2023, operating loss was$63.5 million , as compared to an operating loss of$65.5 million in the prior year period, primarily driven by lower stock-based compensation expense which was partially offset by increase in payroll-related expenses. - Net Loss: was
$16.4 million in the three months ended December 31, 2023, including a gain on the fair value of warrants of$5.7 million , as compared to a net loss of$12.5 million in the prior year period, including a gain on the fair value of the warrants of$1.5 million . In the twelve months ended December 31, 2023, net loss was$71.7 million , including a loss on the fair value of warrants of$4.1 million as compared to a net loss of$40.1 million in the prior year period, including a gain on the fair value of the warrants of$24.7 million . - Balance Sheet: as of December 31, 2023, the Company had
$81.9 million in cash and cash equivalents,$4.0 million in short term investments and has$48.4 million in debt net of unamortized discount attributed to transaction costs and the issuance of warrants, with a gross value of$70.0 million .
Conference Call Information
NextNav will host a conference call for analysts and investors at 5:00 pm ET on Wednesday, March 13, 2024.
Registration for the conference call can be completed by visiting the following website prior to, or on the day of, the conference call: https://registrations.events/direct/Q4I629368796093022208 After registering, each participant will be provided with call details and a registrant ID. Reminders will also be sent to registered participants via email. Alternatively, the conference call will be available via a live webcast.
To access the live webcast or a replay, visit the Company’s investor relations website at https://ir.nextnav.com/.
A replay of the call can also be accessed via phone through March 20, 2024 by dialing (800) 770-2030 from the U.S., or (647) 362-9199 from outside the U.S. The conference I.D. number is 62936.
About NextNav Inc.
NextNav Inc. (Nasdaq: NN) is a leader in next generation positioning, navigation and timing (PNT), enabling a whole new ecosystem of applications and services that rely upon 3D geolocation and PNT technology. Powered by low-band licensed spectrum, NextNav's positioning and timing technologies deliver accurate, reliable, and resilient 3D PNT solutions for critical infrastructure, GPS resiliency and commercial use cases.
For more information, please visit https://nextnav.com/ or follow NextNav on Twitter or LinkedIn.
Source: NN-FIN
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “forecast,” “intend,” “seek,” “target,” “anticipate,” “believe,” “expect,” “estimate,” “plan,” “outlook,” and “project” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These statements, which involve risks and uncertainties, relate to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable and may also relate to NextNav’s future prospects, developments and business strategies. In particular, such forward-looking statements include the approval by the FCC of the transfer of the licenses, closing of the transactions described herein, the achievement of certain FCC-related milestones, the ability to realize the broader spectrum capacity and the advancement of NextNav’s PNT services, NextNav’s position to drive growth in its 3D geolocation business and expansion of its next generation PNT technologies, the business plans, objectives, expectations and intentions of NextNav, and NextNav’s estimated and future business strategies, competitive position, industry environment and potential growth opportunities. These statements are based on NextNav’s management’s current expectations and beliefs, as well as a number of assumptions concerning future events.
Such forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside NextNav’s control that could cause actual results to differ materially from the results discussed in the forward-looking statements. These risks, uncertainties, assumptions and other important factors include, but are not limited to: (1) the risk that the requisite regulatory approvals are not obtained and the closing of the transaction does not occur; (2) the risk that the consummation of the transactions disrupts current plans and operations of NextNav; (3) the ability to recognize the anticipated benefits of the transactions, which may be affected by, among other things, competition, the ability of NextNav to grow and manage growth profitably, maintain relationships with customers and suppliers and retain its management and key employees; (4) costs related to the transactions; (5) the possibility that NextNav may be adversely affected by other economic, business and/or competitive factors; and (6) other risks and uncertainties indicated from time to time in other documents filed with the SEC by NextNav. New risks and uncertainties arise from time to time, and it is impossible for NextNav to predict these events or how they may affect the Company. You are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made, and NextNav undertakes no commitment to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.
Contact:
Erica Bartsch
Sloane & Company
212-446-1875
NEXTNAV INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| December 31, | ||||||||
| 2023 | 2022 | |||||||
| (in thousands) | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 81,878 | $ | 47,230 | ||||
| Short Term Investment | 3,954 | 8,216 | ||||||
| Accounts Receivable | 2,332 | 2,168 | ||||||
| Other current assets | 3,056 | 3,576 | ||||||
| Total current assets | $ | 91,220 | $ | 61,190 | ||||
| Network under construction | 1,676 | 3,574 | ||||||
| Property and equipment, net of accumulated depreciation of | 19,885 | 19,180 | ||||||
| Operating lease right-of-use assets | 19,267 | 10,143 | ||||||
| Goodwill | 17,977 | 17,493 | ||||||
| Intangible assets, net | 10,625 | 10,397 | ||||||
| Other assets | 1,508 | 1,811 | ||||||
| Total assets | $ | 162,158 | $ | 123,788 | ||||
| Liabilities, preferred interests, and stockholders’ equity (deficit) | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 391 | $ | 1,019 | ||||
| Accrued expenses and other current liabilities | 6,592 | 5,241 | ||||||
| Short term lease liabilities - operating | 2,523 | 2,532 | ||||||
| Deferred revenue | 297 | 95 | ||||||
| Total current liabilities | $ | 9,803 | $ | 8,887 | ||||
| Warrants | 7,053 | 4,200 | ||||||
| Long-term lease liabilities - Operating | 15,145 | 5,290 | ||||||
| Other long-term liabilities | 1,614 | 1,547 | ||||||
| Long-term debt, net of debt issuance cost and discount | 48,447 | — | ||||||
| Total liabilities | $ | 82,062 | $ | 19,924 | ||||
| Stockholders’ equity (deficit): | ||||||||
| Common Stock, authorized 500,000,000 shares; 111,260,257 and 106,418,442 shares issued and 111,132,222 and 106,417,265 shares outstanding at December 31, 2023 and 2022, respectively | $ | 12 | $ | 12 | ||||
| Additional paid-in capital | 837,416 | 787,130 | ||||||
| Accumulated other comprehensive income | 2,198 | 1,371 | ||||||
| Accumulated deficit | (760,227 | ) | (688,492 | ) | ||||
| Common stock in treasury, at cost, 128,035 and 1,177 shares at December 31, 2023 and December 31, 2022, respectively | (665 | ) | (4 | ) | ||||
| Total stockholders’ equity (deficit) | $ | 78,734 | $ | 100,017 | ||||
| Non-controlling interests | 1,362 | 3,847 | ||||||
| Total liabilities, preferred interests, stockholders’ equity (deficit) and non-controlling interests | $ | 162,158 | $ | 123,788 | ||||
NEXTNAV INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(UNAUDITED)
| Year Ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| (in thousands, except per share amounts) | ||||||||
| Revenue | $ | 3,862 | $ | 3,926 | ||||
| Operating expenses: | ||||||||
| Cost of goods sold (exclusive of depreciation and amortization) | 12,743 | 11,806 | ||||||
| Research and development | 19,503 | 17,059 | ||||||
| Selling, general and administrative | 30,324 | 36,926 | ||||||
| Depreciation and amortization | 4,821 | 3,671 | ||||||
| Total operating expenses | $ | 67,391 | $ | 69,462 | ||||
| Operating loss | (63,529 | ) | (65,536 | ) | ||||
| Other income (expense): | ||||||||
| Interest income (expense) | (3,664 | ) | 901 | |||||
| Change in fair value of warrants | (4,101 | ) | 24,675 | |||||
| Other loss, net | (220 | ) | (184 | ) | ||||
| Loss before income taxes | $ | (71,514 | ) | $ | (40,144 | ) | ||
| Benefit (Provision) for income taxes | (221 | ) | 28 | |||||
| Net loss | $ | (71,735 | ) | $ | (40,116 | ) | ||
| Foreign currency translation adjustment | 827 | 1,492 | ||||||
| Comprehensive loss | $ | (70,908 | ) | $ | (38,624 | ) | ||
| Net loss | $ | (71,735 | ) | $ | (40,116 | ) | ||
| Net loss attributable to common stockholders | $ | (71,735 | ) | $ | (40,116 | ) | ||
| Weighted average of shares outstanding – basic and diluted | 107,972 | 101,029 | ||||||
| Net loss attributable to common stockholder per share – basic and diluted | $ | (0.66 | ) | $ | (0.40 | ) | ||
NEXTNAV INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| Year Ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| (in thousands) | ||||||||
| Operating activities | ||||||||
| Net loss | $ | (71,735 | ) | $ | (40,116 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 4,821 | 3,671 | ||||||
| Equity-based compensation | 21,838 | 26,501 | ||||||
| Change in fair value of warrant liability | 4,101 | (24,675 | ) | |||||
| Realized and unrealized gain on marketable securities | (546 | ) | (72 | ) | ||||
| Equity method investment loss | 191 | 230 | ||||||
| Asset retirement obligation accretion | 66 | 56 | ||||||
| Amortization of debt issuance costs and discount | 3,151 | — | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivables | (164 | ) | (428 | ) | ||||
| Other current assets | 537 | 593 | ||||||
| Other assets | 119 | 161 | ||||||
| Accounts payable | (627 | ) | 486 | |||||
| Deferred revenue | 202 | (1,537 | ) | |||||
| Accrued expenses and other liabilities | 1,884 | (2,501 | ) | |||||
| Operating lease right-of-use assets and liabilities | 722 | 536 | ||||||
| Net cash used in operating activities | $ | (35,440 | ) | $ | (37,095 | ) | ||
| Investing activities | ||||||||
| Capitalization of costs and purchases of network assets, property, and equipment | (2,751 | ) | (2,964 | ) | ||||
| Purchase of equity method investments | — | (1,125 | ) | |||||
| Purchase of marketable securities | (37,441 | ) | (13,644 | ) | ||||
| Sale and maturity of marketable securities | 42,249 | 5,500 | ||||||
| Purchase of business, net of cash acquired | — | (2,890 | ) | |||||
| Purchase of internal use software | (983 | ) | (613 | ) | ||||
| Net cash provided by (used in) investing activities | $ | 1,074 | $ | (15,736 | ) | |||
| Financing activities | ||||||||
| Proceeds from debt | 70,000 | — | ||||||
| Payments towards debt issuance cost | (1,861 | ) | — | |||||
| Payments towards debt | (110 | ) | (17 | ) | ||||
| Proceeds from exercise of stock option | 73 | 57 | ||||||
| Proceeds from exercise of warrants | 882 | — | ||||||
| Proceeds from issuance of common stock | — | 7 | ||||||
| Purchase of common stock (withholding taxes) | — | (4 | ) | |||||
| Net cash provided by financing activities | $ | 68,984 | $ | 43 | ||||
| Effect of exchange rates on cash and cash equivalents | 30 | (58 | ) | |||||
| Net increase (decrease) in cash and cash equivalents | 34,648 | (52,846 | ) | |||||
| Cash and cash equivalents at beginning of period | 47,230 | 100,076 | ||||||
| Cash and cash equivalents at end of period | $ | 81,878 | $ | 47,230 | ||||
| Non-cash investing and financing activities | ||||||||
| Common stock issued in acquisition of business | $ | — | $ | 13,888 | ||||
| Capital expenditure included in Accrued expenses and other current liabilities | $ | 285 | $ | 605 | ||||
| Reclassification of warrant liability to common stock warrants | $ | 1,248 | $ | — | ||||
| Issuance of warrants | $ | 22,843 | $ | — | ||||
| Interest paid in shares | $ | 1,888 | $ | — | ||||
| Interest paid in cash | $ | 1,808 | $ | — | ||||
| Income taxes paid, net | $ | 147 | $ | — | ||||
FAQ
What were NextNav's revenue figures for Q4 and full year 2023?
How many MHz-PoPs of low band spectrum does NextNav now have?
Who is the new CEO of NextNav?
What was the operating loss in Q4 2023?
How much cash did NextNav have as of December 31, 2023?
