Spire Global, Inc.

Greetings. Welcome to the SPIRE Global Second Quarter 2022 call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to your host, Ben Hackman, head of IR. You may begin.

Thank you. Hello everyone, and thanks for joining us for our second quarter 2022 earnings conference call. Our results press release and SEC filings can be found on our IR website at ir.spire.com. A replay of today's call will also be made available. With me on the call today is Peter Platzer, CEO, and Tom Crywee, CFO. As a reminder, our commentary today will include non-GAAP items. Reconciliations between our GAAP and non-GAAP results, as well as our guidance, can be found in our earnings press release. Some of our comments today may contain forward-looking statements that are subject to risks, uncertainties, and assumptions. In particular, our expectations around our results of operations and financial conditions are uncertain and subject to change. Should any of these fail to materialize or should our assumptions prove to be incorrect, actual company results could differ materially from these forward-looking statements. A description of these risks, uncertainties, and assumptions, and other factors that could affect our financial results is included in our SEC filings. With that, let me hand the call over to Peter.

Thank you, Ben. And thank you, everyone, joining us on the call today. SPIRE continued to drive the business forward in Q2. we again delivered results that were better than expected for revenue and for margin guidance. Complementing our relentless drive for profitability, we also successfully closed a $120 million credit facility, further strengthening our balance sheet and allowing us to confidently execute on our four growth pillars as we continue on our path towards being free cash flow positive in 19 to 25 months. While the macro environment has continued to deteriorate meaningfully throughout Q2, with mentionings of inflation, recession, and war on a seemingly daily basis, Spire's business prospects and opportunity set continue to be strong. The difficult environment requires businesses to make tough decisions with regards to balancing growth and profitability, and we remain at the very core of our customers' business plans. One can see this in the continued improvement of our already high retention rates we delivered yet again in Q2. Our customers look to SPIRE for data, insights, and solutions to run a more efficient and reliable business and manage the volatility of the current economic environment. Throughout Q2, we saw healthy interest in our data and solutions adding 65 new ARR solution customers beating our expectations. With a fully global trade and weather, SPIRE provides a unique perspective that is only available from space. However, we are not immune from the global macro environment. For example, We now expect several million dollars of negative foreign exchange impact to our 2022 revenue, given that Spire sells its solutions to customers in roughly 60 countries, and exchange rates have been highly dynamic. The macro environment has also lengthened the time from initial conversation to contract signature for a handful of our larger pipeline deals. And given the ever-changing market conditions that businesses are contending with, we are also seeing some of our customers needing to go through additional approval cycles, while others are taking longer to obtain the necessary funding. While the pipeline remains extremely robust and growing, we're carefully watching our cycle time to close. Turning now to our business, Spire's fully deployed constellation provides global coverage passing over the Earth 100 times a day and collecting hundreds of millions of data points. Much like the Internet in its early days, we continue to see new and diverse use cases for the data we collect. Whether it be topical conversations like tracking the first grain vessel departing from Odessa or seeing the changing traffic patterns around Taiwan last week, SPIRE listens to the heartbeat of global activity. we are encouraged to see global conversations gain increasing traction on topics such as climate change, for example, evidenced by the U.S. Climate Bill announced last week. Thanks to our deployed scale of operations and investments in innovation made to date, we are confident that we are exceptionally well positioned to help government and commercial customers alike solve problems that are becoming front of mind. I'd like to take a moment to talk about some of these wins we secured in the quarter. Our maritime team was awarded a contract from a Fortune 100 company to provide data that allows them to better meet the needs of their customers. Analyzing this data from SPIRE allows their customers to cut costs and improve efficiency by providing insights, for example, to perform predictive maintenance. FIRE's ability to provide rich insights on multiple different attributes of a vessel, including vessel type, capacity, and size, along with life data, including the vessel's position, current voyage status, reported destination, and ETA, was key in winning this competitive account. Customers continue to appreciate the value of our weather offerings and have consistently awarded us follow-on contracts. During the quarter, we received a follow-on contract of $6 million from NASA for Earth observation data. This data was provided under the commercial SmallSat data acquisition program, and SPIRE has been providing data since 2018. The CSDA program offers Earth observation data that is critical to the efforts of U.S. government agencies and researchers solving some of humanity's biggest challenges like climate change. Recent heat waves in Europe and diametrically opposed weather events of concurrent drought and flooding in the United States clearly indicate the immediate risks posed by extreme weather. The U.S. Congress is poised to enact the largest bill to date, releasing billions in funding to help fight this threat. The success of the CSDA program and SPIRE's role in it is a great example of how partnerships between the private and public sector can accelerate our path to building a better, more sustainable future. SPIRE is extremely well positioned to take advantage of opportunities to partner with the U.S. government and others around the world to tackle the risk posed by climate change. Also during the quarter, SPIRE was awarded a TCOM subcontract for weather forecasts at aerostat sites. The multi-million dollar subcontract is SPIRE's largest numerical weather prediction deal to date. SPIRE's weather forecasts will play a crucial role in efficient and effective operations of these large-scale tethered weather balloons. Space-based data is the differentiator between potentially damaging downtime and operational success, especially in remote areas of the world. SPIRE's unique ability to assimilate large amounts of weather data into SPIRE's proprietary numerical weather model was crucial for TECOM in placing their trust in us. Turning to space services, SPIRE recently won a highly competitive contract for a greenhouse gas monitoring service from space. This contract has the potential to grow to over $100 million of revenue for Spire, showcasing the scalability of our solution. The customer will leverage Spire's robust, reliable, and scalable infrastructure to receive their data through a simple API on a global basis. The data is used to spot and contain greenhouse gas leaks, as well as provide insights for other key decisions on the fight against climate change. This is a great example of what we can do with space services, helping amazing companies who are doing important work scale and expand their impact quickly, building a more sustainable and prosperous future for all. We have continued to see strong customer adoption of our space services model. We previously announced a deal with Northstar focused on space situational awareness and space debris that could grow to more than $200 million of revenue to SPIRE, along with an eight-figure deal with Sierra Nevada Corporation for a service to the U.S. government in signal intelligence and signal geolocation. Just to give you a rough sense of the scope of our space services business, over the past several quarters, space services as an average accounted for roughly 25% of our business. Turning now to technology updates, where we continue to make prudent investments in our technology to add value to existing customers and aid in the acquisition of new customers. These investments span both our hardware and software capabilities and allow us to widen our already substantial competitive mode and pave the way for future business opportunities. The weather market continues to be one of our larger long-term opportunities, with an estimated near-term market size of $22 billion. Listening to our customer needs, we invested in the capability to deliver optimized forecasts 15 days out, expanding our previous offering of the more industry-typical seven-day forecast. Investing in this technology allows us to solve additional use cases for an even broader set of customers. Utilizing machine learning, we continuously work to optimize our forecasts by leveraging the vast data vault that we have accumulated to train our models to deliver better and more valuable forecasts. We recently announced a partnership with RoundSpace to deploy hyperspectral microwave sounders to augment our already substantial weather data collection. These microwave sounders will enable us to deliver a higher level of measurement accuracy for both moisture and temperature, which are essential in numerical weather prediction. This data will join our existing data from radio occultation, reflectometry, and polarimetric RO fed into our proprietary data assimilation system This data drives our in-house global numerical weather prediction model, which runs on our high-performance compute cluster of up to 10,000 cores. This affords SPIRE a unique, sustainable, competitive advantage in providing our customers with highly valuable, accurate weather prediction solutions. We also have continued to invest in our signal geolocation and intelligence capabilities. We recently deployed additional satellites and equipped them with an RF chain capable of capturing and geolocating SATCOM in the L-Band. Presence of these signals in certain locations and under certain circumstances is indicative of activities that are of critical importance to some of our government customers. Further enhancing our signal geolocation and coordinated Earth observation offering, SPIRE also developed the ability to fly our satellites autonomously in formation using differential drag. Our autonomous software uses the Earth's atmosphere to control the distance between satellites, causing them to fly in a coordinated formation without the need for additional hardware or costly propulsion. The system can be enabled on any SPIRE satellite through a remote software upgrade, highlighting the power of SPIRE's focus on software-upgradable space systems. The global signal and intelligence market is estimated to be over $13 billion currently, with a sizable and rapidly growing contribution from space-based geolocation and spectrum monitoring capabilities. Bringing these capabilities online expands our offering for new and existing customers, providing insights to governments to help make the world a safer place. Our regulatory and licensing strategy is helping SPIRE to propel the business forward by capturing high-value, mode-extending licenses. For several years, SPIRE has been working with U.S. government stakeholders to secure U.S. licensing support for SPIA's inter-satellite link technology. In Q2, we successfully completed pre-coordination efforts with NASA, NOAA, and the U.S. Air Force. The FCC is now processing SPIA's inter-satellite link authorization request, and we anticipate that the license will be issued shortly. Furthermore, we recently completed coordination of more than 20 S-band and X-band ground stations. This effort, another multi-year process, represents an approximately 30% expansion of Spire's ground station network. The ability to implement inter-satellite links on our U.S. assets and the coordination of our ground station network are a great example of how Spire's regulatory strategy is designed to help the company maintain its first-mover advantage in an increasingly competitive area. Last, but certainly not least, we bolstered our people team this quarter with leaders who bring decades of experience to their roles and will help us innovate and implement best practices in people operations, talent acquisition, and total rewards as we drive recruitment of top talent and elevate the employee experience. Every day, my colleagues at Spire are pushing the envelope of what is possible. Our people are the driving force of our organization, continually propelling us forward and are critical to our long-term success. This is yet another way Spire is investing to stay ahead of the curve and recognizes the importance of people for our ability to take full advantage of the massive long-term opportunity in front of Spire. As we continue to prudently invest in geographic locations where people can congregate, collaborate and innovate together, we are excited about opening a Melbourne office, which is expected to open in Q3. We have long been committed to the Australian market and the opportunities in the wider APEC region. A dedicated, diversified, growing team and a physical location in the region will allow us more direct access to customer opportunities and top talent from the region. The achievements in the second quarter highlight our continued execution across all four of our growth pillars. We remained focused on investing in sales, marketing, and product, expanding into new geographies and use cases, expanding the capabilities of our data and our analytics, and executing strategic acquisitions to strengthen our market position. Notwithstanding the current headlines, I have never seen the long-term future for SPIRE as bright as I do today. Awareness and interest in SPIRE solutions continue to rise, fueled by the global trends of fighting climate change, increasing global security demands, and ensuring sustainable and peaceful use of space. With an addressable market of nearly $100 billion over the next several years and countless opportunities beyond that, we are well positioned to help build a better future thanks to our substantial scale, competitive advantage, and market leadership in our core verticals. And with that, I'll turn it over to Tom.