• Expansion Agreement: $13.5 million expansion agreement with the Lower Colorado River Authority.
• Cost Reductions: Identified cost reductions of approximately 20% annually.
• Share Repurchase Program: Returned approximately $4 million to shareholders in the third quarter.
• Cash Position: Incremental cash increase of $34 million received at the end of January.
• Cash on Balance Sheet: Approximately $29 million as of December 31, 2024.
• Uncollected Contract Proceeds: Approximately $150 million, with $80 million expected by March 31, 2026.
• Operational Expense Reduction: 20% reduction from annualized run rate from the second quarter.
• Share Repurchase Year-to-Date: $6.5 million returned to shareholders in fiscal '25, including $4.4 million in the third quarter.

• Warning! GuruFocus has detected 3 Warning Signs with ATEX.

Release Date: February 12, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Anterix Inc (NASDAQ:ATEX) announced a $13.5 million expansion agreement with the Lower Colorado River Authority, extending broadband coverage to 102 counties in Texas.
• The company has achieved significant scale, covering 93% of Texas counties with its 900 MHz broadband spectrum.
• Anterix Inc (NASDAQ:ATEX) has identified key areas for cost reductions, achieving approximately 20% annual savings without compromising operational efficiency.
• The company returned roughly $4 million to shareholders through a share repurchase program, reflecting confidence in its business strategy.
• Anterix Inc (NASDAQ:ATEX) is leading the market in private LTE deployments, with 7 customers deploying across 15 states, showcasing its strong ecosystem of 120+ companies.

Negative Points

• The company's equity value has not significantly changed despite moving closer to a 5x5 MHz offering, suggesting a potential undervaluation.
• Utilities, a key market for Anterix Inc (NASDAQ:ATEX), are traditionally slow-moving, which may impact the speed of adoption for new initiatives.
• The strategic review process, while potentially beneficial, introduces uncertainty regarding future partnerships or changes in business strategy.
• There is still work to be done to move the FCC's proposed rulemaking for the 5x5 MHz expansion to a report and order, which could delay potential benefits.
• The company faces challenges in pricing and structuring deals to make the transition to 5x5 MHz attractive and feasible for utilities.

Q & A Highlights

Q: With the move from 3x3 to 5x5 MHz, your equity value hasn't changed much. Is the interest from outside parties due to the perceived undervaluation of your spectrum? A: Scott Lang, President and CEO, explained that the interest stems from the company's large ecosystem, the transition of customers from lab to field, and the pipeline of opportunities. The 5x5 MHz expansion is seen as an additional advantage, even though the current 3x3 MHz satisfies current demands. The interest comes from both financial and strategic entities, recognizing Anterix's market leadership and financial strength.

Q: What motivates utilities to move faster with your industry initiative, given their traditionally slow pace? A: Scott Lang noted that the transition from lab to field has demonstrated the performance and use cases of their spectrum, creating urgency among utilities. The initiative aims to make it easier for utilities to adopt the technology by being aggressive on pricing and offering a frictionless transition.

Q: How long does it typically take to move from rate case approval to spectrum licensing? A: Brian McAuley, Chairman Emeritus, stated that there is no single timeline as it varies by utility. Regulatory support is a significant step, and utilities can take different paths based on their options and procurement processes.

Q: Can you provide goalposts for pricing your spectrum, considering previous auctions and current market conditions? A: Christopher Guttman-Mccabe, Chief Regulatory and Communications Officer, mentioned that previous auctions like AWS 3 and 600 MHz serve as benchmarks. Anterix has room to be creative with pricing, given its current market cap and the potential value to shareholders and utilities.

Q: For counties with existing 3x3 MHz deals, will customers automatically get access to 5x5 MHz, and will there be incremental payments? A: Scott Lang indicated that there would likely be demand for the 5x5 MHz for strategic reasons, and there would be negotiations for its value. The pricing specifics will be determined when the time comes.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.