Spire Global Inc Q3 2021 Earnings Call Transcript

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

Question: Jeffrey Meuler - Baird - Analyst : Yeah. Thank you. Would love any additional detail you can provide on the ARR progression. Obviously, the nice jump, and you called out the two sizeable wins. But it sounds like it's probably broader than that, and the Q4 guidance implies a fairly nice further sequential increase. So would just love any additional color on the breadth of the strength and the pipeline beyond the two mega ones that you discussed. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 10, 2021 / 10:00PM, SPIR.N - Q3 2021 Spire Global Inc Earnings Call

Question: Jeffrey Meuler - Baird - Analyst : Awesome. And then on the accelerated investment to support future revenue growth, I understand that you just raised a lot of capital to do just that. But I guess, you had a business plan that was already assuming increased investment, and now you're also acquiring exactEarth, and you're going to onboard headcount and other capabilities from that. So can you just help me understand relative to the prior growth plan and investment plan, like, what are you incrementally spending on or investing in?

Question: Jeffrey Meuler - Baird - Analyst : Got it. And then last one for me before I hand it over. So your constellation, as I understand it, has full coverage and has the frequency that you need. The exactEarth capabilities, can you just help me understand if there's some reason why the data aggregation or something about their capabilities is complementary? Or should there also be expense synergies at some point in addition to the cross-selling opportunity and the onboarding of talented headcount and everything else that comes with the acquisition?

Question: Jeffrey Meuler - Baird - Analyst : All right. Thank you very much.

Question: Josh Sullivan - The Benchmark Company, LLC - Analyst : Hey. Good evening. Can you hear me?

Question: Josh Sullivan - The Benchmark Company, LLC - Analyst : Yeah. Just to put a finer point on that last question just as far as the salesforce build out here. With exactEarth and what they bring on the marketing and sales front, is there any way to just help us think about what the salesforce needs would have been versus what they will be with exactEarth? Just how we're modeling that going forward.

Question: Josh Sullivan - The Benchmark Company, LLC - Analyst : And then on the aviation market, as markets are reopening here, are you seeing an increase in demand out of global airline activity?

Question: Josh Sullivan - The Benchmark Company, LLC - Analyst : And then were you represented at COP26? Any specific engagements there that you can seize up for us or conversations that you had coming out of those meetings?

Question: Josh Sullivan - The Benchmark Company, LLC - Analyst : And then just one on Myriota, the, if I'm saying that right, relationship. As far as the ownership that came with exactEarth, and then I believe you mentioned they're also a customer, can you just help us understand how that relationship moves forward?

Question: Josh Sullivan - The Benchmark Company, LLC - Analyst : Thank you for the questions.

Question: Weston Twigg - Piper Sandler - Analyst : Hey. Thanks for taking my question. You had really good ARR traction this quarter, and I'm just wondering if you could help translate that into visibility or revenue growth thoughts through next year. I haven't been using the long-term model that was a pre-SPAC model, but I would love some visibility into your growth expectations through next year.

Question: Weston Twigg - Piper Sandler - Analyst : Well, I guess maybe what I'm getting at, is this kind of ARR growth sustainable through the next few quarters?

Question: Weston Twigg - Piper Sandler - Analyst : Okay. Perfect. That makes sense. But just to clarify, too, on the pre-SPAC model, that was, I think last referenced in June, that is not something we should reference any longer, correct?

Question: Weston Twigg - Piper Sandler - Analyst : Okay. Perfect. Another question I had was around gross margin progress through next year. I know you're not giving out your guidance, but it looks like even the guidance for next quarter was slightly lower than at least I expected. And I'm just wondering you talked about the higher investment, do you see that gross margin getting back to stabilizing in the mid-60% range? Or do you think it would be in that high-50s to mid-60s level, the outline for Q4?

Question: Weston Twigg - Piper Sandler - Analyst : That's helpful. And then just last question from me. Can you split out the data solutions and space services revenue in Q3 and the split for Q4 guidance as well?

Question: Weston Twigg - Piper Sandler - Analyst : Understood. All right. Thank you.

Question: Ric Prentiss - Raymond James & Associates - Analyst : Hi. Good evening. A couple of questions --

Question: Ric Prentiss - Raymond James & Associates - Analyst : Hey. Couple of questions for you all. First, it's been about two months since you announced the exactEarth acquisition. Have you heard anything from your own customers on how they feel about the acquisition? Or have you been hearing any feedback from exactEarth customers about coming into your fold about what it might mean to them? So any customer interactions in the last two months from either side?

Question: Ric Prentiss - Raymond James & Associates - Analyst : I understand that. I just had a big transaction in this space this week with Inmarsat and Viasat. And there was talk about how some customers were excited to see the acquisition, not crossing over public company to public company lines. Just sometimes, customers call in and go, hey, I like what I see. So I wasn't sure if you had any of those kinds of incoming calls, not anything about operating separately or anything like that. Okay. Second question on my side is obviously everybody's anxious for '22 guidance. You can't give it yet. Maybe I'll just the flip the question this way on how do you feel about your visibility into '22? As you're coming here into mid-November looking into '22, how visible is '22 from the standpoint of half year, full year? Not giving any numbers, but just how comfortable are you getting on the visibility?

Question: Ric Prentiss - Raymond James & Associates - Analyst : Okay. And final one for me, a little bit more of a housekeeping one. You mentioned obviously the G&A public cost came in higher. How should we think about, is this a good run rate third quarter, or is there more to come as you think through the impact in the fourth quarter? Just where is a good run rate number on the G&A side of things?

Question: Ric Prentiss - Raymond James & Associates - Analyst : Okay. Appreciate it. Stay well.

Question: Colin Canfield - Barclays - Analyst : Good evening, guys. Bit of a higher-level question here, but earlier this week we got the NGA's commercial earth intelligence strategy. Can you maybe talk a little bit about what that means for you, guys, and how you expect to sell into the government customer, whether it's subscription-based or imagery data or anything else? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 10, 2021 / 10:00PM, SPIR.N - Q3 2021 Spire Global Inc Earnings Call

Question: Colin Canfield - Barclays - Analyst : Got it. Got it. And then I understand that the SPAC slides are probably a little bit dated, but if you think about your CapEx estimates and what you're assuming on launch costs, can you maybe just talk us through how you're thinking about procuring launches, whether it's going to be rideshare services versus small set launchers and the premium that you're putting on direct orbit insertion versus a ride share service?

Question: Colin Canfield - Barclays - Analyst : Got it. And then the last question from me, you talked a little bit about inflation of corporate costs, but maybe if you can just discuss the labor costs that you're experiencing within your AI and machine learning build out, and how that's impacting your ability to ramp delivering complete solutions to the customer versus a raw data sale.

Question: Colin Canfield - Barclays - Analyst : So it's fair to assume that you're not having any issues with getting headcount onboarded?

Question: Colin Canfield - Barclays - Analyst : Got it. Thank you so much for the questions.