NextNav Inc.

Good afternoon, everyone, and welcome to the NextNav's fourth quarter and full year 2021 earnings conference call. Participating on today's call are Gary Parsons, NextNav chairman, Ganesh Padabharaman, NextNav co-founder and CEO, and Chris Gates, NextNav's chief financial officer. Before we begin, please note that during today's presentation, the company may make forward-looking statements either in our prepared remarks or in the associated question and answer session. These statements which involve risk 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 statements about NextNav's position to drive growth in its 3D geolocation business and expansion of its next-generation GPS platform, the business plans, objectives, expectations, and intentions of NextNav, NextNav's partnership, and the potential success thereof in NextNav's estimated and future business strategies, competitive position, industry environment, and potential growth opportunities. These statements are based on current expectations or beliefs and are subject to certain risks and uncertainties that may cause actual results to differ materially. 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 forward-looking statements. These risks, uncertainties, assumptions, and other important factors include but are not limited to the ability of NextNav to continue to gain traction in key markets with notable platforms and partners, both within the U.S. and internationally, The ability of NextNav to grow and manage growth profitably, maintain relationships with partners, customers, and suppliers, including with respect to NextNav's pinnacle 911 solution and its TerraPoint network, and the ability to maintain its management and key employees. The ability to maintain balance sheet flexibility and generate effectively deployed capital in line with its business strategies. The possibility that NextNav may be adversely affected by other economic, business, and or competitive factors, including the impact of the ongoing COVID-19 coronavirus pandemic. Other risk and uncertainties indicated from time to time, documents filed with securities and exchange commissioned by NextNav. New risk and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. You are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. NextNav undertakes no commitment to update or revise the forward-looking statements, whether as a result of new information, future events, or otherwise. Risk factors that may impact our performance are identified in our most recent SEC filings. Following our prepared remarks, the company will host an operator-led question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you wish to withdraw your question, please press star, please press the pound key. In addition, at the conclusion of today's call, a replay of our discussion will be posted to the company's investor relation website. With that, I'll turn the call over to NextNav Chairman Gary Parsons. Please go ahead.

Well, thank you very much, Tania. And welcome, everyone, to NextNav's fourth quarter earnings conference call. Actually, before we get into discussions of our business, I think we have to first express our deep concern and give sincere condolences to those who are bearing the brunt of this tragedy unfolding in Ukraine. Simply put, all of us at NextNav, both as a company and as individuals, denounce this senseless violence and brutality and really hope that the situation can be resolved with as little additional suffering and hardship as possible. It's undeniably been a difficult few years for businesses, governments, supply chains, and individuals and families, first with COVID and now with this active armed conflict. But through it all, our business must go on, and particularly because we provide the essential public safety and national security services that are a unique attribute of our technology. um also just as a quick administrative note we have posted a short investor presentation to go along with our earnings material and our conversations and remarks this quarter for those of you who are listening today on the webcast platform the presentation deck is available there on the platform for your review during our remarks you can also download it on the investor relations website under the events and presentation section, if you prefer. We hope you'll take a few moments to review that. And with that, let's go ahead and move into the business aspects of today's call. I'll start by providing a quick overview of NextNav's business strategy and industry positioning. Then I'll hand it over to NextNav's CEO, Ganesh Pataparaman, and take a deeper dive into the business outlook and the new customer wins. Chris Gates, NextNav CFO, will then wrap up with the review of the financials. And we think we've left plenty of time at the end of the call for all of your questions. 2021 was clearly an exciting year for our company. We successfully closed the business combination with Spartacus Acquisition Corp in the fourth quarter and are thrilled to continue building on our unique technology story. The transaction itself was a strong validation point for our technology business plan, leadership, as we continue to build on that momentum. And as part of the process of becoming a public company, we added some very significant new long-term strategic investors. This includes Koch Industries and several long-term investment groups. They were attracted not only to our technology, but also our strong underlying network nationwide spectrum asset and the deployed Pentacle Network. Unlike other spectrum-rich companies, however, NextNav has a proven and internationally standardized technology addressing a compelling need for resilient, reliable and available GPS, 3D location and timing services. We also have a vertical location capability that's already generating revenue and is rapidly adding new platform partners and developers. It has admittedly been a challenging time to go public, particularly with the difficult macroeconomic situation over the past few months. You only need to see the daily ups and downs of the Dow and NASDAQ to see what's going on there. But we do feel confident in our technology and our solid spectrum asset value. We're also encouraged by the traction we're gaining in key markets. and with notable platforms and partners, both here in the United States and in important international markets. In a moment, Ganesh will discuss the various partnerships and platforms that we're engaged with, as well as the international traction that we're experiencing. Some of these were expected, and we've spoken about them in the past. Others represent new initiatives and potential partners who have surfaced that express interest in our capabilities and have the potential to expand either our geographic or our industry reach. Turning to our technology, during 2021, we not only commercially introduced Pinnacle, but we expanded the footprint of our Pinnacle technology to over 4,400 markets across the country, covering over 90% of all buildings above three stories in the country. This substantial coverage area and proven accuracy led to an agreement with one of the nation's largest wireless carriers for E911, a capability that we are working hard to integrate into their network as rapidly as possible right now. Finneco's vertical location capabilities continue to see adoption in the public safety marketplace and increasingly in the gaming market segment, where it serves not only as part of the gameplay, but also as a mechanism for fraud control. providing validation or qualification of participants. Meanwhile, our terrestrially-based next-gen network, TerraPoint, continues to perform well with its broader capability of full three-dimensional position, navigation, and the critical timing aspects. All independent agencies and groups, whether they're government or industry, have consistently validated TerraPoint's market-leading accuracy and reliability. Those groups, as we've said before, include Department of Transportation, Homeland Security, CTIA, ATIS, NASA, and others. The testing and validation is not restricted to the United States alone. As NextNav recently disclosed its participation with European Commission's Joint Research Center, alternative positioning, navigation, and timing evaluation that took place in Italy. These tests further the European Union's desired creation of a backup to the global navigation satellite system, such as Europe's own Galileo system, as well as GPS, and is intended to assess which technologies could strengthen and expand the overall European P&T capacity. And it's probably important to note that this, you know, European Commission's interest in protecting their critical infrastructure and P&T systems was already gaining traction even before the Russian attacks on Ukraine. That military action, of course, vividly highlights the ongoing vulnerabilities of today's GPS, Galileo, and SS systems, whether they're being used for military action or as a timing source for telecom networks, financial transactions, power grids, and other critical infrastructure. The U.S. government's awareness of these vulnerabilities has also become more focused because of this current conflict. The recently passed FY22 budget includes ramped-up funding for DOT to examine next steps following their 2020 technology assessment, and DHS and DOD also secure designated funding specifically targeted towards ensuring GPS resiliency. NextNav is fully engaged with these efforts and assessments and expects to be an integral part of the government's roadmap to address these concerns. The fact that TerraPoint's transmitters are terrestrially based and difficult to jam or spoof are key elements in their ability to penetrate deep inside buildings throughout urban markets. That in-building penetration and wide area coverage are also buttressed by the sub-gigahertz location of the spectrum asset itself. As most of you already know, Our contiguous sub-gigahertz spectrum sits in the middle of two bands of LTE owned by EnterX, which allows us to be integrated into mobile handsets quite easily and which provides excellent propagation benefits. This spectrum asset, representing eight contiguous megahertz and over 2.4 billion megahertz POPs, is nationwide and covers virtually all key markets and the vast preponderance of all urbanized areas in the country. Thus, the ability to back up GPS and provide critical infrastructure timing resiliency in urban markets is quite extensive and quite comprehensive on a nationwide basis. Hopefully that gives you a broad overview of where we stand as we look forward to 2022. As Chris will cover later, a number of the large contracts and development agreements we've announced in 2021 are already showing up in the billings and deferred revenue on our balance sheet in advance of the realized revenue, which will flow this year as the network integrations are completed and the commercial service begins on those platforms. So let me turn it over to Ganesh now to get into the specifics of some of these initiatives and how we're growing the company to accelerate both marketing activities and revenue as we move into 2022. Ganesh?

Thanks, Gary. Welcome everyone to the call. as we've noted in our press release you know we had a very strong year and we accomplished a significant amount of throughput throughout the year in 2021 but before i get into our comments in a little bit more detail i would like to express our solidarity with the people of ukraine as a person who's been to kiev many times in my youth it is quite devastating to see the state of the city and the country and i do hope Common sense prevails quickly and peace returns to Ukraine. And with that, I'll turn over to the business in 2021. So 2021 was quite a busy year for us at NextNav. Not only did we take the company public through a successful reverse merger with Spartacus Acquisition Corp, but we also made great strides on the operational front, building out our pinnacle and TerraPoint technologies. while also signing several new strategic partnerships across industry verticals and across various markets. Let me delve into these in a little bit more detail, starting with the Pinnacle service. As we've noted previously, the Pinnacle network is available in 4,400 markets across the US. As a reminder, this is a passive network that does not use our spectrum asset. Rather, the Pinnacle Network provides the most accurate floor-level altitude with the existing GPS or Wi-Fi-based horizontal location technologies that the industry provides. This past year, we commercially launched our service with AT&T FirstNet to provide highly accurate altitude capabilities for first responders on the FirstNet network. And so that was a very significant milestone for us as public safety has started using these services. As we shared previously, the FCC is also requiring carriers to meet z-axis location requirements for 911 beginning in April of 2022. And we're working with both carriers and device OEMs to help them meet those requirements. Last fall, we signed an agreement with Qualcomm to enable mobile phones to deliver z-axis capabilities with very little modifications to carrier infrastructure at scale. This allows for a wide penetration of devices. This was followed up with the announcement that we had partnered with one of the largest wireless operators in the country to deliver Z-axis capabilities to help them meet the FCC's 911 mandate across their entire user base. We believe this is further validation and validates our technology and the trust operators and OEMs place in it to save lives. In the mass market and IoT space, we have several different activities in progress, specifically in the gaming and IoT areas. We continue to see strong interest and demand for 3D geolocation capabilities. We were recently included in the market map of Metaverse Technologies by John Radoff as part of the spatial computing framework. We also signed an agreement with Echo 3D, one of the content management and distribution platforms for AR VR experiences. They have over 18,000 developers on that platform, specifically focused on providing augmented reality capabilities. And these include companies like Repligen and SpatialIO. These efforts come on the heels of our service being awarded the Unity Verified Solution status in early 2021. And we were also awarded a mega grant by Epic to develop a capability on the Unreal platform. Both of these platforms together give us access to millions of developers to seamlessly integrate the vertical location capabilities into any application and gaming that supports these engines. Much like our previously announced announcement with Atlas Earth, The partnership with Echo3D is NexNav's latest advancement in this field, further demonstrating the enhanced vertical location that brings to the gaming world. However, as we've mentioned a few times in the past, we're not only enabling the three-dimensional blue dot, but the entire ecosystem and visualization aspects of it. In that regard, we signed a deal with CRG, who is a provider of best-in-class indoor and tactical mapping solutions for public safety. to build highly accurate indoor maps with embedded vertical location data. The integration of next pinnacle service will strengthen existing and new building surveys with critical vertical location data to help ensure that each building has the proper protocols in place to aid emergency response. Now, turning our attention to the TerraPoint technology, we continue to make solid progress to building towards the launch of the system. Earlier this year, we announced the trial activity at ISPRA in Italy that Gary discussed. This is very similar to the program launched by the Department of Transportation in 2019 and 2020 to evaluate backup systems to GPS here in the US. This has now obviously taken on added significance in the wake of the Russian aggression in Ukraine, where jamming of GPS and the European Galileo system has become quite common. We believe this is leading to increased security concerns in Europe and similar initiatives for GNSS or global satellite system backup both in UK and Europe. In the US, Congress has allocated approximately $15 million to the Department of Transportation in the recently passed budget bill for 2022. This essentially establishes steps to move forward on developing a backup system to GPS. And then additional funds to the tune of $157 million were also allocated to DHS's R&D group for studying four or five different categories, including P&T resilience in the infrastructure bill. We are obviously actively engaged with all those parties and helping establish the next steps there. In addition, we were recently elected to the chair of the IEEE P1952 group dealing with resilient position navigation and timing standards. This group specifies technical requirements, resiliency levels, and expected behavior of user equipment. This is an important step in the government specifying P&T resilient standards for critical infrastructures and industries across the country. In terms of the TerraPoint build-out, we expect expenditures will continue to be modest in 2022 as we optimize the commercial transmitter design, conduct site selections, and overall network planning. Our strong balance sheet and license spectrum holdings allow us to maintain control over the pace and scope of that activity from both the capital and technology perspective. As we continue to expand the business and our technological footprint is growing, we're also hiding at a pretty robust pace. We recently brought on a new general counsel as well as a VP of government affairs, Ed Mortimer. Ed comes to us from the US Chamber of Commerce, where he was the vice president of transportation and infrastructure and was instrumental in passing the trillion dollar infrastructure bill. We are thrilled to have him join the team and to benefit from his expertise in bringing complex issues to a positive resolution. In closing, it's been a very exciting year for our business, and I'm thrilled for what lies ahead in 2022. We're committed to continuing expanding our partnership both on the Pinnacle technology and as we prepare for the build out of the TerraPoint technology. It is clear that there are vast use cases for technology, and we feel confident that we're on a strong path in the months ahead of us. With that, I'd like to turn it over to Chris, who will walk us through the financials for 2021. Chris? Thanks, Ganesh.