Anterix Inc Stock

Good day, and thank you for standing by. Welcome to Anterix First Quarter Fiscal 2027 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker for today, Natasha Vecchiarelli. Please go ahead.

Good morning, everyone. Thank you for joining us today for Anterix's First Quarter Fiscal Year 2027 Investor Update Call. I'm Natasha Vecchiarelli, Vice President of Investor Relations and Corporate Communications. Joining me today are Scott Lang, President and CEO; Chris Guttman-McCabe, Chief Regulatory and Communications Officer; and Elena Marquez, CFO. Please note that our first quarter financial results were issued yesterday afternoon, and the related materials are available on our Investor Relations website.

Today's call will begin with prepared remarks from management, followed by a question-and-answer session. We may also discuss our business outlook and make forward-looking statements. These statements are based on our current expectations and predictions. Actual events or results could differ materially due to risks and uncertainties described in our SEC filings, including our most recent Form 10-K and Form 10-Q. With that, I'll turn the call over to Scott.

Thank you, Natasha, and good morning, everyone. When we last spoke in June, we shared the progress we were seeing across the business, including increasing customer engagement, active commercial discussions and a broader recognition of the strategic importance of licensed spectrum.

Over the last 2 months, that activity has continued and in many cases, has accelerated. First, as I am sure many of you have seen, just yesterday, SpaceX filed an ex parte letter with the FCC across 3 separate dockets, including ours, advocating for inclusion of a new satellite build-out deployment option.

Of note, 2 of the 3 bands referenced by SpaceX are still in the process of seeking a rulemaking where ours, as you know, has been finalized. In response, yesterday, Anterix filed a letter in support of SpaceX's proposal stating our belief that their request will enhance the optionality and the expanded use of our spectrum in the market.

This filing validates what we have been saying all along. Access to low-band spectrum is extremely limited and the demand for our nationwide 10 megahertz footprint is increasing across all sectors. This is further reflected in close to a dozen spectrum-related initiatives involving wireless carriers, satellite and space-based connectivity providers along with the successful conclusion of the AWS-3 auction. That plays directly into the position we have built at Anterix.

Our 900 megahertz spectrum gives us multiple ways to create value through utility transactions, product revenue around the networks we enable, strategic opportunities and new applications as the market evolves. The key point is this, we are not managing to one outcome. We have optionality. And with a nationwide licensed low-band spectrum portfolio, and increasing market recognition of what we own, that optionality puts us in a very strong position.

And we continue to be disciplined on how we maximize this asset. We are pursuing the opportunities where value is most compelling and where we can create the best long-term outcome for customers and shareholders. The opportunity is significant and the market is moving in our direction. And turning to our utility pipeline. The last 2 months have been equally active, and we were pleased with the amount of interest and engagement with nearly a dozen active opportunities.

Before I turn the call over to Chris, I want to recognize the remarkable team at Anterix. The progress we are seeing today is a reflection of their hard work, commitment and execution, and I'm incredibly proud of what they continue to accomplish. With that, I will turn the call over to Chris.

Thanks, Scott, and good morning, everyone. As Scott highlighted, we have optionality, which extends not only to how we monetize our spectrum, but also to how we advance it. Whether market-specific, regional or national in scope, we can approach our clearing objectives in a way that aligns with customer demand and the opportunities in front of us.

With the FCC's expansion to the full 10 megahertz broadband configuration, our focus remains on advancing our nationwide footprint. building on the 40% of counties already cleared in the 10 megahertz configuration. We also have the capability to move at the pace the opportunity requires. We believe our teams can effectuate nationwide clearing of the full 10 megahertz configuration in a way that fully aligns with customer deployment requirements and the opportunities we see in the market.

We have consistently executed against our clearing commitments, meeting requested delivery schedules and delivering broadband availability ahead of contracted timelines for the majority of our customers. That track record demonstrates the scalability of our approach and our ability to translate spectrum availability into customer and shareholder value. The progress we are making and the growing interest we see reflect the capabilities we have built, the strength of our relationships and the significant opportunity that remains ahead. With that, I'll turn the call over to Elena.

Thank you, Chris. Anterix is entering this next phase from a position of financial strength. Our income statement has significantly improved over the last several quarters with higher revenue and lower expenses. For the first quarter fiscal year 2027, our GAAP revenue is $2 million and our operating expenses are $9.5 million (sic) [ $12.856 million ] , a level we have maintained with our disciplined cost structure.

In addition, broadband license exchanges generated a gain of approximately $11 million during the quarter, further demonstrating our ability to actively manage and maximize the value of this unique asset. Turning to the balance sheet. We ended the quarter with approximately $116 million in cash and no debt. During the quarter, we received approximately $16 million in customer payments and $20 million from stock option exercises.

We expect to receive approximately $10 million of additional contracted proceeds during the remainder of fiscal 2027. We also continue to invest in clearing with approximately $7 million allocated to spectrum clearing during the quarter. Our balance sheet is one of our greatest strengths. Our scarce low-band spectrum assets, combined with our robust cash balance positions us to pursue attractive monetization opportunities as the market continues to evolve. We remain disciplined in managing expenses and thoughtful in how we allocate capital towards activities that increase the value and commercial availability of our spectrum.

Importantly, as Scott discussed, the market environment surrounding spectrum transactions continues to provide greater transparency into the value of licensed spectrum ownership. We're seeing that through both our own commercial execution and broader market activity. Our executed utility spectrum transactions have averaged approximately $1.40 per megahertz-POP while the FCC's most recent AWS-3 auction averaged approximately $2.50 per megahertz-POP. We believe there is a strong upside opportunity, both for existing and prospective investors when compared to our current market capitalization, which implies a spectrum valuation of approximately $0.60 per megahertz-POP.

We're also seeing continued strategic demand for spectrum across the communications ecosystem with activity involving companies like Amazon and Globalstar, SpaceX and EchoStar and Rocket Lab and Iridium. While these transactions reflect different spectrum characteristics and strategic objectives, together, they provide additional market reference points for the value of licensed spectrum. In our view, the market has more evidence than ever to value our asset, and Anterix has increasing ways to realize that value. That is an important distinction.

We control a scarce, licensed, low-band spectrum at a time when demand for spectrum is increasing and supply remains constrained. With no debt, a strong cash position and a disciplined cost structure, we have the flexibility to be thoughtful about timing and remain firm on pricing as we monetize this asset. That matters because the majority of the value remains ahead of us.

Across our nationwide footprint, approximately 3 billion megahertz-POPs, representing about 85% of our total megahertz-POPs remain available to monetize, including many of the largest and most valuable metropolitan markets. In closing, we have the balance sheet to be patient, the discipline to invest where it matters and significant value still ahead of us to capture. With that, I will turn the call back over to Scott.

Thanks, Elena. Before we open the call for questions, I want to leave you with one final thought. We believe Anterix is uniquely positioned at the intersection of 2 powerful forces: heightened demand for secure connectivity and a finite supply of high-quality licensed spectrum. We are excited about where we are and what lies ahead. Thank you, operator. We are ready for questions.

[Operator Instructions] First question will be coming from the line of Sebastiano Petti of JPMorgan.

I guess given just the amount of demand in the market and that you kind of each touched on as well as the active customer engagements, is the strategic review still actively passive? Or has the volume or the level of conversations internally within the company kind of increased, kind of given some of the market forces and activity out there as well?

And then if you could also update us on where you are? I think you touched on there's engagement with, I think Scott said a dozen active opportunities out there. I guess where are you with utilities, other utilities outside of your traditional IOUs? And maybe helping us think about maybe gating factors there for additional opportunities, additional perhaps announcements outside your traditional cohort and maybe some of these other utility infrastructure opportunities.

Sebastiano, thanks for the questions. On the first one, the strategic review, as you could imagine, the increasing demand and the preciousness of licensed spectrum, I would say, has increased the amount of interest with our spectrum. both from the utility side, which leads into your second question and the first question of the strategic review that those conversations on both of those angles are increasing in the last 2 months since we spoke with you.

And regarding the deals, as I did mention on the prepared remarks, there's about a dozen deals. They're very active. There continues to be new deals that are coming to the table each month. And the ones that were starting 2 months ago when we spoke with you have continued to accelerate in their conversations. And I'll leave you with this last thought to give you a little bit more color on the 12. There are a very nice set of 7-digit, 8-digit and 9-digit deals and very well represented in each one of those categories.

Next question is coming from the line of Mike Crawford of B. Riley Securities.

Given that SpaceX now can be seen as a credible buyer to take everything and having over $100 billion of cash and securities on its balance sheet, have you come back to your critical infrastructure targets and said, look, this is -- it's like now or never because I'm sure your asset would be more valuable to someone like SpaceX to the extent that it covered more of the country and with less of a patch quilt pattern.

Mike, it's Scott. We clearly are talking about that. We'll be prepared for that. That's a rich problem to have when the time comes, and we will be ready to have it. I will leave you with this. I wake up every morning of how to maximize the shareholder value and this incredible asset that we're sitting on. And I know I have the Board's full support and this team's full support that we will not compromise this asset and the value of this asset for a subpar deal.

Okay. And then just on the status quo of this asset. So you got 40% of counties now cleared for 5x5 LTE. Is there -- can you give any estimate of cost to clear everything and including what percent of that might be additional slices of spectrum you would need to acquire at the 600 megahertz auction [indiscernible] price per the Report and Order earlier this year?

Elena, do you want to take that?

Yes, Mike, I will start that and then pass it over to Chris for some additional remarks. As we've commented in the past, we speak to different audiences in these calls, and we need to continue to maintain our negotiation leverage as we negotiate with our incumbents and keep our costs down and returns up.

Those different audiences, of course, yourselves, the analysts, our investors, incumbents and customers. In addition, given that there's now optionality to how we may monetize this spectrum, if we continue to monetize geography by geography, the cost may be lower as they will be over several years. If there's a nationwide buyer, of course, that is looking to clear the spectrum faster, then that cost estimate may be higher given that there may be higher level of incentives to be provided and so on and so forth and just the process will need to be accelerated.

But regardless of the cost estimates, even with the most conservative highest estimates, we believe that there's significant upside in the gross value of our asset as compared to the current market cap. And I wanted to also, in addition, comment on the gross value of the asset. I mentioned in my prepared remarks that, you know, the current two most relevant benchmarks to us are our own, which is the average of all the deals that we've closed, which is the 12 deals over the last several years. That's about $1.40 per megahertz-POP.

The gross value of the asset of the remaining 3 billion POPs, if we use that benchmark, would put us at well over $4 billion. If we use the most current, most latest auction by the FCC, which averaged about $2.50, the gross value of our asset would be about $7.5 billion. Again, we believe there's significant upside as compared to our current market cap. Chris, did you have any additional comments on clearing?

Yes. Thanks, Elena. Mike, to your question specifically about 600, personally, I just want to make sure we level set with everyone on the call. Every one of our deals to date has been a significant premium to 600. So even if we were starting with the basis of having to secure spectrum from the commission's inventory at that price point, the delta between what we've sold at to date and that is significant. And then more specifically, the reality is the amount of spectrum we take from the commission's inventory, it's a sliding scale. Obviously, it differs from county to county. And the fact of the matter is every time we clear an incumbent, we onboard their channels, which means we pay less to the FCC from a spectrum in their inventory 600 megahertz price.

So we've been careful not to give a macro or micro level. But what we've said is, as Scott said, we're going to be a shepherd of this asset, and we're going to monetize it to our shareholders' benefit. And we're very good at this clearing. We can and will be able to monetize 100% of the country. I know you and I and the team and our team had that conversation after the last call. We are confident that 100% of the country is monetizable and we're confident that we can do it in a way that is extremely valuable to our shareholders and to the ultimate buyer.

I have to pile on, early in my days as the CEO of this company, I called out that one of the superpowers that was immediately obvious in this company was its ability to understand spectrum, ability to clear spectrum and put that to use in the market. And that continues to show up as a superpower that's only gained strength and the amount of work that Chris and his team are doing with their strategic nature of our nationwide footprint and clearing to ensure all 10 megahertz-POPs are monetized has been really a pleasure to watch and to see their performance.

Great. I have one final question. Hopefully, given the clearing activity that you've already been incurring for the first half of this quarter, is there any color you can give on potential GAAP broadband license gain estimate for this quarter or the remainder of this fiscal year following the just over $10 million gain recorded in the first quarter?

Yes, Mike, as you know, we don't guide, but I will say we do expect -- I'll call them at least single-digit million gains in the following quarter.

[Operator Instructions] Our next question is coming from the line of Greg Pendy of Clear Street.

The first one, can you share any -- it looks like your D2D experimental licenses run through -- I guess they started on May 31. Can you share anything you've learned so far and what decision points we should be looking for going forward on those trials?

Good morning, Greg. We talk about this regularly. Both Lynk and ourselves were very pleased with the results. So we call it a success. It has a green checkmark to it, and we are very pleased. And the D2D satellite is something we've been anticipating for a long time. And obviously, that is really playing out nicely for us to have that kind of preparation regarding the activity we see in the market. But Chris, do you want to double click on that?

All that, Scott, is spot on, Greg. Hi, and welcome, and we're excited to have the coverage. Yes, I mean, Lynk has been a great partner. It has introduced us, as Scott referenced, to the D2D world. The first round of tests were incredibly successful. We're in conversations with them about how to evolve.

I will say we loved and you saw a press release from us yesterday and a filing at the FCC. We loved what SpaceX introduced publicly, as Scott referenced, it's what we've been talking about internally, which is right now, we have 2 different ways. Our licensees have 2 different ways to satisfy build-out. We would love to have a third way to add satellite coverage to that.

And so what we're seeing is across the board, you're hearing this word, optionality. And so we see optionality in how to monetize. We see optionality in how to clear, and we love the idea of optionality of how to satisfy buildout. David Goldman and the team at SpaceX are very good at what they do. And we love the idea that they put into the public discourse, the idea of using satellite coverage to satisfy build-out.

That's very helpful. And can you just let us know, I mean, with your active conversations on the utilities, whether it's justified or not, as you sell them on a private and secure connection, is there any concerns that they might have about adding a satellite layer that conflicts with the exclusivity that utility customers think they're paying for or believe that...

We have not. I have not and I think if there was any concerns on this, we would hear about it. I have not heard any concerns on that. In fact, I think initially, if anything, they see the optionality is very strong for their cases of the conversations that we've had, Greg?

Okay. Very helpful. And then just one final one. Given the strong cash position that you ended at, it looks like there's $226 million left on the buyback authorization. How should we be thinking about that given that it expires in September, I guess, late September?

Yes. Thanks, Greg. No, we -- just as much as we talk about optionality and maximizing the value of the spectrum, we think about capital allocation almost daily, and we always think of where we should put every dollar to ensure that we maximize the shareholder return while we also balance, of course, the financial health of the company.

Having a strong balance sheet currently allows us to make investments and to ensure that we are unlocking the value of the monetizable spectrum, and also allows us to be patient and to ensure that we utilize the best opportunities to monetize it. Share buybacks will continue being in our toolkit. I expect that I wouldn't be surprised if we renew the program in September. And when the time is right, that is always something that we can utilize.

Our next question is coming from the line of George Sutton of Craig-Hallum Capital Group.

This is Logan on for George. First one for me. I wondered if you could give us an update on TowerX and CatalyX. I'm curious as we think about those dozen opportunities that you talked about, maybe just give us a sense of like what portion of those include conversations about those offerings? And maybe just understand -- help us understand kind of how close you feel like you're getting to having tangible deals there.

Logan, good to hear from you and pass our hello to George. The role that those launches have given us have played out exactly as we were hoping to eliminate friction. To be on spectrum, we work with utilities to help understand the broader roadmap of actually getting it deployed and having their business executives get used of it. And so how commercially that plays out regarding specific products or the premium that we're seeing and the friction that we're reducing in the market is still early days, but it is making a big impact on the acceleration of the deals, the value that we're getting based on the deals and the interest in new conversations that is opening up for us to have broader conversation within the utilities and other sectors for that matter. But commercially of how that plays out is still early days, and we're shaping that, but it is certainly playing a nice impact positively for us.

Got it. And then just one other for me. I mean you mentioned the AWS-3 results. I'm curious, as we look at the pricing in certain areas where you guys might also be in negotiations for Spectrum deals, do those results have any impact on negotiations or pricing talks on your end?

Yes. Logan, this is Elena. Absolutely. Any public data and benchmarks certainly educate our pricing conversations with our customers given that they are public benchmarks. So absolutely, it's been having a great positive effect on our pricing strategy and conversations.

There are no more questions in the queue. And I would like to now turn the call back over to Scott Lang, CEO, for closing remarks. Please go ahead.

I want to just start with once again recognizing this team here at Anterix and the hard work and dedication that I see every single day, literally 7 days a week, almost 24 hours a day. I want to thank all of our investors. I want to thank all of the analysts for dialing in today and the thoughtful questions. It's a real honor to be the CEO of this company and understanding what we do every day and the value and the kind of great company that we are creating. So I want to thank all of you for joining, and we will look forward to following up and staying in touch. Have a great day.

This concludes today's program. Thank you so much for joining. You may now disconnect.

Thank you. Good day and thank you for standing by. Welcome to the Interix Fourth Quarter Fiscal 2026 Investor Update Call. This time all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. If you ask a question during the session, you'll need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again.

Please be advised that today's conference is being recorded. I'd now like to hand the conference over to Natasha Beccarelli, Vice President of Investor Relations and Corporate Communications. Please go ahead.

Thank you, Operator, and good morning, everyone. I'm Natasha Veccarelli, Vice President of Investor Relations and Corporate Communications, and I welcome you to our fourth quarter fiscal year 2026 investor update call. Joining me today are Scott Lang, our President and CEO, Elena Marquez, CFO, and Chris Gutman-McCabe, Chief Regulatory and Communications Officer. Before we begin, please note that today's discussion may include forward-looking statements regarding our outlook operations and expected performance. These are based on current assumptions and subject to risks and uncertainties. We encourage you to review our SEC filings for a detailed discussion, including Forms 10-K and 10-Q, which are available on our website. Please note that we do not undertake any obligation to update forward-looking statements.

With that, I'll turn the call over to Scott. Thank you, Natasha, and good morning, everyone. As we close my first full fiscal year as CEO, I can tell you that Antarex has never been in a better place. Every aspect of this company is stronger and every aspect is performing. We focused this past year on setting a foundation, and that foundation has us ready for the tailwinds we are now seeing in the market. Let's start with the performance of this last quarter. Activities with utilities has increased significantly just in the last 60 days.

Conversations have moved from education and evaluation to now being anchored on deployment, pricing, and time to value. We see it in the number of active engagements, the volume of commercial discussions underway, the quality of opportunities moving through the pipeline, and a notable step-up in direct pricing requests from utilities returning to the table with an increased level of intent. And with that, I am pleased to welcome Kim Kerr as our new Chief Revenue Officer. Kim brings deep experience across telecom, infrastructure, and enterprise markets. Her mandate is clear. scale our commercial execution for the next phase of growth. But what is just as important is the broader market dynamic. And you are seeing it play out in real transactions right in front of us.

Amazon's planned acquisition of Global Star to support direct-to-device capabilities, AT&T's $23 billion purchase of EcoStar Spectrum and SpaceX's acquisition of additional Spectrum resources all point to the same conclusion. Scarce license spectrum is becoming more valuable, not less. These are deals where the market is putting a real price on spectrum and and that price is climbing. These valuations are not speculation. It is recognizing in hard dollars that Spectrum is a scarce and strategic asset, which is what we have been saying for a long time. The value of spectrum is strong, demand is greater than supply, and that thesis is now coming to shape. This puts us in a position of strength, and we are ready for this moment. You might ask why? The answer is simple.

We have done the work to de-risk any licensed 900 megahertz investment from our from our first 11 customers and our robust ecosystem of solution developers to our strong financial position. We also have a unique ability to match the needs of our customers while ensuring that we will monetize the full value of our spectrum. from allowing a utility to start with 10 megahertz or start with 6 MHz and move to 10 MHz. Schedule payment terms to match capital availability. deploy a single use case, or deploy a wide range of solutions, our flexibility to meet every utility where they are is what makes us a compelling partner. We recognize that many utilities are under intense pressure to address affordability, yet need and want the benefits that come with private broadband connectivity. Our flexibility is our strength. Let me go a little deeper on some recent accomplishments. Within a three-month period, we signed four new utilities. Two, that reinforce our strength in the great state of Texas.

CPS Energy and Texas New Mexico Power and also two in the Northwest region, Benton PUD and Northwestern Energy. Notably, two of these customers moved directly to 10 MHz agreements shortly after the FCC ruling. Beyond our Spectrum monetization, interest in our Catalix offering has more than doubled since our February earnings call. that customers are not only evaluating spectrum, they are committing to action. As they do, each relationship we have grows well beyond the initial spectrum sale into the recurring revenue opportunities that run these networks. We are no longer simply participating in a spectrum market. We are positioned to monetize the much larger market being built on its foundation. But that expansion is not limited to utilities.

Licensed low band spectrum is no longer simply a communications input. It is strategic infrastructure and the range of industries competing for that scarce resource continues to expand. Demand is growing. Supply is fixed. Utilities recognize it. the broader market recognizes it. As Chris will discuss in a moment, These same dynamics are also creating new opportunities to extend the value of our spectrum position. Our work with Link Global is one example, exploring additional layers of resilience and coverage, including direct-to-device satellite connectivity within this broader architecture. So when I step back and look at the year, I see a market that has crossed an important threshold.

Utilities have validated the model. Private wireless broadband has moved from evaluation to deployment. Demand is accelerating. opportunity is expanding beyond utilities and licensed low band spectrum is increasingly being recognized for what it is strategic infrastructure As we look to the next year, the table is set, and we are in a strong position to execute. With that, I will turn the call over to Chris. Thank you, Scott, and good morning, everyone.

As Scott discussed throughout the company, our focus is on enhancing and unlocking absolute shareholder value for our spectrum asset. That is why we are investigating extending the utilization and monetization of our spectrum across a broader set of use cases, including evaluating how 900 megahertz can be applied to direct-to-device satellite capabilities. With Link Global, we are testing how enterprise-grade satellite networks can integrate into enterprise-grade terrestrial networks. While much of the direct-to-device discussion today is consumer-focused, we believe a larger long-term opportunity may be in the enterprise and critical infrastructure space where continuous connectivity is paramount. In this context, satellite can extend coverage where terrestrial infrastructure is not yet deployed and provide a resilient overlay where networks already exist. Our testing with LINK will span a range of devices, including LAN mobile radios, smartphones, ruggedized computers, routers, and edge devices that will underpin the integration of AI, and we will complete this testing across multiple geographies. Initial testing has been successful, moving this from a concept to early technical validation.

We are assessing how this capability could be productized through integrated solutions, standalone capabilities, or broader ecosystem participation. The point is simple. We are in a great position to investigate every opportunity that captures value for our spectrum. With that, I will turn the call over to Elena. Thanks, Chris, and good morning, everyone.

I will start by reviewing our fiscal 2026 financial results. Our balance sheet is stronger than ever, and I'm pleased to share that we generated positive cash flows in fiscal 2026. We initially anticipated $80 million in cash receipts, but due to accelerated customer deliveries and strong execution from our spectrum teams, we collected $127 million. We ended the fiscal year with no debt and over $98 million in cash, not including escrow deposits, with approximately $50 million remaining to be collected from contracts already signed. Turning to the income statement, currently our GAAP revenue represents the amortization of our long-term spectrum leases to customers. Our quarterly gap revenue increased to approximately $2 million from $1.6 million in prior quarters, driven by license deliveries to customers during the second half of our fiscal year. Importantly, our fiscal 2026 results are largely driven by the gains on sale of Spectrum, along with non-cash exchange gains associated with Spectrum conversions from narrowband to broadband licenses.

Through fiscal year end, we converted narrowband to broadband licenses across 119 counties, resulting in a $105 million in non-cash exchange gains. We also sold broadband licenses to customers covering 155 counties and recorded $34.8 million in games on sale. Coupled with lower operating expenses, this resulted in a net income and EPS positive year. In our forthcoming Form 10-K, you will also see an update to our Revenue Recognition Policy that reflects our evolving commercial approach to best meet our customer needs. Historically, our go-to-market strategy was centered on a long-term spectrum leases with sales generally limited to certain complex system designated areas. As the market has matured, utilities have become increasingly focused on selecting the ownership structure that best aligns with their operational, regulatory, and financial objectives. In response, we have evolved our commercial approach to provide greater flexibility, meeting customers where they are, and supporting deployment through either lease or sales structures.

As a result, beginning with these transactions and going forward, revenue and cost of sales associated with Spectrum sale agreements will be recognized on a gross basis in accordance with ASC 606. Looking more strategically at our monetization opportunity, to date, we have contracted only 15% of our nationwide spectrum on a megahertz POP basis through long-term leases and sales. Importantly, the majority of our remaining spectrum assets concentrate in some of the most valuable markets in the country, sitting within the top 20 metropolitan areas where scarcity dynamics are most acute. It is increasingly clear that both our historical average contract pricing and broader market comparables on a per megahertz top basis far exceed those implied by our current market valuation. With this context, we are pursuing all opportunities to extract maximum value for our shareholders. In closing, we're a company backed by a scarce asset in high demand with fixed supply. We're well positioned with a strong balance sheet and a lean model.

Our focus remains on disciplined financial execution, continuous spectrum monetization, and capturing spectrum-adjacent recurring revenue, all aimed at delivering long-term shareholder value. With that, I'll turn it back over to Scott.

Thanks, Alaina. Let me put all the information we just discussed into a broader context. Any device that consumes, monitors, or controls the flow of critical data, whether in utilities, industrial operations, logistics networks, satellite, or other mission critical environments, needs secure, deterministic connectivity, and that connectivity is scarce. Demand for it is expanding. The supply of spectrum that can deliver it is fixed. That is the intersection we sit at. the one we have been building toward deliberately from day one. We do not see this dynamic changing. We believe it is where the most durable value in this market will be created. And capturing that value for our shareholders is exactly what we intend to continue to do.

We love the position we're in. Thank you for your support. Operator, we are ready for questions.

As a reminder, if you'd like to ask a question at this time, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. Please stand by while we compile the Q&A roster. Our first question comes from Sebastiano Petty with J.P. Morgan.

Hi, thanks for taking the question. Scott, in your prepared remarks, you touched on the catalytics. conversations you're having any update on you know is that with existing partners are you having maybe follow-on conversations about master services agreement like would you have announced with CPS energy And then I guess, you know, oh, yes, I'm sorry. And then just my second question, just on the non-utility use cases, obviously seems like there's opportunity growing there and interest. I mean, is Antarex's appetite for some non-utility use cases growing? And is this, you know, separate or? with what may come from the link partnership, or are they kind of more ingrained there? Thank you.

Okay, thanks Sebastian, appreciate the questions and good morning. On the Catalyx, first Catalyx, I'm going to hand it over to Chris to touch on some of the use cases of what we're doing with the spectrum outside of utilities. But on Catalyx... As we've talked about, as we started to shape the product initiatives and our ARR initiatives and the service initiatives, we had the luxury of looking at our existing customer base who were standing up these networks, delivering results and understanding where some friction points are to help them move. faster. There were a couple of that stood out. One of those were Cadillacs and is basically the entire SIM management, giving them a single throat to choke of our superpower of spectrum licensing, bringing devices onto the network that they are deploying. Every device that gets connected to a network needs a SIM And we have strong skills within that. We have strong relationships within that.

We have relationships within our ecosystem where we can move faster and have a more simple master service agreement that they can sign versus multiple agreements that they sign. So it helps them eliminate some of the some of the friction to move faster to start getting value from the network when they've bought the network and stood up the infrastructure, the Catalix solution has really helped. What I refer to is the fact that it has doubled and the speed of this. I think we launched this a couple one or two quarters ago. Every customer we've talked to has wanted to learn more about it. The new prospects are wanting to learn more about it. And so we've done an enormous amount of education.

We are now establishing master service agreements within our contracts and within our deals. And it's moved from understanding it, evaluating it, to priced and paper that's getting in front of our customers. And so that is what we are excited about, of the increase of the interest, the education of it, and the actual traction we're seeing with not only our existing customers, but all the new customers, like to see this as well we're not a spectrum speculator we're in this we're building a real business and help them reach the value desperately wanted by the business executives so that's a little bit of context there for catalects especially just you know to address your question Sebastian but also for any others that.

that want to learn a little bit more of the history on that. But Chris, why don't you touch on the use case? Yes, and Scott, one thing to add, the beauty of these products is we can enter into a contract with these products even before a Spectrum contract, right? These can help provide, as Scott referenced, to soft landing to a spectrum product, I mean, to a spectrum contract. And as we look at these opportunities, clearly they are with existing customers. You know, we've got, you know, Scott hired our new chief product officer, Ross Sparrow, and you know, in front of existing customers. And clearly this concept of MSAs and these opportunities are being presented, integrated into and as part of our forward-looking. So, Sebastiano, as you asked about the other verticals in the other sectors, you know, I want to go back to what Scott said, because I do think everyone in the spectrum world is beginning to realize this. And the quote was, any device that consumes, monitors, or controls the flow of critical data needs private connectivity.

And you could apply that to any sector of the 17 critical infrastructure sectors. So, as we look at it, yes, there are inbounds from other sectors coming to us, and yes, we do and can do an analysis of whether that makes sense, but you did, you zeroed in on that key one, which is satellite and direct-to-device. And so we've kicked off an investigation. Actual testing happened the end of last week and into this week. And it all looks great. And so as we say, looking at, I think Elena said, I think Scott said it, I know I said it in our prepared remarks, we're looking at every opportunity to monetize our spectrum to the benefit and to the value of our shareholders. And clearly that includes, you know, looking at these other verticals.

Our next question comes from Mike Crawford with B. Reilly Securities.

Good morning, Mike. All right, good morning. First, just to circle back to the... uh director device opportunity how would link work as its satellites if ever launched any scale would traverse in and out of markets where you've licensed your spectrum to others like utilities.

Yes. Hey, Mike. So the you know, the reality is that the use of this capability is evolving, but we are comfortable that you know, from market to market, we can have folks that are utilizing this product and in the next market they may or may not be. And so whether or not we have legal a portion 15 ish percent from a pops perspective of the country that that's totally fine there's there's no issue with with that from a technical perspective and you know this is the reality with anyone who's going to utilize direct to device right there's I think AT&T and Verizon have a petition in front of the commission right now to use a portion of portion of low-band spectrum where they do not have nationwide licensing of that spectrum. So we're comfortable that this can be a product if that's the path we go down. And And we're excited. Link has our bands in their spectrum. We think they're a very viable entity. We're excited to work with them. And we'll see how this all plays out.

Yes, the first round of testing has gone extremely well on it as well, Mike. We've got some of the initial results already. They're terrific and continuing to span the number of devices and the number of tests is only going to increase now.

Okay, thank you for that. And then just to switch to a few quick modeling questions. What are you planning for cash in the future? and total expenses, including stock comp for the current fiscal 27.

Yes. Thanks, Mike. You know, we're obviously very fortunate to be in a very strong financial position with all of the cash that we were able to collect this year with accelerating deliveries. We have $50 million to collect still from the current customers with about $25 million in cash. coming in in this current fiscal year. We have lowered our expenses significantly, of course, from about $45 million run rate back in the first half of FY25 to well below 40, I want to say, 37, 38 million. I would expect to be at approximately 40 million OPEX at the most all in with one time expenses. in the current fiscal year. You know, and of course, we're currently not exactly guiding on the clearing costs as we are, it's the lever that we've always pulled up and down. And now we will be, of course, focusing on not only delivering to the current customers, but only also unlocking the value of the expenses suspended band tied to near-term opportunities. So of course, as our pipeline continues to move, we will continue moving that up and down.

But we did spend about 27 million in clearing last year. I certainly expect it to be a bit more this year, but I think it may be a placeholder for now that you could use.

Does that answer your question? Well, yes. And then given that Now you're going to recognize spectrum sale revenue on a gross basis. Is that when contracts are signed or when spectrum is delivered or a combo of both? And should we expect you to restate prior financials or not?.

Yes, you know, allows me to clarify some of the points you just raised. So no, absolutely no restatement of prior periods. This is a prospective change really driven by, you know, our go to market approach. As it evolves, right, we're being very flexible with our customers and meeting them where they are. And, you know, our approach used to be primarily long-term leases. And now, of course, as evidenced by the last four contracts, we're very much open to sales of spectrum. And with that, we, you know, again, had to reevaluate our GAAP accounting and this was long in the making.

We're now able to recognize revenue on the gross basis from our sales. So what you will see, again, I'm happy to provide you some guidance on this, again, guided by the current contracts. As you have seen, there's an uptick in our gap revenue in the fourth quarter. So now we're at about 2 million. So certainly expect that running through from our long-term leases for the four quarters in this current year. However, there will be a $13 million revenue recognition related to CPS energy contract in the fourth quarter. order as an addition. And that, of course, does not include any new contracts that we may sign this year.

Did I answer all of your questions or did I miss something? Well, thank you. I'm sorry, can you just clarify again what you said about that 13 million? When is that going to be recognized? It's going to be in the fourth quarter of fiscal 27? That will be in the fourth quarter of FY27, that is correct. And that is tied, the revenue recognition will be tied to the actual delivery.

the delivery dates of the licenses. OK, perfect thank you and then just last one for me is given that. we're 72 out of 90 days into this quarter. Is there... Any further color you could provide on cooling costs in this one quarter, as well as potential gain on sale of intangible assets or gain on... exchange of narrow band for broadband licenses. Just in this one quarter, that's nearly done.

Yes, thank you, Mike. I am seeing that our clearing costs are fairly consistent to kind of the average that we've seen in the past year quarterly. So I'm not seeing a huge uptick in the first quarter as far as the gains are. gains on sale, I would rather not guide because with FCC, we could get a license in on the last day of the quarter that could be extremely immaterial, right? So if I guide you, unfortunately, I could be very off, up or down. So I will continue not guiding on that.

All right, thank you very much. Of course. Thanks, Mike. As a reminder, if you'd like to ask a question at this time, please press star 1-1 on your touchtone phone. Our next question comes from George Sutton with Craig Hallam.

Thank you. Good morning, George. Good morning. You mentioned a notable step up in pricing discussions. I wondered if you could provide a little sense of how broad are Are you referring to that comment to B? Are you specifically referring to Calix, or are you referring to the broader set of license opportunities? Okay.

George, it is probably, I would say it's broader. I'd say it's catalects, but specifically on that point, I was referring to spectrum. I have now just entered my second, well, yes, my second full fiscal year as CEO. So just turning the clock back four quarters. I'll go even five quarters ago compared to today or any other time that I've understood with some of the history of this company. number of active large utilities, small utilities. It's really a branch. There are some There are some utilities that are smaller utilities that range single-digit millions, and some utilities at the other end of the range, the larger utilities, that are nine-digit numbers. So the range on that is very broad.

The diversity is very strong. And it's well represented in each of those categories from smaller to larger. The consistency is give us some indicative pricing, strong interest of getting to five by five, strong interest in the methodical approach we can give them to bite off three by three with their pathway and committed to five by five. Our commitment is we want to monitor monetize the entire five by five. That is what we are doing. That's what we have. We're confident in it. The utilities consistently want it. They see it as a scarce and strategic asset. So everybody we're talking to is really aligned on getting to the five by five, and they like our affordability and the phased approach that we can give. get them there without any risk of a stranded asset from where they are today and where they get there with this affordability challenge that's in front of them.

And so I would tell you, George, there's a lot of excitement within the company and with the team with the activity and the response. and the requests we're getting from utilities. And then of course, on the other side of that is the excitement last week that we just got out of the satellite initial test with Link. and some of the other dynamics we're seeing in the market of the demand for spectrum. And it is only continuing to grow. We continue to see that will continue to grow. The supply is fixed. Well, that's maybe a little longer answer than you were looking for, but I would say that we feel like we're in a really good place, and the energy here is very strong.

So, last quarter you made it pretty clear that pricing in effect was going up. You were eliminating new accelerator program deals. Can you just give us an update on what remains in terms of accelerator opportunities? Are you still honoring anyone who started those discussions at that time?.

We do not have any broad agreements out there. The seller pricing is over. That has not been renewed. We do not intend to renew that. And the pricing that we're doing now is very customized by each utility, each demand, the value of each market. So it's a very customized approach that we are working with every opportunity, whether it's in the alternative industries we're looking at that has reached out to us or whether it's specifically with utilities, the size of the utility, it's really a customized approach. The more recent deals that we announced were very strong pricing and they wanted to go to five by five ASAP. So it really ranges, but the net of the answer is there are there are no new accelerator deals that are active right now.

That program is closed. And the other one, the pricing is very strong. And we have flexibility, but we also have a very scarce asset that we can – will be paid accordingly for that asset. But I look at our current appreciation of where we are. And Elena touched on this. The price per pop backed into our enterprise value now gives us an enormous amount of headroom before we even begin to touch the value of our spectrum and the pricing we're putting on the table as a result of the demand, the scarcity, of what we have and the value, the nature of its strategic value that it brings to the utilities.

Got you thank you for that one question on the product side so I know rocks is in the in the midst of hopefully finding 10 products in terms of things that you can offer in the ecosystem. And we've basically announced two and slash three if we include satellite. Elena has talked about an eight to one revenue opportunity relative to your license value that you would receive. Can you just give us a sense of what is a rational expectation for you to see in a typical market over time relative to that eight-to-one opportunity?.

You're referring specifically to the adjacent new products. Correct. The products. ARR. Okay. You know, Ross and I had a, we talked very deeply on this. What we will not do is chase every rat. There's a lot of opportunities. There could be a lot of, we'd chase a lot of rabbits right now. We're not going to do that. We are singularly focused on building products and reducing friction that helps us sell spectrum and helps utilities get the value of spectrum faster. The first two we identified were Cadillacs and the tower access and the agreement we established with Crown Castle for a nationwide tower access.

There are a couple of new ones that Ross is doing a terrific job with his team. They were in early stages of discussing that existing customers have highlighted. that we're starting to hear about and see in the market. It's early for me to indicate what those are today, but there are a couple of early stage things we're looking at. But we also want to deliver on some of the ones we've already launched, and they're doing a really nice job where it's turning into paper, it's turning into real clarity, into a real value proposition that utilities can put their teeth into. So I'd love to give you a number of what we expect that to look like this year. It's a little early. I'd like to see a couple of these wins turn into a real financial P&L business model, and then we'll be ready. But it has become part of the... of the metric this team is accountable to deliver to our board and to, therefore, to our investors.

So for the first time, this company now has a performance metric that we are being measured by the team, that this is an important aspect of our company because it helps us sell spectrum, it helps our customer be successful and it also addresses a broader opportunity that Elena and Chris referred to. But I think we'll be in a place where we can start sharing some specifics.

and put a time on it, but that would be our goal. So finally, just more of a comment, but you mentioned single-digit million opportunities and then nine-figure opportunities. If we're taking a poll, I would prefer the nine-figure opportunities.

Well, you know, we like all of our children. We love all of our children. We love it all. So, listen, it's all good. We're really in a good place. We like where we're at. There's been a lot of work by this team. I just can't say enough about how hard this team is working and how fun. thoughtful, engaged our board is, and our customers at the table, and really the teamwork going on, not just within the company, but just all of our ecosystem partners, it really has taken a village and everybody's working nicely together. It's nice to see that there's good progress and good excitement. or for good reason across the company.

All right. Thanks, Ken.

Thanks, George. Thanks, George. Our next question comes from Adam Kelsey with Titan Partners.

Thank you. Scott, staying on the topic of the $80 per dollar multiplier that was referenced, I think As the 5x5 configuration evolves and the D2D opportunities scale, do you have any comments on how that $8 multiplier may change?.

Are you referring to the $8 that gets unlocked as a result of every dollar of Spectrum that gets purchased?.

I think so. I'm curious if that $8 would probably increase now that you're going from 3 by 3 to 5 by 5 and now that we have the D to D opportunity.

I think everybody's going to want to comment on that. It's pretty exciting as we start to think about it. The notion and the context of the work we did to put the $8 on the table is that the amount of companies and investment necessary, whether it's a D2D or whether it's a satellite company that's enabling D2D, or I mentioned logistics and mentioned some of the other industries out there and specifically for utilities, that the number of dollars that starts we see flowing around us as a result of standing up these network infrastructures is pretty significant. Some of those dollars we think should run through us and specifically the Catalix and the TowerX because it adds a great value to the market to any customer to have those running through us. There are a couple of others that, as I mentioned, that Ross and his team are looking at and will be very deliberate on understanding what those are. Whether that $8 grows or not, I'm not ready to put a number on that. We did quite a bit of work.

We didn't just grab a number out of the air for the $8. So we'll do the same amount of math as we start to see progress as a result with the successful milestones we hit last year on the link test. Now as we test more devices and we study that more as the impact that our spectrum can create on satellite, directed device, and others, we'll revisit the $8, but I don't see the $8 going down. I see it's fairly well the foundation under the eight and potentially going up. But Chris, do you wanna add anything? Scott, I agree with everything you said. Adam, I do love the way you're looking at it, right?.

there is an element of if you build it, they will come in the sense that, you know, we were at Distributech, we had our four of our customers on a panel, they all talked about crossing over in the next few years, a million devices on their network, right? And so we can all, I think, envision a future where the what these networks are being used for and the products that are being developed will evolve I think Scott's right- you know specifically we're not we're not going to revisit the eight dollars yet but- six months ago we weren't talking at all. About a product being satellite connectivity direct device right and no one was in in in the private you know- network utility space so- you know the reality of connectivity opportunities. Is changing and we're excited to be where we are you know our teams are sitting it with existing customers extensively talking about these experiences and coming up so we you know we're we're excited about where we are- but.

it is all evolving as we are sitting here. Great. And one follow-up from me, Scott, you also mentioned ongoing conversations or at least initial conversations with non-utility potential customers. I know when, Way back when we were undergoing the first initial NPRM, there were several non-utility customers that were in support of the RNO. Curious if you'd characterize some of these conversations as a continuance from those initial efforts or new non-utility customers coming to the table.

I would say it's both. Chris and I are looking and going through our list here of companies, and it's a little bit of both. it's not surprising that the ones that have always been out there had a need for connectivity as part of their really critical aspects of their business and just driving more connectivity. The new ones coming into play, certainly the FCC clearance to 5x5 has hit the radar screen of companies that really are excited about engaging with us on our journey and seeing our products.

So it's a little bit of both, I would say. Yes, and Adam, we're, leading, but also listening and following, right? So, you know, we have we have customers who are thinking of standing up and well, not thinking or pursuing and deploying a network and are looking at providing connectivity to like minded entities within their footprint. Right. So that alone is driving interest. When you look at, you know, LCRA, you know, they are looking at providing service. They've been very public about this to entities within their service territory and their service footprint. So, I think you're going to see, you're going to begin to get a sense of what those entities are, who they are, what sectors they represent. And some of it's just happening organically with our customer base.

That concludes today's question and answer session.

to turn the call back to Scott Lang for closing remarks. Thank you, everyone, for joining. Again, we love where we're at. I've had the opportunity to get in front of a lot of customers over this last quarter. Many times the customers are bringing many people from different parts of the organization. our story is resonating, we're available now, we're proven. We give them flexibility as our strength message. They love the flexibility as our strength and a pathway for them to be successful with real customers showing real value from these business cases. ecosystem coming to the table that helps them get past just a spectrum decision, but really delivering those results. So when we compare that and the ability for us to put a business case on the table, it really addresses The acute affordability challenges for the industry, but also offers us tremendous ability to take care of our shareholders, take care of our customers, and continue to grow is a very powerful message that evolves with their company and the ability for us now with the strength of our ecosystem and the migration happening with devices can give them confidence confidence there is no stranded asset that they're going to leave behind and to back that up with their timeline of how they want to deploy the networks that's right for them. is a very powerful message.

And so we love where we're at. There's a lot more demand than there is supply. We have some really good existing customers that are helping us out and really advocating for this. And as the new prospects get around the table, they start to share that excitement and that gets even more exciting for us. So I want to thank everybody for support and we look forward to keeping you in touch with our progress.

Have a great day. This concludes today's conference. Thank you for participating. You may now disconnect. All right. We're done. Good job.

[Call has ended.]

Good afternoon, everyone. My name is Sebastiano Petti, and I cover the telecom, cable and satellite space at JPMorgan. I want to introduce Chris Guttman-McCabe, Chief Regulatory and Communications Officer of Anterix. Chris, thanks for joining us.

Thank you. Did I do it? Here we go. Thank you, Sebastiano. How are you? Good afternoon.

Yes. Thanks again for joining us. And so Anterix sits at a unique intersection of spectrum policy, utility, modernization and critical infrastructure. There's a lot going on -- happening on each of those fronts. So as you think about the next 12 to 18 months, what are management's top priorities, whether that's advancing customer -- utility customer deployments, working through regulatory milestones or something else? And just where do you see the biggest sources of potential upside or risk to the business from here?

Yes. Thank you. So first of all, thank you for having us. We're excited to be here. When you look around the hotel and you see the unbelievable amount of capital that is being deployed and to be deployed, it's really a testament to your position and your company's position in the marketplace. So we're -- again, we're excited to be here.

For those that don't know, Anterix is -- we're a wireless technology company. As Sebastiano said, we really sit at the intersection of telecommunications, technology, the grid, modernization of the grid. As we jump around and we pop into some of the talks like this, I think it's really fair to say Anterix is at the intersection of a lot of what is being discussed here, whether it's modernization of the grid, whether it's the integration of AI into all of the sectors of our economy, whether it's data centers and/or load growth and it's direct-to-device. Part of what we do at Anterix is we enable the communications connectivity for the critical infrastructure sector that is really going to enable all of that evolution.

And so as we look forward and we look out to the next 6 months, I would say we have 3 areas of focus. One is continuing to execute, continuing to drive spectrum contracts. That's paramount. We have a 10 megahertz spectrum asset that we're working to monetize on behalf of our shareholders, 5 megahertz by 5 megahertz. So that's number one.

Number two is beginning to investigate other opportunities and product opportunities. So we have a new Chief Product Officer, and we're looking to introduce annual recurring revenue, really improve our top line revenue and do it in a way that takes advantage of the position that we have with our current customer base and our future customer base.

And then, I would say, simultaneously to investigate other uses and users of our spectrum. Today, we announced the grant from the FCC of an experimental license to utilize our spectrum, our 900 megahertz spectrum, with Lynk Global to investigate direct-to-device satellite connectivity. So we're excited about that, and we are going to full steam ahead on all -- really all 3 of those priorities.

Great. I definitely I want to come back to the Lynk announcement and continue to elaborate on some of the other items that you noted. So starting with the 5 x 5 report and order from the FCC. So it largely mirrored your original petition. Are there any conditions, whether it be build-out requirements or time line obligations embedded in the order that investors should be aware of or that could constrain your flexibility?

No. There's really -- it was a very magical report and order, if I may use those terms. It was -- it aligned with really exactly how we had petitioned the FCC. So we're very excited about how it came out. In fact, one of the more creative elements in the report and order was the movement of our band of spectrum to what's called flexible use, which actually opens up the opportunity for satellite direct-to-device. So that, to me, was one of those nuggets that you find embedded in a government report, in this case, an FCC report and order that really opens the door to a lot of flexibility. So super excited about that.

As far as build-out, as far as the rules, they are exactly as we petitioned the FCC. And we think we have a lot of flexibility, a lot of optionality, as to how to move forward and monetize the spectrum.

I want to come back to the optionality as well. But thinking about one of the things that we get questions on from the investment community is just the implied asset valuation. And so the expansion from 4 megahertz to 10 megahertz increases your monetizable spectrum per county by, call it, 67%. Elena referenced an implied asset valuation range of $2.5 billion to $7 billion at 10 megahertz. Can you walk us through the key assumptions underlying that range and where you believe your actual pricing is likely to fall?

Yes. And I'm going to make a plug for your recent report because a lot of it is contained right in that report in terms of how to get to an implied valuation. So a fantastic job to you and the team.

Thank you.

So when Elena, our CFO, talked about that range of valuation, 2.5 billion to 7 billion, when we look at pricing our spectrum asset when we have an opportunity in front of a potential customer, we kind of look at the 2 -- some people call them goalposts. I think it's the 2 edges of the fairway since we just had the PGA Championship day. And one is the 600 megahertz auction pricing and the other one is the AWS-3 auction pricing. So if you take that 600 megahertz auction pricing and you apply it to 10 megahertz and to our remaining spectrum that we have yet to monetize, that's where you get to $2.5 billion.

If you take the upside, the AWS-3, the higher pricing, a little bit more competition in that auction and you apply that, that's where you get to $7 billion. But if you look at some of the other transactions, the private market transactions that we've seen, particularly for low-band spectrum, and there was a Columbia Capital to T-Mobile. There was a Comcast to T-Mobile. Those are up in the $3 per megahertz POP. And so they provide an upside that is even beyond the $2.5 billion to $7 billion. So that's sort of how we look at it.

We get to determine our price. And we tend to have our price fall between those 2 guardrails. And we go down that fairway and somewhere between that, what would be $2.5 billion to $7 billion. But that price, and it's turned out to be about $1.70 a megahertz POP if you look at our 11 contracts so far, that's 5 to 6x what we're currently trading at, right? We're trading at -- with a little bit over $1 billion market cap, we're trading at about $0.33 a megahertz POP right now. So there's a lot of upside. There's a lot of headroom. We do have -- we have 11 customers. They're building these networks across 18 states. But we think there's a lot of opportunity to continue to move that number up and also to continue to monetize our asset.

Great. And from a clearing cost perspective, you've indicated you're still within the original, I think, 3 x 3 guidance issued roughly 7 years ago. As you move to 5 x 5, can you help us understand the marginal clearing cost profile? You've mentioned having already blended in some of the incremental 2 x 2 over the past year. But how should we think about the remaining investment required from here?

Yes. I want to focus for a moment on a portion of your question, which is I do think one of our company's superpowers is the ability to really clear the spectrum and bring it to market and ultimately have a cost basis that is just fantastic. And the teams that execute both on the analysis and also on the actual clearing itself happen to flow up through me, the corp dev team and the spectrum teams. And so I feel quite blessed. They picked a number. They did their analysis and identified a number almost 7 years ago. And with years of clearing, they were still on target to hit that number.

As you said, Sebastiano, we began -- as we got closer to a report and order, we began to clear for 5 x 5, not just for 3 x 3. At the moment, we have about 90% of the counties in the country cleared for 3 x 3. When you move to 5 x 5, we're probably closer to 40% are cleared for 5 x 5. What we have determined is that any time we speak publicly, like in an event like this, we're speaking to our analysts, we're speaking to our investors, but we're also speaking both to our potential customers and our potential incumbents. And so we've made a determination, we're not going to talk in detail about clearing costs or margin on our spectrum because we think it just -- it creates an environment that might be more difficult for us than it needs to be.

So where we zero in is we have an incredibly valuable asset. It just grew by 2/3. We have an incredible opportunity to drive value to our shareholders. There is significant margin in the 3 x 3, and there is significant margin in the 5 x 5. Some areas will be more difficult to clear than others. But we are very, very comfortable and optimistic that we're going to clear it in a way that drives a really healthy margin and absolute value for our shareholders.

Got it. So you touched on the Lynk Global experimental license that was approved by the FCC today to explore the use of satellite D2D in Anterix licensed 900 megahertz broadband spectrum. Can you help us maybe understand the architecture that is being tested and helping us -- Lynk connecting directly to devices operating on your 900 megahertz. I mean what would be maybe a -- what would a commercial arrangement look like if the experiment succeeded?

Yes. Let me -- do you mind if I go back to just give a sense of what we're testing. So as we look at opportunities in the enterprise space for direct-to-device, right, there's a lot of talk about the consumer space for direct-to-device. But as an entity that is focused on providing connectivity to the enterprise space, what we are investigating is the direct connection from a low Earth orbit satellite, in this case, Lynk Global because we happen to have our spectrum in their -- or their satellites have our spectrum in their receivers. So we're testing the direct connectivity from the satellite to a range of devices.

And the reason we say a range of devices is we want to see, to get to your ultimate question, what would a product look like across the enterprise community. So we're testing a land mobile radio device. We're testing a smartphone. We're testing a tough book. We're testing a bunch of different edge devices and routers, sort of high-end routers so that any type of enterprise entity paying attention, watching and looking at what we're going to report, we'll be able to say, "Oh, that's our type of connectivity, and that's what we do." And we're doing it across about a half dozen different geographies for the same reason.

And then when you say sort of what the product could look like, that's where that word, you're going to maybe hear me say even one more time, but optionality comes into play. Could we ultimately have an integrated product with Lynk? Certainly. Could it be a Lynk product? It could. Could it be an Anterix product, might it be with another satellite provider? It might. Lynk is a great partner, and we are excited to move forward with them. It doesn't foreclose other opportunities. But when we look at it, we could see a satellite product that is primary connectivity in areas where our 900 megahertz hasn't been built out, and sort of a resilient redundant play almost like a satellite overlay in areas where it has been built out where you would want to make sure and the utilities are a great example for this. They love the belt-and-suspenders approach. So if they have terrestrial connectivity and if something were to happen, you have satellite backup, that's sort of an element of what we're testing.

Okay. And maybe help us think about what is the potential time line for this experimental phase? And I guess maybe what are some of the milestones that need to be achieved before becoming more a commercial launch or maybe a joint go-to-market effort?

Yes. So -- and this is traditional and an experimental license request. We asked for a year, we were granted a year. We will begin testing soon. Lynk has those devices that I referenced. And we will have -- both companies will have presence in the locations where we begin to test. And so we'll work through that in the next couple of months. I don't think it's going to be a year. I think we're talking in the next few months and maybe even a couple of months. And then obviously, we will have commercial discussions with Lynk about what it will look like.

There's a moment, and it's happening very soon, where we take this regulatory approach, and we hand it over actually to our product team. So Ross Spero was brought on as our Chief Product Officer about 4 months ago. So it will be Ross's task to the extent that we move forward, it will be his task to really turn it into a product that is beneficial to our shareholders and our customers.

And so you mentioned that you don't -- this agreement with Lynk doesn't necessarily foreclose you from other opportunities or speaking to others. Have you had conversations with others in terms of -- in dialogue with other satellite or LEO operators?

How about if I say, clearly, there is a lot of activity in the direct-to-device space. And there are other providers out there. Our focus in the near term is on the great relationship with Lynk and on ensuring that this -- we move forward and we really prove out this proof of concept. The next step for any of these bands of spectrum that haven't originally been designated for supplemental coverage from space is to go back to the FCC. So for us, what we're doing is we're gathering a wealth of information with Lynk to be able to go back to the FCC and make the case for this band to be designated for satellite use.

As for the others, it's a very identifiable group. I happen to run corporate development as well. So we listen to all sorts of inbound discussions about use of our spectrum. Is that fuzzy enough?

No, that's perfect. And as you think about D2D, I mean, in your traditional business with utilities and IOUs, do you think of them as a threat longer term, though?

I think that the future for D2D is a little bit unknown. I think you and I probably 6 months ago, wouldn't have anticipated a future where these low earth orbit satellite companies were trying to secure spectrum, right? I think that's a new reality. I know at Anterix, we were waiting for the outcome of the report and order to begin the process of investigating this satellite connectivity. And I look at it like the outcome could definitely be a product that is of value to our customer base. And the outcome could be that a satellite company wants access to our spectrum, the remaining spectrum in its entirety or some blend of both.

And that's why when we say optionality, there it is the third time, when we say optionality, we truly mean it. Like we are open to investigating any path that drives value to our shareholders, including continuing down the path where we are, right? We have a pristine balance sheet. We have no debt. We have more than sufficient cash, both in the bank collected and to be collected. So we don't have any pressure to act in a way that isn't sensible. And so I think we all look at this investigation as something that's very compelling, and we're excited to see where it goes.

Okay. And then I want to talk about the deal momentum at Anterix. So I think you've described the recent pace as a "deal a week." Can you help us understand what has structurally changed in the sales cycle that is driving this acceleration? Is it the 5 x 5 approval, the closure of the accelerator program, proof points from existing deployments or some combination of all of the above?

I think it's probably the last. I think it's a little bit of all of the above. So with 11 customers, right, it certainly will be easier for the 12th to make a decision. It was easier for the 11th than it was the 10th. Each one is an additional proof point, whether it be just the type of utility that is contracting, the geography that they're contracting to or the use cases that have justified building a private network. But I think sort of all of the above.

We certainly don't have to convince any utility of the value of private connectivity anymore. And certainly, they are experiencing a new reality. I mean, it's front and center throughout the conference, right? It is data centers. It's load growth. It's distributed energy. There are a whole bunch of companies here that will help guarantee power and connectivity, fiber, tower. And so the reality that the utilities are facing is really calling for -- absolutely for private secure broadband networks.

And I think you noted that the next 10 customers will come faster than the first 10. I guess what gives you that conviction? And are there specific friction points that you -- that have been eliminated that were bottlenecks for the first cohort?

Our goal is absolutely to pick up the pace of contracts. We think that, that will help unlock the value of our asset and ultimately, our stock price. We were aware of 2 friction points. That awareness was brought to us by what we call our Utility Strategic Advisory Board. So we have 11 CIO-level executives. Obviously, some of them are customers, and they help ensure that we are helping them to drive to an ROI to value. One of the things they brought up was access to towers. And so we worked with Crown Castle, and we launched a product called TowerX. That product, we sit in the middle between Crown Castle and our customer base, and we add scale in both directions.

So Crown Castle has access to 11 customers across 18 states. And those customers, some of them are deploying only in a county, even if they're a big utility. Some of them just serve a very large county. And so we have negotiated a master lease agreement on their behalf with the tower company, Crown Castle in this case. And then we did a very similar thing with Subscriber Identification Module, SIMs. And we worked with a very large SIM provider to procure and ultimately to manage those SIMs and to help provide an environment for roaming and a progression from public network to private network. So those are 2 that are -- were sticking points, ultimately after a utility had contracted. And so any time we find something like that, we put resources to solving the problem. And sometimes like these 2, it results in us actually bringing a product to market.

Great. And so a lot of focus, I guess, maybe some of the focus has waned to some extent, but obviously, there was a lot of focus with Grain Management after their announcement to buy T-Mobile spectrum and then utilize it to go after the utility community. But recently, they've updated their filing to focus on direct-to-device. But help us dig beyond Grain, are there other competitive threats that are on the horizon, whether it be CBRS where we could see increases to power, private 5G or other maybe low-band spectrum holders that could create friction in your utility pipeline or maybe slow down some of the decision-making?

Yes. Let me just take an element of the Grain issue because I think it goes all the way back to our first question that we talked about. I'm generally a glass half full person, right? So as I look at Grain and potentially coming to market to compete with us and/or going to satellite, one of the more compelling elements of that investigation is he/they felt comfortable spending $3.6 billion to buy an asset that they would drive a P/E return for just because they were securing low-band spectrum. And to me, that confirms our thesis, right, that low-band spectrum has an inherent value and an unbelievably inherent scarcity that I think makes our asset really valuable. And so whether or not we see David Grain in the utility space or he goes direct to satellite or he holds the asset and waits for it to continue to appreciate as spectrum assets always do, I think that's going to be interesting to watch.

When I think of competitors, we have worked diligently to be more than just a spectrum company. We've created -- I think we have about 155 companies that build products for our spectrum and services. We've gone out of our way to work with the standards bodies continuously to drive chipsets, to drive modules. At the recent DistribuTECH event, we had about 4 dozen different use cases in our booth. So we had our partners in-stationed in our booth showing what they're doing with the spectrum from a technology development perspective.

So there -- utility can always choose a different communications capability. But I don't think it matches what we're offering, right? You could do network slicing. You're still beholding to the carriers' deployment plans, to their evolution plans. You're still getting a portion of their spectrum, and it doesn't provide the same 5 x 9s reliability. And then you also don't get to capitalize it and put it into your rate base. So I think we just look at there are other opportunities for utilities to connect their devices. I just don't think they're comparative to what we're offering.

Okay. And back to where we started for a moment, but just thinking about valuation, even with shares having rerated over the last several months, at the -- at today's share price, you touched on earlier, the implied valuation is just $0.33 is a steep discount versus your -- the blended average of your announced transactions to date. I guess what do you believe is causing this persistent discount? And what do you see as maybe near-term catalysts that could close the gap?

So I think the catalysts that are currently helping to close the gap, right, because I think we've seen more than a doubling in the share price in the last 4 months or so. I do think it's the movement to 5 megahertz by 5, the investigation of satellite and direct-to-device, the closing of 4 contracts, the hard work that was done to reduce our burn rate. And so I think all of those both enhance investors' view of our spectrum asset and our investment thesis.

So I think we need to continue to get the message out that from just a pure spectrum perspective, we're trading at a fraction of any comparable analysis, right? You could pick the lowest comparable, and we're still 1/3 of that, right? You pick a more reasonable and we're a fifth or a seventh or an eighth. So I think continuing to show up and really get that message out and then really work to drive some additional top-line revenue such that we look more interesting on a Bloomberg terminal type of -- so that when you take a look, you see top line revenue and you see recurring revenue. So there is an absolute focus in the company on that as well. I think those 2 will help really to unlock that disparity.

But we're not being viewed for better or for worse as a spectrum asset. I think we're being viewed as an operating company. And our business, there's a lumpiness to our closing of contracts and bringing in revenue. So we're working on trying to smooth that out, accelerate contracts, get more top line recurring revenue, but at the same time, to really message around the underlying asset provides such significant downside protection just even at the amount that it's valued at now.

And I think some of the new product solutions should probably help with the top line dynamic there.

Yes.

So Scott described the strategic review as passively active with continued inbound interest. Given the 5 x 5 approval and the expanded asset value range of $2.5 billion to $7 billion we talked about, has the profile of potential acquirers or partners changed at all? And I guess, are you seeing any interest from infrastructure funds, tower companies or strategic acquirers outside the traditional telecom universe?

It's a tough one to answer. What I'll say is I think we all at Anterix love Scott's passively active, right, because it makes sense. As a public company, you have to listen to anything that comes in. You can dismiss certain things if it doesn't make sense. But at 5 x 5, I believe we are more appealing to a range of entities, whether it be funds or strategic partners or spectrum companies. And then whether that changes the ultimate outcome, that's going to be up to those entities and our Board. But I think passively active still makes sense as a way to describe it. But obviously, we're at a better share price than we were when we began that process. So could a premium on that be more compelling? It could. We'll see.

Okay. We'll be on the lookout there.

Yes.

So your customer base today is primarily investor-owned electric utilities. But on the April call, I believe you referenced water and wastewater systems, transportation and logistics, and industrial IoT as potential verticals. How should we think about that -- about the optionality of value embedded in some of these nonutility verticals that I just kind of listed off that have not necessarily been contracted? I guess is there a framework for when these become more material contributors to the business?

So what 5 x 5 really gives us is the ability potentially for a customer to serve multiple entities within its footprint, right? I think just that additional capacity opens up that world. I think satellite direct-to-device connectivity potentially opens up a range of others in the enterprise sector. Imagine if you could wake up tomorrow and you have a satellite connectivity to the entire remaining country that we haven't yet monetized. I think that opens up some opportunities. And then I really do believe we're going to see more broader enterprise sector interest now that we're at 5 x 5. It's just more easily understood by those folks in the connectivity community. It's a more traditional 3GPP sort of designation. We are perfectly set at 3 x 3. We have it standardized LTE and for 5G, but we also already have 5 x 5 standardized for 5G in our band. So yes.

Okay. And then just touching on the deal pipeline again. Just with the Accelerator program, you've indicated that the program window is now closed to new entrants, but that active deals showing good faith will be honored. How many deals remain active within that framework? And what is the range of contract sizes you're seeing?

So one of the things that's new about Accelerator is we've begun to put companies on notice that were part of it, that it's time to finalize those agreements and that, that price won't remain out there permanently. I think we've been asked multiple times by the investor community, was that program come to an end. So we've begun to notify participants that the window is closing on that particular price.

And as we think and as we look forward, what we did there, and I think this is incumbent on the leadership of a public company, we investigated different paths to try to move contracts more quickly. And so we were looking at sort of price elasticity, right? Is there? And what we found is, for some of them, it was important, not all, but for some companies, it was. And those companies that remain, there is a range of deal sizes, all the way up to 9 figures, right? And we've talked about that. That's nothing new. But collectively, it aggregates up to the full complement, the full $250 million. So there are a range of entities in the program still, but that window is not open permanently.

Got it. And I guess real quick, lastly, I think there's 2 operating company IOUs, a fairly large one that is still in active negotiations. Is that correct?

Yes.

Okay. And so without naming the counterparty, can you characterize where those discussions stand today and the remaining milestones?

Robust discussions still, and continues to move forward. Sort of stay tuned, I guess, is how I would characterize it.

Great. Well, I guess that's a great place to end it. Chris, thank you again for your time today, and thanks, everybody.

Yes. Thank you. Appreciate it. Thank you.

Hello, and welcome to the Anterix April 2026 Investor Update Call. [Operator Instructions] Please be advised that today's conference is being recorded. It is now my pleasure to introduce Natasha Vecchiarelli.

Thank you, operator, and good morning, everyone. I'm Natasha Vecchiarelli, Vice President of Investor Relations and Corporate Communications, and I welcome you to our April 2026 Investor Update Call. Joining me today are Scott Lang, our President and CEO; Elena Marquez, CFO; and Chris Guttman-McCabe, Chief Regulatory and Communications Officer.

Before we begin, please note that today's discussion may include forward-looking statements regarding our outlook, operations and expected performance. These are based on current assumptions and subject to risks and uncertainties.

We encourage you to review our SEC filings for a detailed discussion, including Forms 10-K and 10-Q, which are available on our website. Please note that we do not undertake any obligation to update forward-looking statements.

With that, I'll turn the call over to Scott.

Thank you, Natasha. Good morning, everyone, and thank you for joining. Since our last earnings call in February, we have reached a powerful milestone that we have been building toward for years. The successful expansion of our spectrum from 6 megahertz to 10 megahertz.

We felt this achievement along with several other meaningful developments warranted a mid-quarter update. This successful milestone could not have come at a better time. It reflects the work we have done to strengthen every part of this company. We are executing from a position of greater focus, stronger fundamentals and a platform already delivering real results in the field.

On February 18, the Federal Communications Commission adopted its report and order, expanding our 900-megahertz spectrum modernization opportunity from 6 megahertz to 10 megahertz, which we believe represents a dramatic increase in the value of our assets for our shareholders and our customers.

Whether you are just now learning about Anterix or you have been with us for some time, the Anterix of today did not happen in isolation. We built this market. Private wireless broadband is a proven technology serving as the critical foundation for enterprise connectivity across the country.

Today, we stand with 10 customers collectively serving more than 53 million people. We have secured more than $400 million in contracted spectrum proceeds to date, barely scratching the surface of the value of our spectrum asset yet to be monetized.

We have also expanded beyond spectrum, creating additional revenue opportunities with a growing portfolio of solutions that are targeted to reduce friction, accelerate deployment and shorten the time to value for our customers. The expansion to 10 megahertz builds on that foundation. It unlocks greater capacity and expands our opportunity.

What we have built for utilities increasingly applies to any industry that depends on secure, private and resilient connectivity. Put simply, we enable control of the systems and devices that power our economy from the edge to space.

As utilities move from evaluation to execution, our ability to execute across a growing range of use cases, becomes a powerful competitive advantage. The FCC's action is not the starting point. It is the accelerate. Anterix was built for this moment and the market is moving decisively with us.

The past 2 weeks have marked a definitive shift in this trajectory by securing a 6 megahertz contract with Texas-New Mexico Power we have expanded our reach to over 93% of the great state of Texas, a near total footprint in a critical energy corridor.

Coupled with our recent milestone contract with NorthWestern Energy for a full 10 megahertz private wireless deployment, these agreements signal we are moving beyond simple adoption toward true industry standardization.

In addition to our new customers, just this week, we partnered with Lynk Global, a leading pioneer of satellite direct-to-device connectivity to file for an experimental license. Together, we will test the integration of Lynk's satellite capabilities with Anterix' 900 megahertz private wireless.

Today, satellite coverage is not yet ubiquitous. We all know that. But that future is coming. By leaning in early and experimenting with technologies like direct-to-device we are positioning ourselves and our customers to take advantage of what's next.

As we said on our last call, we love the position we are in. Today, that position is even stronger. We have the right asset, the right partners, a proven model and a team executing with discipline. And the 10 megahertz now in place, we are accelerating that trajectory.

With that, I will turn it over to Chris.

Well, thank you, Scott, and good morning, everyone. For those of you that know me, you can imagine that I was very excited for this call. This FCC decision is the culmination of roughly 2 years of focused, disciplined and strategic efforts to expand the 900 megahertz band and unlock its full potential for private broadband networks.

For background, in early 2024, a coalition of utilities and industry associations joined Anterix in filing a petition with the FCC, demonstrating that the communications requirements of modernized electric grids and other mission-critical infrastructure demanded additional licensed spectrum capacity.

We moved from the petition to an NPRM and then to a report and order in unprecedented time. The strength of our request is that it was good for the nation, it represented sound spectrum policy, and it was beneficial for critical infrastructure.

A special thanks to Chairman Carr, Commissioners Gomez and trustee, their incredible staff, as well as the staff at the Wireless Bureau for their hard work in getting this so quickly to conclusion.

Our objective with the filing was straightforward. Expand the technical capability of the band while preserving the market-based framework that was established in 2020, ensuring that we could continue to support the next generation of mission-critical networks.

The commission's decision delivers on that objective with the report and order reflecting almost exactly what we had originally proposed. It enables a full 10 megahertz of broadband configuration. That is not incremental bandwidth. It is a super pipe for mission-critical communications, a robust, secure and dedicated foundation that operators can rely on for decades.

And perhaps most importantly, as Scott referenced, this evolution of the band unleashes a wide range of new opportunities highlighted in the recent filing with Lynk. Partnering with Lynk on this experimental license makes complete strategic sense as they are a leading innovator in the effort to connect directly from satellite to existing devices.

We are testing handsets, computers, edge devices, routers and more that can serve a wide range of enterprise sectors. And we're doing that across multiple geographic locations.

As the satellite experiment highlights, the expanded 900 megahertz band unlocks broader strategic optionality. The capacity increase in the global technology alignment can make this spectrum attractive not only to utilities, but to other critical infrastructure and enterprise operators, including industrial IoT networks, transportation and logistic hubs, water and wastewater systems, and quite timely satellite providers.

That optionality opens pathways for partnerships, joint ventures and ecosystem expansion. All areas we are actively exploring to extend the value of our spectrum and to accelerate adoption.

The FCC's decision reinforces the scarcity and strategic value of low-band spectrum. There are no other nationwide spectrum opportunities for private broadband networks with this combination of capacity, reliability and regulatory clarity.

Timing and momentum matter. The FCC's framework provides the certainty required for multi-decade infrastructure investment, market demand, regulatory clarity and technology readiness are converging. That combination is what we are excited about.

And with that, I'll turn it over to Elena.

Thank you, Chris, and good morning, everyone. I'll focus my remarks on how the FCC's expanded 900 megahertz framework together with our recent customer agreements, including Texas-New Mexico Power and NorthWestern Energy enhances the economic profile of Anterix. We are operating from a position of strength.

Our business is built on a proven 6 megahertz model that is continuing to deliver contracted value and cash flows. And now the expansion from 6 megahertz to 10 megahertz increases monetizable spectrum capacity in each eligible county by 67%.

Our 6 megahertz spectrum asset has been implied to have a valuation range of approximately $1.5 billion to over $4 billion based on 600 megahertz and AWS 3 auction pricing. Applying the same methodology, the expanded 10 megahertz allocation implies a range of approximately $2.5 billion to over $7 billion.

Notably, the contracts we have signed have fallen within this range with one deal priced above. The FCC's framework preserves deployment flexibility, allowing customers to scale from partial broadband to full 10 megahertz over time.

Since the February 18 vote, we have seen a clear shift with several customers now focused on securing 10 megahertz configuration as evidenced by our recent contract with NorthWestern Energy. This underscores the immediate value of the expanded band. The order also reaffirms a voluntary clearing process, which Anterix and our competitors helped shape.

Clearing will remain a disciplined market-by-market investment with costs tied to near-term contract opportunities. We continue to view this as a value-creating process that enables contracted proceeds and full utilization of the band.

Given the significant broadening of our opportunities, we will remove our demonstrated intent metric disclosure beginning in the fourth fiscal quarter. Going forward, we will take a more strategic approach to disclosure to preserve negotiation leverage and maintain flexibility as we execute.

At the same time, we will continue evolving our pricing strategy to reflect the value of our asset, supporting strong margins and long-term shareholder returns.

In summary, our financial strength remains grounded in a proven 6 megahertz foundation, with 10 megahertz providing a clear and compelling upside. Our focus is on converting that expanded capacity into long-term contracted value through disciplined clearing investments and value-based pricing. while pursuing multiple avenues for additional revenue growth.

With that, I'll turn it over to Scott.

Thanks, Elena. Before we move to Q&A, I will leave you with this. The expansion to 10 megahertz has meaningfully enhanced the value of the Anterix opportunity. But more importantly, it reinforces what we are building, a bridge that connects any device that consumes, monitors or controls the flow of data.

For the critical infrastructure community, the time is now to secure this valuable digital real estate to serve generations to come.

With that, operator, please open the line for questions.

[Operator Instructions] Our first question comes from the line of George Sutton with Craig-Hallum.

It was very interesting to hear Chairman Carr in his speech relative to your approval, talking about what was almost a national opportunity, much more so than a market-by-market opportunity. Can you talk about -- will we ultimately be able to sign national deals on top of our utility market deals just so we're clear?

George. I appreciate the question. I think that it depends, I think, would be the best answer. I think the way we're contracting our contracts with these utilities, whether it's a sale or whether it's a license, whether they do the 6 megahertz or the way they want the full 10 megahertz, we keep as much optionality in that framework as those come together.

We still have, what, 85% of our market to be monetized. And now we believe more than ever, we have the optionality to be able to form contracts in the best interest of our shareholders, long-term value of our clients and our customers. And so I don't think we're in a position to give you a yes or no to that answer right now, but it's certainly optionality that we're being very mindful of.

So when we talk about the deals that have been in your pipeline for a bit of time, my belief had been some of those were predicated on you getting 10 megahertz approval given that was sort of the future proofing that certain utility customers are looking for. Can you give us a sense of any change in the timing or in the opportunity set as you see it with this approval.

Well, I will tell you, George, that the activity in the pipeline is stronger than I have ever seen it. If I compare where we are today to 1 year ago, it's night and day experience. Some of these clients, their customers that just came to the table -- came to the table very quickly and their sales cycle was quite a bit shorter.

And they also include MOUs kind of letter of intent, memorandum of understanding, however you want to think about that for the add-on services that we've launched that we are now entering into detailed conversations have had to get those ramped up. It helps them make decisions faster because they know what the next step is after they secure spectrum.

And that's when I've talked about or we've talked about eliminating some of the friction in the market, one of the friction points and important one is that they're like, okay, now that we've secured the spectrum, which, by the way, I feel like it's becoming a moral responsibility for these companies to have critical infrastructure and digital cloud that they need to own or license or secure for generations to come of their responsibility to provide power and connectivity to every customer in those geographies.

And so one of the friction points we saw as they got past the spectrum decision, which -- we have 10 customers now and I think the next 10 are going to come a lot faster than these first 10. But now we can offer solutions that show them the first, second, third, fourth step to get moving and reduce that time to value.

So the accelerator program, I'm sure that's on your mind, and will be on the mind of some of the others that have called in. That window is closed. There are still some active deals that are showing very good faith to stay active and negotiate.

And while they stay active and negotiating and working on getting started, we will keep them in it, but there are no new deals coming into accelerating -- the accelerator program, and we are revisiting our pricing as a result of this expansion with 10 megahertz, the scarcity of it, the demand for it and our overall solutions we're now bringing into the market.

Great. And relative to your comment on providing edge to space. I'm curious, when we look at the satellite opportunity, would that ultimately be packaged as a separate product like another Calix, another TowerX in effect?

George, that's a great question. Chris, do you want to take that?

Yes. George, I actually really like how Scott framed this investigation, right? And I'm going to re-read it because I like it. By leaning in early and experimenting with technologies like direct-to-device, we are positioning ourselves and our customers to take advantage of what's next.

So I would say stay tuned for how this plays out. Lynk has been a great partner. We are excited to work with them. We are testing, as we talked about a range of devices that can be used across broad ecosystem of sectors, not just utilities, and we're testing a wide range of geographies directly with and in consultation with the team at Lynk.

How that becomes? When that becomes a product? Stay tuned. But our goal is to ensure for our customers and for our shareholders that we put the best use to this valuable spectrum asset.

And so would it -- could it evolve to a product? Certainly. Could it evolve to a product -- is a joint go-to-market? Certainly. Could it -- there are obviously a wide range of beneficial outcomes. So stay tuned.

Well, I love the recent cadence of a deal a week.

We love it too George.

Your next question comes from the line of Sebastiano Petti with JPMorgan.

Yes, just kind of piggyback on the last comment there. You had the deal a week is great to see, but I mean, anything to contemplate or think through just the relative deal sizes kind of lower or below kind of where you guys had been pricing deals or announcing deals over the last handful of years.

And so maybe this speaks to anything to glean from that? Or is that just kind of speak to the level of complexity around some of these agreements and some of the go-to-market and some of what you're doing behind the scenes from a non-connectivity standpoint to lower the friction. I mean, any kind of update there?

And then relatedly, if we could perhaps -- any update on the actively passive strategic review? Has anything changed? Or has any comment that you can make around whether or not inbounds or activities have changed at all over the last couple of months here as you now have visibility from 3x3 to 5x5? How is the team thinking about The strategic review. Is that still in process?

Okay. Yes. A couple of things there. First of all, I would say no, there's nothing to glean in that we're hitting some nice singles and doubles along the way. We are singularly also very focused on the larger opportunities, which we are active with several that we're as excited about as we ever have been and they continue to progress.

There's a lot of big deals left in the marketplace. As I have mentioned earlier, we've got about 85% of our spectrum asset to monetize. And in the meantime, we've got the team very focused on hitting singles and doubles in between the bigger elephants. And I love it that we actually are getting really good of bringing those deals along and showing that the next set of customers are joining an ecosystem and our existing customers now that they're having even more proof of going from lab to field and demonstrate real value propositions.

I think gives those new clients and new customers the chance to move a lot faster.

And then the other question, I think, was regarding the strategic review. And the strategic review is, I think in the last earnings call, I called it passively active. But there is still activity. There are still people learning about us. We still like the amount of headroom that's in front of us. And so we're not going to say no, we listen. We share our story. People are getting excited about our story and they have gotten excited about our story.

But I feel like you just haven't seen anything yet. So we've got a pretty clear windshield. We've really cleaned up a lot of things. We're running a very tight ship, we're keeping a very close eye on our operating expenses, which will give a broader update on our next earnings call in 6 or 7 weeks, sometime in June. So we like where we're at. And -- but we're certainly not -- we're certainly keeping our door open for firms who want to come in and talk about where we're going and spread the message out as broadly as we can.

Got it. And then quickly following up on my first question about just deal flows. I think -- in November, you talked about discussions or new contract discussions with a fairly large IOU that was part of a 2 operating company organization. Is that -- those conversations continuing? Are those still ongoing?

Yes, there are. we're very pleased with their progress. And the deals we just announced does not include that one.

[Operator Instructions] Your next question comes from the line of Mike Crawford with B. Riley.

So it's great to see the incremental demand coming from the 10 megahertz ruling. Can you frame what kind of clearing costs we should expect in the form of the 600 megahertz auction clean prices that I believe you will pay to acquire any spectrum in any market that you don't have to get to the full 5x5 LTE, maybe as a percent of nation covered or market opportunity?

Thanks, Mike, for the question. I'm going to ask Elena, is going to jump in here.

Thanks Scott. Mike, thanks. Great question. I just want to start with the fact that for about a year now, we have been blending in some of those incremental 2x2 costs as we've anticipated this reporting order kind of come to a successful outcome.

And so we've acquired some number of channels that were beyond just what was necessary for the 3x3 segment. Again, for about a past year or so. And I'm happy to share that we're still well within the original guidance for the 3x3 that we issued, I believe, about 7 years ago, which highlights what an incredible team of experts we have here at Anterix really driving the clearing activities.

As 3x3, 2x2 costs will vary greatly by market, and we are committed to continuing to delivering attractive margins on our contracts for both our shareholders while providing great value for our customers. And in fact, our first 5x5 contract that we've just closed with NorthWestern Energy has met both of those objectives.

Right. But -- in the past, the company gave a total estimated clearing cost number for 3x3. Now -- I know in some markets you already hold 5x5, but in others not. So like what would be the incremental nationwide clearing cost, if, for example, you got up to 5x5 in most places?

Yes. I appreciate it, Mike. We currently don't intend, as I've mentioned in my prepared remarks, to provide kind of very exact guidance on our pipeline or our clearing costs as we want to preserve as much of the negotiation leverage with both our incumbents, which is our clearing cost side and our customers, which is our revenue side, to ensure that we can continue delivering the attractive margins to the shareholders and the great value to the customers.

Yes. And I'll just add, Mike, that we've looked very carefully of the total clearing across the nation in 3x3 and in 5x5. And the costs that we anticipate as we move forward and get deeper into the 85% remaining versus the value and the price that we feel very comfortable with bringing this spectrum to the market has strong -- very strong margins in that regardless if it's 3x3 and regardless if it's 5x5.

So our estimate, I think, is very conservative. And our estimate of the way we monetize that and will monetize that is also very conservative. And even with those conservative perspectives, there is a lot of strong pent-up value there for our shareholders and our customers and our continued growth.

Just to give you an idea, I think Elena in her prepared remarks, referred to this now, the asset value has gone up north of $7 billion from where it was previously. I think was it $4 billion -- $4 billion to $5 billion. It was over $4 billion. And now it's over 7%.

So you can imagine, we've looked hard at the clearing what's out there, and there's some really strong value that's left for us to go address and bring back to the company and bring back to our shareholders and continue to deliver solutions to help these companies, whether it's a utility, whether it's other markets we're looking at, but there's a lot of strong margin there for us to monetize.

Thank you. I'll try one last time. Approximately what percent of the nation do you -- are you already near 5x5 versus markets where you need to acquire additional spectrum to get up there -- to get to that service you...

Chris, do you want to give an estimate around the range of that could be...

Yes. I would say, obviously, there's a major incumbent which are the railroads, and we're having great dialogue with them, and we're excited about where we stand with them. They've been a good partner to date. And if you take them out, I would say, in terms of incumbents, close to more than half of the counties are probably available for licensing.

So probably almost even approaching 2/3. And I know, you know that we respect the question you're asking. And what we're saying is we always try to balance sharing as much detail as we can with our analysts and our investors while strategically pursuing clearing deals and spectrum deals on behalf of our shareholders.

And so when we -- when you hear Elena and Scott talk about being strategic, we are always trying to find the right balance with our analysts and with our shareholders and with disclosure, keeping in mind that our goal and our task is to clear that spectrum and monetize it on behalf of our shareholders.

And so we'll give as much detail as make strategic sense, and that might be different than what we did in the past. But I hope you respect that that's the balance we're trying to strike.

Yes, I can appreciate that. And then just one other question or line of questioning regarding Lynk. So we cover a bunch of space companies and know that Lynk had a failed SPAC with Alex Rodriguez, SLAM and has been kind of searching for capital and might be merging with Omnispace, which has global S-band spectrum but not -- but this is a company with not a lot of capital nor a lot of satellites in operations.

So is this something that you're exploring that might become meaningful 2 or 3 years from now? Or how would you frame your relationship with Lynk?

Yes. Thanks, Mike. Lynk is 1 of the 3 entities that are pursuing and actually was probably one of the earliest if not the earliest to prove the ability to connect directly to devices and not having to modify those devices. They are a technology leader. So we're excited to work with them as a technology leader.

I think there's a lot of evolution yet to come. Scott said it directly, right? Ubiquitous coverage from space is not an absolute reality yet. And the direct-to-device companies, all 3 of them are evolving their constellations and their technology. So we think we're in a great pace -- place with a great company. And we're going to investigate their current, smaller constellation can connect directly through our spectrum to our devices. And so we're going to show that. And then we're going to go from there. This is a test. It's an experimental license, testing that connectivity.

And our next question comes from the line of George Sutton with Craig-Hallum.

I just want to clarify something you said, Scott. So the -- it's rare in covering this company for a long time where we talk about faster deal cycles. But I'm wondering what you believe is causing that? Is you think a part of that could be the end of the accelerator program? Do you think that's coming from regulatory pressure on the utilities? Or is that just now having the access to the 10 megahertz.

George, I appreciate it. Listen, I've been selling and creating innovation and doing some really remarkable things within the utility industry for a long time. And I've seen deals move fast, and I've seen deals take a long time and a lot of times, the larger deals that took time are the most meaningful that really create radical change in an industry.

And I do believe that, that's why some of these larger deals do take time. And I think that as you -- as we take time to work those out, it's good for us and our long-term impact that we can create, and it's good for them. And they do happen, and I believe they will happen.

And I think we're going to have a very good year ahead of us. The newer deals, I think, are moving at a nice clip. We like the pipeline. New deals are coming to the table with this fantastic sales organization that we have 1 year in.

Now I'm really pleased that each week it's, oh, by the way, I've got a new deal that they want to get some pricing on or would we consider this kind of a deal. And they're not only just utilities. And they're not only just their traditional framework, but we're thinking about that.

So I guess -- I don't think there's any silver bullet to why, George, I think it's really -- I think of it as like silver buckshot. There's a lot of things that are coming together and that I think are giving us these tailwinds right now. One is the amount of time and maturity our existing customers have and the proof points that they are able to demonstrate and on a panel not too long ago, they've stood up and said, we have thousands today.

Over time, there are going to be millions of devices and this network is not even hiccuping, of the amount of bandwidth that we're pushing through that network. And so I think with our new prospects, hearing those messages, seeing the proof points, seeing the use cases being demonstrated that is covering 53 million people in the United States, I think, is one.

I think our ability now to work with clients in terms of a full service model and helping them pass just the spectrum decision is another important aspect. I think our continued ability to think strategically about the clearing question that Mike brought up a little earlier. I think, gives them very good comfort that we know how to do this.

I think my first or second earnings call in, I talked about the superpower of this company was around clearing. I go down the hallway here in our office, and I could see clearing strategies. And some of these companies that are inside the places we need to get cleared want to get moved out because we've been so thoughtful about where they will be and why it will be better for them than being placed of where they are, that's eventually going to go away.

And so it's a long answer to your question, George, but there is no really one single thing. I think just across the board, execution and giving our customers comfort in each place and the broader portfolio of the markets that we can go address now.

Thank you. I'll now hand the call back over to President and CEO, Scott Lang for any closing remarks.

I would like to thank everyone for dialing in today. As I said in the prepared remarks, whether you're new to the Anterix story or you've been with us for a number of times. We love where we're at. We like what we're doing a lot. Our customers are in a good spot. I'm really proud of this team that's working very hard 24/7 to build a great company. We're in a great spot.

I think the time to act is now. We're making that very clear. And I think the market is hearing that message very loud and clear as well. So we will look forward to hosting all of you for the next earnings call in June. Stay tuned for the date.

And in the meantime, this weekend for all of you golfers, I hope you enjoy Master Sunday, is one of the finest events that you get to see all year long. And have a great weekend, and we will look forward to talking with you soon and keep you updated on our progress.

Ladies and gentlemen, thank you for participating. This does conclude today's program, and you may now disconnect.

Good day, and thank you for standing by. Welcome to the Anterix Third Quarter Fiscal 2026 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Natasha Vecchiarelli. Ma'am, please go ahead.

Thank you, operator, and good morning, everyone. I'm Natasha Vecchiarelli, Vice President of Investor Relations and Corporate Communications, and I welcome you to our Fiscal 2026 Third Quarter Investor Update Call. Joining me today are Scott Lang, our President and CEO; Elena Marquez, CFO; Chris Guttman-McCabe, Chief Regulatory and Communications Officer; and Heather Martin, Chief Marketing Officer.

Before we begin, please note that our discussion may include forward-looking statements regarding our outlook, operations and expected performance. We do not undertake any obligation to update these statements. Additionally, these statements are based on current assumptions and are subject to risks and uncertainties. For a detailed discussion, we encourage you to review our SEC filings, which are available on our website.

With that, I'll turn the call over to Scott.

Thank you, Natasha, and good morning, everyone. Thank you for joining us. Let me start with this. We are not the same company we were a year ago. We have executed a complete and total refresh of the critical components of this company. We significantly reduced operating expenses while at the same time, strengthening our balance sheet. We successfully launched the Anterix Accelerator program. We introduced new products to remove barriers to deployment and also create the opportunity for annual recurring revenue. We have put in place the senior leadership team to execute on the opportunity in front of us. And our recent brand refresh just unveiled last week at DISTRIBUTECH reflects this evolution, clearly signaling who we are today and where we are headed.

As a result of our efforts, our 900 megahertz broadband spectrum is increasingly viewed not as optional, but as foundational. This is evident in how utilities are planning their networks. In one active deployment, Evergy is supporting roughly 4,500 connected devices today, and that is growing significantly each year with a future line of sight to over 1 million connected devices. This is a real-world example of the scale that utilities are deploying to connect and secure their most critical infrastructure assets.

Evergy is not alone. We are hearing and seeing the same plans from each one of our existing customers. For example, and our booth at DISTRIBUTECH, San Diego Gas & Electric spoke to the scale and meaningful operational impact that our collaboration has delivered, validating the credibility, momentum and trust behind the Anterix platform. CPS, our newest customer, had more than 20 members of their team in our booth, witnessing this collaboration firsthand and reinforcing their excitement to get started. And with our foundational 900 megahertz spectrum now poised to cover more than 93% of the counties in the great state of Texas, one thing is clear. Anterix is the trusted partner for utility private wireless.

With 8 flagship customers that represent $400 million in contract value, we are the market leader. We remain in active negotiations with a wide range of utilities from those serving hundreds of thousands of customers and moving at a faster pace to some of the largest utilities in the country serving millions of customers, where the scale and complexity naturally lengthen decision cycles. We look forward to sharing more on these deals with you soon.

During our last earnings call, we announced 2 important products that we launched to address friction points and challenges as utilities move from spectrum decision to an actual deployment. Every utility that I have spoken with is excited about what these products can do for their company and are learning more. With our success, our spectrum still to monetize and our new solutions, we are making it easier for utilities to move from network design to real deployments, speeding up time to value.

To lead this effort, we recently appointed Ross Spero as our first Chief Product Officer. Ross is already making an impact, working closely with customers and our ecosystem partners to ensure our product road map is grounded in real-world operational needs while increasing the value delivered per megahertz.

Equally significant, we are encouraged by the FCC's plan to consider a report and order on February 18 that would enable broadband deployment across the full 10 megahertz of 900 megahertz band. We appreciate the leadership shown by the FCC and Chairman Carr in advancing policies that recognize the role of private wireless broadband in supporting critical infrastructure and long-term grid modernization.

Taken together, these milestones reflect a company that has done the foundational work and is now moving with total focus and intent. Our strategy is clear. Execution is accelerating, and our confidence has never been higher. We are uniquely positioned to deliver durable long-term value for our customers, our shareholders and the entire utility ecosystem.

With that, I will turn the call over to Elena to discuss our financial performance.

Thanks, Scott. Under Scott's leadership, we're poised for success from a financial standpoint. We have reduced our operating expense run rate by 20%, accelerated the delivery of 900 megahertz broadband spectrum to customers, which resulted in the highest number of licenses we have delivered in a single year, positioning us for our first year ever of positive GAAP net income.

On the commercial front, our CPS Energy agreement is a $13 million contract and represents the first commitment under the Anterix Accelerator program. This agreement includes favorable cash timing with 50% payable upfront and the remaining 50% payable at the end of our fiscal 2027. Importantly, this agreement provides a potential path towards top line revenue as both parties have committed to negotiate a master agreement for additional products and services.

More broadly, our financial position reflects the underlying strength of our spectrum asset and the valuable opportunities it supports. As we expand our offerings to address a broader set of utility use cases and develop additional recurring revenue streams, we continue to believe there is a substantial disconnect between our enterprise value and the significant opportunity that is in front of us.

Over the past year, we have become a leaner, more disciplined organization with a sharper focus on execution, capital efficiency and long-term value creation. Our balance sheet remains strong with approximately $30 million in cash as of December 31. We have 0 debt and over $80 million to be collected during the fourth quarter, including a $6.5 million initial payment from CPS Energy. We now raise our projected cash proceeds for the current fiscal year to a $120 million from the $100 million we previously guided on just last quarter. Our lean OpEx structure and disciplined spend approach provides flexibility, allowing us to take strategic steps towards creating long-term value for our shareholders and customers.

With that, I'll turn it back to Scott.

Thank you, Elena. To close, let me be clear. Anterix is no longer just building the foundation. We are scaling a movement. We have the strategy, the team, the momentum, and we are making meaningful decisive strides every day. The foundation for private wireless is firmly established. Regulatory alignment is advancing, and our engagement with the nation's leading utilities has never been stronger. We are aggressively advancing active commercial negotiations to expand our footprint. We're executing on a product road map that delivers more value to our customers than ever before. And we are maintaining the rigorous financial discipline that ensures our long-term strength. We are focused, we are disciplined, and we are ready. Thank you for your continued support.

Operator, we'll now open the line for questions.

[Operator Instructions] Our first question comes from the line of George Sutton with Craig-Hallum Capital Group.

Scott, to your point of foundational versus optional for your spectrum, I wondered if you could, coming off of NARUC that just occurred, give us a sense of what the public utility commissioners are saying. We're hearing increasing pressure on utilities to modernize their grid given the demand or the data center demand that's out there.

George, good to hear from you again. Yes, in fact, I was at NARUC. I had the opportunity to meet with a few commissioners and specifically talk with them about connectivity, about the importance of connectivity and how they are navigating all of the challenges they're seeing across the industry with large investments being asked for and affordability. It's on their mind. And in fact, one of the commissioners I spoke with is a commissioner that was familiar with this whole movement of connecting devices and the importance of it for utilities going all the way back to my first company, Silver Spring Networks, when we touched so many homes and businesses across the entire United States.

And so this came up, and this was part of the conversation, and it was on their mind, and we enjoyed -- I enjoyed these conversations and connecting with some of these commissioners. They get it. They see this as important. They see this as a way to keep customers informed, safe, secure, enabling utilities to be responsive when the power is out. And the risk of not having that kind of connectivity, the risk of not having that kind of responsiveness and securing the grid is a great risk.

Our message resonates with that audience as well, which I touched on a little bit of the regulation support where I'm not just only referring to the FCC support, but across the board because our message resonates. We are proven, therefore, eliminating this -- utilities often don't like to be first, well, the next utility is not first anymore. The risk aspect of it is easier for regulators to say, "Wow, you have 8 customers out there." You saw it yourself, George, in our booth of the testimonies that are being had and how it's making an impact and lighting up their grid and allowing them to be more responsive to outages and connect their critical infrastructure.

So commissioners are seeing that same message. Our economics are very strong. The nature of how we've proven this technology and it's validated by some of the most leading utilities in the nation is strong. And so I think it was -- I was pleased compared to 1 year ago, right when I first started, there was not this level of conversation about private broadband wireless. And part of that is that now we're seeing utilities with real success stories talking about it, which you witnessed yourself at DISTRIBUTECH, and that is permeating across every aspect of this industry, our customers, our partners and now on the regulation side.

You mentioned Silver Spring. I wonder -- Silver Spring Networks. I wondered if you could discuss because that really became a network effect story, a run the table kind of thing. Can you give us a sense of where you think 900 megahertz fits relative to that network effect concept?

Thank you for that, George. I love the question. I -- there are a lot of flashbacks I get to that journey that we took with Silver Spring Networks. And sharing with the team some of the recollections I had and having been working with Ross Spero for so many years before I started Silver Spring Networks, and he always said he saw so many companies get to where the table was sat ready to go sweep the table and just sweep the opportunities and they don't think big enough and strategic enough.

And at Silver Spring, we did have that kind of network effect where we won on each side of the country and then literally swept the table across the entire nation as utilities started to stand up, talk about it, advocate our brand, what we were doing. We made it easy for them to have successful deployments. What we have here at Anterix is a table that is set that we didn't have 20 years ago when we started Silver Spring. We didn't have 8 customers that were advocating for us. We didn't have a multibillion-dollar pipeline of opportunities. We didn't have a cash on the balance sheet the way we had a cash on the balance sheet now. We had a handful of engineers, didn't have the strength and the depth of an experienced leadership team at the table. And we yet have that now, and we have the tools and we have the opportunity right here in front of us to think big and really be that change agent that utilities are asking us to be.

And so there is -- it's not exactly the same. I like where we are. In fact, I told the team last night, I love where we're at right now. I just absolutely love it. And where we are today versus anything I've seen, and I put it up against any company that you can start the race with the tools and what we have to work with clearly puts us in a strong lead, and we plan to keep it.

I have 1,000 questions, but I'll limit it to just one more, if I could. The products that you're building out, certainly, I got a sense talking to a number of the partners that the opportunities from the product side are actually fairly significant relative to the size of your licenses. Could you just talk about what the product opportunities may end up resulting in from a revenue opportunity?

It's another great question, George. I -- there's probably close to $8 for every dollar that's spent on us that have historically flown around us versus through us. And that is something that with the appointment of a Chief Product Officer, we're changing.

These 2 products that we launched, just to give you an idea, are -- there's one particular utility that we're in deep discussions with that are interested in both products. And it is a significant increase. I don't want to give percentages yet, but I will say it's a significant increase of just the wireless spectrum alone. There's not a lot of risk. They deliver strong margins and they're long term and they're recurring and they're sticky. All the things that you'd love to have that underpins a strong recurring business that's being built as a result of the asset that we have and the success of selling that asset. So it's really -- it's a very synergistic kind of opportunity of products that we're getting pulled into naturally by existing customers and they are being built as a result of what we're selling and what we have as an asset.

And the reason that's important is one of the other things that lessons learned and leadership lessons learned is you don't want to go just chasing everything that moves in order to try to grab revenue here and grab revenue there because it takes the team away from maniacal singular focus on what we are here to do. And these products are naturally connected to everything Anterix has done and the preparations we've made and what I have called before the superpowers in this company of wireless spectrum leadership. And so I like the products, that gives you a little bit of an idea, hopefully, of the kind of dollars that are there and available.

And I guess I'll just dismount off of this question with a final comment. And that is when I use the Evergy as an example, and I threw out the San Diego as an example. And frankly, we could talk about every one of our current customers of what they're doing. For them, they told me in live conversations, this is -- this will help them move faster. They're frustrated that sometimes they don't have the skills and the focus internally to stand these networks up once they make the purchases of spectrum. So the tower access and the SIM management piece of that are first up whenever the spectrum gets purchased. And for them, it reduces complexity. It's good for them. They like it. We make the contracting easy and it's not a lot of risk, and it's really immediately profitable, generating some nice margins.

But it doesn't stop there. It also is -- what we've noticed is helping the prospects that have been at the table that we've been in discussions with that they now know what the second and third step is once they make a spectrum decision. Versus saying, okay, now I've got to figure out the next many steps in this long journey to having millions of devices connected, we make it easier for them. We make it a safer place that they can step on to, not just because of the testimonials and the support they're getting from our large customer base now, but we can make it easy for them to get started to actually getting real results of reducing that time to value is very important to them, and therefore, it's very important to us.

[Operator Instructions] Our next question will come from the line of Mike Crawford with B. Riley Securities.

I'm just thinking about what steps you will be taking if we get as anticipated this favorable report in order for 5x5 next week. And I know in some markets, like, I don't know, maybe Washington, D.C., you might already have close to 10 megahertz of spectrum in the band. But in others, you may have to pay the 600 megahertz auction coin prices to get enough spectrum to enable such a solution. But can you just provide some color on where you have concentrations of spectrum in or not across the U.S.?

I'm going to take the first part of that, and then I'm going to ask Chris to jump in on the second part of that. The first part of that is, yes, we're cautiously optimistic. We're excited about the February 15, in part because we've tried to be responsible of how we've been signaling the progress that we've been making on this for the last several quarters, and we always want to be able to be in a place to underpromise and overdeliver. And so we continue to be enthusiastic, and we're excited about the 18th.

And once the 18th happens, we will be sharing in short order and with our investors and our analysts and the broader community of what that means and how we will plan to go forward now that we have 10 megahertz. So until that happens, we're not going to make a lot of projections on it at this time. But soon after the 18th, when that is completed, we will be able to talk about it in some level of detail.

And I'm going to ask Chris to touch on the second part of that question.

Yes. Thanks, Scott. So I think, obviously, you're spot on in terms of painting a picture that the market-to-market, the reality of clearing an incumbent is different. The beauty of our product offering, and to be quite honest, it's fueled by the beauty of our balance sheet is that we can take our utility customers where they are. Where they are from a spectrum need perspective, where they are from a capital allocation perspective. You've seen it in our contracts. We deliver counties when they want it. We deliver it in a time frame that matches their capital -- access to capital. And we'll apply that to the 5x5 approach.

So Scott has given us the ability -- our balance sheet has given us the ability to be flexible in our product offering. That will continue with 5x5. And the reality is the incumbents and the clearing and the unjust enrichment payments, they all become a portion and a part of our basis, and that helps to inform our price point. And that will continue as we move. Again, I don't want to get too far out of our skis, but we will, as Scott said, come back and have a broader discussion about that after the 18th.

Thank you. And I would like to hand the conference back over to Scott Lang for closing remarks.

Okay. And I would like to say again, thank you all for joining. If you hear a level of excitement, it's because there is a lot of excitement. We love where we're at right now. The opportunity to see the energy and the engagement at one point when we had our customers speaking in the booth, we were probably 4 or 5 deep and 180-degree half circle all the way around the booth of future -- current prospects, future customers, future prospects, existing customers, partners, partners actually wanted to get the microphone and talk about their products and how Anterix has been a good partner.

This week at NARUC being able to talk with commissioners, but also some of our biggest customers were there saying, "Wow, you guys have been such a great partner. We love your technology. It's doing these things for us." And I said, "Hey, will you go -- we need your engagement. We need you to tell those stories with us". Yes, counting us in. Anytime, any place, we want to make sure everybody understands what we're trying to get done. And so we like where we are a lot. We are building a great company. We have the table set to do something that's very significant with an OpEx structure that is being very well managed, and I'm looking at Elena that she manages every single dollar as the best long-term interest of our shareholders and our customers and our company of what we're trying to build.

And I think we've really got a really great team around the table as well to go execute this. And that's what we're singularly focused on, and we look forward to sharing results as we go forward and be in touch on the events over the next couple of weeks. And thank you again for everyone, and have a terrific rest of your day.

This concludes today's conference call. Thank you for participating, and you may now disconnect.

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Anterix Second Quarter Fiscal 2026 Earnings Conference Call. [Operator Instructions]. As a reminder, this conference call is being recorded.

At this time, I would like to turn the conference over to Ms. Natasha Vecchiarelli, Vice President of Investor Relations and Corporate Communications. Ma'am, please begin.

Thank you, operator, and good morning, everyone. I'm Natasha Vecchiarelli, Vice President of Investor Relations and Corporate Communications, and I welcome you to our fiscal 2026 Second Quarter Investor Update Call. Joining me today are Scott Lang, our President and CEO; Elena Marquez, CFO; Chris Guttman-McCabe, Chief Regulatory and Communications Officer; and Ryan Gerbrandt, COO.

Before we begin, please note that today's discussion may include forward-looking statements regarding our outlook, operations and expected performance. These are based on current assumptions and subject to risks and uncertainties. We encourage you to review our SEC filings for a detailed discussion including Forms 10-K and 10-Q, which are available on our website. We do not undertake any obligation to update forward-looking statements.

With that, I'll turn the call over to Scott.

Thanks, Natasha, and good morning, everyone. I appreciate you joining us today. October marked my 1-year anniversary as CEO of Anterix, a year of hard work, and clear progress. I came to Anterix because I believe then, and I have even more conviction now that Anterix is in a unique position to be the first disruptive company in a generation to make an even greater, lasting and profound impact for the entire industry for the next generation.

With a strong customer base and asset value that we believe is 10x our current cost basis, a strong balance sheet, a light OpEx model and expansive industry partnerships, we are well positioned to deliver for the industry and our shareholders. Over the past year, we have strengthened our foundation, deepened customer relationships and positioned Anterix to expand be on spectrum while executing on our long-term strategy. Recent transactions including those led by EchoStar and others, reinforce what we have been saying all along. Spectrum is a strategic asset, not only for utilities but also for a wide range of critical infrastructure and adjacent industries. We see this opportunity clearly and are taking deliberate steps to make our company an even more powerful partner for our customers.

With that said, momentum toward 10 megahertz continues to accelerate, and we remain engaged with the FCC with confidence and a favorable outcome for Anterix, our customers and the federal government. While 6 megahertz already stands up competitively against any available alternative today, our expansion to 10 megahertz, physicians and tariffs as the future true foundation for critical infrastructure modernization, unlocking additional opportunity for the design, build and operation of private broadband networks. Utilities have entrusted Anterix with this mission to lead solutions that are designed to simplify and accelerate deployments that will capture meaningful incremental value for shareholders.

This expansion marks more than the evolution of our spectrum position. It defines our intent to own a larger share of the infrastructure market by being the partner utilities rely upon to connect, secure and modernize the nation's most critical systems. Through our partnerships with leading utilities both those already deploying private networks using our technology and those in our active pipeline, we have seen what works, the unique challenges that utilities face and where they need the most support. That insight is shaping the next chapter of Anterix, expanding beyond spectrum, unlocking incremental opportunity and helping utilities modernize critical infrastructure while driving sustainable growth for our stakeholders.

Building on this foundation, I want to highlight two initiatives where we see significant opportunity to scale. Together, these two offerings represent an annual market opportunity of roughly $1 billion, positioning us to capture a share that we believe will be important for our customers and deliver value for our shareholders. The first initiative I'd like to highlight is TowerX as recently announced. TowerX is a first of its kind tower optimization and access program providing utilities with prenegotiated leasing terms standardized pricing and end-to-end support services. Launched together with one of the nation's largest tower companies, Crown Castle, utilities have access to a broad network of tower infrastructure, including Crown Castle's 40,000-plus sites, enabling faster deployment of 900 megahertz private wireless networks.

While TowerX accelerates the physical deployment of private networks by simplifying site access and infrastructure readiness, our second offering, CatalyX is designed to fuel adoption, helping utilities deploy their private networks faster. CatalyX was created to meet the clear first step needs customers identified for adopting private wireless networks. This streamlined customer-driven solution, enables utilities to connect and manage devices immediately, even before securing spectrum while simplifying operations, reducing friction and ensuring multiple layers of security, built on cutting-edge SIM and eSIM management in collaboration with a top-tier roaming solution partner CatalyX capitalizes on Anterix' deep customer relationships and ecosystem strengths to generate significant customer value and create new growth avenues for the company.

Together, these opportunities position Anterix to accelerate adoption, broaden customer engagement, and lead the transformation of the nation's grid backed by our exclusive 900-megahertz spectrum, proven deployment tools and unmatched industry partnerships. We are empowering utilities to enable connected intelligence, securely, reliably and at scale, delivering real lasting value for our customers, and our shareholders. And finally, before I turn the call over to Elena, I want to give a quick update on new customers. We continue to make strong progress on negotiations with customers that are participating in the Accelerator program and are also pleased to share that we recently were selected after a competitive procurement process to begin contract negotiations on a spectrum opportunity with one operating company that is part of a two operating company organization with the goal to scale across their entire footprint.

With that, Elena, welcome to your first earnings call as our new CFO. The floor is yours.

Thanks, Scott. I'm honored to take on the CFO role at such a transformative time for Anterix. I'm excited to continue partnering with this talented team as we drive our strategy forward, deliver on key initiatives and create meaningful long-term value for our shareholders. As Anterix' new CFO, I want to set the stage for looking at Anterix differently, not as a typical EBITDA or revenue-driven business. Our value is not solely in our quarterly earnings. It is in the strategic spectrum asset that we're actively monetizing and the long-term high-margin cash flows, our 900-megahertz spectrum generates.

This is a balance sheet and free cash flow story. Every spectrum transaction, deployment partnership and network solution we execute enhances value and creates optionality for growth. Digging a bit deeper, today, our spectrum assets are carried on our balance sheet at $325 million, far below their true monetization potential. The 85% of our spectrum yet to be monetized is valued in the range of roughly 1.5 to well over $4 billion based on 600 megahertz and AWS 3 auction prices with all of our current contracts falling in that range. The cement headroom provides us with unmatched pricing power and a path to unlocking billions in additional value from our spectrum asset alone.

Combined with the new low capital-intensive solutions and services Scott outlined, including TowerX and CatalyX. We're expanding and improving our financial profile. We are focused on growing top line revenue and unlocking even greater value. With both of these products, we're taking recognized market leaders who are part of our active ecosystem and partnering with them to capture new revenue. Turning to our results. We closed our second quarter of fiscal 2026 with approximately $39 million in cash and no debt. Looking ahead, we have approximately $114 million in contracted proceeds to be received with over $60 million of proceeds projected to come primarily in the fourth quarter of fiscal year 2026.

Notably, on the contracted proceeds front, during the quarter, we received $29 million in milestone customer payments. Additionally, we continue to successfully deliver spectrum to customers ahead of schedule, thanks to the outstanding coordination between our teams and our utility partners. Through the second quarter of our fiscal year 2026, we received $19 million in accelerated payments, raising our projected cash proceeds for the current fiscal year to $100 million from the $80 million we previously guided on.

Turning to our income statement. We see the benefits of our OpEx reductions and our continued financial discipline, setting the foundation to deliver strong results. Additionally, we recorded a total gain of $71 million in the quarter, consisting of $60 million from the exchange of narrowband to broadband licenses across 99 counties and $11 million from the sale and delivery of broadband licenses in 26 counties. These record high onetime gains demonstrate our continued ability to monetize our spectrum assets and deliver on our commitments to current and prospective customers.

With that, I will turn it back to Scott.

Thank you, Elena. I am betting on us. We are building a new enteric leaner, more focused and positioned to deliver long-term growth and value for customers and shareholders alike. The progress we have made this year is real, and the opportunity ahead is exciting. To reinforce this conviction I invested in Anterix in the open market following last quarter's earnings call, and I plan to be doing that again in the near future. On behalf of our leadership team and the entire Anterix organization, thank you for your continued confidence and support. We will now open the line for questions.

[Operator Instructions]. Our first question or comment comes from the line of Mike Crawford from B. Riley Securities.

A couple of quick questions on the balance sheet. One, in income statement. What are these wireless licenses that you entered into agreement with an incumbent for in June and you have $28 million that you need to pay in. For which licenses?

Elena, do you want to take that?

I'm here. She might be on mute. So there were disclosures regarding this in the last two Qs, but I don't know the number you guys are talking about this.

Sorry, Mike. Give Elena and...

Can you hear us?

Yes.

Okay. Perfect. Apologies, we're on the right line now. Yes, Mike. Thank you for the question. So I'll start and then I'll pass it over to Chris for some additional insight. So yes, you will see in the disclosure that we have a total commitment for this clearing arrangement of about $20 million. So as far as the financial impact for the quarter, we have funded a $14 million escrow for this agreement, and you will also see it in our disclosures. Out of which, only about $5.5 million have been so far expanded with about $8.5 million left, and we expect that likely this will be -- the Escrow should fund this for the rest of the year. There may be -- maybe a slight additional spend, but I will pass it over to Chris for the additional color.

Yes, thanks. Thanks, Elena. Hey, Mike. So this is part of our clearing. This is the clearing of a complex system. It allows us to deliver for an existing customer, but it also unlocks a range of opportunities in that footprint, potentially for other broadband customers. So this is part of our anticipated, sort of clearing pathway and clearing costs and we're still in line and in budget for our clearing estimates that we made multiple years ago, and we're still on path for that.

Okay. And in August, I think you spoke of being 80% through clearing. Is that...

Yes. We're now north of that. We're closer to 85% of incumbents cleared. We could actually go to FCC licensing on 90% of the counties in the United States now. And as we've talked about in the past, we continue to clear both strategically and opportunistically. And we're still right in line. We're still delivering actually, not only on time but early our licenses to our existing customers, and this is all sort of part of that.

Okay. Thank you. And then, just as these licenses get exchanged from narrowband to broadband. You have these kind of noncash -- well, noncash changes on your balance sheet and income statement. And in the past, the company has been reticent to try to put any kind of scale or scope on that are you able to do so now for the rest of this year or in the future altogether?

No. No, Mike. Thanks for asking again. But again, right, we're not able to provide guidance simply because we work right partner with FCC, and it all depends on the timing of licensing and we will not guide on this.

Okay. And then final question is in -- once -- the company in the past has reached contract negotiation stages for a complex system. Is there any time frame around when that process might conclude and lead to actual transaction?

Yes, Mike, it's Chris again. So we've cleared 6 of the 11 complex systems. We're working on the seventh right now. We have a path for each of the remaining complex systems, and we'll move forward with them, again, sort of strategically and opportunistically. So not all 6 and even the seventh are always tied to a near-term spectrum contracting opportunity. It's not always a one-for-one, particularly with the complex systems, we are particularly strategic and opportunistic. And so it's not a one-to-one. So clearing one doesn't necessarily mean that there's a contract falling right behind it. And so we'll continue to tackle them that way. But the reality is it's how we tackle all of the incumbents, including the remaining 15-ish percent that are still in place.

Our next question or comment comes from the line of George Sutton from Craig-Hallum.

Scott, you kind of buried the lead at the end of your prepared comments. So -- and congratulations on moving at least a bit forward with two operator deals. I wondered if you could give us a better sense of where that stands and what kind of population is involved?

Good morning, George. Thank you for that. Well, it's a fairly large IOU. I can't give you the specifics on it at this time under NDA, but it's a fairly large utility. And as we mentioned, it has two large operating groups, one of which is taking the lead to select us, work with us, did that standing up, demonstrate the power of the broadband networks. And then we see that deploying across both operating companies, but it is a nice sizable contract opportunity.

So you mentioned your asset value being 10x your current cost basis, and I'm not sure what you're referring to as your cost basis. Are you referring to the $325 million in your balance sheet? Are you referring to the initial cost of the spectrum. Could you just give us a little more clarity there?

Yes. I another -- Elena, you go first and then I'll weigh in.

Thanks so much, Scott. Yes, so $325 million just refers to the balance sheet. But ultimately, within the balance sheet number, right, there's still some of that broadband conversion. So ultimately, our cost base is even lower than that. So ultimately, we're referring to our -- the market value of our assets being about 10x the balance sheet.

10x the balance sheet. Okay, great. Scott, the Edison Institute Conference was a bit of a buzz. You're basically talking about the utility market for the CEO there saying they're going to spend $1 trillion over the next 5 years. So we're really serving arguably the highest demand market in the country, and they don't have modernized systems. I wondered if you could just talk about having Tom as your CEO, former Edison, CEO and just the broad sort of interest that you're getting relative to these very, very busy utility systems.

Yes. Great question, George. So first of all, I've worked with Tom for 20 years. He's phenomenal. He's just a terrific chair of our company, and spokesperson. He certainly has made a huge impact on the back of his tenure at EEI, which is when I met him back 20 years ago. The connectivity platform, as we've talked about historically and something I've been focused on for a good part of most of my career, is the first and most strategic part of a utilities decision when they think about the long-term nature of the flexibility and the security of the number of devices and the scale of the devices to offer these services to their customers.

And so while the utilities are making investments, large investments around data center builds, new generation. Underneath that are enormous amount of population that demands and will require connectivity and new devices that are coming into the system. So as those devices come into the system, there's a common theme with all of them. How do I get connected to the grid? How do I have real-time secure connectivity to the grid, which leads us right back to a foundational step of building the wireless network infrastructure underneath that. And so I think this has clearly become a board-level conversation, a strategic conversation that our partners and our utilities, and our clients, our existing clients and our prospective clients see that this is something that is critical to their future.

So I think it is continuing to be one of the top of mind, which is why we even see this progress with a new utility progress with the existing customers and their deployment, which is the launch of TowerX and CatalyX and the interest in the strong demand and negotiations we're having with new prospects.

[Operator Instructions]. I'm showing no additional questions in the queue. I would like to turn the conference back over to Mr. Scott Lang for any closing remarks.

I'd like to thank everyone for joining us today, and I'd especially like to call out to our existing customers who have been just absolutely terrific to work with as we've shaped these new initiatives. And I would especially like to call out appreciation of the team who's just working really hard and made the progress that we've made in these last few months, and we look forward to keeping you updated on our progress as we move forward.

Have a great day, everyone, and we will be talking with you again soon. Thank you.

Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day.