Q1 2025 Spire Global Inc Earnings Call
Operator: Greetings and welcome Quarter 2025 Earnings Conference. At this time, all participants are in.
Greetings and welcome to spire Global first quarter 2025 earnings conference call.
At this time all participants are in a listen only mode.
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<unk> and answer session will follow the formal presentation.
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Ben Hackman: I will now turn the conference over to your host. Ben Hackman, head of a restaurant. Thank you. You may be Thank you.
I will now turn the conference over to your host Ben Hackman head of Investor Relations. Thank you you may begin.
Ben Hackman: Thank you Hello, everyone and thank you for joining spires first quarter 2025 earnings Conference call. Our earnings press release and related SEC filings are posted on the company's IR website. A replay of today's call will also be made available.
Ben Hackman: Hello, everyone, and thank you for joining Spire's first quarter 2025 earnings conference call. Our earnings press release and related SEC filings are posted on the company's IR website. A replay of today's call will also be made available.
Ben Hackman: With me on the call today is Theresa Condor, CEO, and Allie Engel, CFO. As a reminder, our commentary today will include non-GAP... Reconciliations between our GAAP and non-GAAP results, as well as our guidance, can be found in our earnings press release, which can be found on our IR website.
Speaker Change: With me on the call today is Teresa Condor, CEO and Ali Engel CFO.
Speaker Change: 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, which can be found on our IR website.
Ben Hackman: Some of our comments today contain forward-looking statements that are subject to risks, uncertainties, and a... In particular, our expectations around our results of operations and financial conditions are uncertain and subjective. Should any of these expectations fail to materialize, or should our assumptions prove to be incorrect, actual company results could differ materially from these four looking statements. A description of these risks, uncertainties, and assumptions, and other factors that could affect our financial results is included in our SEC filing.
Some of our comments today contain forward looking statements that are subject to risks uncertainties and assumptions.
Speaker Change: In particular, our expectations around our results of operations and financial conditions are uncertain and subject to change.
Speaker 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.
Speaker Change: A description of these risks uncertainties and assumptions and other factors that could affect our financial results is included in our SEC filings.
Theresa Condor: With that, let me hand the call over to Theresa. Thank you, Ben. Good afternoon, and thank you for joining us today. I want to start by discussing the powerful drivers for Spire's business and the transforming landscape for space and defense technology. On our last call, we highlighted a fundamental approach to the U.S. Space Force procurement strategy—buying what they can, only building what they must. This shift has not just continued, it has accelerated. In April, the U.S. administration released an executive order designed to revolutionize and accelerate defense acquisitions. It established commercial solutions as the first choice, creating new opportunity for innovators like Spire.
Teresa Condor: With that let me hand, the call over to Teresa.
Teresa Condor: Thank you Ben good afternoon, and thank you for joining us today.
Teresa Condor: I want to start by discussing the powerful drivers for spires business and a transforming landscape for space and defense technologies.
Teresa Condor: On our last call, we highlighted a fundamental approach to the U S space Force procurement strategy.
Teresa Condor: Buying what they can only building what they must.
Teresa Condor: This shift has not just continued it has accelerated in.
Teresa Condor: In April the U S Administration released an executive order designed to revolutionize and accelerate defense acquisitions.
Teresa Condor: It established commercial solutions as he first choice, creating new opportunity for innovators like spire.
Theresa Condor: To further this vision, the administration also included a 13% increase in defense spending in its proposed budget for fiscal year 2026. In early March, we mentioned the Space Test Experiments Platform.
Teresa Condor: To further this vision. The administration also included a 13% increase in defense spending and its proposed budget for fiscal year 'twenty to 'twenty six.
Teresa Condor: In early March we mentioned the space test experiments platform.
Theresa Condor: Spire was recently notified of its selection to participate in this initiative, where commercial innovation meets national security, potentially unlocking up to $237 million for participating companies over multiple years. This program serves as the Defense Department and other agencies proving ground for new space technologies, with over 300 successful program missions that have redefined what's possible in orbit. Our selection represents validation of Spire's capabilities and an opportunity to accelerate development of cutting-edge space technologies for the joint warfighter.
Teresa Condor: Fire was recently notified of its election to participate in this initiative.
Teresa Condor: Our commercial innovation meets National security.
Teresa Condor: Potentially unlocking up to $237 million for participating companies over multiple years.
Teresa Condor: This program serves as the defense Department and other agencies proving ground for new space technologies with over 300 successful program missions that are redefine what's possible in orbit.
Teresa Condor: Our selection represents validation of spires capabilities, and an opportunity to accelerate development of cutting edge based technologies for the joint Warfighter.
Theresa Condor: Outside the United States, we continue to see opportunities in the UK, Europe, and Canada. Britain's defense industrial strategy has highlighted the focus on local procurement partnerships and the expectation that defense capabilities also drive growth across the country. With our longstanding small satellite manufacturing and test facilities in Scotland and existing government contracts, Spire is a key player in the UK space ecosystem.
Outside the United States, we continue to see opportunities in the U K Europe and Canada.
Speaker Change: Britain's defense industrial strategy has highlighted the focus on local procurement partnerships any expectation that defense capabilities also drive growth across the country.
Speaker Change: With our longstanding small satellite manufacturing and test facilities in Scotland, and existing government contracts expire as a key player in the U K space ecosystem.
Theresa Condor: In Germany, the new government of Friedrich Manz is set to establish a ministry for space, and NATO has indicated its intention to be a leader in the integration of commercial capabilities with its first commercial space strategy expected soon. Intelligence, surveillance, and reconnaissance capabilities, which Spire offers today with in-orbit assets, is on the short list of critical infrastructure for sovereign advantage across many defense and intelligence agencies. As of 2025, the United States has over 200 operational surveillance satellites, whereas Europe has fewer than 20. With a global base of customers and expanding capabilities to build satellites in the United States, Canada, the United Kingdom, and Germany, Spire is well-equipped to be a long-term, reliable partner and is strategically positioned to offer local solutions for sovereign space capabilities.
Speaker Change: In Germany, the new government a free drink match is set to establish a ministry for space and NATO has indicated its intention to be a leader in the integration of commercial capabilities.
Speaker Change: With its first commercial space strategy expected soon.
Intelligence surveillance and reconnaissance capabilities, which spire offers today with in orbit assets is on the short list of critical infrastructure for sovereign advantage across many defense and intelligence agencies.
Speaker Change: As a 2025, the United States has over 200 operational surveillance satellites, whereas Europe has fewer than 20.
Speaker Change: With a global base of customers and expanding capabilities to build satellites in the United States, Canada, United Kingdom, and Germany by.
Speaker Change: Spire is well equipped to be a long term reliable partner.
Speaker Change: Is strategically positioned to offer local solutions for sovereign space capabilities.
Theresa Condor: The market's growing confidence in our capabilities is reflected in Spire's recent contract award.
Speaker Change: The market's growing confidence in our capabilities is reflected inspires recent contract awards.
Theresa Condor: During the first quarter, we secured our most significant contract to date, a $72 million Canadian dollar contract from the Canadian Space Agency to design and develop a dedicated satellite constellation for comprehensive wildfire monitoring across Canada. This achievement represents both technical recognition and a meaningful contribution to environmental protection efforts.
Speaker Change: During the first quarter, we secured our most significant contract to date.
Speaker Change: 72 million Canadian dollar contract from the Canadian Space Agency to design and develop a dedicated satellite constellation for comprehensive wildfire monitoring across Canada.
Speaker Change: This achievement represents both technical recognition and a meaningful contribution to environmental protection efforts.
Theresa Condor: Spire also established a new relationship with a non-US government customer for daily radio frequency collections with signal geolocation.
Speaker Change: <unk> also established a new relationship with a non U S government customer for daily Radiofrequency collections with signal geolocation.
Theresa Condor: These diverse partnerships underscore the expanding trust in our solutions across borders and disciplines as we continue to address complex challenges through innovative space-based technologies. During our last call, we discussed the radio occultation modeling experiment, which revealed how forecast accuracy steadily improves as more radio occultation measurements are incorporated. In a significant development, NOAA has committed to the study's recommendation of 20,000 RO profiles per day, a meaningful increase from the 3,300 profiles currently sourced from the commercial space industry. For Spire, this shift opens a promising path forward in 2025 and the coming years. Despite NOAA's ongoing organizational changes that have drawn media attention, we expect commercial data procurements that enhance forecast capabilities will continue to receive priority funding and sustained focus.
Speaker Change: These diverse partnerships underscore the expanding trust and our solutions across borders and disciplines.
Speaker Change: We continue to address complex challenges through innovative space based technologies.
Speaker Change: During our last call we discussed the radio occultation modeling experiment, which revealed how forecast accuracy steadily improve as more radio occultation measurements are incorporated.
Speaker Change: And a significant development Noah has committed to the studies recommendation of 20000, Aro profiles per day, meaning.
Speaker Change: A meaningful increase from the 3300 profiles currently sourced from the commercial space industry.
Speaker Change: For spire. This shift opens a promising path forward in 2025 in the coming years.
Speaker Change: Despite no is ongoing organizational changes that have drawn media attention. We expect commercial data procurements that enhance forecasts capabilities will continue to receive priority funding and sustained focus even as resources tighten elsewhere within the agency.
Theresa Condor: even as resources tighten elsewhere within the agency.
Theresa Condor: This cultivation of vital weather data from commercial partners represents both scientific progress and a thoughtful investment in our shared future.
Speaker Change: This cultivation of vital whether data from commercial partners represents the scientific progress and a thoughtful investment in our shared future.
Theresa Condor: Beyond our government partnerships, Spire continues to provide space services solutions for commercial entities seeking to establish and expand their presence in space. These relationships often begin modestly, perhaps with initial design work or access on a single satellite, before evolving into deeper collaborations over time. Our comprehensive technology platform and proven operational heritage positions us as a trusted long-term partner for these growing ventures. Marriott's recent agreement for 16 additional satellites illustrates this journey of mutual growth, bringing the total constellation we have deployed on their behalf to more than 40 satellites. This enduring partnership reflects not just transactional success but the confidence clients place in our ability to support their ambitious vision from concept to orbital reality.
Speaker Change: Beyond our government partnerships aspire continues to provide space services solutions for commercial entities seeking to establish and extend their presence in space.
Speaker Change: These relationships often begin modestly perhaps with initial design work our access on a single satellite.
Speaker Change: Before evolving into deeper collaborations overtime.
Speaker Change: Our comprehensive technology platform and proven operational heritage positions us as a trusted long term partner for these growing ventures.
Speaker Change: Mario chose recent agreement for 16 additional satellites illustrates this journey of mutual growth, bringing the total constellation we have deployed on their behalf to more than 40 satellites.
Speaker Change: This enduring partnership reflects not just transactional success, but the confidence clients place in our ability to support our ambitious vision from concept to orbital reality.
Theresa Condor: Last month, Spire finalized the strategic sale of our maritime business, a decisive moment that has transformed our financial landscape. This transaction enabled us to eliminate our entire debt burden and provided relief from substantial interest payments. It strengthened our balance sheet by over $100 million, creating a clearer path toward our fundamental goal of becoming adjusted EBITDA and free cash flow positive. Our fortified financial position provides not just immediate stability, but the meaningful assurance that we can reach these critical financial milestones without requiring additional capital.
Speaker Change: Last month aspire finalized a strategic sale of our maritime business.
Speaker Change: A decisive moment that has transformed our financial landscape.
Speaker Change: This transaction enabled us to eliminate our entire debt burden and provided relief from substantial interest payments.
Speaker Change: It strengthened our balance sheet by over $100 million, creating a clear path toward our fundamental goal of becoming adjusted EBITDA and free cash flow positive.
Speaker Change: Our fortified our financial position provides not just immediate stability, but theyre meaningful assurance that we can reach these critical financial milestones without requiring additional capital.
Theresa Condor: The past nine months have tested Spire through a convergence of extraordinary challenges. navigating a protracted restatement process while managing the distracting timing considerations of our maritime transaction. Amid this complexity, leadership transitioned to an entirely new executive team. These internal changes unfolded against a backdrop of mounting geopolitical tensions, policy shifts following the U.S. government transition, and growing economic uncertainty. Yet through these compounding pressures, Spire's business model has demonstrated remarkable resilience. While we acknowledge the impact these challenges have had on our momentum, we remain steadfast in rebuilding our trajectory toward medium to long term 20 percent revenue growth targets and an unwavering focus on achieving profitability.
Speaker Change: The past nine months have tested spire through a convergence of extraordinary challenges.
Speaker Change: Navigating a protracted restatement process, while managing the distracting timing considerations of our maritime transaction.
Speaker Change: Amid this complexity leadership transition to an entirely new executive team.
Speaker Change: These internal changes unfolded against a backdrop of mounting geopolitical tensions policy shifts following the U S government transition and growing economic uncertainty.
Speaker Change: Yet through these compounding pressures spires business model has demonstrated remarkable resilience.
Speaker Change: We acknowledge the impact these challenges have had on our momentum we remain steadfast in rebuilding our trajectory towards medium to long term, 20% revenue growth targets.
Speaker Change: An unwavering focus on achieving profitability is.
Theresa Condor: This period of adversity has revealed Spire's capacity to emerge with renewed clarity and purpose. As we continue our journey toward greater efficiency and renewed market focus, the executive team has undertaken a comprehensive review of our organizational structure and cost base. As part of the maritime transaction, a number of employees transitioned to the acquiring organization. Spire also made further adjustments to our headcount in the second quarter and we now have approximately 380 employees. This is down from approximately 450 employees at the end of 2024. We are also streamlining our office footprint to better support our evolving business needs.
Speaker Change: This period of adversity has revealed spires capacity to emerge with renewed clarity and purpose.
Speaker Change: As we continue our journey toward greater efficiency and renewed market focus the.
Speaker Change: The executive team has undertaken a comprehensive review of our organizational structure and cost base.
Speaker Change: As part of the Maritime transaction, a number of employees transitioned to the acquiring organization.
Speaker Change: <unk> also made further adjustments to our head count in the second quarter and we now have approximately 380 employees.
Speaker Change: This is down from approximately 450 employees at the end of 'twenty 'twenty four.
Speaker Change: We are also streamlining our office footprint to better support our evolving business needs, we will be closing, our San Francisco office in the second quarter, and our Singapore office by mid 'twenty 'twenty six.
Theresa Condor: We will be closing our San Francisco office in the second quarter and our Singapore office by mid-2020. Spire is expanding manufacturing capabilities at our Boulder and Munich locations to better support our U.S. government and European customers. The compact design of our satellites allows us to expand these sites efficiently and cost-effectively, ensuring Spire can scale production while maintaining high standards of quality and innovation. These strategic investments underscore our commitment to delivering exceptional value and reliability to our customers across key markets. With these headcount and facility adjustments, along with improvements in managing procurement and cost tracking, we expect to achieve break even to positive operating cash flow in the second half of the year and make meaningful progress towards profitability.
Speaker Change: Fire is expanding manufacturing capabilities at our Boulder in Munich locations to better support our U S government and European customers.
Speaker Change: The compact design of our satellites allows us to expand these sites efficiently and cost effectively.
Speaker Change: Ensuring spire can scale production, while maintaining high standards of quality and innovation.
Speaker Change: These strategic investments underscore our commitment to delivering exceptional value and reliability to our customers across key markets.
Speaker Change: With these head count and facility adjustments, along with improvements in managing procurement and cost tracking we expect to achieve breakeven to positive operating cash flow in the second half of the year and make meaningful progress towards profitability.
Theresa Condor: We expect to finish the year with over $100 million of cash, cash equivalents, and marketable securities on the balance sheet.
Speaker Change: We expect to finish the year with over $100 million of cash cash equivalents and marketable securities on the balance sheet.
Theresa Condor: We are in a new moment for Spire, and we are steadfast in driving profitable growth, enhancing operational efficiency, and ensuring reliable execution.
Speaker Change: We are in a new moment for spire, and we are steadfast in driving profitable growth enhancing operational efficiency and ensuring reliable execution.
Allie Engel: With that, I will turn it over to Allie. Thank you, Theresa. I will be discussing non-GAAP financial measures unless otherwise stated. We have provided a reconciliation of GAAP to non-GAAP financials in our earnings release, which is available on our Investor Relations website and should be reviewed in conjunction with this earnings call. As a reminder, Spire's Q1 2025 results and prior quarters results include portions of the Maritime business, which was sold at the end of April. Gap revenue for the first quarter was $23.9 million, reflecting $2.2 million, or 10% sequential growth from the fourth quarter of 2024.
Ali Engel: With that I will turn it over to Ali.
Ali Engel: Thank you Teresa I will be discussing non-GAAP financial measures unless otherwise stated we have provided a reconciliation of GAAP to non-GAAP financials in our earnings release, which is available on our Investor Relations website and should be reviewed in conjunction with this earnings call as a reminder, spires Q1.
Ali Engel: <unk> 2025 results in prior quarters results include portions of the Maritime business, which was sold at the end of April.
Ali Engel: GAAP revenue for the first quarter was $23 $9 million, reflecting $2 $2 million or 10% sequential growth from the fourth quarter of 'twenty 'twenty four.
Allie Engel: The first quarter 2025 revenue compares to revenue of $34.8 million in the first quarter 2024. As a reminder, Q1 2024 revenue included approximately $9.6 million of revenue associated with a single performance obligation for a space services customer. Revenue in the first quarter associated with the portion of the maritime business sold was a little over $10 million. Non-GAAP operating loss was negative $11.5 million for the first quarter 2025 as compared to negative $7.1 million in the first quarter of 2024. Adjusted EBITDA was negative $7.9 million for the first quarter of 2025 compared to negative $1.2 million for the first quarter 2024.
Ali Engel: The first quarter 'twenty 'twenty five revenue compares to revenue of $34 $8 million in the first quarter 'twenty 'twenty four.
Ali Engel: As a reminder, Q1 'twenty 'twenty four revenue included approximately $9.6 million of revenue associated with a single performance obligation for a space services customer.
Ali Engel: Revenue in the first quarter associated with the portion of the Maritime business sold was a little over $10 million.
Ali Engel: non-GAAP operating loss was negative $11 $5 million for the first quarter 2025.
As compared to negative $7 $1 million in the first quarter of 'twenty 'twenty four.
Ali Engel: Adjusted EBITDA was negative $7 $9 million for the first quarter of 2025 compared to negative $1.2 million for the first quarter 2024.
Allie Engel: First quarter costs remained elevated, but improved as compared to Q4 2024.
Ali Engel: First quarter cost remained elevated but improved as compared to Q4 'twenty 'twenty four.
Allie Engel: Moving now to the balance sheet. In the first quarter, 2025, we utilized $17.3 million of free cash flow and ended the quarter with $35.9 million of cash and cash equivalent. The cash balance was at the top end of the projections for the quarter. As of the end of April, we had cash and cash equivalents of approximately $136 million and zero debt.
Ali Engel: Moving now to the balance sheet in the first quarter 2025, we utilized $17.3 million of free cash flow and ended the quarter with $35 $9 million of cash and cash equivalents the.
Ali Engel: The cash balance was at the top end of actions for the quarter.
As of the end of April we had cash and cash equivalents of approximately $136 million and zero debt.
Allie Engel: As we now discuss our outlook for the rest of the year, I want to take a moment to provide some insights into our business and how new awards lead to revenue recognition. For our space services contracts, we typically recognize revenue during the data delivery phase of our contract. While the type of mission can impact the timeframe, typically it will take between 12 to 18 months to deploy a satellite from contract signature. When we can, we try to announce our larger contracts. This can be helpful for our investors to determine the start of the 12 to 18 month period.
Ali Engel: As we now discuss our outlook for the rest of the year I wanted to take a moment to provide some insights into our business and how new awards lead to revenue recognition.
Ali Engel: Our space services contracts, we typically recognize revenue during the data delivery phase of our contract.
Ali Engel: While the type of mission can impact the time frame typically it will take between 12 to 18 months to deploy a satellite from contract signature.
Ali Engel: When we can we try to announce our larger contracts. This can be helpful for our investors to determine the start of the 12 to 18 month period.
Allie Engel: We also try to share the launch of satellites when we can. The launch of a satellite indicates we are nearing the data delivery phase. Between launch and the data delivery phase, there is a period of time in which we are commissioning and completing on-orbit verification of the satellite. Once data delivery starts, we typically begin to recognize revenue. While we typically wait to recognize revenue until the data delivery phase, it's important to remember we receive payments during the pre-space phase of the contracts to fund satellite development and construction. As a quick reminder, we had approximately 20 satellites launched in the first quarter.
Ali Engel: We also try to share this launch of satellites when we can.
Ali Engel: The launch of a satellite indicates we are nearing the data delivery phase.
Ali Engel: Between launch and the data delivery phase there is a period of time in which we are commissioning and completing an orbit verification of the satellite.
Ali Engel: Once data delivery starts we typically begin to recognize revenue.
Ali Engel: Well, we typically wait to recognize revenue until the data delivery phase it's important to remember we receive payments during the pre space phase of the contracts to fun satellite development and construction.
Ali Engel: As a quick reminder, we had approximately 20 satellites launched in the first quarter roughly half of those satellites contained payloads for space services customers, which gives us clarity into the revenue ramp up in the second half of the year.
Allie Engel: Roughly half of those satellites contained payloads for Space Services customers, which gives us clarity into the revenue ramp-up in the second half of the year. The other half contain payloads to support our data and analytics business, including weather data. These deployments enhance the quality and types of weather data available to support current and future opportunities.
Ali Engel: The other half contain payloads to support our data and analytics business, including weather data.
Ali Engel: These deployments enhance the quality and types of weather data available to support current and future opportunities.
Allie Engel: I also want to touch briefly on the potential impacts of tariffs on our business, which we have been analyzing. Given the relatively low cost of our satellites, we do not foresee a material impact to our business based on current tariff levels. Any impact is largely due to U.S. launch activities, and we are working to minimize the impact.
Ali Engel: I also want to touch briefly on the potential impacts of tariffs on our business, which we have been analyzing.
Ali Engel: Given the relatively low cost of our satellites, we did not see a four or see a material impact to our business based on current tariff levels.
Ali Engel: Any impact is largely due to U S launch activities and we are working to minimize the impact.
Allie Engel: For the second quarter, we expect revenue to range between $18 million to $20 million. This includes approximately $3 million of revenue in April for the portion of the maritime business that we sold. For the full year, we expect revenue to range between $85 million and $95 million, which includes approximately $14 million of revenue for the portion of the maritime business we This range is consistent with the expectations we provided on the last earnings call. We continue to expect revenue from our remaining business to accelerate in the second half of the year upon the on-orbit verification and data delivery of recently launched satellites.
Ali Engel: For the second quarter, we expect revenue to range between $18 million to $20 million.
Ali Engel: This includes approximately $3 million of revenue in April for the portion of the maritime business that we sold.
Ali Engel: For the full year, we expect revenue to range between 85 and $95 million, which includes approximately $14 million of revenue for the portion of the maritime business we sold.
Ali Engel: This range is consistent with the expectations, we provided on the last earnings call.
Ali Engel: We continue to expect revenue from our remaining business to accelerate in the second half of the year upon the on orbit verification and data delivery of recently launched satellites as we look to 'twenty 'twenty six we continue to expect approximately 20% revenue growth over 2025 for our remaining business.
Allie Engel: As we look to 2026, we continue to expect approximately 20% revenue growth over 2025 for our remaining business. We anticipate second quarter non-GAAP operating loss to range between negative $13 million and negative $11 million, and second quarter adjusted EBITDA to be in the range of negative $8.5 million and negative $6.5 million. Given the adjustments we are making to headcount and offices, we expect both non-GAAP operating loss and adjusted EBITDA loss to continue to reduce in the second half of the year. We anticipate full-year non-GAAP operating loss to range between negative $43 million and negative $35 million and full-year adjusted EBITDA to range between negative $24 million and negative $16 million.
Ali Engel: We anticipate second quarter non-GAAP operating loss to range between negative $13 million of negative $11 million and second quarter adjusted EBITDA to be in the range of negative $8 5 million and negative $6 $5 million.
Ali Engel: Given the adjustments, we're making to head count and offices, we expect both non-GAAP operating loss and adjusted EBITDA loss to continue to reduce in the second half of the year.
Ali Engel: We anticipate full year non-GAAP operating loss to range between negative 43 million and negative $35 million in full year adjusted EBITDA to range between negative 24 million and negative $16 million.
Allie Engel: Over the past couple of years, we have spent at the low end of the range for Spire-funded CAPEX. We expect to have modest growth in Spire-funded CAPEX for this year to a range of $8 to $10 million as we complete some ground station maintenance and deploy LEMUR satellites to support revenue growth. During the second quarter, we will have elevated operating cash usage associated with transaction costs. However, we expect to achieve break-even to positive operating cash flow in the second half of the year and end the year with over $100 million on our balance. For non-GAAP loss per share, we expect a range from negative $0.49 to negative $0.42 for the second quarter, which assumes a basic weighted average share count of approximately 31.2 million shares.
Ali Engel: Over the past couple of years, we have spent at the low end of the range for spire funded capex, we expect to have modest growth inspire funded capex for this year to a range of $8 million to $10 million as we complete some ground station maintenance and deploy lemur satellites to support revenue growth.
Ali Engel: During the second quarter, we will have elevated operating cash usage associated with transaction costs.
Ali Engel: However, we expect to achieve break even to positive operating cash flow in the second half of the year and end the year with over $100 million on our balance sheet.
Ali Engel: Our non-GAAP loss per share, we expect a range from negative 49 cents to negative 42 cents for the second quarter, which assumes a basic weighted average share count of approximately 31.2 million shares for the full year, we expect a range from negative $1.80 to negative $1.
Allie Engel: For the full year, we expect a range from negative $1.80 to negative $1.51, which assumes a basic weighted average share count of approximately 30.4 million shares.
Ali Engel: And 51 cents, which assumes a basic weighted average share count of approximately 34 million shares.
Operator: Now I would like to open the call for questions. Thank you. And at this time, we will conduct our question-and-answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question... Star 2 if you would like to remove your question from the queue.
Ali Engel: Now I would like to open the call for questions.
Ali Engel: Thank you.
Ali Engel: And at this time, we will conduct a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad.
Ali Engel: Information tone will indicate that your line is in the question queue.
Ali Engel: Press Star two if you would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.
Operator: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the button.
Erik Rasmussen: And our first question comes from Erik Rasmussen with Stiefel. Please stay. Yeah, thanks for all the details on the quarter, glad to see a lot of the issues behind the company, we can actually start looking at the business on a go-forward basis. Maybe just into your guidance for the year, 90 million at the midpoint suggests a second half pick up a ramp. How should we think about the sequential growth rates in the back half of the year? Yeah.
Speaker Change: And our first question comes from Erik Rasmussen with Stifel. Please state your question.
Erik Rasmussen: Yeah. Thanks.
Speaker Change: All the details.
Erik Rasmussen: The quarter.
Erik Rasmussen: Glad to see a lot of the.
Erik Rasmussen: Issues behind the company.
Erik Rasmussen: And you can get the business.
Erik Rasmussen: Yes.
Erik Rasmussen: And maybe just in your guidance.
Erik Rasmussen: Year $90 million.
Erik Rasmussen: It suggests the second half.
Erik Rasmussen: How should we think about the sequential growth rates.
Erik Rasmussen: For the year.
Speaker Change: Yeah, Hi, Hi, Eric Thanks, Thanks for the for the Nice words about the go forward process. We're super excited to have some of these things behind us and really look forward. We we really feel good about the growth.
Theresa Condor: Hi, Erik. Thanks for the nice words about the go-forward process. We're super excited to have some of these things behind us and really look forward. We really feel good about the growth that is going to come in the second half of the year, and I'm going to let Allie answer and talk to specific patterns of sequential growth, but I really want to just make a few comments on demand and how good we feel about what that's going to look like in the second half of the year. We talked about it a little bit on the other call, and all of those things around government demand, increasing defense budgets, buyers' ability to achieve growth and offer customer solutions both in Europe and the rest of the world, as well as the United States, the expectation of commercial partnerships coming out of the U.S.
Speaker Change: Is going to come in the second half of the year and I'm going to let Alan answer and talk to them.
Speaker Change: Patterns of sequential growth, but I really want to just make a few comments on demand and how good we feel about what that's going to look like in the second half of the year, we talked about it a little bit on the other call and all of those around.
Speaker Change: Around.
Speaker Change: Government demand increasing defense budget.
Speaker Change: <unk> ability to achieve growth and offer our customer solutions, both in Europe, and rest of world as well as in the United States.
Speaker Change: The expectation of commercial partnerships coming out of the U S. Government all of that is going to contribute to what we see in outer quarters and going into 2026 as well as all of the revenue recognition will get from satellites that have launched in the early part of this year and that are yet.
Allie Engel: government, all of that is going to contribute to what we see in outer quarters and going into 2026, as well as all of the revenue recognition we'll get from satellites that have launched in the early part of this year and that are yet to come.
Allie Engel: Allie, do you have anything you want to add on that? Hey, Eric, good to talk to you today. I think in the back half of the year, we're seeing growth rates that are in the midpoint of our 12 to 17 percent range, the mid to high point of that, so 15 to 17 percent, and thinking about really focused on sequential quarter-over-quarter growth, which happened this quarter when we compared to the fourth quarter of 2024 and continuing to ramp up in that manner. Great, and it sounds like you're going to potentially hit a break-even or a positive operating cash flow sometime in the second half of the year, but I think you're right now at an adjusted EBITDA with your guidance in Q2 and what you did in Q1 of about $15.5 million, and you're looking at about $20 million for the year of a negative adjusted EBITDA.
Speaker Change: Hum.
Ali Engel: Ali do you have anything you want <unk> yeah yeah.
Speaker Change: Yeah.
Speaker Change: Good to talk to you today, I mean, I think in the back half of the year were seen you know growth rates that are in the mid point of our 12% to 17% range. The mid to high point of that so 15% to 17% and thinking about really focused on sequential quarter over quarter growth, which happened this quarter.
Speaker Change: When we compare to the fourth quarter of 'twenty, 'twenty, four and continuing to ramp up in that manner.
Speaker Change: Great and then it sounds like Youre going to potentially.
Speaker Change: Breakeven or positive operating cash flow sometime in the second half of the year because I think you are right now in adjusted EBITDA with your guidance in Q2, you did in Q1.
Speaker Change: That $15 million and Youre looking at about $20 billion for the year have been negative adjusted EBITDA could you actually see positive adjusted EBITDA.
Allie Engel: Could you actually hit positive adjusted EBITDA by the end of the year, or is that more of an exit-the-year run rate, and obviously then it depends on the top line and some of the efficiencies you talked about, but just wanted to get a sense of how you're thinking about how we should be modeling maybe adjusted EBITDA. Yeah, thanks for that. I think we're looking at breakeven kind of going into 2026 right now. So again, sequential improvement quarter over quarter for adjusted EBITDA and then going into 2026, hopefully, we'll be in a positive adjusted EBITDA position and definitely in the back half of the year, cash from operating activities, we're hoping to be in a positive position in the back half of the year.
Speaker Change: By the end of the year or is that more but exit the year run rate.
Speaker Change: And obviously then.
Speaker Change: On the top line and some of the efficiencies.
Speaker Change: Just wanted to get a sense of how you're thinking about how we should be modeling maybe adjusted EBITDA.
Speaker Change: Yeah. Thanks for that I think we're looking at break even kind of going into 'twenty twenty-six right now so again sequential improvement quarter over quarter for adjusted EBIDTA, and then going into 2020 six hopefully will.
Speaker Change: We'll be in a positive adjusted EBITDA position and definitely in the back half of the year cash from operating activities, where we're hoping to be in a positive position in the back half of the year.
Theresa Condor: Right, maybe just a couple on the business. You've talked about NOAA. I think we're all aware of some of the cuts to the funding there that are being contemplated. But, you know, for any upcoming awards though, what's your confidence level that you can maybe achieve a higher award value and maybe regain some of that performance requirements and reestablish yourselves with that? Yeah, I feel quite confident of that. Our expectation is that despite a lot of these high-profile cuts that have been happening, the focus on getting data in to improve forecasting, number one, is something that has continued to be reiterated as important for NOAA, and for the administration as a whole, the continued focus on partnering and working with commercial companies.
Speaker Change: Great and maybe just a couple on the business.
Speaker Change: You talked about.
I think we're all aware.
Speaker Change: That does it.
Speaker Change: Being there.
Speaker Change: That are being contemplated but.
Speaker Change: Yes.
Speaker Change: Any upcoming awards so what's your confidence.
Speaker Change: Okay level that you can maybe achieve a higher award value.
Speaker Change: Or maybe regain some of that performance requirements and reestablish yourselves.
Speaker Change: Chris.
Speaker Change: Yeah, I I feel quite confident of that.
Speaker Change: Our expectation is that despite a lot of these high profile cuts that have been happening.
Speaker Change: The focus on getting data and to improve forecasting number one is something that has continued to be reiterated as important for NOLA and for the administration as a whole the continued focus on partnering and working with commercial company. So my expectation is that the budge.
Theresa Condor: So, my expectation is that the budgets will continue to increase at NOAA, and my expectation is that the move from, I think it's currently 3,300 profiles per day of radio occultation that NOAA is purchasing from the two available suppliers, they are expecting to grow that, and have stated that 20,000 per day is the, you know, kind of the minimum right number, and all of the studies we referenced last time have shown that. So, I feel very good that this administration understands the importance of purchasing this type of data, as well as working with all of the available commercial companies that can provide something of value.
Speaker Change: It will continue to increase at NOLA and my expectation is that the the move from I think it's currently 3300 profiles per day of radio application that Noah is purchasing from that shoe available suppliers.
Speaker Change: They are expecting to grow that and have stated that 20000 per day is the you know kind of the minimum right number and all of the studies. We referenced last time have shown that so I feel very good that this administration understands the importance of purchasing this.
Speaker Change: Type of data as well as working with all of the available commercial companies that can provide something of value.
Erik Rasmussen: Great. Maybe just my last one.
Speaker Change: Great and maybe just my last one.
Theresa Condor: Any updates on the TALUS opportunity now that you closed the deal with Kepler and I think importantly avoided an extended legal battle, which I think you've mentioned drew some hesitancy there. Yeah, so I'll say across the board, having the the restatement completed, having all of the sales, the maritime business and that litigation behind us and having all of the cash on the balance sheet. It just it puts us in such a different position. With all of our customers across the board, everyone is just ready to look at at go forward. So we have a good relationship with TALUS.
Speaker Change: Any updates on the <unk> opportunity that you closed the deal with Kepler.
Speaker Change: I think importantly avoided an extended legal battle.
You'd mentioned drew some hesitancy there.
Speaker Change: Yeah, So I'll say across the board, having the the restatement completed having all of the sale of the maritime business in that litigation behind us and having all of the cash on the balance sheet. It just it puts us in such a different position with all of our customers across.
Speaker Change: The board everyone is just ready to look at it go forward. So we have a good relationship with Hollister, we are continuing to work through.
Theresa Condor: We are continuing to work through all of the next steps. We also continue to partner with them on the Urialo project that is kind of interrelated with the TALUS opportunity. And we continue to to put out news on progress that we're making there on LinkedIn.
Speaker Change: All of the next that we also continue to partner with them on the Uri Allo project.
Speaker Change: That is kind of interrelated with the tallest opportunity and we continue to to put out news on progress that we're making there on Linkedin and so this is you know this is moving forward, but I don't have further details that well that I can share at the moment.
Erik Rasmussen: And so this is, you know, this is moving forward, but I don't have further details that that I can share at the moment. Great. Appreciate all the all the info. Good luck. Thank you.
Speaker Change: Great I appreciate all that.
Speaker Change: Good luck.
Speaker Change: Thank you thanks.
Jeff Mueller: Your next question comes from Jeff Mueller with Baird. Thank you. Appreciate the geographic breakdown.
Speaker Change: Your next question comes from Jeff Mueller with Baird. Please state your question.
Speaker Change: Thank you.
Speaker Change: The geographic breakdown, but can you give us any sort of go forward revenue.
Theresa Condor: But can you give us any sort of go forward revenue mix, even approximate for like space services, aviation, weather, not sure if wildfire is separate from that, but just any sort of like use case, or end market type of breakdown. So we're generally not giving the breakdown across each one of those businesses. We're giving it in aggregate and across the geographical area. So I think what I can say is that all of those areas between space services, between what we do in space reconnaissance, what we're doing in weather, in climate, and what we're doing in aviation are all important areas for us, and they are all growth areas.
Speaker Change: Mix, even approximate for like space services aviation weather not sure of wildfire separate from that but just any sort of like use case.
Speaker Change: Or end market type of breakdown.
Speaker Change: So where we're generally not giving the breakdown across each one of those businesses, where we're giving it in the aggregate and in across the geographical area.
Speaker Change: So I think what I can say is that all of those areas between space services between what we do in space reconnaissance, what we're doing in weather and climate and what we're doing in aviation are all important areas for us and they are all growth.
Speaker Change: Areas, we'd given the breakdown between Europe and U S and in Asia Pacific I think you have those numbers with strong representation with customers in United States and and and.
Jeff Mueller: We've given the breakdown between Europe and U.S. and Asia Pacific. I think you have those numbers with strong representation with customers in the United States and next coming in Europe where we have a strong presence. And then maybe to just put a final point on Erik's first question, I think the Q2 guidance at the midpoint X maritime contribution is something like $16 million of revenue. And the back half on average at the midpoint implies a step up from $16 to like $23.5. That looks like a pretty sizable underlying step up normalized for the April maritime contribution.
Speaker Change: Next coming in Europe, where.
Speaker Change: Where we have a strong presence.
Speaker Change: Okay, and then maybe they just put a finer point on Eric's first question.
Speaker Change: I think the Q2 guidance at the midpoint ex maritime contribution of something like $16 million of revenue in the back half on average at the midpoint implies a step up from $16 23, and a half that looks like a pretty sizable underlying stuff up normalized for the April maritime contribution.
Theresa Condor: I guess how much of that is those 20 space services satellites that have launched and are starting to deliver data in the near term? I don't know how much contribution there is from the Canadian wildfire contract in the back half or just anything else you can say to increase confidence from the outside and the magnitude of the step up. Yeah, so I think we do have confidence because of satellites that we've launched that will start to generate revenue. We have quite a few other launches for space services customers also coming up throughout the year. We do have the WildfireSat contract that is in implementation and will contribute to revenue.
Speaker Change: I guess, how much of that is those 20 space services satellites that have launched and are starting to deliver data in the near term.
Speaker Change: I don't know how much contribution there was from the Canadian Wild fire contracts in the back half or just anything else you can say to increase.
Speaker Change: Conference from the outside of the magnitude of the stuff up.
Speaker Change: Yeah. So I think we do have confidence because of satellites that we've launched that will start to generate revenue. We have a quite a few other launches for space services customers also coming up throughout the year. We we do have the wildfires that contract that is in implementation.
Speaker Change: And will contribute to revenue. So that's just a matter of execution and then as we also mentioned we've been replenishing the satellite fleet and that allows us to continue to serve customers with the space reconnaissance solutions and you know the the weather and climate.
Theresa Condor: So that's just a matter of the execution. And then as we also mentioned, we've been replenishing the satellite fleet, and that allows us to continue to serve customers with the space reconnaissance solutions and, you know, the weather and climate. We just talked about NOAA and our expectation that there will be increasing numbers of RO procurement. And so all of those satellites also contribute to our ability to deliver on those type of customer expectations.
Speaker Change: We just talked about Noah and our expectation that there will be increasing the numbers of Aro procurement and so all of those satellites also contribute to our ability to deliver on those type of customer expectations.
Allie Engel: Okay. And then it sounds like you're going to be in a pretty good position from a cash flow and adjusted to the top perspective kind of getting into 2026. Is there any sort of framework you can give us for how to think about like incremental margins or annualized margin expansion? you know, over an intermediate term horizon.
Speaker Change: Okay.
And then it sounds like you're going to get a pretty good position from a cash flow and adjusted EBITDA perspective kind of getting into 2026.
Speaker Change: Is there any sort of framework you can give us for how to think about like incremental margins or marked annualized margin expansion.
Speaker Change: Yeah over an intermediate term.
Speaker Change: Horizon.
Allie Engel: And then I guess the second part of the question would be. As you think about pursuing some of these larger opportunities, Like, what could that entail in terms of investment? Is there the potential for kind of a step back and and even to pursue one of those larger opportunities before we get back to margin expansion? Thank you. Yes, I mean, we're definitely looking at, you know, expansion of the non-GAAP operating margin in the back half of the year. And it's coming from increase in the top line and reduction in cost. We're, you know, obviously focused on both.
Speaker Change: And then I guess the second part of the question would be.
Speaker Change: Just as you think about pursuing some of these larger opportunities.
Like what could that entail in terms of investment is there the potential for kind of a step back and.
Speaker Change: And EBITDA to pursue one of those larger opportunities before we get back to margin expansion. Thank you.
Speaker Change: Yes, I mean, we're definitely looking at you know expansion of the non-GAAP operating margin in the back half of the year and it's coming from increase in the top line and reduction in cost where you know obviously focused on both I think Trish has talked about are quite a bit about the revenue growth but.
Allie Engel: I think Theresa's talked about quite a bit about the revenue growth. But on the cost side, we've, you know, taken some steps in terms of reducing our headcount, reducing our office space. We have another office we're closing by mid-2026. So it's, there is improvement in the margin, and it's coming from both the top line and the cost side as well.
Speaker Change: On the cost side we've.
Speaker Change: <unk> taken some steps in terms of reducing our head count reducing our office space Oh, we have another office. We're closing by mid 2026. So it's there is improvement in the margin and it's coming from both the top line and the cost side as well.
Allie Engel: Yeah, I was wondering if you can give any sort of like intermediate term margin expansion framework or address if the larger opportunities that you're pursuing could pause any headwinds to kind of that view. I don't think we're prepared right now to provide that detail. I know that we've talked about that in the past, and so we'll take that under advisement, but I don't have that detail to provide today.
Speaker Change: Yeah I was wondering if you can give any sort of like intermediate term margin expansion framework.
Speaker Change: The address if the larger opportunities that you're pursuing could.
Speaker Change: Any headwinds to kind of that view.
Speaker Change: I don't think we're prepared right now to provide that detail I know that we talked about that we've talked about that in the past and so we will well, we'll take that under advisement, but I don't have that have that detail to provide today.
Theresa Condor: Okay. Thank you. And the only other comment I can give you, because you asked again about larger opportunities, is that we've talked about the manufacturing capabilities that are in process of being built out in Germany and in Boulder that allow us, in fact, to take advantage of these opportunities. And we already mentioned the Canadian WildfireSat-1 and the facilities we're building out there. All of that is built into our numbers on our expectations. And so I think the biggest thing in allowing us to pursue these larger opportunities is putting ourselves in a stable footing with a solid balance sheet, having these difficulties behind us, and going in and showing that we can execute, that we can maintain careful cost control.
Speaker Change: Thank you I mean, the only other comment I can give you because you you asked again about larger opportunities is that we've talked about the manufacturing capabilities that are in process of being built out in Germany and in Boulder.
Speaker Change: That allow us in fact to take advantage of these opportunities and we already mentioned the Canadian wildfires that one and the facilities were building out there all of that is you know it is built into our numbers on our expectations and so I think the the the biggest thing and allowing us to them.
Speaker Change: These larger opportunities is putting ourselves in a stable footing with a solid balance sheet, having these difficulties behind us.
Speaker Change: And going in and you know showing that we can execute that we can maintain them.
Speaker Change: Careful cost control.
Theresa Condor: And we're really seeing customers respond to that and to our long heritage of being able to innovate and put stuff in orbit and generate real value for customers.
Speaker Change: And we're really seeing customers respond to that and who are our long heritage.
Speaker Change: Sure.
Speaker Change: Put stuff in orbit and generate real value for customers.
Theresa Condor: Got it. Thank you.
Speaker Change: Got it thank you.
Speaker Change: Thanks.
Jeff Van Ree: And your next question comes from Jeff Van Ree with Craig Hallam. Please say your... Hey guys, thanks for taking the questions, yeah, and congrats on getting the Maritime sale completed, just a fantastic outcome.
Speaker Change: And your next question comes from Jeff Van <unk> with Craig Hallum. Please state your question.
Speaker Change: Hey, guys. Thanks, Thanks for taking the questions and congrats on getting the maritime sale completed just a fantastic outcome Teresa a number of questions Patrice as you step into the CEO role what are the critical things that you've got top of list that you have to accomplish this year.
Theresa Condor: Theresa, a number of questions, but Theresa, as you step into the CEO role, what are the critical things that you've got top of the list that you have to accomplish this year? Yeah, so I think, you know, the first critical thing was closing that maritime transaction. So that is a huge thing. And, you know, I want to keep coming back to that, because it just puts us in such a different position. The second thing was getting my executive team in place. And, you know, now we've got Ali here for the first earnings call. And I think we've, you know, doing a really good job.
Speaker Change: Yeah. So I think you know the the first critical Fang was clothing that had that maritime transaction. So that is that is that is a huge thing and you know I don't want to keep coming back to that because it just puts us in such a different position. The second thing was getting my executive team in place.
Speaker Change: And you know now we've got Alley here for their first earnings call and I think we've made great progress in getting great people in the door, Julia and Gabriel, arguing a really good job they've been really part of the the work that we've been doing around efficiency and managing our costs.
Theresa Condor: They've been really part of the work that we've been doing around efficiency and managing our costs. It's also top of mind to make sure that we are setting ourselves up to appropriately take advantage of the demand that we see. And so I think we are doing some of that with the manufacturing facilities that we've set up. I think we need to look at further investment in our sales and marketing and make sure that we've got the right people in the right places to really push forward and take advantage of that demand. And what you see with all of the satellites that are being launched this year is that I also want to make sure that we are maintaining the satellite network and our infrastructure and, you know, capabilities there so that we can also execute on all the demand that we're seeing.
Speaker Change: It's also top of mind to make sure that we are setting ourselves up to appropriately take advantage of the demand that we see I'm sorry, I think we are doing some of that with the the manufacturing facilities that we have set up I think we need to look at further investment in our sales and marketing.
Speaker Change: And make sure that we've got the right people in the right places to really push forward and take advantage of that demand and what you see with all of the satellites that are being launched this year is that I also want to make sure that we are maintaining the satellite network and our infrastructure.
Speaker Change: Sure and you know best in class capabilities there so.
Speaker Change: We can also execute on all of the demand that we're seeing and of course, the pathway to profitability I shouldn't neglect to mention that that's something that we had talked about all the time for the last two years and that is still very much top of mind mhm.
Theresa Condor: And, of course, the pathway to profitability, I shouldn't neglect to mention that. That's something that we had talked about all the time for the last two years, and that is still very much top of mind. Very helpful.
Speaker Change: Uh-huh.
Theresa Condor: And on the revenue guide, what has to happen to be at the low end versus the high end? Just talk to the variability, 10 million gap between the two. What are the primary things that we should be keeping an eye on? Yeah, I think there's, you know, there's some variability in there. Number one, just because the the world is so uncertain. And we're we're coming out of a restatement with very new accounting policies for how we do revenue recognition with those space services contracts. And so, you know, I think we want to we want to make sure we're very careful in understanding how that how that works and how that plays out, given that this is a new way of doing things.
Speaker Change: Very helpful. And then on the revenue guide what is what has to happen to be at the low end versus the high end and just talk to the variability 10 million gap between the two what are the primary things that we should be keeping an eye on.
Speaker Change: Yeah.
Speaker Change: Yeah, I think there's you know there's some variability in there number one just because the the world is so uncertain and where we're coming out of a restatement with very new accounting policies for how we do revenue recognition with those space services.
Speaker Change: Contracts and so you know I think we want to we want to make sure. We're very careful in understanding how that how that works and how that plays out given that this is a new way of doing things you know I think the D. R. F. G L.
Theresa Condor: You know, I think the the RFGL demand we're seeing is very strong and our ability to to go close those contracts and deliver on that data, you know, has a powerful difference in our ability to generate the revenue. And I think the the differences also potentially on ultimately how much NOAA does decide to procure this year in terms of the radio occultation number. Okay. That's helpful.
Speaker Change: Demand, we're seeing is very strong and our ability to go close those contracts and deliver on that data I'm. You know has a powerful difference in our ability to generate the revenue and I think the the difference is also potentially on ultimately how much no. It does.
Speaker Change: [laughter] procure this year in terms of the radio occultation numbers.
Speaker Change: Mhm Okay.
Speaker Change: That's helpful. And then I guess, just lastly on the space services I mean, obviously those can be serious needle moving deals I think earlier somebody touched on the palace and you referenced your alio, maybe you can just briefly read revisit a if it's out there I didn't catch it on Linkedin.
Jeff Van Ree: And then I guess just lastly, on the space services, I mean, obviously those can be serious needle-moving deals. I think earlier somebody touched on the TALIS and you referenced Euralio. Maybe you can just briefly revisit, if it's out there, didn't catch it on LinkedIn, what the latest update is on Euralio. And then also in that context, just any glimpses into space services pipeline, I realize things probably paused during the restatement and the sale and a lot of complications. But just a sense, even broadly, of how possible it is or how frequent it is to get deals in that pipe that are eight or nine figures.
Speaker Change: Just update us on your value and then also in that context, just any glimpses into space services pipeline I realize things probably paused during.
Speaker Change: During the restatement in the sale and a lot of complications, but just a sense even broadly of how possible. It is or how frequent it is to get deals in that pipe that are eight or nine figures you you've certainly announced some you did the Canadian wildfire deal here here your allele et cetera. So maybe just comment on your <unk> and then just to the <unk>.
Theresa Condor: You've certainly announced some. You did the Canadian wildfire deal here, Euralio, et cetera. So maybe just comment on Euralio and then just the strength and depth of the pipeline in space services. Yeah, the Uriello one is moving along, and I... We just recently completed, I don't know, a critical design review phase. Now, I'm going to mess up the exact wording on this, Jeff, but we're moving through certain phases of it that we announced, which is basically, you know, checking off stuff is moving along. So that program is progressing. There continues to be work done on what a next phase of Ureala would look like, which is something that goes through the European Space Agency and work that happens later this year.
Speaker Change: Strength and depth of the pipeline, it's based services.
Speaker Change: Yeah, no the Yuri Allo, one is moving along and I.
Speaker Change: We just recently completed I don't know a critical design review phase now and I'm going to mess up you expect working on this Jeff, but where we're moving through a certain phases of it that went out of which is basically you know checking off stuff is moving along so that that program is progressing there.
Speaker Change: Continues to be work done on what a and next phase of Youri Allo would look like which is something that goes through the European space Agency.
Speaker Change: And work that happens later this year. So those are all things that we continue to do in partnership with Talis and yeah, I expect that we keep having news coming out of that from the space services demand side I. You know we have a nice pipeline of that this is a pipeline.
Theresa Condor: So those are all things that we continue to do in partnership with Thales. And, you know, I expect that we keep having news coming out of that.
Theresa Condor: From the space services demand side, I, you know, we have a nice pipeline of that. This is a pipeline that is working with commercial entities. It's a pipeline that is also working with government entities. And, you know, quite often, they, like we mentioned with the Marriott one in the comments earlier, they will start smaller as someone starts to work with us. And then, as you saw with Marriott, they start to get bigger and bigger as those organizations start to want to deploy further assets after they start working with us. So I think you'll continue to see growth in space services as we go through the year.
Speaker Change: And that is working with commercial entities. It's a pipeline that is also working with government entities and you know quite often they like we mentioned with the Marriott what you want in the comments earlier, they will start smaller as someone starts to work with US and then as you saw with mariota.
Speaker Change: They start to get bigger and bigger as as those organizations start to want to deploy you know further assets. After they start working with us. So I think you'll continue to see growth in space services as we go through the year.
Jeff Van Ree: Great. That's helpful and congrats. Real defining window for you guys. Great to see you coming out from under the debt and able to go execute. So, appreciate it. Thanks, Jeff.
Speaker Change: Great that's helpful and congrats real defining window for your guys great to see you coming out from under the debt and able to go execute so I appreciate it.
Jeff: Thanks, Jeff.
Brian Kinstlinger: Your next question comes from Brian Kinstlinger with Alliance Global Partners. Hey, great. Thanks so much.
Speaker Change: Your next question comes from Brian Kingston with Alliance Global Partners. Please state your question.
Jeff: Okay, great. Thanks, so much.
Theresa Condor: I'm curious if there's any way to quantify the pipeline, maybe TCV of bids you're looking at the next year or two, and how this compares to a year ago. And if you can give numbers, which you haven't traditionally given, maybe just speak to the level of growth in the pipeline or overall trends in the pipeline. Yeah, we we don't give straight. We don't we don't give pipeline numbers. As you said, we haven't historically done that. I don't think that we will give specific numbers on that. So I think all that I can tell you is to again, share how how good we feel about the demand that we're seeing right now.
Brian Kingston: I'm curious if there's any way to quantify the pipeline maybe.
Brian Kingston: <unk> of bids you are looking at next year or two and how this compares to a year ago and if you can't give numbers, which you haven't traditionally given maybe just speak to the level of growth in our pipeline or our overall trends in our pipeline.
Brian Kingston: Yeah, we we don't give straight we don't we don't give pipeline numbers as you said, we havent historically done that I don't think that we will give specific numbers on that so I think all that I can tell you is to again sure how.
Brian Kingston: How good we feel about the demand that we're seeing right now and I can say that it's across all of the products and solutions that we have and in particular, we're seeing growth in demand on the government side and and that's on the government side, both the U S.
Theresa Condor: And I can say that it's across all of the products and solutions that we have. And in particular, we're seeing growth and demand on the government side, and that's on the government side, both U.S. government side and rest of world. And we're seeing that across all of our products and services. So it's not just going to be space services or space reconnaissance that we see it. It's really across all products and services. So I really I really do feel good about the demand that we have.
Brian Kingston: Inside and rest of world and we're seeing that across all of our products and services. So.
Brian Kingston: So it is not just going to be space services or space reconnaissance that we see it. It's it's it's really across all products and services. So I really I really do feel good about the demand that we have I do want to have further investment in our sales and marketing and and I.
Theresa Condor: I do want to have further investment in our sales and marketing. And I think that that just grows the pipeline even further as we get more people in the door who are out there talking to customers.
Brian Kingston: Think that that just grows the pipeline even further as we get more people in the door, who are out there talking to customers.
Brian Kinstlinger: Great.
Brian Kingston: Great.
Theresa Condor: Follow-up would be on the NOAA contract, is there a one-to-one relationship with ROs requested versus revenue, or is it fixed price? Just remind us the way that plays out. So, the way that it is priced is usually a price per radio occultation sounding, and then NOAA will determine how many soundings they want to buy. And then that is the price of the contract. And then we or any other commercial company has to then go and deliver that particular number of soundings. So, this is why, as you have NOAA going from their current 3,300 RO soundings that they purchased and indicating that they want to increase that number, and, you know, this is why it was so important that we talked about that study that happened the last time and that everyone agrees the impact that radio occultation has on forecast accuracy and net procurement of larger numbers of RO is the strategy and the expectation, then you just immediately have a higher amount of revenue coming from RO.
Brian Kingston: Follow up would be on the normal contract.
Brian Kingston: Is there a one to one relationship with Oh rose.
Brian Kingston: I stayed in groceries versus revenue or or is it a fixed price or just remind us.
Brian Kingston: The way that plays out.
Brian Kingston: So the way that is priced is usually a price per radio occultation sounding and then Noah will determine how many soundings they want to buy and then that is the the price of the contract and then we or any other commercial company has to them.
Brian Kingston: You can go and deliver that particular number of soundings. So this is why as you have no what going from their current 3300, Aro soundings that they purchase.
Speaker Change: And indicating that they want to increase that number and you know this is why I was so important that we talked about that study that happened the last time and that everyone agrees the impact that radio occultation has on forecast accuracy and that procurement of larger numbers of our O is is the strategy.
Speaker Change: And the expectation then you just immediately have a higher amount of revenue coming from Aro and of course, we have to do with it.
Theresa Condor: Of course, we have to, you know, sell it with NOAA, and then we have to deliver the RO, which, you know, is important and part of all of the deployment of satellites that we do this year.
Speaker Change: Sell it with Noah and and we have to deliver the Aro.
Speaker Change: Which is important and part of all of the deployment of satellites that we do this year.
Theresa Condor: Great. Thank you.
Speaker Change: Okay. Thank you.
Speaker Change: Yeah.
Austin Moeller: Thank you and just a reminder to ask a question press star 1 to remove yourself from Our next question comes from Austin Moeller with Canuck .
Speaker Change: Thank you and just a reminder to ask a question press star one to remove yourself from the queue Press star two.
Our next question comes from Austin Moeller with Canaccord. Please state your question.
Austin Moeller: Hi, good afternoon, Theresa and Ali. So just my first question here, your $3.8 million NOAA contract expires on in September 2025. Does that get automatically renewed at prior contract value because of the one year continuing resolution for 2025? Or does it get renegotiated on price? It's going to get redone. And that means price and it means number of soundings that are requested to purchase. So this is not something where you just expect an automatic amount at the same number that it currently is. We expect this to be different.
Austin Moeller: Hi, Good afternoon, Teresa and Ali So just my first question here your $3 8 million dollar Noah contract expires in September 2025 does that get automatically renewed at prior contract value because of the one year continuing resolution for 2025 or does it get renegotiated on price.
Speaker Change: It's it's going to get redone and and that that means price and it means number of soundings that are requested to purchase. So this is this is not something where you just expect an automatic amount at the same <unk>. The same number that it currently is we expect this.
Austin Moeller: To be different.
Austin Moeller: Okay, and just on the high-definition weather forecast using NVIDIA Earth-2 data, do you have any additional information you can share on customer demand or uptake for that product? Okay, and then just if we think about 2026, does your view of 20% top line growth, is that still a reasonable assumption? Absolutely, yes. Austin, did you hear that answer? It was absolutely. Yes, great. Thank you. Sorry, you didn't hear us the first time. We answered too quickly. Thank you.
Austin Moeller: Okay, and just sort of the high definition weather forecasts using.
Austin Moeller: Video <unk> two data.
Austin Moeller: Any.
Austin Moeller: Additional information you can share on customer demand or uptake for that product.
So I I don't have something specific that I can tell you other than you know we announced it at the last one which was a month ago. We've had a lot of these earnings most recently.
Austin Moeller: And so the team is out there now building out the demand for it and and I think what I can share is that there is demand both on the commercial side and and there is demand on the government side as well.
Austin Moeller: Okay and then just if we think about 2026 does your view of a 20% top line growth is that still a reasonable assumption.
Austin Moeller: Yes.
Austin Moeller: Yeah, Austin did you hear that answer it was absolutely yes, great. Thank you.
Speaker Change: Alright, you didn't hear is the first time, we answered you quickly [laughter].
Speaker Change: Thank you and our next question comes from Chris Quilty with Quilty space. Please state your question.
Christopher Quilty: And our next question comes from Chris Quilty with Quilty Space.
Christopher Quilty: Please state your name. Can you get a 30%? We will, we will try. I did want to clarify, I mean, I think you were saying that on the soundings with NOAA paper soundings. I'm not expecting. The number of soundings go up 7x, the revenues are going 7x. But should we think about the contracting opportunity as maybe... under this new regime. or does it go up 20%? or have you seen anything in the budget doc? what they're indicating. Yeah, so there's a few things. There is indication and expectation that the budgets that are put specifically against radio occultation will be increasing.
Speaker Change: At a 30%.
Speaker Change: I was just can you get a 30% [laughter], we will we will try.
Speaker Change: I did want to clarify I mean, I think you were saying that on the surroundings with Noah.
Speaker Change: You pay per soundings I am not expecting that as the number of soundings go up seven acts the revenues are growing seven X Bush.
Speaker Change: Or should we think about the contracting opportunity as maybe the revenues.
Speaker Change: Under this new regime.
Speaker Change: Or the revenue contribution does it double where does it go up 20% you know when you.
Speaker Change: Or have you seen anything in the budget documents that would indicate.
Speaker Change: What they're indicating to pay for the stepped up sounding.
Speaker Change: Yeah. So so theres a few things there is indication an expectation that the budgets that are put specifically against or radio occultation will be increasing them and you know moved around.
Theresa Condor: And, you know, moved around within NOAA, right, but with radio occultation and commercial procurement, a very key part of this. So when it comes to the pricing of radio occultation soundings, this has been a bit all over the place in the past, which is where you've seen changing number of soundings and the changing price per soundings. And I expect that to be something that is different in how NOAA does procurement of radio occultation going into the future, that this will start to get a little bit more consistent and a little bit more expected. And this is also because, like in the last procurement that happened, there is an expectation to work with all of industry in doing this.
Speaker Change: And within Noah right, but with radio occultation in commercial procurement, a very key part of this so when it comes to the pricing of radio occultation Soundings. This has been a bit all over the place in the past, which is where you've seen them at changing number of sounding.
Speaker Change: <unk> and the changing price per soundings and I expect that to be something that is different and how no. It does procurement of radio occultation going into the future that this will start to get a little bit more consistent and a little bit more expected and this is also because like in the last procure them.
Speaker Change: And that happened there.
Speaker Change: There is an expectation to work with all of industry in doing this.
Theresa Condor: So as you have higher number of soundings, you will have higher revenue. And I do expect the government to pay a reasonable price for radio occultation data. This is not a kind of price to the bottom. This is like, we want long term partnerships that are going to give us valuable data that impact forecast accuracy and is for the good of the nation and the world.
Speaker Change: So as you have higher number of soundings, you will have higher revenue and I do expect the government to pay a reasonable price for radio occultation data. This is not a kind of.
Speaker Change: Price to the bottom. This is like we want long term partnerships that are going to give us valuable data that impact forecast accuracy and as for the good of the nation in the world.
Speaker Change: Great MACRA.
Christopher Quilty: A macro question, if we're looking for 20% growth this year and next year. You know, now that I think about the maritime business. that out and try to understand which pieces are moving at which rate. Where would you expect the biggest growth drivers? Driver, let's say if we'll just pick one, you know, this year. Or is it consistent? Is it all? whether it's the driver, is it more on the space service? So, maritime, you know, maritime was a good business for us. Maritime was also our slowest growing business. So, I do expect that we're going to have growth coming from all areas of our business.
Macro question if were looking for 20% growth this year and next year.
Speaker Change: Now that I think about the maritime business and sort of take that out and try to understand which pieces are moving at which rates.
Speaker Change: Where would you expect the biggest growth drivers are or driver, let's say, we'll just pick one.
Speaker Change: This year versus next year or is it consistent is it all coming from.
As the driver or is it more on a.
Speaker Change: The space services businesses.
Speaker Change: <unk>.
Speaker Change: Or is it something else and air traffic.
Speaker Change: So maritime and maritime was a good business for us.
Speaker Change: Maritime was also our slowest growing business. So I do expect that we're going to have growth coming from all areas of our business and I would say at different periods of time historically, we've seen different parts of the business growing a growing.
Theresa Condor: And I would say at different periods of time, historically, we've seen different parts of the business growing, growing differently, right? So, when we are in the middle of COVID and everyone stopped flying, right, that was impacting the, you know, the aviation business a little bit. But in other areas, it was then compensated for. What I can say is that I think across the product areas, growth in sales to government customers, U.S. and rest of world is where you're going to see a lot of the growth drivers coming from in the second half of this year and into 2026.
Speaker Change: It differently right. So when we are in the middle of Covid and everyone's stopped flying alright that was impacting the you know the aviation business, a little bit but in the other areas. It was then compensated for.
Speaker Change: What I can say is that I think.
Speaker Change: Across the product areas growth and sales to government customers U S and rest of world is where you're going to see a lot of the growth drivers coming from in the second half of this year and into 2000, Twenty's, yet I do expect that the space reconnaissance piece or the their radio frequency.
Theresa Condor: I do expect that the space reconnaissance piece or the radio frequency geolocation is also going to be a strong area for us.
Speaker Change: G. O location is also going to be a strong area for us.
Speaker Change: Great. One final question, which is the speed services business, which is now about 50% of revenues.
Christopher Quilty: One final question, which is the Space Service... Now, you know, about 50% of revenue. When you look at the business and Thank you.
Speaker Change: When you look at the business and.
Speaker Change: The prospects for growing it do you consider at this point.
Theresa Condor: Have a good day. be there, you know, vertically integrating, you know, forward or backward, more into the components. programs, or forward any. end-to-end delivery. or do you expect that most of the capital investment will be direct? Yeah, so I am very focused on our organic growth and meeting what I consider quite strong demand in space services and across our other areas. And so I don't necessarily want to go into, you know, vertically integrating on the component side or otherwise. Right now, you know, we just came out of a difficult nine month period. We want to focus, focus, focus.
Speaker Change: Either vertically integrating forward or backward more into the components business to increase your strength.
Speaker Change: Programs.
Speaker Change: Or or forward integrating into things like.
Speaker Change: Transfer vehicle or something so you can take more of a.
Speaker Change: And delivery of the system.
Speaker Change: Or do you expect that most of the capital investment will be directed towards.
Speaker Change: The analytics side of the business.
Speaker Change: Yeah, So I I am very focused on our organic growth and meeting what what I consider quite strong demand in space services and across our other areas and so I I don't.
I really want to go into you know vertically integrating on the component side or otherwise right. Now you know we we just came out of a difficult nine months period, we want to focus focus focus and we really want to pay attention to them our efficiency in our <unk>.
Theresa Condor: And we really want to pay attention to our efficiency and our profitability and really get down to that nice, steady growth that everyone wants to see. So I think we have enough on our plate to have the growth that we want and the focus that we want without worrying about going in different directions right now.
Speaker Change: Fit ability and really get down to that nice steady growth that everyone wants to see so I I think we have enough on our plate to them to have the growth that we won and the focus that we want without worrying about you know going in different directions right now.
Operator: Very good. Thank you. Congrats on Yeah, thank you. Thanks very much. Thank you.
Speaker Change: Very good thank you and congrats on the new Queen slate going forward.
Speaker Change: Yeah. Thank you and thanks very much.
Speaker Change: Thank you and ladies and gentlemen, there are no further questions at this time.
Operator: And ladies and gentlemen, there are no further questions at this time. This concludes Spire Global's first quarter 2025 earnings conference call. You may disconnect your lines at this time. Thank you all for your participation.
This concludes spire Global's first quarter 2025 earnings conference call. You may disconnect. Your lines at this time. Thank you all for your participation.