Spire Global Third Quarter 2026 Results Conference Call - SPIRE GLOBAL INC

Greetings. Welcome to the SPIRE Global Third Quarter 2026 Results Conference 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 Ben Hackman, Head of IR. Thank you. You may begin. Thank you. Hello, everyone, and thank you for joining SPIRE's third quarter 2026 earnings conference call. Our earnings press release and related SEC filings are posted on the company's IR website. A replay of today's call will also be made available. With me on the call today is Teresa Condor, CEO, and Allie Engel, 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, which can be found on our IR website. Some of our comments today contain forward-looking statements that are subject to risks, uncertainties, and assumptions. In particular, our expectations around our plans, future results of operations, and financial condition 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 Teresa. Thank you, Ben, and good afternoon, everyone. The story at Spire is shifting to execution, and our third quarter results reflect that with decreasing cash usage, strong contract wins, and 77% core revenue growth year over year. In Q3, we captured approximately 75 million of new weather data awards, including a $33.2 million NOAA radio occultation task order, a $28 million NOA contract to advance hyperspectral microwave sounding toward operational use, and an expanded radio occultan renewal with UMITSAT. We have continued to task Spire Satellite RFGL clusters, expanding our relationships with key customers. These awards support both top-line growth and bottom-line improvement, providing multi-year revenue visibility and supporting our path to positive adjusted EBITDA in 2027. For Q3, revenue was approximately $18 million. Core revenue, which excludes maritime and is the number we have asked you to focus on, grew nearly 10% sequentially and approximately 77% year-on-year. Reported revenue grew approximately 42% year over year. Q3 was also our first quarter with no maritime revenue at all, so from here on, reported and core revenue are the same number. operating cash use fell to approximately 5 million in the quarter from 23.4 million in the second quarter and we ended the quarter with 78 million in cash and marketable securities and no debt on our last call i named four markers to watch the radio occultation awards the outcome of our microwave-sounding negotiations, the StratFi launch, and continued RFGL awards. All four happened. In Q3, NOAA awarded us approximately $70 million of new contracts. Just as important as the total is the size and length of these contracts. Starting with radio occultation, NOAA awarded us a $33.2 million task order for our RO data with a base period of two years, running December 1st, 2026 through December 1, 2028. On an annual basis, that is $16.6 million per year, nearly 50% higher than the $11.2 million annual contract awarded in 2025. The two-year base period is also a sizable step up from the six to eight-month contracts we were receiving just a few years ago. And with surge options, the total value could reach about $66 million if fully exercised. The order sits under NOAA's new space-based environmental monitoring IDIQ contract, which has a shared $8 billion ceiling. In addition to the radio occultation contract we were already awarded, we were also selected as eligible for future task orders to provide GNSS reflectometry, hyperspectral microwave sounding, and thermospheric neutral density data. A $3.7 million Bridge Award, which began on September 18th, will help keep our RO data flowing without a gap until this order starts on December 1st. This award shows NOAA's commitment to working with commercial space companies to provide data that is critical to operational weather forecasts. Next, Microwave Sounding, where the HIMSS data we have been delivering is leading to new contract awards. NOAA extended our HIMSS Data contract by six months for $3 million, with a three-month option valued at another $2 million, to evaluate HIMSS data across a broader range of conditions, including hurricanes and winter storms. NOAA also awarded us a two-year, $28 million contract under its TEAMMATE program to build and qualify a matured satellite and hyperspectral microwave sounder payload through flight readiness in an orbit designed for NOAA's forecasting needs. Operational capability is targeted to begin no later than 2030. This moves HIMSS beyond demonstration and toward operational weather observations. Turning to RFGL, we signed five awards in the quarter, two from U.S. customers and three from international customers, including repeat customers expanding their orders with us. As we described at the beginning of the year, these relationships typically move from a a pilot to a data subscription to a larger operational program, and repeat orders show us that the progression from smaller transactions to enduring relationships is happening. Our pipeline of opportunities for data subscriptions and sovereign capabilities is robust going into 2027. As a brief update on Europe, we continue to move forward the partnerships with Scheffler and Deal Defense, with joint pursuits underway. More broadly, the NOAA and U.S. Federal Pipeline we described last quarter is what produced the awards I just walked through, with the team under our new Chief Commercial Officer working to close further opportunities and continue building the pipeline. In our commercial businesses, we are seeing growing demand from energy utility customers for our weather forecasting decision support solutions. As in our weather data business, these organizations are increasingly choosing commercial solutions built on proprietary data over developing capabilities in-house. We are also seeing growing interest in our GNSS spoofing interference intelligence platform for aviation, which maps spoofings incidents. Our commercial business diversifies our revenue base, including through recurring subscriptions. It also drives operating leverage by generating additional revenue from infrastructure already in place. All of the awards drove a significant increase in remaining performance obligations from approximately $135 million as of the end of the second quarter to $175 million as of end of third quarter. The fourth quarter is the first full quarter of revenue from these wins, and we expect revenue to step up from approximately $18 million in Q3 to $23 to $28 million in Q4. The walk to the bottom end of the range is primarily driven by three parts. The first is radio occultation data under both NOAA and UMITSAT. The second is the HIMSS data purchase. The third is the first full quarter of teammate. The high end of the range depends on one additional deal that has timing uncertainty. If it closes in the fourth quarter, we expect to be near the top of the range. If it slips, that revenue moves into the first quarter of 2027. Teammate revenue is recognized on a percent of completion basis, so it follows the work as it is completed. Based on the timing of signing, our updated program schedule moves some work effort from 2026 into 2027. The contract value is unchanged. The timing moved, and that is primarily what drives lowering the top end of our 2026 guidance. Our data revenue from radio occultation, microwave sounding, RFGL, and aviation runs on infrastructure we have already built. The satellites are in orbit, the ground network is in place, and our satellite operations are established, so much of that added revenue falls to adjusted EBITDA. With the higher revenue, we expect continued improvement in cash usage in Q4. For 2027, we are providing a preliminary revenue range of $96 million to $106 million, which reflects strong expected year-over-year growth. From midpoint 2026 to midpoint 2027 revenue, growth is expected to be 30%. Importantly, we have good visibility into this growth with approximately 78% of the midpoint revenue already under contract as of the end of the third quarter. We launched 10 satellites in july followed by three more that shipped in september and launched in october bringing our total for 2026 to 32. the october launch was the last of the year and we expect our next launch to be no earlier than the first quarter of 2027. the three satellites launched in october marked an important milestone for us as the first satellites to come out of our boulder facility built on American soil. They were developed under our $14 million StratFi contract and have been designed to detect and track moving objects on Earth to improve situational awareness for U.S. defense operations. The program adds to our RFGL infrastructure and is expected to deliver space-based surveillance, reconnaissance, and tracking capabilities. We have launched slots booked through the end of 2028 to continue supporting our customer needs and our pipeline of sovereign opportunities. Spire has experience across 10 launch vehicles and more than 50 missions, positioning us well to navigate the changing launch environment. As we look to 2027, execution is becoming more important for us, and the growth we have been discussing for 2027 is now more visible. First, the teammate contract is expected to provide significant revenue growth in 2027 as execution gets fully underway. Second, the baseline radio occultation contract is roughly a 50% increase over the previous annual amount. Those two efforts alone are expected to drive significant revenue grow in 2028. Beyond that, radio occultation surge options and growing opportunities for RFGL solutions and sovereign capabilities in both the U.S. and rest of the world could add further growth in 2027. FIRE is debt-free, growing, and positioned in key markets with increasing demand for our capabilities. This quarter, you can see what that looks like in contracts. We have spent years building the satellites, the ground network, the manufacturing and the partnerships, and the role of commercial space is maturing to meet exactly that kind of capability we have, operational, at scale, and ready today. The third quarter turned that into awards of a size and length we have not had before. Now the story is execution, and we intend to deliver it quarter after quarter. With that, Allie, over to you. Thank you, Teresa, and good afternoon, everyone. As a reminder, unless otherwise noted, I will be discussing non-GAAP financial measures, and reconciliations to those measures are in our press release. Revenue remains the metric we watch most closely. Third quarter GAAP revenue was approximately $18 million, up approximately 42% year over year and approximately 77% excluding the maritime revenue in the prior year quarter. This is our first quarter without maritime revenue, so reported revenue and core revenue are now the same. The year-over-year increase was primarily driven by a nearly $6 million increase in space services data delivery and an approximately $2 million increase for additional weather and climate data sales, primarily driven by hyperspectral microwave sensor sounding data. These increases were partially offset by the absence of maritime revenue, which was approximately $2.5 million in the third quarter of 2025. While headline revenue looks flat with the second quarter, core revenue grew nearly 10% sequentially and should set us up for further growth in the fourth quarter, consistent with the fourth quarter weighted revenue ramp we have described. Non-GAAP gross margin was 49% compared with 41% a year ago and recovered from 38% in the second quarter. We believe this business model can power further margin expansion as we continue to generate revenue from our deployed infrastructure. Adjusted EBITDA was approximately $-8.6 million, an improvement of 27% from $-11.8 million a year ago as higher revenue on a largely fixed cost base drove operating leverage. I am very pleased with our progress on cash. Cash flow used in operations improved substantially in the third quarter, just as we said it would in the second half to approximately $5 million. This compares to cash used in operations of $23.4 million in the 2nd quarter and approximately $12 million in Q3 2025. Said another way, that is a 79% sequential and a 59% year-over-year improvement. The improvement comes from disciplined management of cash and working capital. We expect continued improvement in cash usage in the fourth quarter. We ended the third quarter with $78 million in cash, cash equivalents and marketable securities and we remain debt free. As we have stated in previous quarters, we don't expect to raise capital for the business to continue on its current trajectory. Now to guidance. Year to date revenue is approximately $52 million. We now expect full-year revenue of $75 to $80 million, compared with our prior range of $ 75 to $85 million. This range takes into account updated value and timing expectations for awards captured through the third quarter. This range also implies fourth quarter revenue of 23 to $28 million, up from $18 million in the third-quarter. Let me put the numbers on the walk Teresa described. Bridging from Q3 results to expected Q4 results, radio occultation data under NOAA and UMETS STAT contributes nearly $2 million. The HIMSS data purchase contributes half a million dollars. And the balance is primarily driven by the full first quarter of TEAMMATE, along with contributions from weather forecasting, aviation, and RFGL. The outcome of the deal Teresa mentioned is the primary driver to achieve a result near the high end of the revenue range. For the fourth quarter, we expect adjusted EBITDA of negative $5 million to break even, an improvement at the midpoint of 71% from the third quarter. Achieving an outcome within this range would represent meaningful progress towards adjusted EBITD break even driven by growing revenue on our deployed infrastructure. Adding that to year-to-date adjusted EBITDA of approximately $27.4 million, we now expect full-year adjusted EBIDDA of $32.4 to $274 million. Going forward, we will only be providing revenue and adjusted EBITA guidance. As we look to 2027, we are providing a preliminary revenue range of $96 to $106 million. At the midpoint, this is 30% growth on a non-adjusted basis. I want to reiterate something Teresa mentioned. Approximately 78% of the 2027 midpoint revenue is already under contract as of the end of the third quarter. The main drivers for our expected growth in 2027 come from the teammate contract and contracted increases in radio occultation data. We expect to achieve positive adjusted EBITDA for the full year 2027. As for operating cash flow breakeven, we continue to expect to reach operating cash flow breakaven during a quarter in 2026. The strategic path forward is focused on stepping up our revenue by leveraging infrastructure that is already built, gross margin expanding with it, and cash usage decreasing. The headline I would leave you with is this. We expect revenue to step up in the fourth quarter, as we previously said. Cash used in operations improved significantly, gross margins recovered, and the awards signed in this quarter provide contracted support for fourth quarter revenue and also the revenue growth we expect in 2027. Our balance sheet is debt-free and funds our plans for the business to continue on its current trajectory. With that, let's open it up for questions. Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Thank you. Our first question comes from Eric Rasmussen from Stifel. You may proceed with your question. Eric R. Yeah, thanks for taking the questions. Maybe just wanted to talk about the adjusted EBITDA. It looks like in Q4, you're implying, your guidance implies about $2.5 million at the midpoint. What quarterly revenue and margin levels are now needed to reach a break-even, and when do you expect to get there? I know you gave for the full year, but what quarter next year? Hey, Eric, good to hear from you. I think for adjusted EBITDA for next year with our revenue growth, we know we will get there for the full year. We are finishing up our final budget for 2027 and our expense spread, and we're very focused on getting there in the first half of 2027. We will and do expect to see a substantial improvement in adjusted EBIDDA in the fourth quarter based on the revenue growth projected. So we are feeling very good about our trajectory towards profitability right now. Great. Maybe just the ramp in Q4 seems pretty steep. I know you outlined the drivers there, but where can we see some slippage if we don't hit the bottom point of that guided range? Yeah, so the bottom part of that guidance range, Eric, is really well-baked. So I don't really have much worry about that. And getting to the top end is really about timing more than anything else. We talked a lot about the radio occultation, the teammate work, the stuff that is happening with HIMSS. So this is really just about execution at this point and timing. Okay, great. And maybe just my last one. You know, as government budgets increasingly prioritize a lot of the space-based capabilities, are you seeing a larger mix of multi-year awards entering the pipeline? And maybe just how should we think about timing between award announcements and then just revenue recognition there? Thanks. So, yes, absolutely. We are seeing more multi-Year deals going into the pipeline. I think, as you know, our new chief commercial officer joined about a quarter ago. He's been coming in and really working with the team as well to increase the quality and the resilience of the pipeline. And I feel really good about where that is and the opportunities for 2027 and also the diversification as well. And the government deals are important in there, and I don't want to minimize the ongoing work that we're doing on the civil government side around weather, as well as the commercial side. All right, I'll jump back into the queue. Thanks, Eric. Thank you. Our next question is from Jeff Van Ree from Craig Hallam Capital Group. You may proceed with your question. Great. Thanks. Thanks for taking the questions. A couple from you guys. Teresa, maybe just touch on the RFGL pipeline. It's interesting. I mean, you're getting a lot of these starter pilots and you talked about the ability to turn these into larger deals and ultimately recurring and much larger transactions. Just spend a second and talk about that. Give a few examples and then maybe a little more color on pipeline would be great. yeah i mean as you know there's only there there's not always a lot of example that we can talk about here i think what i want to emphasize is that we've been doing repeat work with customers as well as signing on new customers both this quarter and throughout the year and what is really important for us is that these are these are not just short transactions but they are turning into enduring relationships that, um, that are meaningful in the longterm. And, and I feel very confident that that is what we have laid the groundwork for in 2026. And that is also helped to build out that pipeline of sovereign opportunities that, that continue to happen. And I know everyone gets very impatient in, in wanting to hear announcements and examples of this stuff. When we're able to give specific announcements about it, we will. But this is both European, outside of Europe, rest of world, as well as United States pipeline that exists and continues to be built, both for RFGL and for the, you know, the satellite-based sovereign capabilities. And are there realistic prospects or opportunities that might land in 27 that might be in the eight-figure range as you look at whatever you're working on now, the pilots, kind of how these things are progressing? Or is 27 more of a, hey, maybe we'll see a few seven figures and give them time, maybe they'll go into eight figures once we get out into 28 and beyond? Can you give any crude sense of a possible trajectory there? Yeah, so we do have eight-figure things in the pipeline. We do have things in the pipeline that could close still in 2026. They are not things that I would plan on impacting our revenue in 2026, but that are part of that pipeline that would add to growth in 2027. And Allie commented on the guided range and to get to the high end, you have a large transaction that is the big swing factor this year. Is that, in fact, an RFGL opportunity, or is that a weather opportunity? No, it's a separate contract from those types of contracts, Jeff. Okay. And then I guess just maybe one last one on the new two-year $33 million deal. You've commented that there's also an opportunity that it might go to 66 million on surge capacity and they have the budget capacity to do it. What does that look like? Like how would that play out? When would they start to get far enough into it to know if they want that surge capacity? Just educate us to the degree that you can as to what that surge factor sort of how it might behave. Yeah yeah and And I think I'm going to start by mentioning that the surge capacity is not something that is currently in the numbers that are planned for 2027. So this is, again, part of upside opportunity on top of what we've already talked about. It would double the contract size as well as the volume of radio occultations that we would sell to NOAA. What I can tell you is that NOAA wants that data. This is why they priced it and put it into and signed a contract, allowing them to do it. The only question mark is going to be around the exact timing of that. And this is where, unfortunately, in our business, there does tend to be some of these timing things that are hard to tell. So I don't have a great answer on timing, only that I know NOAA wants the surge. Mm-hmm. Yep. Maybe one last, if I could sneak it in, Teresa. The space-based monitoring opportunity, hearing a lot of folks talking about all of the aspects of in-space warfare and the need to have better tracking of adversaries, you referenced it in your script. and it was a little bit vague, and I understand you can't be too particular, but just talk about the opportunity there and size it and the scope and, you know, where does it sit in the sort of list of potential call options for the next year or two in terms of how big it might be? Yeah, I mean, I think you might have misunderstood, Jeff, because I think your – you might be talking about the NOAA data type that we had under the IDIQ. um and and i think this is um more around the um the idiq itself and the various data types under it and including the uh the tec ionospheric information so i wasn't specifically referencing space domain awareness stuff um i i i'll still give you i'll Still give you a comment on it though is that nothing related to that is in our numbers, but certainly we are always, I would say, looking at some opportunities and have done very small contracts looking at how data sets collected by our satellites give people information about what is happening in orbit. So I would say that's something that, you know, we're always looking at and paying attention to. At the same time, I think with our four segments, we've got a lot of growth and opportunity in front of us. And I think, as you know, I've repeated it to the whole team here. The focus is important in making sure where we're going after the markets and all the opportunities that are going to give us immediate growth and immediate revenue and, of course, drive towards profitability. Yep, that is helpful. I did misunderstand that. I appreciate the clarification. Thanks so much. MS. Sure. MR. Thank you. Our next question is from Brian Kinslinger from Alliance Global Partners. You may proceed with your question. MR. Hi. This is Kevin. I'm from Brian. Thanks for taking our question. You've announced solid wins with NOAA. A few months back, you said you were bidding on $150 million of TCV. How much of that has been awarded? Is the recent still waiting adjudication? can you speak to the NOAA-related pipeline following your recent success? Yeah, so there is certainly quite a bit of that pipeline that has already been awarded and that we've announced. There is also some of that timeline that has not been awarded. And we still do expect that there are certain decisions that happen between now and the end of the year. That doesn't mean we win everything, right? It's pipeline. So we may win, we may lose, but there is still stuff in play. And there is pipeline that is in play that we know of very specifically right now with NOAA in 2027. There is the surge capacity that we talked about from the other question at play in 2026. And then there are the other two or three data types that are on the IDIQ that NOAA has indicated they want the data sets for, but we don't know anything yet about timing of when they would or wouldn't procure it through task orders. So, there's still a lot of work being done with NOAA. Understood. Thank you. Thanks. Thank You. Our next question is from Scott Buck of Titan Partners. You may proceed with your question. Hi, good afternoon, guys. Thank you for taking my questions. I guess first on the Boulder facility, the first three Boulder Belt satellites were launched in October. What is that facility's capacity and how much of that is already committed? Yeah, so the capacity of that is probably up to about 50 a year if we're really like working people in shifts and having the customer demand for it. We don't really give details about capacity being filled or not filled through the clean rooms. It's going to depend a whole lot on the type of work being done. What I can say is that I feel very good and strongly that the demand for, how do we say, rapid development and deployment made in the United States is something that is very important to working with the government here in the united states they've made that clear to us repeatedly and and that we will continue to be using that clean room okay perfect that's helpful and then I think you mentioned in the prepared remarks that you have launch slots into 2028 Is pricing locked in there, or what kind of visibility on where launch costs are going over the next two years do you have, and what is your ability to pass that on to any customers? Yeah, so we do have those launch slots already booked, and that means the pricing for that is already locked in. I mean, I think, as you know, there's a lot of discussion about this in the press about what happens in 2029 and beyond. So, you know, I think no one is completely sure what that looks like. There are a lot of new launch companies, a number of which are starting to have successful launches. There's a lot launch brokering companies out there that are also starting to put up rockets and satellites. So I think, you Know, it's a bit unknown at this point, how much of that capacity manages to come online post-2028. I feel very good about our positioning and our continued access to orbit. Great. Those are my only two. I appreciate the added color, guys. Thank you. Thanks, Scott. Our last question is from Caleb Henry of Quilty Space. You may proceed with your question. Hi. Thanks for the question opportunity. I think most of mine have been answered, but maybe some little clarifications. On the RF geolocation business, you mentioned seeing a lot of interest from the U.S. and Europe. I'm curious, which of those two do you see more opportunity or perhaps growing faster? And are those the two primary areas, or do you anticipate seeing additional opportunities in other geographies? So, yes, opportunities in other geographies are absolutely in the pipeline and are important as well. You know, which grows faster is always going to be hard to say in terms of timing. The United States always is larger, has bigger budgets, and to some extent is always going to dwarf spending from any single other country. At the same time, you know that Europe has a lot of geopolitical things happening, as do other parts of the world. And so then it becomes a question of how quickly you start to see real movement in budgets. So I think they're all going to be important going forward, but you never get away from working with the U.S. government. and then just one follow-up on the the launch question i know you mentioned having launches covered for the next two years i'm curious how you're planning for kind of post 2028 or post falcon 9 and also if any of the sovereign deals that spire is working towards be that in the u.s or the U.S. or come with any geographic launch stipulations? Yeah, you know, countries can't give geographic launch stipulation if they don't have a working launch pad and local launch provider. So I think countries would like to be able to do that. The reality is none of them are actually in a position to dictate that at the current moment. For us, having the launch slots available for our sovereign customers is something that they find valuable. And we are entirely willing and able to work with any launch provider that is out there. We have a history of working with a lot of different rocket providers, probably just about more than any other company out there, I think we mentioned some of the numbers in the call so i feel very good that as additional launch capacity comes online we'll be able to take advantage of it and i also feel very good about our current constellation and and the kind of ongoing replenishment that we do that we will not have a problem um post 2028. Thank you. Thank you, and our last question will be from Austin Mueller from Canaccord. You may proceed with your question. Hi, this is actually Eddie on for Austin, and I apologize if this has already been asked, but my question was, do you guys still expect NASA and NOAA budgets to be prioritizing commercial vendors for satellite data under the new Congress? Yes. The importance of weather data has generally been a bipartisan effort, and so I'm not expecting that to change. Weather is something that is impacting everyone in the country, very personally even. And at the same time, we've got a two-year NOAA contract for radio occultation and the IDIQ in place. So I'm not really expecting changes there. Okay, great. Thank you so much. And my second question would be, has anything kind of changed in your guys' timeline regarding visibility in 2027 to becoming EBITDA and free cash flow positive? I think, hey, Eddie, this is Allie. I think that what we've said is that right now, and we're giving guidance earlier this year than we've given in the past. So we're given revenue guidance today. We're saying that we know we can be adjusted EBITDA positive in 2027. We'RE trying to reach that goal as early in the year as possible, but we haven't given a quarterly spread yet. But we're definitely working towards that. We're still working on our final budget and all of our expenses and the things that we need to do to become adjusted EBITDA positive, which is the goal that we are on right now. Okay, great. Thank you so much. That's it for me. Thank you. Thanks. Thank you, ladies and gentlemen. Thank you for your participation. This concludes today's teleconference. Please disconnect your lines and have a wonderful day.