Q2 2023 Spire Global Inc Earnings Call
Greetings and welcome to spire Globals second quarter 'twenty to 'twenty three conference call.
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A question and answer session will follow the formal presentation.
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I would now like to turn the conference over to your host Ben Hackman head of IR. Please go ahead.
Thank you Hello, everyone and thank you for joining us for our second quarter 2023 earnings Conference call. Our earnings 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 Cray, We 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 our results of operations and financial conditions are uncertain and subject to change.
Should any of these expectations failed to 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.
With that let me hand, the call over to Peter.
The second quarter was another quarter of strong growth and progress towards profitability. In addition to spire, adding yet another quarter I'm, a broken record of quarterly revenue growth since becoming public we exceeded expectations by delivering more revenue and strong.
On the margins than anticipated.
Long side, our strong results, we continue to see broad based demand for our solutions. We signed another 32 solution customers achieving nearly $113 million in ear are and yet again increased our rolling 12 months organic net retention rate.
Hundred and 17%.
Based on first half results that exceeded our guidance and market expectations. We are thrilled to improve our margin guidance for the full year and share these important anticipated milestones.
We expect to generate positive cash flow from operations during the fourth quarter of this year.
Be adjusted EBITDA positive in the first or second quarter of next year 2024.
They live a positive operating margins in the second quarter of 2024 and be free cash flow positive in the second or third quarter of 2024.
I could not be more proud or excited about spires prospects for profitability and sustainable growth.
The macro environment has become more stable over the past quarter. The U S. Federal reserve is no longer a forecasting of recessions and markets are showing strength.
Which business is adjusting to our interest rates and a more stable outlook. We are seeing a renewed focus from customers looking to drive cost out of their business.
We have not seen a further degradation in time to contract and in some instances we have actually seen some of the fastest time to contract since becoming public.
The flip side to these improved macro conditions is it still very tied to capital market that is putting a conservative overlay to the business environment in terms of customers, making investments for that graph.
Businesses continue to be ever more aware of the risks and cost that weather and climate would have on the operations and I increasingly eager to find solutions to manage and mitigate and reduce that risk and cost.
At the World Economic Forum Davos this year, the burgeoning future of space based businesses was top off mind, the global management consulting firm Mckinsey values. This space market at $447 billion this year and on track to exceed one trillion dollars by 2030 in fact make.
Lindsey recently stated that we believe that space is at the point at which leaders must consider its potential impact and more importantly begin to shape their organizational strategy to unlock the potential of this domain as it accelerates over the next five to 10 years.
Irrespective of industry investment is a daily plans. The world is now remarkably interconnected global events from severe weather to cargo congestion draws closer together.
The world is seeing the hottest days hundreds if not thousands of years wildfires small cars impacted many cities and communities thousands of miles away flooding has severely impacted many diverse geographic areas and the U S has already seen 12 weather events.
In 'twenty, two 'twenty three alone, whereas the losses exceeding $1 billion each.
These extreme weather events are causing insurance companies to re evaluate the geographic areas. They are willing to cover.
Against these demand backdrop spire has been building over the last 10 years.
Technology to gain insights to better navigate this changing environment.
With more than 100, Laura's multi use receiver satellites in orbit spires Earth observation coverage is near real time and spans the entire globe.
This comprehensive network empowers companies and governments worldwide to leverage radiofrequency intelligence to make decisions with confidence in a rapidly changing world reduce costs from climate and weather risks and strengthen global security. This is not a vision of.
We plan to do in the future.
Is built today and we are utilizing it for our customers to make a meaningful impact to the world around us.
Spire is unique data collection methods and what leading analytics open a range of use cases.
Enabling weather forecasting monitoring ocean, the winds and waves plotting and monitoring optimal courses for cargo ships forecasting whether that could impact the power grid estimating take golf and survival times for airlines, even measuring headwinds that could impact their flights fuel usage.
We are leveraging the continued advancements in machine learning in the eye to provide insights that were not previously available.
We have used this technology to combine a weather forecast with publicly available data to create even more accurate forecast and to determine the probabilistic forecast for specific customer needs.
Using AI, we are also able to create better soil moisture estimates.
Higher resolution than it would be otherwise possible as well as provide predictive analytics using our historical data to infer that likely estimated time of arrival for a vessel and like the weather conditions doing their voyage.
Against this backdrop and the multi billion dollar global weather forecasting services market. That's expected to double by 2030 spire has continued to invest in all weather prediction capabilities.
Cindy rolled out our deep vision, whether solution and high resolution forecast models deep vision is a cross industry, whether solution, which moves us up the value chain from clean and smart data to decision solutions for our customers, we help our customers and so to your question what should I.
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Oh, whether dashboard and why the risk communications support team a trusted partner for our customers who need the most accurate weather data to be able to quickly make decisions that impact the safety of people and property.
With our new high resolution, whether products, but chicken a global model and improving the resolution 144 times to a one by one kilometer resolution.
This provides additional detail to help understand what populated areas at risk what infrastructure is at risk and what the weather is occurring around important whether transition zones, such as lindsay interface or mountainous hilly terrain.
But the powerful combination of our leading forecast high resolution whether model and on cold weather experts, we can provide enhanced knowledge of likely better outcomes colder than simple red yellow and green status to indicate levels of risk and allow our customers to take.
Such actions could include pre positioning crews before weather events. So utilities can restore services as soon as possible or suspending side operations moving at risk assets.
All things supply chain leaders make decisions related to transporting weather or time sensitive goods.
The annual cost of not making those decisions is estimated in the hundreds of billions of dollars.
Spire is mission is to help the world reduced debt cost Cigna.
Significantly.
For over a decade spy has actively growing our datasets and.
Second our datasets grow we increased our ability to create and machine learning models and train AI for predictive insights across virtually all industries. One such dataset is radio quotation data spire is the largest provider of radio occultation data in the world with the balance sheet today.
Should produce approximately 20000, so called Aro profiles daily did.
The addition of these proprietary our profiles to numerical weather models has resulted in spire is global forecast consistently outperforming leading public global forecast models. However.
However, the forecast improvement does not stop with 20000 hour of profiles.
Scientists have demonstrated increased forecast accuracy with the addition of up to 100000 hour profiles a day.
Spire empowers our customers with the ability to predict weather events with heightened precision and accuracy, meaning early warning sports of weird weather phenomena I'm more reliable customer such as nausea are purchasing this data from spire in increasing amounts, we recently announced that we have renewed and increased.
<unk> now has a contract to a $6 $5 million for Earth observation data, including G&A says R O, which can be assimilated into better models G. N S Azhar, which can measure see I saw the moisture and ocean surface wind speed and space weather measurements.
As our customers continue to look for answers in this ever changing environment spire stands ready to serve them without growing set of unique datasets and powerful insights about earth.
But several years now the aviation industry was impacted by lower demand driven by Covid. However, we are now seeing global travel demand approached 2019 levels again, and we have seen domestic travel demand in some markets. So past 2019 levels.
The aviation market was wondering which spire targeted early on.
Our aviation business lagged the other three businesses and did not contribute as meaningfully to spire is impressive cross over the past several years, primarily due to the impact of Covid. We are very excited about the opportunity in front of us for our aviation solution and the increased demand for spire products and capabilities.
Yeah.
Monitoring planes from space offers one of the most notable advantages.
Unrivaled accessibility to even the most remote areas as well as continents with burgeoning and rapidly growing aviation activity like Asia and Africa.
These are areas that planes fly over but do not have traditional ground based assets to track their moments.
Spire now has over 500 years of flight heritage operating sensors in satellites and space and more than a decade of experience in satellite design mission operations and radio frequency technology.
Given this impressive pedigree spire and only spire was uniquely position called contract with the European Space Agency to.
To build a best in class system designed to make the skies safer.
The 16 million Euro contract is to design and demonstrate a satellite based LTE Asian savanna system for he says you Rialto program.
Currently air traffic surveillance heavily relies on radar systems and technology dating back to World War two.
These radar systems have drawbacks, including high cost demanding maintenance and some technical limitations. Additionally, they failed to provide coverage in vast areas such as the oceans remote or mountainous regions as well as the 90% of the world population living outside the western wear.
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Modern air traffic Savannah systems, like terrestrial and space based ads b depend on the global navigation satellite system to determine an aircraft disposition.
Genesis signals can be interfered with our spoofed leading to inaccuracies in tracking aircraft locations ultimately impacting air traffic control operations.
Incidents over the belts exceed exemplified as potential risks frequent.
Frequent genesis jamming in the area has disrupted civilian air traffic, necessitating rerouting that causes delays and increases fuel burn, resulting in higher emissions in cost even super yachts.
Employing chinas S jamming to evade paparazzi have inadvertently effected a T C operations in the vicinity.
Hey, Jeremy Allaire program is intended to develop and demonstrate a first of its kind every Asian surveillance system that will independently determined aircraft position using geolocation.
It will be complementary to existing so the air systems, providing a reliable and resilient space space to their own solutions.
Beyond the significant opportunity that could potentially see spire be selected to build out the full constellation of a large number of satellites. We are seeing growing interest from aviation related technology companies.
One area, where space based ads B data has had a significant impact is an airline economics in the North American market alone. There is an estimated potential of $600 million to $800 million of achievable savings for carriers flying narrow body aircraft.
Having granular and holistic data on cost is crucial for airlines and it helps them to easily identify areas, where they can reduce spending and improve efficiency.
This can include everything from fuel consumption and maintenance expenses to fleet planning and route optimization.
In order to create comprehensive bottom up models accurate historical flight data is needed to better understand which flights actually took place meaning scheduled flight data cannot be relied upon spire flight report, which aggregates hundreds of millions of satellite and terrestrial.
<unk> be positions to provide actionable flight aircraft and airline major data.
It was chosen by both Odyssey aviation and Skylark to support their businesses.
With an estimated 1005 fund that aviation related technology companies that can benefit from integrating spire is global flight analytics and insights spire has plenty of room to push the envelope with our aviation solution and that's exactly what we're doing last year, we brought them.
World Insides on the location of sanctioned ration only got yacht movements.
Just recently, we know there's something interesting regarding sanctioned Russian oligarchs plain movements.
We have seen more reporting an airplane turbulence recently and experts estimate that severe turbulence has increased 55% over the past 44 years spire.
Spire has the ability to track clear air turbulence, which can improve the safety of the flight.
And as air travel demand has returned but looking to bring insights around fuel Brendan emissions, while the aircrafts are taxing on the ground.
You reality awards is a great example of how geolocation is being utilized for civil and commercial means in the future.
<unk> currently operates over 40 satellites that help detect and geo locate signal interference jamming and spoofing we.
These satellites can identify the power location and directionality of such events in multiple frequency bands.
With these capabilities, we are continuing to see customer demand for our radio frequency geolocation data from those groups tasked with providing global security.
I'll become to openly discuss the continued two miles were seeing with in this segment. We can say we have recently received additional multimillion dollar agreements for RF gel real time tasking.
In addition to the strengths and future opportunities, we see in all weather and aviation businesses. We are continuing to see demand you know space services and maritime businesses, just yesterday G. H G set a leader in greenhouse gas monitoring announced that they are expanding their existing contract with us.
To add four additional satellites to there's three that were announced last year and during the quarter spire signed an agreement with Aurora attack to build launch and operate an eighth satellite constellation dedicated to global temperature monitoring.
Our our attack has successfully operated a precursor sensor in orbit honest satellite designed built and operated by spire for 18 months.
Initially intended as a technology demonstration it exceeded expectation and is now serving as an active fire monitoring instrument for customers across the globe.
In our maritime business and market that is early and it's Digitization journey, we announced it in the video.
Well integrate spire data to help users track vessel positions along a route re optimize routes based on various conditions and automatically record environmental compliance data.
Video is also leveraging spire historical and real time Air S data to train machine learning algorithms that provide users with AI insights to augment decision, making and optimize their vessels for safety emissions and performance.
Given them an ACH in a highly competitive environment.
Speaking of eye not only are we utilizing it to enhance our custom offerings and provide new analytics and insights. We are also using it to improve our internal processes.
A large number of multi sensor satellites, we have a vast number of options to consider when it comes to deciding what data to collect from which satellite at what time as a satellite is passing over an area.
We've successfully deployed an optimizer tool to help us with this decision making we.
We started by providing requirements such as how many are old profiles or the number of ore. So it is b messages, we would like to collect.
This information is combined with the capabilities and positions of each satellites.
Our optimizer will then suggest how best to configure our satellites to achieve our goal.
This has made our satellite operations much more effective and provides the ability for us to scale, our constellation as the market dictates without a corresponding growth to our operations.
We plan to incorporate AI capabilities to further improve the robustness and operability of our optimizer tool.
And the eight quarters that we have been a public company.
If delivered high revenue growth and improving profitability metrics.
Given this reliable execution within the backdrop of a long term growing demand for our products. We are excited about the prospect of all of our key profitability metrics trading positive over the next few quarters, starting with positive cash flow from operation, which is expected in Q4 of 2023.
Just as the Internet brought the world of Commerce and utility to our doorsteps space based data is connecting us with the environmental and security realities that surround each of us it is allowing us to make better decisions with speed and confidence in the context of an increasingly complicated rule.
<unk> between all the activities happening on planet Earth.
I could not be more excited about spire future as we continue expanding into a growing and global market convert our topline growth into bottom line profitability and continued to grow our impact on making the world and more safe sustainable and prosperous place for all.
And with that I'll turn it over to Tom.
Thanks, Peter we had another strong quarter of execution from the top line down to margins with revenue non-GAAP operating loss adjusted EBITDA non-GAAP loss per share and a our solution customers all coming in above the high end of our guidance.
Our results also provided another successful quarter methodically progressing on our trajectory towards profitability.
Q2 revenue increased 37% year over year to $26 5 million once again, hitting a quarterly record and exceeding the high end of our guidance by $1 5 million.
Margins expanded to 64% on a GAAP basis, and 68% on a non-GAAP basis, representing a 13 percentage point improvement over Q2, 2022 on a GAAP basis, and an 11 percentage point improvement on a non-GAAP basis.
There are at quarter end was $112 8 million up 32% year over year, with adding $8 million of sequential growth quarter over quarter. This included a nice mix of adding new logos, while expanding with our existing customers. We finished the quarter above guidance with 813 <unk> solution customers.
Net add of 32 customers quarter over quarter.
Our Q2 are our net retention rate was 112% up from 108% last quarter and in the same quarter a year ago.
The Rolling 12 month organic are our net retention rate was 117% up from last quarters. Rolling 12 month organic are our net retention rate of 116%.
Now I'll be discussing non-GAAP financial measures unless otherwise stated we've provided a reconciliation of GAAP to non-GAAP financials in our earnings release that should be reviewed in conjunction with this earnings call.
Driven by exceeding our Q2 revenue expectations, our leveraged business model across four solutions and our high asset utilization. Our Q2 operating loss came in at $6 1 million, which is 2.7 million better than the top end of our guidance.
This is an improvement of $4 million year over year, and an improvement of over $3 7 million quarter over quarter.
Likewise total adjusted EBITDA for the second quarter came in better than guidance at negative 3 million or negative 11% of revenue a $4.3 million or 58% improvement from negative $7 3 million in the same period a year ago.
We ended the quarter with cash cash equivalents restricted cash and short term marketable securities of $64 7 million down $8 3 million sequentially quarter over quarter.
Now turning to our outlook for the third quarter and full fiscal year 2023.
For the third quarter, we expect revenue to range between $26 million and $27 million, we're holding our full year guidance at a range between $104 million and $109 million.
We expect a single quarter drop in air are to range between $107 5 million and $108 5 million. This anticipated decrease is due to the timing of one are our contract finishing prior to other air our contracts coming online.
We remain confident in the opportunity to win back that contract along with executing on our strong Q3, and Q4 2023 pipeline like we did in Q1 and Q2 of this year.
As such we are holding our full year <unk> guidance at a range between $129 million and $135 million, we're continuing to see expanding demand for our solutions and expect third quarter are our solution customers to range from 835 to 845.
We are increasing the midpoint of our full year AOR solution customers guidance, which now ranges from 855 and 875.
Given the operational leverage we are continuing to see across our head count and infrastructure, we anticipate third quarter non-GAAP operating loss to range between 7 million and $6 million, which is a $4 $9 million or 43% improvement year over year at the midpoint.
For the full year, we are improving our guidance by $2 million at the midpoint and we expect non-GAAP operating loss to range between $32 million and 27 million <unk>.
Adjusted EBITDA for the third quarter is expected to range from negative $3 5 million to negative $2 5 million.
Which represents an improvement of $5 3 million or 64% year over year at the midpoint.
For the full year, we are improving our guidance by $1 million at the midpoint with a range from negative 18 million to negative $13 million we.
We expect non-GAAP loss per share for the third quarter to range from negative eight cents to negative seven cents, which assumes a basic weighted average share count of approximately 167 1 million shares we are improving our full year guidance for non-GAAP loss per share by four cents at the midpoint with our non-GAAP loss per share to range from <unk>.
Ergative 32 cents to negative 29 cents, which assumes a basic weighted average share count of approximately 157 5 million shares.
Given the strong results in the second quarter, we expect some very exciting milestones in the upcoming quarters.
We expect cash from operations to turn positive later this year non-GAAP operating margins turning positive in the second quarter of 2024, adjusted EBITDA turning positive by the first or second quarter of 2024, and we expect positive free cash flow by the second or third quarter of 2024.
Additionally, we expect to execute a reverse stock split within the next 30 days designed to regain compliance with our New York stock exchange listing requirements.
We've seen two quarters in a row of revenue AOR solution customers non-GAAP operating loss non-GAAP loss per share and adjusted EBITDA results exceeding our expectations and this has allowed us to improve our margin expectations for the full fiscal year.
We remain focused on execution and we are excited about the opportunity ahead.
Thanks for joining us today now I would like to open up the call for questions.
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Our first question today is from Austin Moeller of Canaccord Genuity. Please proceed with your question.
Hi, good afternoon.
Good afternoon.
My first question here, Peter last quarter, we discussed how some contracts and expansions of contracts from customers had been delayed is the takeaway from the strong results in a higher number of they are solution customers. This quarter that some of these delayed contracts Scott closed out in Q2.
I think I think that's I think that's a good way to approach. It Austin I mean, we certainly have seen the business environment that kind of like maintain and in some areas actually improve them.
Interest rates are still high but they have stabilized them.
And business is you know it seemed to feel more confident about playing ability. They they feel more okay. I understand how this has gone up to look like and they are increasingly looking for okay. How can I take now cost out of my system with having a greater sense of how the world is going to look like and so indeed, you know we have seen.
Seen a very very good conversion in the quarter that has continued that momentum into the current quarter. So we continue to see is that there's greater predictability of a challenging but knowable environment translates into more predictable sales cycle.
And in conversations with customers.
Excellent and are the majority of the customers you're seeing right now for our chicken currently coming from NATO Europe , I know you can't say, who they are.
No we have I have actually a very very good makes and Ah between you know like five eyes, and and non five Ais customers and feel that we are still just scratching. The surface. There spire has assets, which are purely an exclusively United States asset. So U S license the U S.
She downloading data over the U S. But we also have assets, which are non U S that that facility changed that process outside of the U S. For example in Europe as you have mentioned.
Excellent very exciting congrats on the quarter really appreciate it thanks a lot.
The next question is from Erik Rasmussen of Stifel. Please proceed with your question.
Yeah, Thanks for taking the questions and congrats on the strong results and margin improvement. Thanks, a lot Eric.
Got it.
Yeah, and then maybe sticking with margins.
Obviously, you continue to see nice.
Progression there and if you just reported.
64% on a GAAP basis.
But as we think about your more recent target I think you gave last quarter.
Our goal of GAAP gross margins at 70%.
What did you see you hitting hitting this target.
Yeah, Eric we had mentioned that that was in the coming years, we didn't give a like a specific date, where we said you know that was that was coming in the near term.
Though as you can see from the results getting the 64 and 68 on a non-GAAP basis were moving up that path quite fast and the non-GAAP was obviously nearly getting to that 70% Mark I think the most amazing thing that well you know we had in the quarter was the 11 percentage point improvement that we saw both on a GAAP and a non-GAAP basis over the.
Two quarters. So that's just been done in the first half of this year, so really happy with that progression and that leveraged you know infrastructure. We have the leverage head count we have all that's coming to fruition because it's not just the revenue growth I mean, that's obviously going to be super helpful. But it's also that cost maintaining and spreading that over our four solutions and that's driving our.
Gross margins up on a on a fast pace. So yeah, those numbers are getting closer and closer by by the quarter.
Great.
And then maybe just.
We had a number of contract signings and pretty meaningful it seems like the pace of those awards is picking up and also the magnitude and level of engagement seems to be increasing.
But what's driving this relative strength and how do you see the split.
Maybe between you'd need a services and space our services business as it relates to sort of the opportunities the team is tracking.
So what is driving it is it a little bit of what I mentioned earlier, Eric is that the world feels a little bit more attuned to it challenging but predictable environment.
And that is and it is driving those decisions I think the other thing you're seeing is is that.
Customers are becoming selective with.
Who they work with us because they know that it has to work b that our data be that analytics be that a space services you know their business relies on that right you don't get to 117% net retention rate with your customers if you're not reliable.
And so what we see is is a it's an environment, where those that consistently and reliably deliver for their customers are winning more and more of their business from those customers, but also attracting other companies in terms of like Oh, everyone needs to have a space strat.
G. If you went to believes mckinsey of what they have said, who do I work with well if I'm in the maritime aviation weather always face service says spire is the place that I, probably should be calling first and it's that confidence and that the other brand that starts to drive some of those I ever larger wins.
That you rightfully have called out yeah, and Eric just to put some numbers around some of the you know that expansion, both landing and expanding with customers. I mean, we were able to get 80 net new customers in the first half of this year. So we're seeing that progression and be able to land a new logos across all four of our solutions I think Peter mentioned earlier about the.
The aviation business is really starting to kick into gear now that you know, we're coming out of Covid years, and that was obviously not our highest growing business during those years and now we're starting to see that so that's one one fourth of our our solution really starting to kick into gear and then on the expansion side. There's also just amount of time has gone by with a lot of customers.
And we've listed some of these in the press releases, but these expansions with if it's in space services, where they might start out with one or two or three satellites and now they're doing full constellations with us a lot of that was built into our contracts when we sign it with them and now they are coming to fruition like people like Aurora attack and other folks that we listed or we just announced today.
Expanding with NASA, taking that contract from 6 million, a six and a half million for another annual year with them. So they're just seeing that we can solve more and more use cases with them and then expanding with them. So you know not only landing those new ones, but then also expanding with the existing.
Great and then maybe on.
On the CFO transition.
Do you have any updates you could share on how the process is going and what we can sort of expect to see.
Yeah. So you can expect to hear something quite specific from us very soon.
Thomas speeding that giving us a lot of time, he's always are gonna stay unfortunate station period as a consultant to the company. So we feel extremely good about the whole handover and the process has been going very well and I'm and I'm quite excited about something that I won't be able to share pretty soon with you.
Great.
Back in the queue. Congrats again, thanks, a lot Eric.
The next question is from Rick Prentiss of Raymond James. Please proceed with your question.
Thanks, Good afternoon, everyone. Good afternoon.
First since this is probably the last call for Tom where I can say I've enjoyed working with you it's been a pleasure. So best wishes. Thank you very much.
You mentioned on the a or are that there's a timing issue what are our finished up.
And that's the reason for the quarter to quarter downtick in they are ours, but you also I think mentioned that you had some confidence about winning it back can you give us a little more color on kind of whats involved in that contract and why you think you can put it back in or they're using anybody else right now.
Yeah. So I mean as you see and you know we've delivered very very strong revenue, 37% year over year growth, we exceeded all the margins we kept the revenue guidance for the year constant, but you saw that you know we improved the margin guidance. So that gives you a good sense of how confident we are about the revenue side. Indeed, a R. R.
It has like this mathematical drop it's an oral contract with them with Noah we have multiple contracts with no are they they decided to give in that last award them only to one company and not to two companies. They gave them at six months. So it doesn't have any short term contract. So very very near term we have the opportunity.
To add to that again with our a 59 million idea to contract in the meantime, NOAA has reached out to us for other data types that we have with regard to weather. So that that gives us great confidence on that but even more importantly, it's like the traction that we have seen as we have reallocated assets.
Or four are all into RF geolocation and those contracts are multimillion dollar contracts often for very very short delivery times and we have seen you know several of those coming repeatedly also from from from from the same customer. So that reallocation has helped us a lot and given us great confidence in the growth.
The momentum that we talked about a little bit on this call already that we've seen in the second quarter has carried into the third quarter. So overall, we feel very confident about.
About the guidance that we have given I think we've done that Tom has done a very good job historically and given very accurate guidance and so you know we we we have every intention of continuing on that trend.
Very good and.
Stock splits coming up in the next 30 days has the decision been made yet as far as what magnitude of reverse split it will be.
So you know we have spoken with numerous advisors investors and parties and and there is a there's certainly yeah I would say like a common sense a consensus.
Emerging from that.
You know you need to balance the they are the amount of shares that will trade on a number of shares per day with their stock price that you achieve them keeping in mind that above a stock price of three four or $5. You open yourself up to a lot more of the investor community that can.
Invest in stocks that are a little bit higher in that 345 $6 range. So taken all of that into consideration, we feel pretty good and we have received very positive feedback they sense that I have it says a lot of feeding people waiting for us to do this because it allows them to actually.
Part of the spire story.
Yeah, exactly and when will that decision be made and announced you know.
Yeah, we were just waiting for the earnings stock activity, just settle down and then were there won't make action.
Makes sense, Okay, and then final one from me Tom.
Tom You mentioned some of the per share numbers out there in the share count is going up more significantly than what we had in our models is there anything going on specifically as far as the share count.
Yeah, we we had set up the a T M. A year ago and you know we haven't used it up until actually June .
In June there were some unique days, where there was high volume and high trade activity. We did take advantage of that to help boost the balance sheet, a bit and get a little bit of that ATM Act money through obviously that was why we put the ATM in place we haven't used it since the month of June because we just felt we didn't have a need to do it thereafter.
You know if there's other days like that where there's some opportunistic days to take advantage of using the ATM to improve the balance sheet and give us more business flexibility with the investments then we will take advantage of that so that was the that was the reason for the share count increase.
Okay. That's also since it was June it doesn't reflect much within <unk>, but it affects Morrison correct, because we're a weighted average share count it really shows up kind of in the Q3 timeframe and in not so much because we did it the last month of the quarter right. Okay. I appreciate it.
Tom that's wishes. Thanks, so much thanks a lot.
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Our next question is from Jeff Mueller of Baird. Please proceed with your question.
Yeah, Peter Thanks for all the use cases and they are examples but just on the financials like I know this has been asked but it does look like a really big step up sequentially from Q3 to Q4 to hit the full year <unk> guidance, and you've announced a bunch of really large.
Tracks or a lot of these large contracts not.
Hitting until Q4, and that's a big part of the answer or is it more based upon confidence in pipeline of large opportunities that are at an advanced stage, but what you have not yet announced.
Yeah, it's it's definitely the the confidence in the pipeline you know what we've been able to do to date and making those conversions and making those things happen. The expansions that we've had with our customers along the way we still have a lot of activity in the pipeline for the rest of the year in that front and as we did mentioned we have the capability.
To win back some portion or all of that contract in the fourth quarter also that would help boost the Ah. There are two so it's a mix of all that but we are very confident with the pipeline and where we're at and it's why we're keeping that guidance at that at that point.
And can you get into the guidance range without winning back a portion of the NOAA contract before year end.
Yeah, I mean, we could yeah, there's there's very significant deals out there and and and deals. It just depends on closing time and all of that wonderful stuff, but yeah. We could yeah, we're very confident with that.
Got it and then Peter.
Peter you referenced kind of the unusual weather activity in the first half of the year end.
Insurance companies stopping writing business in certain states.
Just help.
Help me with like.
The insurance market opportunity for you or have you started to make good inroads. There do you tend to go direct to the insurers or do you intend to partner with or sell into some of the other data and analytics solution providers in the sell through to the insurance industry.
Talk to the insurance market is an opportunity for you.
So I would say that the insurance market. The reason why we mentioned it is one that is becoming more to the forefront as their business model is now starting to be impacts that and Ah you know I don't know how much time, you have spend with insurance companies I apologize. If you have covered them in the past and I'm not aware of it they they are not that far.
Foster I'm changing industries, you know I'm thinking of some companies from Switzerland and have been around for a couple of hundred years.
So what has happened, though is that the ever increasing amount of extreme weather events and you said you know the extreme weather events in the first half of the year end and I think that statement has been true for the last decade.
But now after a decade of Dallas surprising extreme weather events, even that industry has to start to adjust their business model a lot of parametric insurance you know starts to come into play the reinsurance industry have to adjust them. There is a it is a quite a active.
A provider industry with analytics for the insurance industry, which has arisen.
And we certainly are a beneficiary of that change in business model of that change in how they approach whether given given the type of data that we have and in some instances the long history that we have for some of our data types.
Okay.
And then just lastly, anything you can say about like from.
From a geographic perspective, it looks like your growth has been quite a bit stronger in the Americas, just any any reason for that I don't know if its sales resources driven or opportunity driven.
It's more opportunity driven I would say rather than salesforce.
And from my perspective, the way I look at it is it.
It just means that the opportunities we have in the other parts of the world.
Have not been on Earth, and we have great opportunity to leverage them by by paying even more attention to the other parts of the world as well if you think about it from an overall G. D. P girls perspective, 80% of the world's GDP growth is outside of the Western World and I think we have I, absolutely just scratched the surface.
There in and providing that large GDP growth large population area large land mass area that very often does not have the traditional land based infrastructure be that far for weather information be that for flight tracking that.
Is that a that the western world has which creates even more opportunities for spire to deliver directly a space based solution leapfrogging. The the traditional development of having something installed on land that eventually gets augmented with something from space, which is something you see more in the western world, but actually leapfrogging that for large.
Portions of the Earth delivering space based solution directly spire arms of large constellation that covers the earth a at least 100 times a day and in many instances 200 times a day, that's a pretty big coverage area and a pretty a pretty high advantage from a little temporary resolute.
That we have to deliver solutions to these areas.
Okay.
There are no additional questions at this time I'd like to turn the call back to Peter Patzer CEO for closing remarks.
Thank you and in closing I would really like to thank our customers employees and numerous suppliers for partnering with us in bringing innovative solutions to solve the challenges that people communities and countries face every day across the globe.
There's uncertainty and challenges in the world at large increase we see ever increasing demand for space based solutions as I, just talked about b that supply chain or mobility communication remote internet, whether climate change global security agriculture energy that list of areas, which increasingly use and deploy.
And on space, just keeps growing and just like computers and the Internet driven by Moore's law became inextricably linked without daily lives in the global economy in the Eighty's Ninety's in early two thousands we see the same thing happening today with space driven by similar law of constant performance.
Improvements tenfold every five years for satellite capabilities and that has been working now for a quarter century and shows no sign of a Beijing anytime soon.
They're mission driven and incredibly motivated team that we have here at spire. We are proud to be part of and indeed I would argue shape. This transformation a wave of change to create a safer more prosperous and sustainable future on earth by serving our customers everywhere in the World every single day.
And I look on with great optimism to the rest of 2023 and onwards into the future as we drive towards profitability and sustainable growth.
This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.
Okay.
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