Financial Overview of NextNav Corporation

NextNav Corporation is the market leader in delivering resilient, next-generation positioning, navigation and timing (PNT) solutions. The company’s technology is designed to overcome the limitations and vulnerabilities of the existing global positioning system (GPS) and global navigation satellite systems (GNSS).

Revenue and Profit Trends

In the fiscal year ended December 31, 2024, NextNav generated $5.7 million in revenue, an increase of 47% from the prior year. This growth was driven by an increase in service revenue from technology and services contracts with government and commercial customers. However, the company continues to operate at a significant loss, reporting a net loss of $101.9 million for the year, compared to a net loss of $71.7 million in 2023.

Expenses

NextNav’s operating expenses totaled $65.8 million in 2024, down slightly from $67.4 million in 2023. The largest expense categories were:

• Cost of Goods Sold (COGS): $10.8 million in 2024, down 15% from 2023. The decrease was primarily due to lower stock-based compensation, software license expenses, outside consulting costs, and maintenance/operational costs, partially offset by increases in payroll, site rent, and non-recurring engineering services.

• Research and Development: $16.2 million in 2024, down 17% from 2023. The decrease was driven by lower stock-based compensation expenses.

• Selling, General and Administrative: $33.5 million in 2024, up 10% from 2023. The increase was due to the growth of the business, pursuit of regulatory and technology initiatives, and costs associated with being a public company.

Strengths and Weaknesses

Strengths:

• Valuable spectrum licenses, including a contiguous 8 MHz block of 900 MHz M-LMS spectrum covering over 90% of the U.S. population
• Extensive patent portfolio of over 145 patents related to PNT systems and services
• Standardized technologies with the 3rd Generation Partnership Project (3GPP), a global telecommunications standards-setting body
• Successful launch of Pinnacle solution in partnership with AT&T, used for public safety applications
• TerraPoiNT system received highest scores in testing by the U.S. Department of Transportation for potential PNT backup solutions

Weaknesses:

• Significant and growing net losses, with a net loss of $101.9 million in 2024
• Heavy reliance on outside funding and debt financing to support operations
• Limited revenue generation, with only $5.7 million in revenue in 2024
• Highly regulated industry with ongoing FCC review process for spectrum reconfiguration

Outlook and Future Prospects

NextNav is focused on evolving its technology platform to a 5G-based “NextGen” solution, which it believes will significantly improve the efficiency, flexibility, and scale of its operations. The company has filed a Petition with the FCC to reconfigure and update the rules governing the Lower 900 MHz band, which it believes will enable a high-quality terrestrial PNT network to complement and back up GPS, address a critical national security vulnerability, and add 5G broadband capacity.

The company’s success in this regulatory process will be crucial to its future prospects. If approved, NextGen could allow NextNav to partner with 5G network operators to integrate its spectrum and deliver both complementary PNT services and additional broadband capacity. However, the regulatory process is ongoing, and there is no guarantee of a favorable outcome.

In the meantime, NextNav continues to generate revenue from its existing Pinnacle and TerraPoiNT solutions, which provide PNT services to government, public safety, and commercial customers. The company believes there is significant demand for resilient PNT solutions to complement and back up GPS, which is vulnerable to disruption.

Overall, NextNav faces both significant opportunities and challenges. Its technology and spectrum assets have the potential to address critical national infrastructure needs, but the company must navigate a complex regulatory environment and continue to invest heavily in research and development to bring its NextGen platform to market. Investors will be closely watching the company’s progress on the regulatory front and its ability to translate its technical capabilities into sustainable revenue and profitability.