NextNav (ticker: NN (NASDAQ:NNBR)) saw a year-over-year increase in revenue for Q3 2024, as reported during their earnings call on November 7, 2024. CEO Mariam Sorond and CFO Chris Gates discussed the company's financial performance, strategic initiatives, and ongoing efforts to secure FCC (BME:FCC) approval for enhancing terrestrial Positioning, Navigation, and Timing (PNT) services.
With a Q3 revenue of $1.6 million, up from $1.0 million, and a reduced net loss from the previous year, NextNav presented an optimistic outlook despite not expecting FCC's Notice of Proposed Rule-Making to be adopted in 2024.
Key Takeaways
- NextNav reported increased Q3 revenue of $1.6 million, up from $1.0 million year-over-year.
- The net loss for Q3 narrowed to $13.6 million, improving from $23.2 million in the same quarter of the previous year.
- Over 1,800 comments were filed with the FCC, showing significant support for NextNav's proposal from public safety stakeholders.
- The company highlighted an economic analysis estimating a $14.6 billion public benefit from its proposal to prevent financial losses during GPS outages.
- NextNav is preparing for additional data requests from the FCC and remains committed to bipartisan advocacy for national security.
Company Outlook
- NextNav anticipates further engagement with the FCC, including potential notices of proposed rule-making.
- The company remains optimistic about its strategic initiatives and the critical role of its technology in public safety and connectivity.
- Relationships with various stakeholders, including potential partnerships with mobile network operators, are being prioritized for future infrastructure developments.
Bearish Highlights
- Despite the positive developments, NextNav does not expect the FCC's Notice of Proposed Rule-Making to be adopted in 2024.
Bullish Highlights
- NextNav emphasized the importance of a terrestrial backup for GPS, especially in urban areas where satellite signals are weak.
- The federal government, particularly the Department of Defense and Department of Energy, is identified as a primary user of NextNav's service.
Misses
- There were no specific misses reported during the earnings call.
Q&A Highlights
- CEO Mariam Sorond confirmed that the federal government represents primary users of their spectrum and sees significant opportunities to provide terrestrial backup to GPS.
- Sorond highlighted the bipartisan support for the initiative, aligning with national security interests.
- Further updates on the company's progress are expected in the next quarterly call.
InvestingPro Insights
NextNav's recent financial performance and strategic positioning are reflected in several key metrics and insights from InvestingPro. The company's revenue growth of 49.28% over the last twelve months as of Q2 2024 aligns with the year-over-year increase reported in their Q3 2024 earnings call. This growth trajectory is further emphasized by the quarterly revenue growth of 38.12% in Q2 2024.
Despite the positive revenue trends, InvestingPro Tips highlight that NextNav "suffers from weak gross profit margins" and is "not profitable over the last twelve months." This is consistent with the company's reported net loss, albeit reduced, in the recent earnings call. The tip indicating that "net income is expected to drop this year" suggests ongoing challenges in achieving profitability, which is a critical factor for investors to consider.
On the market performance front, NextNav has shown remarkable strength. InvestingPro Data reveals a substantial year-to-date price total return of 204.72% as of the latest data, with the stock trading at 97.28% of its 52-week high. This aligns with the InvestingPro Tip noting a "high return over the last year" and "trading near 52-week high," reflecting investor optimism about the company's potential and its strategic initiatives in the PNT services sector.
For investors seeking a more comprehensive analysis, InvestingPro offers 13 additional tips for NextNav, providing a deeper understanding of the company's financial health and market position. These insights can be particularly valuable given the company's unique position in the GPS backup technology space and its ongoing regulatory engagements.
Full transcript - Nextnav Acquisition Corp (NASDAQ:NN) Q3 2024:
Operator: Hello, and welcome to the NextNav Third Quarter 2024 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers remarks, there will be a question-and-answer session. [Operator Instructions]. I would now like to turn the conference over to Erica Bartsch. You may begin.
Erica Bartsch: Good afternoon, everyone, and welcome to NextNav Third Quarter 2024 Earnings Conference Call. Participating on today's call are Mariam Sorond, NextNav's Chief Executive Officer; and Chris Gates, NextNav's Chief Financial Officer. Before we begin, let me remind everyone that this call will include certain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as may, anticipate, believe, expect, intends, might, plan, possible potential aim drive, predict, project, should, could, would, will, and similar expressions may identify forward-looking statements, but the absence of these words does not in the United statement is not forward-looking. Such forward-looking statements, which may relate to NextNav's forecast of future results, future prospects, developments and business strategies are subject to known and unknown risks, uncertainties and assumptions and other important factors, many of which are outside NextNav control that could cause actual results to differ materially from the results discussed in the forward-looking statements. In particular, such forward-looking statements include the achievement of certain FCC-related milestones and FCC approvals the ability to realize the broader spectrum capacity and the advancement of NextNav terrestrial 3D P&T services, NextNav positioned to drive growth in its 3D G location business, an expansion of its next-generation terrestrial 3D P&C technologies, the business plans, objectives, expectations and intentions of NextNav and NextNav's estimated and future business strategies, competitive position, industry environment, potential growth opportunities, revenue, expenses and profitability. These statements are based on NextNav management's current expectations and beliefs as well as a number of assumptions concerning future events. 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. For additional information regarding risk factors, the Part 1 Item 1A Risk Factors of the company's quarterly reports on Form 10-Q and Part 1 Item 1A Risk Factors of the NextNav annual report on Form 10-K for the year ended December 31, 2023, as well as those otherwise described or updated from time to time in our other filings with the Securities and Exchange Commission. Following our prepared remarks, the company will host an operator-led question-and-answer session. In addition, at the conclusion of today's call, a replay of our discussion will be posted to the company's Investor Relations website. I'd now like to turn the call over to Ms. Mariam Sorond, Chief Executive Officer of NextNav. Please go ahead.
Mariam Sorond: Thank you, Erica. Good afternoon, and thank you, everyone, for joining us today. I would like to begin today's call with an update on the business and our latest steps with the FCC and key stakeholders. I will then turn things over to Chris to provide an update on our financials. It's been an exciting few months for NextNav. We are energized by the early momentum as we advance our strategic vision and address the critical need for a terrestrial complement and backup to GPS. Following the release of the FCC's August 6 public notice, the entire NextNav team has been hard at work. We submitted formal comments on September 5 and followed by reply comments on September 20 in support of our petition to reconfigure the lower 900 megahertz band. As we shared in our filings, our petition offers a unique opportunity to address a national security problem. Specifically the lack of a wide-scale terrestrial PNT backup and complement to GPS. We are confident that the FCC understands the importance and urgency of this need. This was evident in the thorough public notice they issued back in August. We were pleased to see the FCC asking the right questions and placing the specific focus on PNT, validating the national security needs, which we highlighted in our own proposal. In response to the public notice, over 1,800 filings were submitted to the SEC, a vast majority, over 1,500 were from amateur operators who typically file on an individual basis. Of the remaining 300 filings, there were no real surprises or showstoppers. We saw support from select stakeholders, including those in the pulp safety arena, we are close to the issue and understand the impact of not having to back up and complement to GPS. For example, both the California and Massachusetts Fire chiefs Association came out in support, along with Fairfax (TSX:FFH) County, Virginia, one of the largest counties in the U.S. and which is in close proximity to DC. We also worked from some of the licensed operators who continue to express concerns about the effects of NextNavs' next-gen system on their current operations. The National Telecommunications and Information Administration, or NTIA, also filed and said that its views were informed by the concerns of the Best Department of Transportation. As with any band, license operations are critical, and we are committed to coexistence with site-based licensees and to minimizing any impact on these licensees. We see the NTIA being active as a positive sign for a timely resolution and an outcome that makes available much needed commercial spectrum for 5G broadband. The NCI filing acknowledges the importance of terrestrial PNT capabilities to back up and complement GPS and calls for additional testing to ensure that the operations of railroads and tolling entities are protected. We agree with the NCI on both points and have been planning to conduct the necessary technical testing all along. As noted in our reply comments, NextNav previously contacted more than 110 stakeholders, including incumbent tolling entities, railroads, unlicensed users and amateurs to understand opposition views from an engineered to engineered technical point of view. Our goal was and is to find solutions that minimize potential disruptions to existing licensed operations and leave licensees at least as well off, while enabling the benefits of our proposed terrestrial PNT system. Since our outreach several stakeholders have been responsive and engaged in active dialogue. For example, NextNav is in discussions with the Association of American Railroads or AAR (NYSE:AIR), and representatives from tolling operators to evaluate the full scope of their operations and address harmful interference concerns. Furthermore, we regard the NTIs called for testing as a helpful procedural tool to induce incumbents to engage and be responsive. As a reminder, the FCC has brought authority to revise the tools and modify licenses when it determines that doing so would promote the public interest. As we move forward, we are committed to continuing engineer to engineer dialogue with the appropriate stakeholders in support of our petition. We believe that collaborative analysis is essential to achieving an outcome that best serves the public interest and addresses a national security problem. As we expected and it's typical, a portion of filings were from unlicensed stakeholders in opposition. As a reminder, NextNav is already a spectrum license holder in the 900 megahertz band. Though it was clear that many opposition commenters were unaware of this fact. For the unlicensed community, their assertions appear to exaggerate the potential effects on unlicensed use from our next-gen system. Unlicensed users already operate in the lower 900 megahertz band and coexist with many other users in the band. This is precisely because unlicensed technologies are designed and built to coexist with both unlicensed and licensed users operating in the band. It is also important to point out that those oppositions failed to put forth viable alternative solutions that meet the pressing need for a wide-scale terrestrial PNT service that can be broadly adopted. Even those who oppose our petition acknowledge that a terrestrial complement and backup to a satellite-based PNT service is critically important to safeguarding U.S. national security, public safety and our economy. Failure to identify terrestrial P&T solutions with the same technical sophistication and business logic as NextNav solution only serves to further highlight the lack of another wide-scale PNT service solution available that can both operate in consumer devices and serve government entities. As a result, there could not be a more critical time to address the important need for a terrestrial complement and backup to GPS. As noted by retired Rear Admiral, David Simpson in his recent white paper published by Virginia Tech University on PNT resiliency, a day without actual unavailable PNT services is a scenario the U.S. cannot afford and the country needs to identify a terrestrial complement and backup to GPS. Today, NextNav offers the only concrete opportunity to enable a wide-scale terrestrial PNT service one that has a clear path to availability in consumer devices such as cell phones with no cost to taxpayers. This is why we believe we have a compelling proposal and feel confident about our path forward. Since the completion of the common period in September, the team has remained focused on execution leveraging feedback garnered during the comment period, we are actively engaged in engineer-to-engineer dialogue with the appropriate stakeholders. This includes ongoing conversations with the toll companies, railroads and other licensed incumbents. In late October, we also filed a detailed economic analysis conducted by the Brattle Group. The filing details how NextNav's proposal would prevent hundreds of millions of dollars in losses in the event of a global GPS outage. Based on our initial assessment, the Brattle Group found that a 1-day global GPS outage would cost the American economy $1.6 billion. while our proposal could prevent a loss of $663 million for a 1-day outage. For a 30-day outage, the loss could be as large as $58.2 billion but our proposal could prevent nearly $31.9 billion of net loss. Given the probability of a potential outage event in the U.S. NextNav proposal is the equivalent of offering the American economy a $10.8 billion insurance policy to protect against GPS outages plus additional benefits of $3.8 billion from increased resiliency. Taken together, the total quantified value of a GPS backup is $14.6 billion based on the Brattle Group's analysis. This is a powerful impact and why we believe our proposal offers an enormous public benefit. We were also pleased to see that in late October, the Flex (NASDAQ:FLEX) Association filed in support of the FCC considering NextNavs' proposal. Flex represents U.S. rideshare and delivery platforms, including companies such as Uber (NYSE:UBER), Lyft (NASDAQ:LYFT) and DoorDash (NASDAQ:DASH). The associations finally emphasize the crucial role NextNav enhanced geolocation technology could play in boosting the app as rideshare and delivery industry communities annual contribution of over $212 billion to the U.S. economy. This activity, coupled with continued dialogue with the appropriate stakeholders leave us energized as we chart our path forward. Concurrently, the FCC is moving forward, reviewing and summarizing the over 1,800 filed comments. The next key milestone could be an NPRM or notice of proposed rule-making However, there's also the possibility that the FCC will ask for additional data or post additional questions prior to issuing an NPRM. This is all standard procedure and something we are prepared for savers. As a reminder, we do not anticipate that the FCC will adopt an NPRM in 2024. Finally, with former President Trump reelected to the presidency last week, we would remind everyone that this is a bipartisan issue. Both Republicans and Democrats care about national security and public safety. From the beginning, our advocacy has been designed to be pipe artisan. We have been talking to all commissioners' offices at the FCC majority and minority members and staffers in the Senate and the House. We look forward to continuing our work with the current FCC commissioners, leadership and staff, including Chairwoman, Jessica [indiscernible] through the remainder of their terms. We also continue our discussions with the senior [indiscernible] Republican Commissioner, Brandon [indiscernible], and we expect to engage with the additional leadership and staff once appointed in 2025. Moving forward, we feel confident in our ability to work closely with the relevant government agencies to address the critical need for a terrestrial complement and backup to GPS. In closing, this is an exciting time for our business. We believe that few challenges are more pressing than incorporating greater resiliency into life-saving and mission-critical terrestrial PNT technologies and more spectrum to make wireless broadband services more accessible for consumers. Though there is more work ahead, our team is ready to advance our mission and work closely with stakeholders. We look forward to ongoing engagement with the FCC and keeping our investors updated on our progress. With that, let me turn things over to Chris for a discussion of our financials. Chris?
Christian Gates: Thanks, Mariam, and good afternoon, everyone. NextNav's revenue in the third quarter was $1.6 million, a $0.6 million increase from $1.0 million in the prior year period. For the nine month period, revenue was $3.8 million, a $1.1 million increase from $2.7 million in 2023. The increase in both the three and nine month periods was driven by an increase in service revenue from technology and services contracts with government and commercial customers. Operating expenses for the third quarter were $15.5 million, down approximately $0.1 million versus the same period last year. Operating expenses included $1.3 million in depreciation and amortization and $3.3 million in equity compensation compared to $1.3 million in depreciation and amortization and $4.4 million in equity compensation in the third quarter of 2023. In the nine month period, operating expenses were $49.1 million as compared to $46.3 million in 2023. Excluding stock-based compensation expense and depreciation and amortization, operating expenses were $34 million in the first nine months and $30.1 million in the prior year period. Net loss for the third quarter was $13.6 million, which included a $2.5 million gain associated with the change in the fair value of warrants and liability associated with the telesource asset purchase agreement. This is compared to a net loss of $23.2 million in the third quarter of 2023 and which included a loss of $6.7 million associated with the change in the fair value of warrant liability. For the nine month period, net loss was $69.6 million including a $17.3 million loss associated with the change in the fair value of warrant liability, net of a gain associated with the change in liability associated with the total source asset purchase agreement. Compared to a net loss of $55.3 million in the first nine months of 2023, including $9.8 million associated with the change in the fair value of warrant liability. Turning to our balance sheet. We finished the quarter with $86.8 million in cash, cash equivalents and short-term investments. This is a result of our continued disciplined use of our cash, and we enjoyed the benefit of $6.9 million of proceeds from additional warrant exercises in the quarter. At September 30, we had $53 million in debt, net of unamortized discount attributed to transaction costs and the issuance of warrants with a gross value of $70 million. As we've mentioned in the past, we continue to carefully manage our use of capital, taking a disciplined approach to any spend. Overall, it's been another productive quarter for NextNav, we believe our vision offers an innovative spectrum solution in the lower 900 megahertz band and we are excited for what lies ahead. With that, I will turn the call back to the operator for questions. Operator?
Operator: Thank you. [Operator Instructions] Your first question comes from the line of Mike Crawford with B. Riley. Your line is open.
Mike Crawford: Thank you. It's good to hear that you're in active discussions with people that have commented on your petition. You did mention railroads, toll, main operators. Anything of note to convey regarding discussions with others like Edison Electric Institute or the NTIA.
Mariam Sorond: Thank you, Mike, for the question. So as I mentioned, we've contacted over 110 stakeholders in the past. And these would include the tolls, railroads unlicensed users and matures to understand their opposition views. So -- and we're going to -- moving forward, we're committed to continuing this dialogue with them. What's very key for us is to make sure that the conversations are fact-based, that we have engineered to engineer dialogue and that we move forward with the progress as we anticipate.
Mike Crawford: Okay. Mariam. Thank you. Thoughts on -- just to take one position, like the NTIA recommends the FCC grants for short-term experimental license. So you can test field test operations. Is that something that you see happening in the near future or not?
Mariam Sorond: So generally speaking, we actually regard the NTIA call for testing as a very helpful procedural tool, right, to induce incumbents to engage and be responsive. Now for us, we've done testing in the past, and we're moving forward to a phase of collaborative analysis that includes this engineer to engineer dialogue, and it could also include testing.
Mike Crawford: Okay. Thank you. And then it's also great to see all the comments in favor of terrestrial PNT, especially for urban areas where signals on space are hard to reach. But there's also movement to create more resilient LEO space-based PNT. In fact, with four companies picked by the space for us to put up some potentially put up satellites in that regard. And I think that would be complementary to your service, but are you talking L3 Harris or ceramic or any of those companies that are involved in that effort to provide some more resilience from space?
Mariam Sorond: So we're actually in agreement with the DOT's view that the complementary action plan that is a system of systems, which means that a system of systems back and complement really could have a satellite element, but it must also include a ground-based terrestrial network. So far, we're the only viable wide-scale terrestrial P&T proposal that is on the table. But the vision of the system of systems is the more comprehensive solution for a backup and complement. We talked to many industry stakeholders, our support, our opposition and the broader partnership opportunities.
Mike Crawford: Okay. Thank you. And then last question for me is given the administration change where maybe commissioner Car becomes -- well, gets there's a change to him. And these changed situations, is it -- is there any kind of precedent whether the outgoing commissioner what put for us an NPRM? Or would it -- is this something we would need to wait for the actual transition before we should start actively anticipating potential NPRM action in 2025.
Mariam Sorond: So Mike, you're correct. So recent news coverage post-election, it does include predictions that Brendan Car is likely to be named the next FCC Chair. Ultimately, President Elect Trump will name a new FCC Commissioner once he is an office in 2025. We will continue our work with [indiscernible] and then we will continue to work also with Brendan Carr, who is the senior Citi/Republican Commissioner. As we've said in the past, we don't anticipate an NPRM in 2025. but we're not going to -- in 2024, I apologize for that, but we're not going to speculate on timing for the current or future administration on an NPRF.
Mike Crawford: Okay. That makes sense. Thank you very much.
Operator: The next question is from Tim Horan with Oppenheimer. Your line is open.
Timothy Horan: Thanks guys. The reason you see the threshold basis required is for better building penetration or and/or...
Mariam Sorond: I'm sorry, there was static. I need a repeat of that question.
Operator: Tim's line has disconnected. Our next question will come from the line of Rosemary Sisson with Odeon Capital. Your line is open.
Rosemary Sisson: Yes. Thank you. Hello, Mariam and Chris. I just wanted to understand the time line. If -- whenever you do say whenever you do get the NPRN, what would be the time line a what would be the next set of events to happen in order for you to actually get moving in to work through the process.
Mariam Sorond: So the next step of an NPRM could be a report in order the FCC could also, again, just similar with also ask for more data and information between the NPRM and the reported order we're not going to speculate on timing of NPRM or after that, when the report and order is going to be at this point.
Rosemary Sisson: Okay. Thank you.
Operator: And your next question is from Tim Horan with Oppenheimer.
Timothy Horan: Sorry, guys. That was the first that's ever happened to me, and I decided to use a wireline phone. The reason you think terrestrial base is required, is that for in building penetration vertical or just back up the case satellites are out or all the above?
Mariam Sorond: Sure. It's all of the above, and so just to state that comprehensively in order to overcome the vulnerabilities of the satellite which themselves have vulnerabilities, but also spoofing and jamming as it occurs in GPS today, you actually need a terrestrial network there is more resilience in that perspective, but also it can serve as a compliment, because satellite signals [indiscernible] they don’t penetrate indoors.
Timothy Horan: Got it. Got it. And just sort of curious, is the spoofing and jamming easier or harder to do for Leo versus GEO?
Mariam Sorond: So jamming is very easy to do with weak signals and satellites weather in the LEO space or above are continuing to going to be weak signals and that's why they don't cover indoor and urban Canyon. So the weaker signal, the easier to jam, cell phones are on towers in close proximity to us, they are much stronger signals and not easy to jam. This will spread out and the over a smaller coverage area per tower than satellites are.
Timothy Horan: Very helpful. Can you just remind us, has Brendan Carr made any comments on your proposal or publicly or any thoughts on what he's thinking.
Mariam Sorond: To my knowledge, he has not made any public comments on our proposal. Now definitely, there have been comments on a focus on national security from the FCC commissioners recently.
Timothy Horan: Got it. And lastly, any updated thoughts on the highest and best use of the spectrum? Have you studied maybe other things can be used for, I guess, the LEOs are looking to do direct-to-device direct to cell phone type service. Could the spectrum be used for that? Or they're also looking to do IoT? Or do you still think being part of one of the big three mobile operators might be the best use.
Mariam Sorond: So our focus continues to be to solve the national security, economic and public safety which is a complement and back up to GPS, and concurrent to that, it would unleash 15 megahertz of spectrum into 5G broadband news especially at the current time where Spectrum pipeline is mostly empty. So we continue and continue, and we'll remain focused on that objective.
Timothy Horan: Very helpful. Thank you.
Operator: The next question comes from the line of Jamie Perez with RF Lafferty. Your line is open.
Jamie Perez: Hi, everybody. Thanks for taking my question. In your proposed plan to swap the band, I mean what does that entail equipment, software? Can you describe what exactly that you have to do to swap the bands.
Mariam Sorond: So it's not really a swap. It's a tweaking to update the rules and a little bit of movement on the spectrum to make it actually viable for 5G broadband. And every time that you have tweaked rules to spectrum you would need to look at developing new infrastructure. So that's radios that go on towers, right? You need to have your devices include that spectrum. This is the case with any new spectrum that goes into the radios on the towers, also the handsets need to accommodate from that spectrum. And of course, infrastructure for 5G is these days consisting of both hardware and software. Now when NextNav rolled that out or would you find a carrier to roll that out? As we have mentioned also in prior calls, we remain focused on working with a partner, and we've mentioned that the likely partner could be an existing MNO. But obviously, we are talking to the entire industry about partnership.
Jamie Perez: My next question is a little bit on the technical side. When -- if the license use, for example, the toll collection vehicle, I mean, the power or the RF frequency was about 150 feet for commercial and 15 feet for the past of. I mean -- is that -- does that really interfere with the change in spectrum since it's pretty much a limited distance? I mean how does that work?
Mariam Sorond: Jamie, sorry, I didn't get the first part. What are you referring to that 150 feet, can you repeat that?
Jamie Perez: I think from the filing -- yes, the signal from the [VEGO] identification and tow collection was about $15 or 150 feet of double the actual number. I mean does that interfere, let's say, long distance with the spectrum?
Mariam Sorond: You mean, do the tolls interferes was 5G? We have not concessed any interference from tolls to our systems. Toll companies are in licensed spectrum and basically, so our licenses or licensed spectrum and there is not an overlap currently.
Jamie Perez: Not overlap. All right. And some of the amateur operators, I mean it isn't [indiscernible] part, 97 or prop requires them to not cause in deference to the primary user, which is you guys, NextNav. Is that true? I mean I think that's part of the argument.
Mariam Sorond: Yes. Both amateurs and Part 15 need to operate per the Part 15 roles on a noninterference basis. And amateurs, I don't recall which part they were in the FCC, but they have, I anticipate similar sort of regime.
Jamie Perez: Right. Now as far as our stakeholders, according to your filings, you had a pretty good chart. It's the federal government, is that the military use followed by nonmilitary use. So would the military use to be the primary users? I mean, how does that work in the hierarchy of spectrum users?
Mariam Sorond: Within the federal governor, so the federal use of the spectrum is the primary use of this spectrum. There is also an ISM use, which is industrial scientific and medical use, that is also the primary. So is there typically all transmitters and non-receiving. So then after that, it is the licensees, which include both the site-based licensees and the geographic licensees then it's the license and amateurs. As far as how the federal government IRT is, I mean, the federal use of this band so far from what we have seen has been used by the Department of Energy. And we're continuously talking to understanding more about the operations. But so far, we have not seen any comments.
Jamie Perez: Now I'll dig in a little bit further. So in -- what I'm reading is basically your customers will be the federal level because of the Department of Defense, Energy mandate for PNT solution. That's what -- is that -- is that correct? Is that -- just characterize it?
Mariam Sorond: So you mean our complement backup to GPS use will be by the federal agencies? Yes, it could be, it absolutely could be for the -- so it definitely could be a use case for them.
Jamie Perez: All right. Okay. And then you updated the Executive Board at 3905 and that's probably too early to mention. I mean, as far as -- I mean he's named some his cabinet members, someone a pretty [indiscernible] as far as military, you think. We could see a next escalation of this executive order at the [indiscernible] because Trump is pretty hawkish on some of the military usage even using it internally. I mean what you could describe anymore.
Mariam Sorond: I think the need for a backup in complement to GPS is a completely bipartisan issue, both Democrats and Republicans care about national security and public safety. And from the beginning, our advocacy has been designed to also be very bipartisan. I think the second quarter was also executive order 13905 was varied bipartisan. It came in on administration and followed through by the next administration.
Jamie Perez: All right. That’s all the questions I have. Thanks for taking my questions.
Operator: This concludes the question-and-answer session. I'll turn the call to Mariam for closing remarks.
Mariam Sorond: So thank you all for joining us today. I am very pleased with the progress we've made to date and feel confident in our path forward. And as I have said many times, we're working hard to advance our strategic vision and address the critical need for a terrestrial complement and backup to GPS. We look forward to the opportunities ahead, and we'll share additional updates on our next quarterly call. Thank you, everyone.
Operator: This concludes today's conference call. Thank you for joining. You may now disconnect.
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