Release Date: August 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Anterix Inc (ATEX, Financial) has expanded its 900 MHz utility broadband movement to 7 utility customers across 15 states, positioning it as the fourth largest wireless carrier in the nation.
- The company has developed a significant pipeline of customer opportunities, supported by a demonstrated intent scorecard.
- Anterix Inc (ATEX) announced a partnership with the National Rural Telecommunications Cooperative (NRTC) to extend its 900 MHz spectrum benefits to rural cooperative utility members.
- The company continues to engage with key policymakers at both federal and state levels to increase awareness of the benefits of 900 MHz private wireless broadband for the utility sector.
- Anterix Inc (ATEX) remains focused on enhancing shareholder value through customer pipeline development, team growth, and targeted use of its share repurchase program.
Negative Points
- Despite progress, there was no change in the DI scorecard quarter over quarter, indicating potential delays in closing new deals.
- The company faces challenges from macroeconomic conditions such as higher inflation and interest rates, which could impact utility capital investments.
- There is uncertainty regarding the impact of future political administrations on infrastructure funding and regulatory support.
- Concerns exist about the competition from satellite constellations like StarLink, which could be perceived as a threat to Anterix Inc (ATEX)'s connectivity solutions.
- The company's share repurchase strategy has been questioned for not being aggressive enough, despite having a strong pipeline and high creditworthy customers.
Q & A Highlights
Q: Could you just tell us a little bit more about this new NRTC partnership? How does that affect your DI scorecard? And are there any pricing mechanisms involved in this agreement that would facilitate easier individual negotiations with any particular rural utility?
A: We're excited about the NRTC agreement on multiple levels. It expands our 900 MHz capabilities into rural America, serving a key role in the energy sector. NRTC has a strong track record and relationships with rural utilities. This partnership, along with Southern Company and Ericsson, aims to provide an easier solution leveraging 900 MHz. We will continue to garner fair market value for our spectrum in future transactions. This is a cost-effective indirect channel to reach thousands of utilities.
Q: Is the company still expecting just another $10 million of cash coming in from spectrum deliveries in this fiscal year, and then a $34 million early or a $39 million, I think, early in next fiscal year?
A: Yes, we expect about $10 million for the rest of this fiscal year. Next year, we anticipate significant cash inflows, including $92.5 million from Oncore, out of a total of about $176 million yet to be collected. All proceeds from Oncore should be in by the end of our next fiscal year.
Q: Can you frame up for us what it was like under a Trump administration in terms of programs that would help to upgrade the infrastructure in our country at utilities, and how that might play out under either administration?
A: Our work is incredibly non-political. Our initial report and order was under a Republican administration with a 5-0 vote, and the processing of licenses has continued positively under a Democratic administration. Infrastructure investments are likely to continue regardless of the administration. However, a Trump administration might see less federal funding compared to a Democratic one. Both parties support infrastructure investments, which benefit us as utilities deploy private wireless or other infrastructure projects.
Q: How do utilities view constellations like StarLink and Amazon's Kuiper in their overall connectivity strategy?
A: All forms of communication, including satellite, play an important role in the solution set for industrial users. However, nothing substitutes the level of control, low latency, and broadband capabilities that private wireless provides for utilities. Satellite will complement other solutions but won't replace the need for private wireless networks.
Q: Why not a more aggressive strategy to buy back the stock, given the pipeline and future prospects?
A: We base our quarterly purchases on cash receipts and future spending needs, which can vary each quarter. While we haven't ruled out leveraging to be more aggressive, it's not in our immediate plans. We will continue with our current strategy.
Q: Could you provide an update on what you're seeing in terms of 5/5 proceedings?
A: Everything has been very positive. Over 30 companies supported the proceeding with no opposition. Some entities requested protection from interference, which we will ensure. We aim to move to the next phase and get a Notice of Proposed Rulemaking out as soon as possible.
Q: Have events like wildfires and hurricanes impacted the speed of discussions with utilities?
A: Yes, macro forces like wildfires and hurricanes drive momentum around proactive readiness. These events bring stakeholders to the table, helping us develop market opportunities and address critical issues with modern solutions built around broadband.
Q: What are the implications of the NRTC partnership for the DI scorecard and market strategy?
A: The NRTC partnership allows us to capture go-to-market strategies for a channel with 1,500 members. NRTC's expertise helps co-ops embrace solutions like ours. This partnership won't directly impact our DI scorecard, which remains focused on IOUs.
Q: How does the current administration's approach to infrastructure funding impact Anterix?
A: Federal funding and infrastructure investments benefit us, whether for private wireless deployment or other projects. Both parties support infrastructure investments, and we expect continued positive impacts regardless of the administration.
Q: What are the financial expectations for the rest of the fiscal year and the next?
A: We expect $10 million in cash receipts for the rest of this fiscal year and significant inflows next year, including $92.5 million from Oncore. All proceeds from Oncore should be collected by the end of the next fiscal year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
