Anterix Inc. (NASDAQ:ATEX) Q3 2024 Earnings Call Transcript February 15, 2024
Anterix Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Hello and welcome to the Anterix Fiscal 2024 Third Quarter Investor Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] I would now like to hand the call to Natasha Vecchiarelli. Please go ahead.
Natasha Vecchiarelli: Thank you and good morning, everyone. I'm Natasha Vecchiarelli Vice President of Investor Relations and Corporate Communications. And I welcome you to the Anterix third quarter conference call. Joining me today are Rob Schwartz, President and CEO; Ryan Gerbrandt, COO; Tim Gray, CFO; and Chris Guttman-McCabe, Chief Regulatory and Communications Officer. Before we begin, I would like to remind you that we will make forward-looking statements during this call regarding future events and our anticipated future performance such as our commercial outlook and guidance. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Investors are cautioned not to place undue reliance on forward-looking statements.
Additionally, we do not undertake any duty to update any forward-looking statements. Important factors and risks that could cause actual results to differ materially from the Company's expectations are disclosed in our most recent SEC filings. These files can be accessed on our website or on the SEC's website. After Rob provides his prepared remarks, we'll open the call for questions. With that I'll turn the call over to Rob.
Rob Schwartz: Thanks, Natasha and good morning, everyone and thank you for joining us. In this latest quarter in Anterix continued progress on our journey to making 900 megahertz Utility Broadband, the de facto standard in creating a cleaner, safer, affordable and more secure energy future. Since our last investor update in November, we welcomed our six utility customer, Tampa Electric. We achieved 3GPP standards approval giving a clear evolutionary path to 5G for 900 megahertz spectrum users. We continued to advance industry wide support for utility private broadband evidenced by a significant movement in our demonstrated intent scorecard and we welcomed the legendary utility industry leader, Tom Kuhn to our team as Vice Chairman of our Board.
I'll start by providing a quick update on our demonstrated intent scorecard, which we began sharing a year ago to measure and quantify the meaningful indicators of customer intent that we see before we get to get to a contract. As a reminder, the analysis behind our demonstrated intent scorecard, includes tracking of 20 measurable indicators for each prospective customer in our pipeline, scoring each indicator based on our assessment of its relative importance and then calculated a combined demonstrated intent or DI score for each of these prospective customers. As we track and score 20 into individual indicators with scores it's the sum of the analysis that lets us know whether the DI threshold has been crossed and in turn informs our confidence level that a utility is demonstrating its intent to proceed with deploying 900 megahertz spectrum.
Of course, that does not mean that the process of moving them toward a contract is finished. Work is still needed like the work we did with Tampa Electric to move them to a contract and therefore out of the DI scorecard. Even with those that have shown the highest of demonstrated intent stops and starts are expected. It's the total score of the opportunity within this category and beyond that makes us confident that will continue to finalize contracts. And we have seen that continued movement both for the number of utilities that have crossed the threshold and beyond. As the updated DI infographic available on our Investor Relations website shows since our last report in November four utilities have crossed the DI threshold representing approximately 200 million in additional potential contracts.
A technician working on an aerial view of a critical infrastructure, emphasizing the importance of the company's utility services.
In total there are now 18 utilities in that highest category of DI, representing about $1.1 billion of potential contract proceeds. Note that this count is net of Tampa Electric that came out of the scorecard when we entered into a contract and also reflects the removal of one small municipal utility a single-digit deal. Needless to say, we are working collaboratively with all 18 of this category and the dozens of other utilities in our pipeline to move them to contracts. Another significant milestone that we reached this quarter is the inclusion of new specifications in 3GPPs release 18. Anterix's technology team was able to secure global support for our effort as we move through the standardization process. For those less familiar, 3GPP is the global organization of wireless carriers and infrastructure vendors as defined the evolutionary standards of LTE through 3G, 4G, 5G and beyond.
The new 3GPP specification means that utilities using Anterix’s 900 megahertz spectrum for private wireless networks now have a clear migration path to 5G when needed, ensuring that their investments in private networks are forward compatible. Anterix is also advancing our efforts to build industry-wide support and scale for utility private wireless broadband networks at 900 megahertz. We continue to engage with the utility and wireless ecosystem as well as policymakers to join us including our utility customers in this collective action. Later this month we will harness three flagship industry events to continue to build our momentum with all of our stakeholders. Anterix's presence at the key industry trade show DISTRIBUTECH will showcase dozens of real-world use cases, showing valuable applications that are available now for utilities to strengthen their grids.
We will have 40 of our active ecosystem members co-located in our booth, demonstrating their solutions that harness the power of broadband platform we are enabling. As we've seen from prior years. This event has resulted in broadening industry awareness of the tangible and immediate benefits of 900 megahertz private wireless broadband. At the same time, the winter meeting of NARUC, the National Association of Regulatory Utility Commissioners will convene utility regulators and their staffs from virtually every state in the nation to examine industry-wide challenges including top priorities of integrating more renewable energy and addressing the growing threats of wildfires and cybersecurity. We will be actively participating this event to further educate policymakers about the essential need for private broadband networks to support solutions for these increasing challenges.
And third, we'll have an executive presence at Wireless sector's flagship event Mobile World Congress, we will engage the global leaders, driving the development and deployment of private wireless broadband networks. Anterix is also advancing the market by supporting multiple filings to the US Department of Energy for funding under the bipartisan infrastructure law. One submission included a collaboration with the Southern States Energy Board and a national organization representing the Rural Cooperative Utilities, known as co-ops. The business model represented in the filing provides a scalable shared communications platform, where each regional utility can connect to improve grid resilience and deliver more affordable electricity to rural communities.
This provide – will provide a channel to extend Anterix's 900 megahertz spectrum to the co-op community, addressing the 2000 plus universe of cooperative electric providers. Additionally, Anterix was recently invited to participate in supporting the US Department of Energy's efforts to help modernize the electric grid. Anterix is joining with four of the DOE's national laboratories and others to support a program entitled; the Assessment of Communications Architectures for Energy Systems. This multiparty team is investigating ways to mitigate gaps in technology, standards and processes for communications across the grid. This program is designed to support and advance future cybersecurity training and planning and provide recommendations for improved technology standards and practices for the grid.
Before I wrap up our prepared remarks, I want to highlight another indicator of strength for our movement advancing Utility Broadband. Our Anterix team, this quarter as a resounding sign of further industry endorsement we proudly welcome the legendary electric power industry leader Tom Kuhn, as Vice Chairman of our Board of Directors. Tom brings decades of energy industry experience and policy expertise to Anterix. His track record of accomplishments and honors during his more than 30 years as President and CEO of Edison Electric Institute is formidable. Tom has built his career on leading winning coalitions that bring together utility C-suites, regulators, legislators, environmental advocates, labor leaders and other stakeholders to advance favorable public policies from debates over legislation of deregulation decades ago to the bipartisan infrastructure law and Inflation Reduction Act, Tom has helped shape the industry wide narrative and policy environment in support of the industry's vision for resilient clean energy future.
We are honored that Tom has chosen to join us in advancing the industry-wide movement towards private wireless broadband networks at 900 megahertz. As we have said throughout our journey, Anterix is doing more than simply providing spectrum, we are shaping a nationwide platform to support utility success in creating a secure, resilient energy future. We are in this for the long game, and we are confident in the belief that our sector-specific strategy with multi-decade relationships uniquely positions us for long-term growth and capturing additional opportunities for Anterix and our shareholders. And with that, I'll turn it over to the operator for questions.
