Good afternoon, ladies and gentlemen and welcome to the Anterix Second Quarter Fiscal Year 2022 Investor Update. At this time, all participants are in a listen-only mode and the floor will be open for your questions and comments following the presentation. It is now my pleasure to turn the floor over to your host, Natasha Vecchiarelli, Director of Investor Relations and Corporate Communications. Ma'am, the floor is yours.

Good afternoon, everyone and welcome to the Anterix second quarter fiscal year 2022 investor call. Joining me today are Rob Schwartz, our President and CEO; Ryan Gerbrandt, our COO; Tim Gray, our CFO; and Chris Guttman-McCabe, our Chief Regulatory and Communications Officer. Before we begin, please note that during today's presentation, we may make forward-looking statements, either in our prepared remarks or in the associated question-and-answer session. These statements are based on current expectations or beliefs and are subject to certain risks and uncertainties that may cause actual results to differ materially. Risk factors that may impact our performance are identified in our most recent SEC filings. Following our prepared remarks, we will have an operator-led question-and-answer session. In addition, at the conclusion of today's call, a replay and transcript of our discussion will be posted to our Investor Relations website. With that, I'll turn the call over to Anterix' President and CEO, Rob Schwartz.

Thanks, Natasha. Good afternoon, everyone and thanks for joining our Q2 investor call. Today, Tim and I will provide you with an update of the key elements of our continued progress since our last quarterly call, including the signing of our third contract, some additional market indications of our progress and the authorization of a share repurchase program. Following our comments, we'll open it up for Q&A. As you'll see, there's a great deal of activity across the industry that's fueling market momentum and our continued confidence. So let's dive into the details, starting with Evergy. As many of you read on September 20, we announced that we entered into our third 900 megahertz broadband spectrum contracts. Evergy, a Midwest electric utility serving customers in Kansas and Missouri, executed a 20-year spectrum lease agreement with two additional 10-year renewal options. The lease spectrum spans Evergy's 28,000 square mile service territory, covering over 80 counties, including approximately 4 million people. The total prepaid lease payment of $30.2 million for the 20-year initial term was recently paid in full in October. This once again demonstrates the beneficial cash flow trend of the prepayment of our spectrum leases by utilities. Evergy plans to utilize the spectrum to deploy a private wireless network using LTE technology to provide critical broadband communications capabilities in support of their grid modernization initiatives. As highlighted during the recent Investor Day, Evergy intends to deploy smart devices across its service territory to improve system awareness and control, enable a large-scale expansion of secure interconnected devices and is also implementing an advanced distribution management system, or ADMS, to automate outage restoration and optimize grid performance. So now in just the past nine months, we've secured three customer contracts for our spectrum with major investor-owned utilities. Ameren was first out of the gate with leasing our 900 megahertz spectrum, and then San Diego Gas & Electric validated the value of our spectrum proposition. And this Evergy transaction, we believe, now demonstrates the trend line towards the industry-wide adoption of 900 megahertz private LTE. Beyond my excitement in welcoming Evergy to the growing list of utility partners embracing the transformative potential of private LTE, there are several attributes of the deal and their journey that I want to point out. First, as we've previously discussed, broad adoption of private LTE networks will create incremental opportunity and benefits as individual utilities come together, first, locally then regionally and ultimately nationwide. We call this the network of networks. Because Evergy's service territory borders Ameren in 25 Missouri counties, working collectively with these two forward-thinking utilities, we will be able to demonstrate a number of these networking benefits, including the value of interoperable communications as well as the potential for sharing infrastructure along these border areas. It's also worth pointing out that Evergy has one of the complex systems as defined by the FCC. And as we've said previously and now demonstrated twice, we see these complex systems as part of our addressable market. Also worth noting, just like with SDG&E, Evergy did not conduct a 900 megahertz pilot in advance of securing spectrum from Anterix, which is notable in that it further illustrates the multitude of ways we're seeing utilities explore these opportunities. There's a tremendous collaborative discussion occurring across the industry. And appropriately, the visionary first movers are sharing their experiences and lessons learned and helping their peers at other utilities. This industry collaboration is what we had in mind. We made an early commitment to be a facilitator, bringing together key parties to share learnings, build scale and drive innovation. Let me take you through three examples that further demonstrate this growing collaborative movement. One clear example is our successful launch in support of the Utility Broadband Alliance, or UBBA. In fact, I had the great opportunity to attend in person, the live and vibrant UBBA Summit & Plugfest just two weeks ago in St. Louis, hosted by our partner utility Ameren. As many of you know, several years ago, we, at Anterix, along with some of the leading minds of the utility private LTE sector determined that there needed to be a forum to bring together the leaders of the utility industry, complemented by technology companies to collectively solve the big challenges they're facing regarding utility need for broadband. We've had the privilege to collaborate with forward-thinking utilities such as Ameren, Southern Company, NYPA, National Grid as well as technology innovators, including Burns & McDonnell, Cisco, Ericsson, Federated, GE, Motorola, Nokia and Sierra Wireless to name a few. Since then, UBBA has experienced much growth and success, now fully independent, self-funded and utility led. At UBBA's recent sold-out event, over 400 utility sector leaders, including approximately 20 utilities, gathered to participate in a range of educational panels focused on private LTE, utility opportunities to support rural broadband, utility use cases and many more topics. There was also a Plugfest that demonstrated the interoperability of an expanding range and ecosystem of 900 megahertz devices and technologies. The excitement in the room was really palpable and I want to emphasize this important point. As I know it can be difficult in this market to really understand the relevant signs of progress, I'll just say this is one of them. The trajectory of UBBA, the fact that there were 400 people safely participating in the middle of a pandemic all collectively driving for solutions for immediate challenges. This is a direct sign of the collaborative movement underway. Another key sign of industry momentum. In May of this year, we launched the Anterix Active Ecosystem Program to build and grow a collaborative thriving community of companies and innovators, developing solutions, equipment and services to help address utilities' broadband communications needs. This program launched with 37 companies participating and now has over 65, including telecommunications companies, such as Nokia, Motorola Solutions and Ericsson, providing radio access network infrastructure, leading metering players, Itron and Landis+Gyr, chipset providers, like Qualcomm and Sequans; and industry IoT solution providers, such as Cisco and GE. Importantly, also contributing value are innovative companies such as Index AR and Kognitiv Spark, breaking ground and emerging technologies of augmented reality and mixed reality. And so many others, not only supporting all aspects of private networks but also bringing fresh perspectives and energy. There's great interest in this collaborative approach to building the 900 megahertz private LTE marketplace. In addition, as part of our active ecosystem effort, we have recognized that security, both cyber and physical, is key to a robust utility private LTE network. Accordingly, we have aligned our efforts to help coordinate, facilitate and organize security solutions for utility consideration as part of their private LTE platform. As a result, you'll hear us soon announce the launch of the security initiative within our active ecosystem program. Security remains one of the top reasons why utilities are turning to private LTE. And our Anterix goal is to drive further development and integration of solutions in the 900 megahertz offering. We look forward to sharing more with you on this topic soon. I also recently had the privilege of participating in a discussion hosted by the leading industry association for utilities, Edison Electric Institute, or EEI, through their Institute for Electric Innovation. I was honored to join thought leaders, including Ameren Chairman, President and CEO, Warner Baxter; and their Chief Digital Information Officer, Bhavani Amirthalingam; as well as Puget Sound Energy's President and CEO, Mary Kipp. Our engaging discussion focused on the benefit of Ameren's deployment of a private wireless communications network, leveraging our 900 megahertz spectrum. Perhaps most exciting was Warner Baxter echoing our call for collective movement and highlighting the strong partner they found in Anterix. EEI has put together a valuable summary of the event and a link to that can be found on their website as well as ours. We're also seeing continued significant positive momentum from policymakers. We've engaged with lawmakers and their staffs in coordination with some of the leading organizations in the industry, including GridWise Alliance and EEI to support provisions that could facilitate utilities' grid modernization efforts. While the legislation still has not been passed by the House, we are excited that key elements of the Senate-passed bill aligned with our belief that a modern grid needs a modern communications platform. We look forward to working with the agencies, the administration, members of Congress and the utility industry as the legislation progresses. The path and the process that led to the development of this legislation has already enhanced our effort to educate both the industry and policymakers regarding the connection between a modern grid and a modern communication platform. Let me wrap up by saying that all of this collective industry activity from legislation to the UBBA and EEI events and Evergy agreements support the industry movement towards 900 megahertz private LTE and enhance our confidence in meeting our objectives and delivering on our mission of becoming the de facto wireless broadband solution provider for utilities. And with that, I'll turn it over to Tim.

Thanks, Rob and good afternoon, everyone. With three contracts now in place, all of which have provided upfront proceeds, I want to point out some important outcomes from these transactions. First, our balance sheet continues to strengthen as a result with approximately $101 million in cash as of September 30, 2021. I'm also pleased to share that in October, we received an additional $17 million payment of previously contracted proceeds from Ameren and $30 million for the full prepayment of our initial 20-year lease term with Evergy, increasing our cash balance accordingly. Further, we expect receipt of an additional $55 million of contracted proceeds due from SDG&E and Ameren contracts through mid-2026. For the Evergy lease agreement which represents fair market value for their service territory, revenue will be recognized after spectrum is delivered based on straight-line amortization over the initial 20-year term of the lease and we expect to begin revenue recognition this fiscal year. In addition, now that we have delivered spectrum to Ameren, we will begin to recognize revenue in our fiscal third quarter. In our current fiscal year ending March 31, 2022, based on our current sales pipeline progress, we continue to forecast signing contracts with proceeds of over $200 million. Our Evergy contracted proceeds are included in this projected figure. From a cost perspective, we remain on track with our forecast of spending approximately $30 million for clearing efforts per year for the next three years as customer acquisitions ramp up. Through September 30, 2021, we have spent about $12 million on clearing-related efforts this fiscal year. As noted previously, clearing costs can be accelerated or decelerated based on customer demand. In addition, our projected operating expense-related spend is estimated to run between $37 million and $40 million per year through fiscal '24. We have spent roughly $17 million in the first six months of our fiscal year through September 30, 2021. Finally, following the momentum of our business and related cash flows and the confidence in our continued performance, we recently announced that our Board approved a share repurchase program, pursuant to which we are authorized to repurchase up to $50 million of our common stock over a two-year period. We are following through on our plans to return value to shareholders as discussed at our Investor Day in June, even earlier than anticipated. I look forward to reporting on our progress for this program in future quarters. That concludes our prepared remarks. I will now turn it back over to the operator for questions.

Your first question is coming from Chase White. Your line is live.

Thanks. Good afternoon, guys. So a couple of questions here. First of all, is the contract pricing that we saw in the Evergy deal, which was at a pretty good premium to the comp, something that we can expect going forward? And then second question would be, now that you've done deals with two complex systems operators, one that was effectively a sale and one that was effectively a lease. Any color on whether the other utilities that are also complex system operators generally are more interested in a sale or a lease?

Thanks, Chase. Let me start and then Tim feel free to jump in. I think on the question about the Evergy deal and its pricing, we always say our goal is to get to fair market value in these discussions. As you know, price is one of the many terms in these agreements. And obviously, we're happy with the pricing. I think we'll stick with the idea that we'll continue to see prices at fair market value as we move forward. It is important to note that fair market value is really a reference to market conditions and comparables. And as we continue to see year-over-year growth of values of spectrum marked by the historic comparables we talked about of 600 megahertz auction, AWS auctions, AWS-3. But also now as we're seeing more and more demand for spectrum, what went on with C-band, what we're seeing now in Auction 110 of really strong continued demand for all bands and obviously, low band being the scarcest of spectrum, we expect to continue to see growth of values overall of our particular spectrum band. On the second question about comparable complex facilities and the kinds of transactions. We've been consistent in saying on those systems, we were going to be incredibly flexible to get accretive deals done, deals that bring value to our shareholders. As you noted, SDG&E was a sale where Evergy's was a long-term lease. We're going to continue to be within those bounds of flexibility and whatever it takes to good value-accretive deals done on complex systems. The important message and as I think we had these conversations earlier, there were questions of whether those complex systems would be part of our addressable market. And I think the key message here is that they clearly are as we've gotten two of those deals done and continue to focus on all the complex systems as being opportunities for us in our pipeline.

Got it, helpful. Thanks, guys.

Your next question is coming from Mike Crawford with B. Riley. Your line is live.

Hi, this is Katherine Knop on from Mike Crawford. Do you guys believe that the current Auction 110 will have any effect on pricing discussions with prospective customers? Thanks.

Thanks, Katherine. This is Rob. As I mentioned earlier, Auction 110 is another clear illustration of the ongoing increasing demand for spectrum. The trend has been evident over time, with occasional fluctuations, but the overall pattern shows strong and sustained demand for licensed spectrum year after year. While we've observed other auctions featuring different models of shared and unlicensed spectrum, we believe that having licensed private spectrum, like our 900 megahertz, will be essential for many critical business models, which is why we consider 900 to be so valuable.

Thank you.

Your next question is coming from Walter Piecyk with LightShed. Your line is live.

Rob, how you doing? Share repurchase; I guess, you announced this saying 9/30/21. Can you tell us whether you bought any stock back after the quarter ended?

Tim, I'm going to let you take that question.

Yes. Well, we're going to report on that after each quarter. So we're not going to comment on when we're in the marketplace. I don't think that would be best for us or our shareholders. So we'll do the reporting on that on a quarterly basis. But we expect to be active throughout the two-year period, starting with this quarter through the end of the two years that we talked about for the program.

Some companies like Iridium or Cogent seem to prefer picking stocks, discussing the intrinsic value of their shares and similar concepts. Others, however, simply commit to purchasing a set amount each day or a certain percentage of the volume annually. For instance, America Movil had a similar strategy at one point. How do you approach this conceptually? When you mention a timeframe of over two years, will it follow a steady program or be more opportunistic? Are decisions being left to a random banker? I'd appreciate some insight into your thought process here.

Go ahead, Rob.

No. I was going to say that clearly, we have a program authorized and we did so earlier than we originally expected. We're going to deploy capital strategically to drive value to shareholders. And it's going to be opportunistic. So for us, that's really early in our evolution and we're going to continue to hopefully see, as we projected, more contracted proceeds which will give us more capital to be even more aggressive if we choose to do so. But for now, I think sticking to what Tim said is we're going to be revealing more about our strategy in arrears after we actually start executing. We think it's a prudent way to do it for the value to accrete to shareholders.

Basically, it's management, someone in management, that's going to make that decision on...

Yes, we're involved.

Yes, we're absolutely driving it. And it's not, as you said, going to be a random banker or trader that's going to be driving how we're doing it.

Got it. Okay. So CBRS is my next question. There seems to be a lot of momentum regarding various applications for CBRS. We all know that one of your lease customers will utilize it in the network. As this has progressed over the month and you've consulted more with utility companies, what role do you expect to play in integrating CBRS into these networks? Or do you view it as demonstrating that if people need different applications, there are mid-band options they can layer on top of the necessary low-band elements in a layered deployment? Please share your current thoughts on this.

Sure. I think you've probably noticed several areas where we're integrating CBRS as a complementary band in 900, which began with our initial work with SDG&E and other licensed spectrum holders. We're also collaborating with customers planning to utilize unlicensed CBRS spectrum. The advantage of this band is its accessibility to everyone, whether they hold a license or not. We see the 900 band enhancing the reliability of the unlicensed band, allowing users to take greater risks with unlicensed CBRS by having the safety net of 900. We're actively advancing our Anterix Active Ecosystem Program, engaging with partners on integration capabilities for both equipment and applications that utilize both bands. Furthermore, our partnership with Federated Wireless, a leader in the space, is crucial as we assist utilities in adopting their SaaS offerings. This initiative encompasses the integration of various services on the platform along with spectrum management. Ultimately, this isn't just about the spectrum or technology for utilities; it's about addressing the increasing number of use cases. CBRS serves as another resource to help us achieve goals like distributed energy resources, microgrids, solar, and battery storage. We can leverage CBRS for added capacity or various types of coverage where needed. The physics of CBRS differ significantly from 900; it excels in in-building environments and close-knit campuses, while 900 better suits long-distance coverage and building penetration.

Got it, thanks.

Your next question is coming from George Sutton with Craig-Hallum. Your line is live.

Thank you. Ryan has been painfully quiet during this whole call, so I'm going to try to address my question to him. At the Analyst Day, you talked about Phase 1, Phase 2, Phase 3 deals. I wondered if you could give us a sense of movement across the phases. And then also, can you update us on the number of live pilots relative to when we talked at Analyst Day?

Excellent, George. Yes, let's look at the overall pipeline. As we discussed during Investor Day, it's essential to reflect on our opportunity funnel. Currently, we have about $3 billion in market opportunity in the pipeline, which represents roughly 85% of our addressable market. This is crucial as we focus our efforts on moving customers through their evolution. In terms of specifics, I want to highlight Phase 2, where we are seeing significant momentum as they advance. In this phase, about one-third of our pipeline value is situated, totaling around $1 billion. Together with our efforts in Phase 3, this informs our confidence as we approach the end of this year and continue to aim for our fiscal year '24 targets. The mass of opportunities we have is vital for strategically advancing each one. Each utility has unique dynamics that influence their priorities and could either expedite or hinder progress. However, in this aggregation, we aim to enhance our sales team's capabilities. We are seeing positive momentum and maturation across all phases. Currently, we have 14 experimental licenses in place. We are observing progression on several existing pilots, along with new ones. For instance, our engagement with Avangrid continues to move forward. However, I should note the evolving landscape among utilities; some still require pilots while others are moving away from that approach, which is a positive trend overall. Historically, our industry has been criticized for over-piloting as technology evolved. The UBBA plays a critical role in facilitating mass education among utilities so they can learn from each other’s experiences. With LTE technology being standards-based, it ensures consistency in performance across different regions, aiding in adoption efforts. While I expect some utilities will continue to need pilots, others are making progress without them.

All right, that's great. I got you up to your word limit for the call. So Rob, I did want to ask you one other question relative to what you seem to be suggesting relative to the test case of Evergy and Ameren on a network of networks. Can you just be a little more clear at what you're suggesting there? Could that be a test case for the network of networks?

Yes. Every customer we have engaged with has received our close attention. Once they acquire the spectrum, we are invested in their success throughout the design, development, and deployment phases. We have been very involved with Ameren, and now with Evergy operating near those 25 Missouri counties, we are witnessing the potential for collaboration in those adjacent territories. This opens the door for us to create added value for both companies. A straightforward example of this is mutual aid, where utilities assist each other during emergencies, which is a simple yet effective concept. Additionally, we can delve into the intricacies of the LTE network and the various service layers that can be integrated, showcasing their value first to our initial customers. This approach lays the groundwork for a scalable model that we can expand regionally and eventually nationally. This is the foundation of our vision for a network of networks, presenting a significant opportunity for us to demonstrate this capability through our partnerships.

Got you, super. Thanks, guys. Appreciate it.

Thank you, George.

We have no further questions from the lines at this time. I would now like to turn the floor back to Rob Schwartz for closing remarks.

Thank you, Catherine. And thank you all for joining us today. And we look forward to our continued discussions. And always feel free to reach out to us with any additional questions. Have a great day.

Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.