Q3 2021 Spire Global Inc Earnings Call
Please standby.
Good day, ladies and gentlemen, and welcome to the spire Global third quarter 2021 earnings Conference call.
All lines have been placed in a listen only mode and the floor will be opened for questions and comments following the presentation.
If you should require assistance throughout the conference. Please press Star then zero on your telephone keypad reach a live operator.
At this time it is my pleasure to turn the floor over to your host head of communications and Investor Relations Hillary Jaffe ma'am the floor is yours.
Thank you Hello, everyone and thanks for joining us for our third quarter conference call.
Our results press release, and SEC filings can be found on our IR website at IR dot spire dotcom.
A replay of today's call will also be made available.
With me on the call today is Peter plots are CEO and Tom Crowley CFO.
As a reminder, our commentary today will include non-GAAP items reconciliations between our GAAP and non-GAAP results as well as our guidance can be found in our earnings press release.
Some of our comments today may contain forward looking statements that are subject to risks uncertainties and assumptions in particular, our expectations around the impact of the pending acquisition results of operations and financial conditions are uncertain and subject to change.
Should any of these materialize or should our assumptions prove to be incorrect actual company results could differ materially from these forward looking statements.
A description of these risks uncertainties and assumptions and other factors that could affect our financial results is included in our SEC filings with that let me hand, the call over to Peter.
Thank you Hillary.
Good afternoon, and thank you for joining us today I am truly excited to be sharing with you. The team's progress along our four growth pillars, and our mission to leverage space to solve problems on Earth.
This has been a very busy quarter, where we became a public company.
Listed on the New York Stock Exchange and signed a definitive agreement to acquire executor as a leader in the maritime data space with over 150 customers and over $18 million and last 12 months' revenue all while growing our ear our solution customers, 69% year over year.
This would not have been possible without our exceptional team of over 330 professionals from over 40 different countries that is relentlessly executing with a true sense of urgency every single day.
And I'm truly fortunate to be part of such a globally diverse collaborative and dedicated team and I want to take this opportunity to really my heartfelt thanks to each and every one of them.
Winning is a team sport SBC and we would not be here today without you. So thank you.
Since we started the company in 2012, we had a simple yet powerful mission.
To leverage data from space too so global problems on Earth and today spire owns and operates it was largest multipurpose satellite constellation.
Fully deploy constellation and vertically integrated data platform provides our over 200 customers with unique and comprehensive data and analytics assisting them in fulfilling their emissions and solving their business problems beat Port operations command.
City trading route optimization, whether risk mitigation renewable energy production and logistics planning with hundreds of other use cases.
Our customers rely on our data to help them solve some of their most vexing business challenges and grow their business faster more profitably and more sustainably.
Serving 225 global air solution customers out of an estimated potential target pool of over 200000 customers. We believe we have barely scratched the surface of this estimated $90 billion a year market opportunity.
Adoption of data and analytics firm space has been increasing rapidly by both the commercial and the government sector.
And we share that conviction from a prominent analyst that in the not too distant future space My touch and potentially disrupt every industry in the same way that computers and the internet have thanks to the transformation from the mainframe computer to the P. C.
Today, there is a very analogous transformation happening in space inspire sits at the very crest off this massive wave of disruption leveraging space to solve problems on earth.
And at its core this is powered by constellations of small satellites, whose capabilities increase exponentially every year and the increase in launch opportunities and we are extremely excited about our role in this global transformation and how it impacts industries and <unk>.
Manatee.
Buyers language here of course starts with our cutting edge space technology, where we continue to innovate and invest.
In July of this year, we successfully completed our 31st launch campaign, which put to Lima satellites into orbit with new optical I S L capabilities or into satellite links.
The successful incorporation of ISR capabilities will have a meaningful impact on the next generation of our constellation, enabling more secure data transfers, reducing data latency and expanding the data and solution that we are able to offer our current and future customers.
We also invested in all of software.
Leveraging the software defined nature of our constellation we increased state of production across the board and in particular reached 20000 R. O profiles, a world leading amount of crucial whether data affording our customers more accurate weather predictions.
Next I wanted to spend a minute and highlight again spires four growth pillars.
These are the four core strategies that'd be execute against to drive our business growth over the next several years.
They are number one invest in sales marketing and product number two expand into new geographies and use cases number three expand the capabilities of our data and analytics and four executing strategic acquisitions to strengthen.
And our market position.
And during the third quarter, we made great progress on each of these pillars and on today's call I'd like to focus on two pillars specifically.
First on executing strategic acquisitions to strengthen our market position.
On September 14, we signed a definitive agreement to acquire <unk> sector as a leading provider of global maritime data.
We expect the transaction to close in late Q4, and if not in Q4 that no later than in Q1 'twenty to 'twenty two.
Exactly so it's approximately 150 customers across numerous countries to whom we then would be able to offer additional spire solutions.
And as mentioned in exactly this latest earnings release, the last 12 months revenue was $18 $2 million and their fiscal year to date year over year growth rate was 30%.
Once closed we believe this transaction will add meaningfully to our customer base and ear are as we head into 2022, strengthening our leadership position in the maritime data and analytics market.
And this is a market opportunity estimated to be $4 billion annually grew.
Boeing at a low teens CAGR over the next five years.
Howard body did utilization off the global maritime economy.
Even combined our penetration in this market would still be very small affording us tremendous upside for gains in market share based on our growing because I should position.
The second pillar that I don't want to cover is expanding the use cases for our data and analytics.
One of spy is core datasets isn't weather.
Well, we produce more radio occultation R. R O data for temperature pressure and moisture than anyone else public or private.
They stayed in general drive so it was 70% of global weather forecast accuracy. According to a recent analysis by eastern double U S. The European centre for medium range weather forecasts.
They also started and documented the highly beneficial nature of our O data in particular to global weather forecast accuracy.
And based on an intensive testing and trial period.
Spire was able to win a contract covering up to three years with humid set to provide our R O data.
This is a first of its kind for that.
Now Eumetsat the European organization for the exploitation of Metro logical satellites is in many aspects of the European sister organization to NOAA, the National Oceanic atmospheric administration from the U S.
Inspire was also able to win a follow on subscription contract with Noah for our R O data.
With these two contracts combined spires Aro weather data is now used by public agencies, providing weather predictions to protect lives and prevent the loss of property for almost a billion people and almost half of global GDP.
With the impact of climate change being increasingly found all across the world from extreme floods in Europe to freezing temperatures in Texas frequent hurricanes and blistering wildfires aspire is truly proud to be able to collaborate with our customers to help humanity adapt.
Climate change.
Before I turn it over to Tom who will discuss our Q3 financial results and provide an update on our Q4 and fiscal year 2021 guidance I want to reiterate our confidence expires on the cusp of an enormous opportunity in the market for space based data and analytics.
The market should they might be somewhat nascent the speed of development and the adoption of new applications is accelerating.
We believe that we use ahead of the competition without fully deployed constellation a proprietary ground station network and our integrated data and analytics offering.
Serving over 200 customers today and sold almost 400, we have tremendous resilience in the business.
As we focus and execute on our four growth pillars, we expect to increase our market share in this vast and growing market opportunity drive significant growth in revenue and ultimately help our customers across the world grow more profitably and more sustainably.
And with that I'll turn it over to Tom.
Thank you Peter before I kick off a review of our third quarter results and our outlook for Q4 and fiscal year 2021 I would like to point you to our earnings release sent over the wire today after market closed and the release you will find both the detail of our GAAP to non-GAAP reconciliation and our outlook for Q4 and fiscal year 2021.
Q3, 2021 was a solid quarter for us on the top line with the revenue increasing 33% year over year to $9 6 million and air are increasing 51% year over year to $45 $2 million with they are representing a very nice sequential jump of $8 6 million versus Q2, 2021 and then there are of 36.
Point $6 million.
The year over year increase in revenue was driven by the addition of 92 net new air solution customers versus the prior period, a 69% increase highlighting our focus during the second half of the year on adding new customers.
Our last 12 months net retention rate of 119%.
Q3, net retention rate was 111% as mentioned earlier in the year. This reflects a lower rate compared to the rates in 2020 due to delays in existing customers buying decisions and some non subscription based business taking longer to deliver due to launch delays and customer work stream delays.
Based on the concentration of new versus existing customer activity and having a larger overall base. We expect net retention rate to generally be lower than what we had in 2020.
As this rate can fluctuate per quarter ranges are likely to be between 100% to 135% depending on the quarter.
We ended Q3 with 200 and twenty-five air solution customers, representing a 69% year over year growth from the prior year period, we track Air solution customers is a key metric a good indicator of growth in our reoccurring revenue base.
We define and they are solution customer as an entity that has a maritime aviation weather where space services contract with us.
That is either a binding and renewable agreement for our subscription solutions or a binding multiyear contract as the measurement date.
We count every solution the customer has with us separately.
Two of these new air solution customers in the third quarter represented deal values of over seven figures.
We saw strength in the third quarter across all four of our solutions are weather solutions saw the highest increase in ending are our year over year with key wins, such as <unk> and Noah that Peter had mentioned earlier.
<unk> services also had a strong quarter with solid traction in year over year AOR growth.
Space services bookings benefited not only from the growth within existing customers, but also from the addition of new space service customers like Mariota, a leader in space based provision of Iot services.
Q3, GAAP gross profit was $4 2 million and non-GAAP gross profit, which excludes stock based compensation was $4 3 million a decrease of 11% year over year.
The decrease year over year was impacted by the timing of revenue recognition on several non subscription based contracts.
And our decision to accelerate certain technology investments to support future revenue growth.
We expect gross margins to return to the range of 59% to 65% in the fourth quarter as we continue to scale revenue relative to our level of investment.
Q3, GAAP operating loss was $17 4 million and non-GAAP operating loss, which excludes stock based compensation merger and acquisition related expenses and other unusual one time cost was $13 6 million.
Our Q3 GAAP operating loss was impacted by a number of large onetime cost related to our merger with Nab site and other financing related transactions. In addition to general increases in expenditures to support the rapid growth of our business.
The non-GAAP increase in operating loss of $8 3 million year over year was driven by increased spend on sales and marketing to align with our 2021 growth plan further funding of our research and development teams to enhance our solution offerings and customer datasets and increased cost and general and administrative to support our transition to being a public company.
EBITDA was negative $28 million in the third quarter, and adjusted EBITDA, which excludes stock based compensation merger and acquisition related expenses and other unusual onetime costs change in fair market value of warrant liabilities and other income or expense net was negative $11 5 million for the quarter.
Q3, GAAP net loss was $32 7 million and our Q3, non-GAAP net loss, which excludes stock based compensation merger and acquisition related expenses. Other unusual onetime costs change in fair value of warrant liabilities and other income or expense net was $16 3 million Q3, GAAP net loss.
Loss per share was 49 based on the basic weighted average share count of approximately $67 3 million shares and our Q3 non-GAAP net loss per share, which exclude exclude stock based compensation merger and acquisition related expenses other unusual onetime costs change in fair value of warrant liabilities and other income.
Our expense net was 24 cents.
Lastly, we ended the quarter with cash cash equivalents and restricted cash of $259 million.
We anticipate using approximately $110 million of cash to complete the exact or a transaction and in Q4, we'll use an additional approximate $20 million of cash to cancel outstanding warrants to purchase approximately one 6 million shares pursuant to the warrant agreement with the European investment Bank previously described in our public filings.
Now I'll provide guidance for the fourth quarter as we expect total revenue to range between $11 6 million and $13 6 million.
The sequential increase in Q4 revenue reflects the incremental <unk> of $8 6 million from Q2 fiscal year 'twenty, one to Q3 fiscal year 'twenty, one along with Q4 fiscal year 'twenty, one having just over 1 million more of potential non subscription based revenue than Q3 fiscal year 'twenty one.
We anticipate Q4, non-GAAP gross profit to be between $6 8 million and $8 8 million.
Q4, non-GAAP gross profit primarily reflects the increase in the expected Q4 revenue.
Non-GAAP operating loss for Q4 is expected to range between $15 9 million and $11 8 million.
Our non-GAAP operating loss guidance reflects increased hiring expenses and costs from operating as a public company.
We expect EBITDA to range from negative $15 4 million to negative $12 4 million and adjusted EBITDA to range from negative $13 3 million to negative $10 3 million.
Non-GAAP loss per share for Q4 is expected to range from negative 14 to negative <unk> 11 cents and assumes a basic weighted average share count of approximately $133 7 million shares.
Now turning to the outlook for the full fiscal year. We're on track to hit our previously issued guidance for total revenue to range between 40 million and $42 million.
We are also maintaining our guidance for year, ending <unk> and year, ending AOR solution customers.
We expect year, ending IRR to range between $48 4 million and $52 million in the year, ending AOR solution customers to range between 240 to 252.
We expect fiscal year 2021, non-GAAP gross profit to be between $22 9 million and $24 9 million.
This is a reduction from our previously issued guidance and as I explained earlier in the call is primarily the result of our decision to accelerate the investment in our infrastructure to support future revenue growth. Despite the reduction in guidance and non-GAAP gross profit we are maintaining our previously issued non-GAAP operating loss guidance range for the full year of 48.
$5 million and $44 4 million.
We expect full year EBITDA to range from negative $79 8 million to negative $76 8 million the change from prior guidance, primarily driven by the significant increase in the change in the fair market value of warrant liabilities and stock based compensation that resulted from our merger with Nab site.
Adjusted EBITDA is expected to be between negative $40 3 million and negative $37 3 million a reduction from our previously issued guidance.
This is a result of both our decision to accelerate investment in our infrastructure to support future revenue growth and certain general and administrative expenses related to operating as a public company being higher than expected.
Non-GAAP loss per share for fiscal year 2021 is expected to range from negative 99 cents to negative 92 cents, which assumes a basic weighted average share count of approximately $61 7 million shares.
As a reminder, our guidance excludes any potential impact from the exact or a transaction that could close in Q4. According to exact Earth earnings release. Their last 12 months revenue was $18 2 million and their fiscal year to date year over year growth rate was 30%.
Once closed the transaction would add quite meaningfully to spire is there are as well as about 150 customers the.
The close of the transaction will also add approximately five 2 million shares to a basic and fully diluted share counts.
In summary, as previously stated by Peter we continue to deliver solid growth in revenue <unk> solution customers by relentlessly executing on our four growth pillars, our technology leadership delivers innovative solutions that position us well for continued capture of market share.
And with that I'd like to open the call up for questions.
Thank you the floor is now open for questions. If you do have a question. Please press Star then one on your telephone keypad to join the queue. If youre using a speakerphone. Please pick up your handset to provide the best quality again, ladies and gentlemen, if you do have a question or comment. Please press Star then one on your telephone keypad at this time.
And we take our first question from Jeff Mueller Baird. Please go ahead.
Yes. Thank you would love any additional detail you can provide on the <unk>.
Our our progression obviously, the nice jump in you called out the two sides of the bowl.
Wins, but it sounds like it's probably broader than that and the.
The Q4 guidance implies a fairly nice further sequential increase so we're just love any additional color on the breadth of the strength and the pipeline beyond the two big ones that you discussed.
Sure.
I'll start with the first one with the AOR and the sequential jump of $8 6 million from Q2 to Q3.
As you mentioned, we did land some really good wins within the quarter, we had customers like <unk> that are mariota in hand, com as new wins and not only do we have some really good new wins during the quarter, we had some upselling with existing customers with NASA and Noah. So we did see some really positive activity in all of those fronts on from.
<unk> from new and also on the up selling front.
We added 71, net new <unk> solution customers from the beginning of the year to Q3 and.
And we had 69% on a year over year standpoint for our <unk> solution customers. So heavy focus on that front.
And then on the accelerated investment.
To support future revenue growth I understand that you just raised a lot of capital to do just that but.
I guess you had a business plan that was already assuming increased investment and now you're also acquiring <unk>.
Exact earth, and Youre going to onboard head count and other capabilities from that so.
Can you just help me understand relative to the prior growth plan that investment plan, but what are you incrementally spend to garner invest again.
So that two areas and <unk> been investing in one of them is in the is in the pure technology side right, where the optical into satellite links is really a technology that we are quite excited about of what he can bring to our customers.
And and that's certainly our are investments that we had to take their the other one is really related to a dramatic change in.
Availability of resources to to run a public company.
Roughly the middle of the year, we had an over 190% increase in ipos in the U S year over year.
So what that means is that it really stressed the the labor market and the services market beta at content speed that lawyers and B that the financial professionals to give you. Just one small example, you know they they are their exercise and and officers insurance.
Came in I think it's over 30% higher than what the original quote was because the market was so stressed but is massive increase in ipos and investing in the infrastructure.
Being a public company is the other element, where we have invested and had to contest with that increase in the cost base due to the high increase off of Ipos.
Got it and then last one for me before I hand, it over.
So youre constellation as I understand it is full coverage in.
The frequency that you need.
The exact earth capabilities can you just help me understand is there some reason why.
The data aggregation or something about their capabilities.
Complementary or should there also be expense synergies at some point in addition to the cross selling opportunity.
The onboarding of talent that head count and everything else that comes with the acquisition.
So the exact earth transaction once it closes really supports all four of our girls pillars.
It expands our investment in sales and marketing and bringing on a highly experienced sales force and our marketing team.
<unk> has been operating in the market for maritime data analytics and on the product side. It expands our capability to cheat two fold number one it affords us a lower latency data.
And number two.
The transaction will come with a about a 10 year database off off maritime traction data that will allow us to drive more value for our customers with more efficient and effective use of AI and machine learning.
This transaction also of course, you know Ah.
It forces with the additional customers that that Tom had mentioned earlier over 150 that we can offer our additional products and services too and then of course it brings a certain amount of revenue.
Tom mentioned over $18 million year to date last 12 months' revenue that had been growing at 30% over the last 12 months also year to date, which will meaningfully add to our a R. R. So it really supports all four of our growth pillars, which is why we are engaged in the definitive agreement.
And sometime on September of this quarter.
Alright, Thank you very much.
Our next question or comment comes from the line of Josh Sullivan with the benchmark company. Please go ahead.
Hey, good evening.
Can you hear me, yes, yes, Josh.
Yeah, just to put a finer point on the on that last question just as far as the sales force build out here is with exactly.
What they bring on the marketing and sales front is there any way to kind of just help us think about what the sales force needs would've been versus what they will be with exact or just how are you modeling that going forward.
Of course.
So maritime is one of our four segments.
And with the transaction once it closes.
It's quite meaningfully to our global coverage both in the direct sales force that has done this for many years as well as through distributors, which exact threats also has for many years.
So it wouldn't impact our our investment in sales in our other markets aviation weather space services, but it certainly augments our coverage globally and our sales force in the Maritime segment.
Quite substantially.
And then on the aviation market as you know markets are reopening here are you seeing an increase in demand out of.
Global airline activity.
We do we absolutely do see.
Yes, the markets are opening but the cost pressure on the industry is still pretty high and while the aviation industry in general we feel is a bit further along in the digitalization of its economy as compared to for example, the maritime industry.
Those cost precious still drive adoption of data and analytics at an accelerated pace and we are definitely a beneficiary of that trend.
And then where you represented.
COPD 26 specific engagements there that you can you can see is up for us or conversations that you've had coming out of those meetings.
I just had two meetings today about about cop 26.
Being right there in Glasgow, and having a F F focus on weather and climate change.
Clearly that's been a number of engagements in conversations that we were paid off in all honestly.
I don't have all of them on top of my off of my head right now we'd be happy to follow up with the detailed engagements and some of the potential follow ups that have come out of our engagement and cop 26.
And then just one on <unk> I'm, saying that right relationship as far as the ownership that came with <unk> and then I believe you mentioned there are also a customer can you just help us understand how that relationship moves forward.
Mario There is a fantastic customer and we are extremely focused on making them very successful that that's really the focus yes, we'll get a front row seat in the Iot from space, our industry as well, but as a company that focus is clearly and definitively on making the customer.
Successful by delivering our service to them.
Thank you for the question.
Our next question or comment comes from the line of Weston Twigg with Piper Sandler. Please go ahead.
Hey, Thanks for taking my question.
You had really good traction this quarter and I'm just wondering if you could help translate that into your visibility or revenue growth.
<unk> through next year.
I haven't been using the long term model there was a priest back model, but would love some visibility into to your growth expectations through next year.
Yeah.
The one piece with the $8 $6 million of incremental from Q2 to get a fee. That's now going to translate into the revenue out into the next couple of four quarters right. So we'll get that flow through for Q4, all the way through roughly Q3 of next year. So that piece and then along with adding all those new <unk> solution customers now we have that opportunity.
Tuning to go expand with them and gain some further further growth out in there we're not providing any 2022 guidance at this point, but yeah. We're really excited about those those the AOR solution as we had plus that incremental piece quarter over quarter, but flows that revenue into the future.
Well I guess.
Maybe what I'm getting at is this kind of our growth.
Stable.
Through the next few quarters.
You know again, we're not giving any 'twenty two guidance because the reason being also if we close the transaction with E and the doctors in the fourth quarter, we're going to combine that guidance and combine that that consolidated and really go out looking at what's going on there and then we'll get we'll provide that in the fourth quarter earnings.
And then Tom statement here, we got 200 customers over 200 customers today you add in the are the customers that are exactly that might bring to the table once that transaction closes, but even that is still a very small percentage of the estimated 200.
<unk> thousand customers that make up the totality of our estimated $90 billion market. So the penetration rate that we see is still actually quite low relative to the opportunity set that we have in front of us.
Okay, perfect that makes sense.
But just to clarify too on the on the sort of the priest back model that was I think last referenced in June that is not something we should reference any longer correct.
I think the best information to use is always the most recent and latest information.
And I think we've provided a solid numbers to use today that could help you understand how the company operates today.
Okay perfect.
Another question I had was around gross margin progress through next year, I know, you're not giving guidance but.
It looks like even the guidance for next quarter was slightly lower than at least I expected and I'm just wondering.
You talked about the higher investment do you see that gross margin getting back to stabilizing in the mid 60% range or do you think it would be.
Sort of in that kind of high <unk> to mid sixties level that you outlined for Q4.
Yeah cause that guidance for Q4 is ranging between 60 59 and 65. So we are getting back up into the sixties I'm, a big uptick from the third quarter and that's mainly around some timing issues that we had on the third quarter, but to also that revenue growth that we're kicking in from the <unk>.
<unk> increase that will now flow into the revenue, which will drive up that business plus we continually have that leverage cost structure model with with our capex and all those different fronts that we're able to increase that over the course of time.
And we will be able to provide you some guidance in 2022, once we get that exactly with built in and we build that model out for both companies combined and then we'll be able to provide that in the next quarter earnings Thats helpful.
And then just last question for me can you split out the data solutions and space services revenue in Q3, and the split for Q4 guidance as well.
Yeah, we're unable to split out our pieces just because the way our contracts in nature is there a lot of things are combined since we have four solutions multiple customers by multiple things. So we have a hard time, breaking all that stuff out also with our leverage technology, we're providing ultimate solutions to customers solving multiple use cases, so we're unable to break those.
Things out.
Understood Alright, thank you.
We go next to Ric Prentiss with Raymond James Your line is open.
Good evening.
Hey, wait a couple of questions a couple of questions for you all.
It's been about two months into it now exactly.
Have you heard anything from your own customers on how they feel about the acquisition or have you been hearing any feedback from exactly Wisconsin was about coming into your point about what it might mean to them. So any customer interactions in the last few months from either side.
So the two companies.
Have to operate very separately until that transaction closes.
So the simple answer is no we have not.
And it's just a very separate operation.
We have not seen people.
On our side right. So I can't talk to anything which with first two customers on the X factor aside right on that.
Outside our business has been has been growing nicely the customer interactions have been have been positive. So unfortunately, I cant tell you anything more.
We are a public company and so they are a public company I just cant talk to more gives me comp talk with each other until that transaction closes.
Good morning.
I had a big transaction in this space this week with Inmarsat and Viasat.
Talk about housing customers.
Excited to see the acquisition not.
Crossing over.
The company as a public company life, sometimes customers, calling in and go Hey, I like what I see so I wasn't sure. If you had any of those kind of incoming calls not everything.
Our operating separately or anything like that Okay. Second question on my side is obviously.
I can point to guys, who can't get it yet.
Flip the question this way on how you feel about your visibility into 'twenty. Two as you are coming here in the mid November looking into 'twenty two.
Visible is 22 from the standpoint of.
Happier pool, you're not giving any numbers or just how comfortable are you getting on the visibility.
Yeah.
We've been spending quite a bit of time for the executive team with the sales force.
And the leaders that run the sales teams spokes huddling together are quite often.
Talking about all the opportunities the pipeline, where you know again I can't give any specifics on the 22, yet as we go through the activity with hopefully when the exact or closes and combined everything but you.
So we're feeling very confident about 2022 about the pipeline and the for solutions that we have to go sell on all those use cases that we're solving for our customers. The key wins that we had and that keeps carrying forward. We're excited.
Okay and final one for me a little more of a housekeeping one.
And obviously the G&A public costs came in higher how should we think about is this a good run rate third quarter or is there more to come as you think through the impact in fourth quarter, just kind of where the good run rate number on the G&A side of things.
Yeah. The one thing that will be hard as we can we're going to go through this this acquisition. So we will have to sense out all this third party you know me as Peter mentioned this activity with.
All of these Ipos all these third parties are taking advantage of it Unfortunately for us which is a marking up their prices on everything so.
Well, it's going to be hard to tell if if these are third parties keep raising prices and keep making things a little bit harder for us but.
Uh huh.
You know they'll spread similar activity again this quarter, because we will have another transaction to go through.
Okay appreciate it stay well.
We go next to the line of Colin skin Shield with Barclays. Please proceed.
Good evening, guys a bit of a higher level question here, but earlier this week, we got the NGA commercial Earth intelligence strategy.
Can you maybe talk a little bit about what that means for you guys and how you expect to sell into the government customer, whether it's subscription based or our.
Industry data or anything.
Anything else.
Of course call and happy to talk about that.
We have a pretty nice mix between commercial and and government revenue and are the.
The reason for that is that there are long term fundamental trends that drive the demand on both sides.
You have ESG adopting to climate change that utilization of the global economy on one side and you have an intensification of the of this space contested Ness security concerns all of that on the other side. If you listened to the talks that are coming out of the off that.
U S. Government you know you just mentioned one of them, but there are many others not least the creation of the space Force.
You can see that the interest in technologies and solutions that spy or has he is absolutely increasing and you know we have a specific team that is serving the United States government. We have teams globally that is serving you know I would say friendly governments all across the world and we do indeed.
<unk> seen an increase in the demand from those types of customers, helping them solve their use cases.
Got it got it and then I understand the stock sides are probably a little bit dated but if we think about your capex.
Capex estimates and kind of what you're assuming on launch costs can you maybe just talk us through how you're thinking about procuring launches, whether it's going to be advised shared services versus small sat launchers, and the premium that you are putting on.
On kind of direct orbit insertion versus versus a rideshare services.
So aspire just completed its 31st launch campaign launched with nine different launch vehicle. So we certainly have an extremely diverse relationship with launch provide us and experience working with them and that has really helped us a lot.
As I look forward.
It seems that almost every one of them the grandfather restarting and launch company and we certainly appreciate that we love working with them.
I love that more and more of those capabilities are coming online b that are dedicated launch vehicles as you mentioned or be that orbital transfer vehicles that take advantage of very big rockets with extremely low cost per kilo Cup launch prices.
The way that our constellations are structured is that we have proper.
Probably more flexibility than some others right then we certainly want to be in a particular area.
A particular orbit at particular inclination, but it's not that tight and so for US we look at the launch place as one that is getting better.
Every single month.
Is it to Dave I would like it to be no. It's not you know rocket still blow up and are delayed.
But it is getting better.
Got it and then last question for me.
You talked a little bit about inflation corporate costs.
Maybe if you can just discuss kind of the labor costs that you're experiencing within your AI and machine learning built out.
Now that's impacting your ability to ramp kind of delivering complete solutions to the customer versus a raw data sale.
So spire from its very early days has set up as a global company.
Which means that we can take advantage of like a large number of labor markets and not just a concentrated or maybe more contested one and we certainly see that benefit accruing to us as we can hire in different labor market and with the pending close of the exactly that transaction once it closes.
We are having access to yet another location in Canada right didn't need this at Cambridge Waterloo University area, where there is a highly educated highly motivated work force, where we can offer them a unique type of experience.
What we have found is that those people that are in the AI and machine learning space and that can choose where they work when you offer them to work with space data.
Their highest lights up just a little bit more.
So it's fair to assume that you're not having any issues with getting head count on boarded.
[laughter] I've I've always say that the largest you know execution.
Execution was cross is hiring.
Finding the right people at the right point in time in the right location with the right skill set and the right cultural mix is absolutely a challenge because we are pretty proud of the culture that we have in the company and so we want to stick with that and grow with that so hiring anyone who says hiring is easy I think it's just flying themselves in their pocket.
So I'm not going to tell you that hiring is easy, but we are S based company and that helps a great deal.
Got it. Thank you so much of the questions.
This concludes our question and answer session, we returned to CEO, Peter Placer for closing remarks.
Thank you and closing.
We're immensely positive about the momentum we see in the business and recognizing the fortunate position, we occupy a very crest of this massive transformation wave of leveraging space to solve problems on earth.
The team and I are highly encouraged by the progress we continue to make against our four growth pillars.
Have you actually good without typical sense of urgency like signing a definitive agreement to acquire exact or it was just weeks after becoming a public company.
And we relentlessly drive for growth.
Bridging our cutting edge technology and innovation, we endeavor to help our customers and humanity solve oftentimes truly global challenges and strive for a more sustainable and equitable future and.
And with that I. Thank you for your time interest and questions.
This concludes today's teleconference. We thank you for your participation you may disconnect. Your lines at this time have a great day.
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