Spire Global Announces Strong Second Quarter 2023 Results;

Spire Global Announces Strong Second Quarter 2023 Results; Expects Positive Cash Flow from Operations by Year End

Other Definitions

Annual Recurring Revenue (ARR). Spire defines ARR as expected annualized revenue from customers that are under contracts at the end of the reporting period with a binding and renewable agreement for subscription solutions or customers that are under a binding multi-year contract that can range from components of Space Services solutions to a project-based customer solution. Customers with project-based contracts are considered recurring when there is a multi-year binding agreement that has a renewable component in the contract. Customers are also considered recurring when they have multiple contracts over multiple years. Customer contracts for data trials and one-time transactions are excluded from the calculation of ARR.

ARR Customers. Spire defines an ARR Customer as an entity that has a contract with Spire or through its reseller partners contracts, that is either a binding and renewable agreement for subscription solutions, or a binding multi-year contract as of the measurement date independent of the number of solutions the entity has under contract. A single organization with separate subsidiaries, segments, or divisions may represent multiple customers, as Spire treats each entity that is invoiced separately as an individual customer. In cases where customers subscribe to Spire’s platform through its reseller partners, each end customer that meets the above definition is counted separately as an ARR Customer. All entities that have contracts for data trials and one-time transactions are excluded from the calculation of ARR Customers.

ARR Solution Customers. Spire defines an ARR Solution Customer similarly to an ARR Customer, but Spire counts every solution the customer has separately. As a result, the count of ARR Solution Customers exceeds the count of ARR Customers at each period end, as some customers contract with Spire for multiple solutions. Spire’s multiple solution customers are those that are under contract for at least two solutions: Maritime, Aviation, Weather, and Space Services. All entities that have contracts for data trials and one-time transactions are excluded from the calculation of ARR Solution Customers.

Conference Call

Spire will webcast a conference call to discuss the results at 5:00 p.m. Eastern Time today. The webcast will be available on Spire’s Investor Relations website at ir.spire.com. A replay of the call will be available on the site for three months.

Safe Harbor Statement

The forward-looking statements included in this press release and in the related conference call, including for example, the quotations of management, the statements under the heading “Financial Outlook” above, the information provided in the “GAAP to Non-GAAP Reconciliations – Q3 2023 and Full Year 2023 Financial Outlook” section of the tables below, statements regarding continued growth, statements regarding Spire’s expected timing to generate positive cash from operations, non-GAAP operating margins, adjusted EBITDA and free cash flow, statements regarding increasing its ARR, statements regarding profitability, statements regarding an expected reverse stock split and its potential effects, and statements regarding the benefits of its solutions to its customers and generally, reflect management’s best judgment based on factors currently known and involve risks and uncertainties. These risks and uncertainties include, but are not limited to, potential disruption of customer purchase decisions resulting from global economic conditions including from an economic downturn or recession in the United States or in other countries around the world, relative growth of its ARR and revenue, the failure of the Spire and exactEarth businesses (including personnel) to be integrated successfully, the risk that revenue and adjusted EBITDA accretion or the expansion of Spire’s customer count, ARR, product offerings and solutions will not be realized or realized to the extent anticipated, the ability to maintain the listing of Spire’s securities on the New York Stock Exchange, the ability to address the market opportunity for Space-as-a-Service, the ability to implement business plans, forecasts, and other expectations, and identify and realize additional opportunities, the risk of downturns, new entrants and a changing regulatory landscape in the highly competitive space data analytics industries, developments in and the duration of the COVID-19 pandemic and the resulting impact on Spire’s business and operations, and the business of its customers and partners, Spire’s potential inability to manage effectively any growth it experiences, Spire’s ability or inability to develop new products and services, and other risks detailed in reports Spire has filed with the Securities and Exchange Commission, including Spire’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Significant variation from the assumptions underlying Spire’s forward-looking statements could cause its actual results to vary, and the impact could be significant. All forward-looking statements in this press release are based on information available to Spire as of the date hereof. Spire undertakes no obligation, and does not intend, to update the information contained in this press release or the accompanying conference call, except as required by law.

About Spire Global, Inc.

Spire (NYSE: SPIR) is a global provider of space-based data, analytics and space services, offering unique datasets and powerful insights about Earth so that organizations can make decisions with confidence in a rapidly changing world. Spire builds, owns, and operates a fully deployed satellite constellation that observes the Earth in real time using radio frequency technology. The data acquired by Spire’s satellites provides global weather intelligence, ship and plane movements, and spoofing and jamming detection to better predict how their patterns impact economies, global security, business operations and the environment. Spire also offers Space as a Service solutions that empower customers to leverage its established infrastructure to put their business in space. Spire has eight offices across the U.S., Canada, UK, Luxembourg and Singapore. To learn more, visit www.spire.com.


CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands, except share and per share amounts)		2023			2022			2023			2022
Revenue	$	26,493		$	19,395		$	50,661		$	37,465
Cost of revenue		9,633			9,573			19,993			19,419
Gross profit		16,860			9,822			30,668			18,046
Operating expenses:
Research and development		9,752			8,225			19,415			16,882
Sales and marketing		6,729			6,728			13,579			13,633
General and administrative		10,899			11,274			22,669			23,958
Loss on decommissioned satellites		472			—			472			—
Total operating expenses		27,852			26,227			56,135			54,473
Loss from operations		(10,992	)		(16,405	)		(25,467	)		(36,427	)
Other income (expense):
Interest income		636			106			1,201			120
Interest expense		(4,709	)		(2,785	)		(9,287	)		(5,828	)
Change in fair value of contingent earnout liability		128			2,370			204			9,253
Change in fair value of warrant liabilities		357			3,897			1,103			9,732
Foreign exchange		(435	)		(2,605	)		589			(3,540	)
Loss on extinguishment of debt		—			(22,510	)		—			(22,510	)
Other expense, net		(1,038	)		(271	)		(1,800	)		(505	)
Total other expense, net		(5,061	)		(21,798	)		(7,990	)		(13,278	)
Loss before income taxes		(16,053	)		(38,203	)		(33,457	)		(49,705	)
Income tax provision		213			62			482			352
Net loss	$	(16,266	)	$	(38,265	)	$	(33,939	)	$	(50,057	)
Basic and diluted net loss per share	$	(0.11	)	$	(0.27	)	$	(0.23	)	$	(0.36	)
Weighted-average shares used in computing basic and diluted net loss per share		147,751,593			139,687,475			146,271,668			139,482,147


CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
		2023			2022			2023			2022
(In thousands)	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Net loss	$	(16,266	)	$	(38,265	)	$	(33,939	)	$	(50,057	)
Other comprehensive gain (loss):
Foreign currency translation adjustments		4,341			(2,212	)		2,752			(353	)
Net unrealized (loss) gain on investments (net of tax)		(7	)		(83	)		37			(83	)
Comprehensive loss	$	(11,932	)	$	(40,560	)	$	(31,150	)	$	(50,493	)


CONSOLIDATED BALANCE SHEETS (Unaudited)

	June 30,			December 31,
(In thousands)		2023			2022
Assets
Current assets
Cash and cash equivalents	$	43,144		$	47,196
Marketable securities		21,083			23,084
Accounts receivable, net (including allowance of $1,058 and $395 as of June 30, 2023 and December 31, 2022, respectively)		20,462			13,864
Contract assets		4,899			3,353
Other current assets		8,176			9,279
Total current assets		97,764			96,776
Property and equipment, net		62,964			53,752
Operating lease right-of-use assets		13,614			11,687
Goodwill		51,137			49,954
Customer relationships		20,332			20,814
Other intangible assets		13,469			13,967
Other long-term assets, including restricted cash		9,083			9,562
Total assets	$	268,363		$	256,512
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	4,294		$	4,800
Accrued wages and benefits		4,982			4,502
Contract liabilities, current portion		21,854			15,856
Other accrued expenses		9,317			8,210
Total current liabilities		40,447			33,368
Long-term debt		119,790			98,475
Contingent earnout liability		145			349
Deferred income tax liabilities		817			771
Warrant liability		709			1,831
Operating lease liabilities, net of current portion		12,509			10,815
Other long-term liabilities		413			780
Total liabilities		174,830			146,389
Commitments and contingencies
Stockholders’ equity
Common stock		18			16
Additional paid-in capital		470,309			455,751
Accumulated other comprehensive loss		(4,208	)		(6,997	)
Accumulated deficit		(372,586	)		(338,647	)
Total stockholders’ equity		93,533			110,123
Total liabilities and stockholders’ equity	$	268,363		$	256,512


CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

	Six Months Ended June 30,
(In thousands)		2023			2022
Cash flows from operating activities
Net loss	$	(33,939	)	$	(50,057	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		7,883			9,341
Stock-based compensation		5,986			5,198
Amortization of operating lease right-of-use assets		1,128			1,139
Amortization of debt issuance costs		1,086			2,673
Change in fair value of warrant liability		(1,103	)		(9,732	)
Change in fair value of contingent earnout liability		(204	)		(9,253	)
Loss on decommissioned satellites		472			—
Loss on extinguishment of debt		—			22,271
Other, net		(281	)		(16	)
Changes in operating assets and liabilities:
Accounts receivable, net		(6,441	)		(6,708	)
Contract assets		(1,506	)		(2,390	)
Other current assets		263			3,235
Other long-term assets		774			752
Accounts payable		(2,465	)		(2,788	)
Accrued wages and benefits		413			(1,702	)
Contract liabilities		5,467			4,378
Other accrued expenses		766			1,828
Operating lease liabilities		(890	)		(617	)
Other long-term liabilities		—			(46	)
Net cash used in operating activities		(22,591	)		(32,494	)
Cash flows from investing activities
Purchases of short-term investments		(25,845	)		(20,618	)
Maturities of short-term investments		28,400			—
Purchase of property and equipment		(12,677	)		(12,485	)
Net cash used in investing activities		(10,122	)		(33,103	)
Cash flows from financing activities
Proceeds from long-term debt		19,886			100,360
Proceeds from issuance of common stock under the Equity Distribution Agreement, net		7,866			—
Payments on long-term debt		—			(71,512	)
Payments of debt issuance costs		—			(4,342	)
Proceeds from exercise of stock options		—			796
Proceeds from employee stock purchase plan		422			332
Net cash provided by financing activities		28,174			25,634
Effect of foreign currency translation on cash, cash equivalents and restricted cash		597			3,213
Net decrease in cash, cash equivalents and restricted cash		(3,942	)		(36,750	)
Cash, cash equivalents and restricted cash
Beginning balance		47,569			109,645
Ending balance	$	43,627		$	72,895


GAAP to Non-GAAP Reconciliations (Unaudited)

	Three Months End June 30,						Six Months End June 30,
(In thousands, except for share and per share amounts)		2023			2022			2023			2022

Gross profit (GAAP)	$	16,860		$	9,822		$	30,668		$	18,046
Adjustments:
Exclude stock-based compensation		48			43			125			120
Exclude amortization of purchased intangibles		874			895			1,733			1,814
Exclude other acquisition accounting amortization		170			174			336			357
Exclude merger and acquisition related expenses		-			50			-			127
Gross profit (Non-GAAP)	$	17,952		$	10,984		$	32,862		$	20,464

Research and development (GAAP)		9,752			8,225			19,415			16,882
Adjustments:
Exclude stock-based compensation		(902	)		(814	)		(1,553	)		(1,525	)
Exclude merger and acquisition related expenses		-			(109	)		-			(277	)
Research and development (Non-GAAP)		8,850			7,302			17,862			15,080

Sales and marketing (GAAP)		6,729			6,728			13,579			13,633
Adjustments:
Exclude stock-based compensation		(619	)		(735	)		(1,056	)		(1,351	)
Exclude amortization of purchased intangibles		-			(793	)		-			(1,608	)
Exclude merger and acquisition related expenses		-			(109	)		-			(277	)
Sales and marketing (Non-GAAP)		6,110			5,091			12,523			10,397

General and administrative (GAAP)		10,899			11,274			22,669			23,958
Adjustments:
Exclude stock-based compensation		(1,771	)		(1,317	)		(3,252	)		(2,202	)
Exclude merger and acquisition related expenses		-			(1,245	)		(1,015	)		(3,846	)
General and administrative (Non-GAAP)		9,128			8,712			18,402			17,910

Loss on decommissioned satellites (GAAP)		472			-			472			-
Adjustments:
Exclude loss on decommissioned satellites		(472	)		-			(472	)		-
General and administrative (Non-GAAP)		-			-			-			-

Loss from operations (GAAP)	$	(10,992	)	$	(16,405	)	$	(25,467	)	$	(36,427	)
Adjustments:
Exclude stock-based compensation		3,340			2,909			5,986			5,198
Exclude merger and acquisition related expenses		-			1,513			1,015			4,527
Exclude amortization of purchased intangibles		874			1,688			1,733			3,422
Exclude other acquisition accounting amortization		170			174			336			357
Exclude loss on decommissioned satellites		472			-			472			-
Loss from operations (Non-GAAP)	$	(6,136	)	$	(10,121	)	$	(15,925	)	$	(22,923	)

Gross Margin (GAAP)		64	%		51	%		61	%		48	%
Adjustments:
Exclude stock-based compensation and merger and acquisition related expenses		0	%		0	%		0	%		1	%
Exclude amortization of purchased intangibles		3	%		5	%		3	%		5	%
Exclude other acquisition accounting amortization		1	%		1	%		1	%		1	%
Gross Margin (Non-GAAP)		68	%		57	%		65	%		55	%

Operating Margin (GAAP)		-41	%		-85	%		-50	%		-97	%
Adjustments:
Exclude stock-based compensation		12	%		15	%		12	%		14	%
Exclude merger and acquisition related expenses		0	%		8	%		2	%		12	%
Exclude amortization of purchased intangibles		3	%		9	%		3	%		9	%
Exclude other acquisition accounting amortization		1	%		1	%		1	%		1	%
Exclude loss on decommissioned satellites		2	%		0	%		1	%		0	%
Operating Margin (Non-GAAP)		-23	%		-52	%		-31	%		-61	%

Net loss (GAAP)	$	(16,266	)	$	(38,265	)	$	(33,939	)	$	(50,057	)
Adjustments:
Exclude stock-based compensation		3,340			2,909			5,986			5,198
Exclude merger and acquisition related expenses		-			1,513			1,015			4,527
Exclude amortization of purchased intangibles		874			1,688			1,733			3,422
Exclude other acquisition accounting amortization		170			174			336			357
Exclude change in fair value of contingent earnout liability		(128	)		(2,370	)		(204	)		(9,253	)
Exclude change in fair value of warrant liabilities		(357	)		(3,897	)		(1,103	)		(9,732	)
Exclude foreign exchange		435			2,605			(589	)		3,540
Exclude loss on extinguishment of debt		-			22,510			-			22,510
Exclude other expense, net		1,038			271			1,800			505
Exclude loss on decommissioned satellites		472			-			472			-
Net loss (Non-GAAP)	$	(10,422	)	$	(12,862	)	$	(24,493	)	$	(28,983	)

Net loss per share (GAAP)	$	(0.11	)	$	(0.27	)	$	(0.23	)	$	(0.36	)
Adjustments:
Exclude stock-based compensation		0.02			0.02			0.04			0.04
Exclude merger and acquisition related expenses, purchased intangibles and other acquisition accounting amortization		0.01			0.02			0.02			0.06
Exclude change in fair value of warrant liabilities and change in value of contingent earnout liability		-			(0.04	)		(0.01	)		(0.14	)
Exclude foreign exchange		-			0.02			-			0.03
Exclude loss on extinguishment of debt		-			0.16			-			0.16
Exclude other expense, net		0.01			-			0.01			-
Exclude loss on decommissioned satellites		-			-			-			-
Net loss per share (Non-GAAP)	$	(0.07	)	$	(0.09	)		(0.17	)	$	(0.21	)

Weighted-average shares used in computing basic net loss per share		147,751,593			139,687,475			146,271,668			139,482,147
Weighted-average shares used in computing diluted net income per share		147,751,593			139,687,475			146,271,668			139,482,147

Net loss (GAAP)	$	(16,266	)	$	(38,265	)	$	(33,939	)	$	(50,057	)
Depreciation and amortization		3,967			4,507			7,883			9,341
Net Interest		4,073			2,679			8,086			5,708
Taxes		213			62			482			352
EBITDA		(8,013	)		(31,017	)		(17,488	)		(34,656	)
Change in fair value of contingent earnout liability		(128	)		(2,370	)		(204	)		(9,253	)
Change in fair value of warrant liabilities		(357	)		(3,897	)		(1,103	)		(9,732	)
Foreign exchange		435			2,605			(589	)		3,540
Loss on extinguishment of debt		-			22,510			-			22,510
Stock-based compensation		3,340			2,909			5,986			5,198
Mergers and acquisition related expenses		-			1,513			1,015			4,527
Other acquisition accounting amortization		170			174			336			357
Loss on decommissioned satellites		472			-			472			-
Other expense, net		1,038			271			1,800			505
Adjusted EBITDA	$	(3,043	)	$	(7,302	)	$	(9,775	)	$	(17,004	)

Net cash used in operating activities		(11,301	)		(17,502	)		(22,591	)		(32,494	)
Purchase of property and equipment		(8,028	)		(8,242	)		(12,677	)		(12,485	)
Free Cash Flow	$	(19,329	)	$	(25,744	)	$	(35,268	)	$	(44,979	)


GAAP to Non-GAAP Reconciliations – Q3 2023 and Full Year 2023 Financial Outlook (Unaudited)

(In thousands, except for share and per share amounts)	Q3'23 Ranges
		Low			High
Revenue	$	26,000		$	27,000
		Low			High
Loss from operations (GAAP)	$	(11,438	)	$	(10,438	)
Adjustments:
Exclude stock-based compensation		3,391			3,391
Exclude amortization of purchased intangibles		873			873
Exclude other acquisition accounting amortization		174			174
Loss from operations (Non-GAAP)	$	(7,000	)	$	(6,000	)

		Low			High
Net loss per share (GAAP)	$	(0.11	)	$	(0.10	)
Adjustments:
Exclude stock-based compensation		0.02			0.02
Exclude purch intangibles and other purch acctg amortization		0.01			0.01
Net loss per share (Non-GAAP)	$	(0.08	)	$	(0.07	)
Weighted-average shares used in computing basic and diluted net loss per share		167,068,711			167,068,711

		Low			High
Net loss (GAAP)	$	(16,547	)	$	(15,547	)
Depreciation and amortization		4,422			4,422
Net Interest		4,771			4,771
Taxes		89			89
EBITDA	$	(7,265	)	$	(6,265	)
Stock-based compensation		3,391			3,391
Other expense, net		200			200
Other acquisition accounting amortization		174			174
Adjusted EBITDA	$	(3,500	)	$	(2,500	)

(In thousands, except for share and per share amounts)	FY 2023 Ranges
		Low			High
Revenue		104,000			109,000

		Low			High
Loss from operations (GAAP)	$	(50,466	)	$	(45,466	)
Adjustments:
Exclude stock-based compensation		12,818			12,818
Exclude merger and acquisition related expenses		1,015			1,015
Exclude amortization of purchased intangibles		3,479			3,479
Exclude other acquisition accounting amortization		682			682
Exclude loss on decommissioned satellites		472			472
Loss from operations (Non-GAAP)	$	(32,000	)	$	(27,000	)

		Low			High
Net loss per share (GAAP)	$	(0.44	)	$	(0.41	)
Adjustments:
Exclude stock-based compensation	$	0.08		$	0.08
Exclude merger and acquisition related expenses	$	0.01		$	0.01
Exclude purch intangibles and other acq acctg amortization	$	0.03		$	0.03
Exclude change in fair value of warrant liabilities	$	(0.01	)	$	(0.01	)
Exclude other expense, net	$	0.01		$	0.01
Net loss per share (Non-GAAP)	$	(0.32	)	$	(0.29	)
Weighted-average shares used in computing basic and diluted net loss per share		157,470,180			157,470,180

		Low			High
Net loss (GAAP)	$	(69,245	)	$	(64,245	)
Depreciation and amortization		17,332			17,332
Net Interest		17,654			17,654
Taxes		968			968
EBITDA	$	(33,291	)	$	(28,291	)
Change in fair value of contingent earnout liability	$	(204	)	$	(204	)
Change in fair value of warrant liabilities		(1,103	)		(1,103	)
Foreign exchange		(589	)		(589	)
Other expense, net		2,200			2,200
Stock-based compensation		12,818			12,818
Mergers and acquisition related expenses		1,015			1,015
Other acquisition accounting amortization		682			682
Loss on decommissioned satellites		472			472
Adjusted EBITDA	$	(18,000	)	$	(13,000	)

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