Spire Global Inc Q1 2023 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Austin Moeller - Canaccord Genuity LLC - Analyst : Hi, Peter. Good afternoon.

Question: Austin Moeller - Canaccord Genuity LLC - Analyst : Nice seeing you, too. My first question is just around the RF geolocation business. As you stated earlier, the company currently has 40 LEMUR satellites that are capable of RF signal capability. Are you planning to add more satellites as you replenish the constellation over time that will have that capability to get beyond the 40? Or is 40 sufficient to provide global coverage?

Question: Austin Moeller - Canaccord Genuity LLC - Analyst : Okay, great. That's interesting. And then, just on the NOAA contract. Under the terms of that contract being in IDIQ, if you do, in the next 18 to 24 months, get to the point where you can collect 100,000 RO vertical profiles per day, does that enable you to increase the amount that NOAA is paying you through that contract vehicle over the next several years? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 10, 2023 / 9:00PM, SPIR.N - Q1 2023 Spire Global Inc Earnings Call

Question: Austin Moeller - Canaccord Genuity LLC - Analyst : Awesome. Great to hear they can throttle up the utilization there. Thanks for all the great details.

Question: Erik Rasmussen - Stifel Nicolaus - Stifel Financial Corp - Analyst : Yeah. Thanks. Congratulations on the results and great job on the margin improvement. Maybe just starting there on margins and the outperformance, you mentioned leveraging headcounts, infrastructure costs, and other things. As the year progresses, are there still levers you can pull from to eke out more leverage? And how should we think about further improvements and where it may come from?

Question: Erik Rasmussen - Stifel Nicolaus - Stifel Financial Corp - Analyst : Great. And then maybe just your guidance revenue, Q1's outperformance, and the commentary suggesting that the company is on a good trajectory to achieve its 2023 guidance. What could get you to the higher end, or even above the higher end, of that range? And then maybe just where are the limitations at this point? I know you talked about macro, and Peter sort of laid out a number of areas right there. But if you could just talk a little bit more. Thanks.

Question: Erik Rasmussen - Stifel Nicolaus - Stifel Financial Corp - Analyst : Great. Maybe just one quick clarification. I think Peter mentioned, talking about SaaS-type gross margins, 70% in the next two years. Is that within two years? And then is that GAAP or non-GAAP?

Question: Erik Rasmussen - Stifel Nicolaus - Stifel Financial Corp - Analyst : Great. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 10, 2023 / 9:00PM, SPIR.N - Q1 2023 Spire Global Inc Earnings Call

Question: Ric Prentiss - Raymond James Financial Inc. - Analyst : Thanks. Good afternoon, everybody.

Question: Ric Prentiss - Raymond James Financial Inc. - Analyst : Peter, you laid out, obviously, a picture of the conference floor having a lot of CEOs concerned and prepping for recessions the next 12 to 18 months. Walk us through the visibility you have in your guidance for '23 but also then the comfort in the gross margins at individual conversations with customers. Just how are your businesses, you think, going to be affected by the potential recessionary plans at the overall global economy community?

Question: Ric Prentiss - Raymond James Financial Inc. - Analyst : I'm sorry. No, it's me. I'm at an airport, traveling, right now. And It's New Orleans jazz. Sorry.

Question: Ric Prentiss - Raymond James Financial Inc. - Analyst : There you go. Second question is, and you kind of touched on it there a little bit, AI obviously is becoming a hot topic. Some revenue opportunities for you, maybe flush that out a little bit more. Are there cost potentials with AI into the model as well for you?

Question: Ric Prentiss - Raymond James Financial Inc. - Analyst : Anything on the cost side that AI could benefit you all?

Question: Ric Prentiss - Raymond James Financial Inc. - Analyst : Okay. Last one for me is more on the technicality. Obviously, you got the notice from the exchange stock price. I think it's tied to probably your shareholder vote. But update us a little bit on the timing and thoughts on getting back into compliance and the potential on, most likely, a reverse split and what is your target zone. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 10, 2023 / 9:00PM, SPIR.N - Q1 2023 Spire Global Inc Earnings Call

Question: Ric Prentiss - Raymond James Financial Inc. - Analyst : This is not important. Remind me of the shareholder vote date.

Question: Ric Prentiss - Raymond James Financial Inc. - Analyst : Thanks a lot. Stay well.

Question: Jeff Meuler - Robert W. Baird & Co. Incorporated - Analyst : Yeah, thanks. And Peter, breaking new ground using SaaS and GAAP in the same sentence, but I like it. So on the ARR guidance -- so you had a good quarter relative to your expectations, great to see. But the guidance implies a step up in the pace of sequential ARR growth over the balance of the year. And based on the Q2 guidance, it looks like it's starting in Q2. And I guess I'm just comparing it to what it was the last couple of quarters. So just help us understand the visibility into starting to see the bigger ARR growth in an uncertain macro, including the line of sight to Q2, given that we're almost halfway through the quarter.

Question: Jeff Meuler - Robert W. Baird & Co. Incorporated - Analyst : Got it. And then maybe a different take on the AI question. Can you just maybe update us on -- I guess, two years ago, when you were doing the [this pack] investor day, you were talking about AI at that point in time and kind of the journey from clean data, smart data, to more predictive solutions. So, I know that you've -- I know it's become much more topical lately, societally, and among investors, but it's something you've been working on for a while. So just help us, from a solution perspective, on where you are in developing the more predictive solutions or where customers are in adopting them. Thank you.

Question: Jeff Meuler - Robert W. Baird & Co. Incorporated - Analyst : Okay. Thank you.

Question: Caleb Henry - Quilty Analytics - Analyst : Hey, guys. Thanks for taking questions. Some of mine have already been answered, so I think I'll be brief. Can you shed some light on your solutions revenue mix, like the mix between AIS, ADS-B, weather, and space services?

Question: Caleb Henry - Quilty Analytics - Analyst : All right. Thanks. And then, last week, Spire announced the new maritime weather service. I was just wondering if you could share what was the impetus for that and if you see a big gap in the market that that can serve.

Question: Caleb Henry - Quilty Analytics - Analyst : Okay. And then my last question, just -- we're continuing to see headlines about software companies laying off staff. I'm wondering if that has created an opportunity for Spire just because the space industry has historically struggled to win software engineers over from the bigger names, like Google and Apple. So has that been an opportunity for Spire? Or are you guys kind of just watching, more of a wait-and-see mode, on that?

Question: Caleb Henry - Quilty Analytics - Analyst : All right. That's all for me. Thanks, guys.

Question: Andre Madrid - BofA Securities, Inc. - Analyst : Hi. How are you guys?

Question: Andre Madrid - BofA Securities, Inc. - Analyst : Yeah. So looking around at the space in general, there is still a lot of sat operators that don't provide maritime surveillance. Have you considered, at any point, a partnership with a data immigrator to maybe provide a more holistic surveillance solution, something -- partnering with somebody that has land-based surveillance and providing a more whole solution?

Question: Andre Madrid - BofA Securities, Inc. - Analyst : Got you. Very helpful. Thank you.