Spire Global, Inc.

Greetings and welcome to the SPIRE Global First Quarter 2024 call. At this time, all participants are in a listen-only mode. A brief 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. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ben Hackman, Head of Investor Relations. Thank you, sir. You may begin.

Thank you. Hello, everyone, and thank you for joining us for our first quarter 2024 earnings conference call. Our earnings 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 Leah Basola, 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 and in our investor presentation, both of which can be found on our IR website at ir.spire.com. Some of our comments today 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 expectations 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. Good afternoon, everyone, and welcome to today's call. I want to start off by extending my deepest gratitude to our exceptional team dedicated to improving life on Earth with data from space. Their unwavering commitment and boundless innovations are propelling us forward, delivering industry-wide firsts on a regular basis. We have grown at a compound annual growth rate of over 100% since achieving $1 million of revenue in 2017. At the end of last year, we delivered our first quarter of positive adjusted EBITDA ahead of plan. And today, we are at the doorstep of full profitability, starting with continued positive adjusted EBITDA in Q2 and positive free cash flow thereafter. We aim to set the standard in our industry by being a high-margin, profitable, high-growth space company, something that so far has not been demonstrated. We are inspired by leading SaaS companies that grew profitably by more than 20% for 20 years, increasing the market cap over 150 times. And we believe Spire's market and growth opportunity are at least as large, driven by our commitment to improving life on Earth with data from space and supported by massive generational trends, including climate impact, security threats, and the power of AI and machine learning for the digital economy of the future. Our team at Spire is shaping the future of our industry, and I could not be more excited about that journey ahead. For over a decade, Spire's trajectory has been shaped by two enduring exponential global megatrends, global security challenges and the escalating impacts of climate change. The ongoing conflict in Ukraine, the expanding geopolitical landscape in the Middle East, and the persistent tensions in the South China Sea underscore the ever-evolving complexities of our world. Meanwhile, climate change-induced weather volatility continues to surprise the world. Just recently, Dubai experienced a deluge, receiving more rain in a 24-hour period than it typically does in an entire year. This led to widespread flooding and disruptions, including at one of the world's busiest airports. Furthermore, scientific records reveal that this past March was the warmest in 175 years of climate data. With elevated sea surface temperatures, experts are bracing for an extremely active Atlantic hurricane season, projected to spawn up to 23 named storms. These stark realities highlight the enduring relevance and criticality of Smyre's mission. Our impact will not be measured on a quarterly basis, but over the decades to come. In the first quarter, our revenue fell short of expectations, yet our commitment to achieving profitability never wavered. We successfully reached the midpoint of our adjusted EBITDA guidance, and we remain on track for positive free cash flow this summer. As we've done in the past, we optimized the business for profitability and maintained our steadfast drive to a sustained profitable growth. We have established a strong business foundation, coupled with a highly efficient, operationally leveraged business model. As we continue to scale, we anticipate achieving strong profitability, allowing us to prudently reinvest in the business. Looking ahead to the second quarter and beyond, we expect further pivotal moments in our journey driven by high customer demand and improving bottom line metrics. As Spire delivers innovative solutions that address the most formidable challenges in global security and climate change, we are also integrating cutting edge advancements in artificial intelligence and machine learning. The speed of change associated with these technologies is astounding. We are at the beginning of a new industrial revolution with the emergence of artificial intelligence, similar to the industrial revolutions that took place with the emergence of computers and the Internet. AI and machine learning are quickly reshaping the boundaries of what can be achieved, propelling us to its new horizons of possibility. Spire early on recognized the potential for these technologies to drive demand for our proprietary data. they facilitate a paradigm shift where power now lies with those possessing unique, hard-to-acquire data rather than those with access to massive supercomputers. Our wealth of data that can only be collected from space affords us the opportunity to deliver to customers capabilities that surpass previous standards in accuracy, applicability, and value. And the weather industry is one in which we are seeing AI and machine learning quickly upend traditional processes. For decades, the industry has relied on physics-based numerical weather prediction models requiring supercomputing power and lengthy processing times to generate forecasts. Just two years ago, weather experts expressed skepticism regarding the efficacy of AI-driven weather models. However, Within a year, a prominent global weather agency began establishing an AI weather forecasting team and model. Recent analysis has revealed that their AI model surpasses the accuracy of their long-standing physics-based model. And this advancement was achieved in a remarkably short span of time. This aligns with the rapid changes we're seeing in the industry. Instead of running on a supercomputer that costs $80 to $120 million, these weather models are run on a single GPU. Instead of requiring hours to process the data, Spire's AI models run a 10-day global forecast in less than one minute. With these seismic changes in the industry, we are now seeing new AI weather models announced every few weeks. Most of these models have been trained on the same set of initial data, which means that having an additional set of unique data is a major differentiator. That's where SPIRE comes into this rapidly changing industry. SPIRE has world-class data assimilation capabilities. Beyond aggregating conventional data sources, we capture our own proprietary space-based data. This rich data set encompasses a spectrum of information from pressure, temperature, humidity, and precipitation to soil moisture, ocean winds, and sea ice, among others. This comprehensive data set allows us to generate data assimilation grids tailored for training and inference of this new class of AI weather models. Furthermore, the computational efficiency of AI models combined with our deep knowledge and experience in weather prediction allows us to generate massive ensembles comprised of hundreds of individual forecasts. This augmentation empowers us to generate forecasts for low probability but high impact events, such as rapidly intensifying hurricanes or severe flooding. Previously, the computational demand was too high for these types of forecasts, resulting in the omission of such events from forecast and probability assessments. Additionally, we are actively pursuing the development of our proprietary AI weather models. AI modeling is an area in which we are prudently investing in addition to collaborating with industry leaders such as NVIDIA. Crafting our own model empowers us to meticulously tailor the neural network architecture, thereby effectively extracting information from SPIRE's proprietary data and ultimately enhancing the accuracy and reliability of our AI weather predictions. As we progress along each step of this journey, we are looking to monetize our data and capabilities. Beyond enriching the input side of our models, our AI and machine learning capabilities also extend to the post-processing phase, enabling us to introduce innovative solutions to the markets. A recent example is the introduction of SPIRE's Advanced Soil Moisture Insights solution. By leveraging exclusive soil moisture measurements obtained by our satellite constellation and integrated sophisticated AI and ML algorithms, we can offer an unparalleled view of soil moisture around the globe. We are seeing early success of our solutions in the marketplace. We recently announced that we secured a multi-million dollar deal with a financial firm for our six day high resolution weather forecast and to develop an AI powered model for long range forecasting. This is just the beginning of a long list of opportunities. Weather impacts almost every aspect of the human experience. We expect interest from governmental organizations, logistics companies, energy and commodity firms, insurance companies, and companies with infrastructure that can be impacted by adverse weather. It is estimated that weather impacts $30 trillion of GDP, and 10% of that, or $3 trillion, is mitigatable. This is an absolutely massive market, and Spire is in a prime position to capture a portion of it. Our distinctive space-based data positions us as a significant contributor to the revolution being driven by AI and machine learning. Our announced award is the first of what is anticipated to be many opportunities as the marketplace rapidly adopts these new capabilities. Since our founding, we have focused on leveraging space to improve life on Earth. As technologies have advanced, so too have the capabilities that SPIRE can bring to combat climate change and global security. We have the opportunity and fortitude to provide previously unattainable knowledge and insight about Earth from the ultimate vantage point of space to help people make smarter, better, faster decisions about what to do next in a rapidly changing world. As humans look up to the vastness of space for a glimpse of hope or a sign of the future. Space stares back, compelling us to act. At SPIRE, we are progressing every day with the hope and belief of an even brighter future. And with that, I'll turn it over to Leo.