Ready to go? All All right, I think we're ready to go for, you know, the home stretch here. Next up we have. My name is Sujeeva De Silva, I'm the Semiconductor and Intelligence Systems Analyst here at Roth MKM. I have the pleasure of covering space companies like Spire. Privileged to have CFO Leo Basola here, and Ben Hackman is in the front row here as well from the company. With that, Leo, I'll let you kinda start with some of the slides and we'll go to Q& A. Thank you everybody for being here, like the 10 of you. My name is Leo Basola, I'm the CFO for Spire Global. We are a data and analytics company that captures data from space. We basically use that to resolve the biggest issues on Earth. This is basically the presentation that we had. I'll show you well, of course we're a public company, so the quick disclaimer. Before I go into the details of the Q and A, just to frame how we think about satellites. We have basically three segments that we split the satellites in: looking, talking, and listening. So think about looking as the imagery satellites. BlackSky, Maxar, Planet—those are some of the names that you're familiar with. Talking satellites—those are the ones that transfer data from one place to another, mostly in the communications side: Viasat, Starlink, you know, very popular names. Then we are kind of in a niche equation of the satellite industry, which is the listening category. We use radio frequencies to capture the noise of the Earth. So we have very silent, very, let's say, unique assets that allow us to capture radio frequencies globally. And if you think about the radio frequencies, they come from different things: ships, aircraft, our own satellites that do geo-positioning systems, so the GNSS constellations. And we use those for different uses. Now, as you can see, there aren't many competitors that we can list on our radio frequency thing that you would know 'cause it's fairly nichy and we're number one in that segment. And our coverage is global. Some of our competitors have regional coverage. We have software-defined antennas. That means our assets are multipurpose and multi-use. So if we are capturing radio occultation for weather analysis one day, we can upload software and turn that into AIS or ADS-B the following day. So that allows us to really have a flexible constellation. The other thing is, most of the other satellites, particularly the looking ones, for example, they require the sun to reflect for us to basically take pictures. They don't work at night. If there's clouds or other weather, they usually interfere with the pictures. And a lot of the surface of the Earth is water, then there's no interest for that use. When you think about listening, it's the opposite. Everything that happens in weather either starts in the oceans or the poles, and, you know, you have significant, you know, profiles from the atmosphere that you want to measure over those extensions of the Earth. Talking also has a limited use. I'd say 95% of the population sits around 3% of the surface of the Earth. And you need to use those satellites close to where there's people to communicate things back and forth, so the constellations are less utilized. So when we talk about having 100 satellites in space and you start to talk about Starlink having thousands of them, well, they can do their stuff with thousands. We can do our stuff with 100. So you think about the CapEx and the amount of investment required for those things. Very different. We have a fully deployed constellation, more than 100 satellites in space. We've been in business for 12 years. And, I think it's. I have some great stories to tell you about that. All right. And, this is our summary in terms of who we are. We are basically Global, we're publicly traded on the New York Stock Exchange. We listed in 2021. We launched about 170 satellites during our 12 years in 40 campaigns with different launch providers. We're launch agnostic. We have over 30 ground stations that capture the data, more than 600 years of space heritage. That's important because a lot of the startups will tell you that they can do stuff. You only can learn from space once you are in space, right? We have many, many missions and many years of service there. More than 400 employees from 50 countries. I'm originally from Argentina, so I count there as a unique country. Nine offices across three continents and 745 ARR customer solutions and more than $100 million in revenues and shooting for $140+ in 2024. That's that in a nutshell. Great. Thank you, Leo. So, we can start the Q& A portion now. So, what inspired the company to focus on listening from space for data versus terrestrial sources? What were the sort of first applications that resonated just to 'cause I think the listening from space, observing from space is new to a lot of folks, just to understand that landscape. Yeah. So the founders from very early on. Can you hear me okay? The founders from very good, yeah. Okay. Wait one now. The founders from very early on had this idea that there would be some trends that would impact the world, particularly the weather and the climate change, and then more recently evident security and the geopolitical tensions that we have. And those things have been at the forefront of the design of using radio frequency as a design. Plus, I think Peter had a good point. He's one of the founders and more of the business. He's the CEO today, but he's one of the business-oriented people. He basically had this notion that we would not be a satellite company only, and space was a means to get the data and that we would then monetize. So if you think about the design and the use of the assets and the return on the investment, given that these satellites can work day and night in any weather condition, they have a utilization that is factors of multiples of factors of the other satellites. I think that's what drove the idea of radio frequency to begin with. Plus, we're making something that is free for everybody, something that we can sell. So that's perfect, right? Because AIS and ADS-B and the GNSS signals cost you nothing if you can capture them and you can link them and you can clean them and you can basically productize them, you make money out of basically something that is free for everybody just because you have the ability to capture them from space. And that in itself created a barrier of entry that is, very valuable. So, my last job was at Equifax, and these are the kind of companies that we see as immensely valuable because they are proprietary, they own the data proprietarily, and there's barriers to entry for those assets. So. Okay. Great. Maybe you could talk about where the demand has come from. The government's obviously a large customer, defense, civil, and then commercial. Give a sense of where the initial and maybe the current momentum is coming from customers. Yeah. So long term, I'd say 50/50 is a good way of thinking about commercial versus government application. Clearly the early large contracts were with the agencies like NOAA, EUMETSAT, and NASA, where we were able to monetize some of our assets for weather application. Over time, through the acquisition of exactEarth, which was a $20 million company, public company in Canada when we acquired them, we gained a significant presence on the maritime, AIS maritime industry. And I would categorize the four business units that we have: maritime aviation, weather, and space services, as 30/30/30 for maritime, weather, and aviation and space services. Aviation is the one that is lagging, a bit more in terms of the revenue components because the ADS-B signals tend to be a bit more latent than the industry really requires. So if you think about the speed of an airplane versus the speed of a ship, you can measure the ship several times, over a period of five minutes, and they seem to be in the same position, not the same with an airplane. So, the latency that we can achieve with an ADS-B signal for aviation needs to be in the 1.5-2- seconds range. And our technology does not allow us to currently bring down the information faster than maybe 15-20- minutes, which is very well suited for maritime but not as much for aviation. Got it. Okay. And you talked about the landscape maybe briefly with that slide, but talk about maybe the competitive landscape and maybe what are the two or three or four bullet points that are Spire's differentiation within that landscape? Well, I think first of all, size. So when you think about our competitors, they either have one or two satellites when we have 50 doing that, or the scope where they chose to be more regional. So ORBCOMM, who's our second competitor from an AIS standpoint, from maritime, they are more regionally focused, in areas of, of interest. So we have technologies that can cover the globe and will give us significant differentiation. So right now, I think if you think about these three segments that I talked about: maritime, aviation, and weather, Spire has a very strong number one presence or position with good branding, and, you know, that's the differentiator. The product segments you have are maritime, aviation, weather, and then space services. We'll talk about next. The three core ones, you have hundreds of customers. Yeah. Is the kind of RPO per customer roughly similar? Are there large applications, small ones? Because you've built a nice recurring revenue base, so maybe a little bit of a, you know, one click down into that would be helpful. Yeah. So most of our so we have a strategy of landing and expanding our customers. We choose our customers where we can have a significant amount of share of wallet. And lately, we have been refocusing our attention on the mid- to larger customers instead of the smaller customers. We thought that that would be more economical. Most of our customers we have a gross retention rate that lands between 85%-95%, a net retention rate for the year on ARR of 102% for 2023, but it was like 117% for 2022. So above 100%. So you can't really do LTVs on that or CAC on that because it gives you infinite results. We have a very strong experience basically keeping our customers and not only that but upselling and through our price increases once the contracts expire, to basically have more than 100% of net recurring revenue on our existing base. So you should anticipate that to continue to be the case. Most of our customers that leave are either very small customers that tried us out and they were trying to integrate our data into their solutions and it didn't work out, customers that went out of business. The larger customers are very sticky, and they really appreciate and value our assets. So we can basically pass on price increases, and they tend to come to the table with a request for either larger expansion from a geographic standpoint, deeper assets in terms of the datasets that we give them. So it tends to be more of an upsell, discussion. Maybe, you know, CFO's favorite topic, visibility. Can you talk about what the typical terms of a customer's agreement are, you know, so how far you have some visibility forward and what the cash collection cycle is? Are you collecting cash upfront to be able to fund the business? Is that part of the element here? Yeah. So the space industry overall tends to be a cash upfront type of situation, right? And we have been trying to change that with our vendors and explain to them that working capital was very important also. But generally speaking, I'd say that the normal contractual terms for the three datasets that we have, maritime, aviation, and weather, tend to be subscription-based between one and three years, let's say average of two. And we collect most of the money quarterly upfront. We have some monthly billings also. But the subscription 'cause the data is so essential to them, they pay regularly, so we don't have any cash concerns there. NOAA and NASA tend to be more in the scope of a, you know, government contract, so they tend to last a bit longer. We have a framework for IDIQ and other, other provisions, but they bid out these things every six months or eight months. They pay very regularly also, so we have no problems with that cash on that. Space service is a bit different, so we can go into that if you want. Let's talk about space services. Yeah. Just. I think it's the most distinct one. Yeah. So space services, if you think about our ability to use our installed base and our infrastructure and all the 600 years of space heritage that we have to offer our customers a different solution. So they come with a mission purpose. They come with a payload, and they want to integrate into our satellites. And we give them a white gloves approach to getting their assets and getting the data that they want. So the assets end up being ours, not theirs. They fund effectively through fees: the design, the build, the launch, the testing of the satellites. And then the satellites that are still on our books, we commission and repurpose so that they can start generating data. So the customers end up paying for the data streams after we basically launch them and check out and commission them. Before that, they have been funding most of the or all of the build for those satellites. What we find with those customers is that clearly there are some things that are more experimental than others, but we are servicing customers that do greenhouse gas emission tracking for carbon dioxide and methane. We have customers that want to do wildfires, you know, proactive tracking and protection for wildfires. We have customers that want to do space observation and, you know, it's quite impressive all the things that the industry is asking us to put together in our form factor, and we have been very successful at those, so. I guess in space services, you're more of a kind of an outsourced service provider to people really whatever they want to do in space. Like, this is amazing. I could go to you directly, have a friend come up with some application from space, and you guys would design and put in space, and all I'd have to do is hit an API over the cloud and start pulling data, right? So that's. That's right. That's kind of on-demand type service. It can be as involved or as hands-off as you want, right? So some customers will come and just define their needs from a data collection standpoint. We've seen that in Internet of Things and other applications. We have some customers that would really want to see exactly how things are going to work and be very, very close to the mission. Of course, those tend to be the larger ticket items. Yeah. Tell us about the satellite itself and the hardware. Is it distinct in any way? I mean, I hate to kind of go all the way to the end game here, but, you know, there's going to be something like an Amazon Web Services in space over time if all the assets can get up there. So just talk about your satellites and how they're different and maybe the beginning of this hosted service capability you have. Yeah. So you need to think about satellites as things that have a lot of constraints from a power standpoint, what they can do, the payloads and the weight, and, you know, how much it costs to get them up there. LEO, the LEO constellation tends to last between three and five years. So every four or five years, we believe that the assets change significantly where you don't want to have them up there. It's like your cell phone. You can still use it after five, six years, but do you really want to? So the, the, the plan or the business model is designed such that over five years, you extract all of the economics or the economic value of those assets, and then you replenish them, right? We have different form factors, 3U, 4U, which are the size of a bottle of wine. We have 6U and 8U. They're probably a bit bigger, and 16U are a larger configuration. And they have, of course, different challenges, but you can do more with larger satellites effectively, right? So they, they tend to be for power-hungry applications or things that, that require propulsion or other things that the smaller configurations don't have. We manufacture soup to n uts the whole thing. We have some componentry like reaction wheels or maybe some propulsion that we may buy. But generally speaking, all of the bus, the power supply, the integration of the solar panels with our, you know, systems, it's all done in-house. And we have a clean room manufacturing facility in Glasgow that is, you know, high-end from a technology standpoint. And, we have testing capabilities, radio frequency chambers, you name it, so. We talked about this when I met earlier, but can you just walk through the accounting a little bit of how the customer pays for an asset but ends up on your books? And also, sorry, the incremental OpEx of space services. There's a lot of scalability there, so maybe you could walk through that. Yeah. So the idea of space services was to really leverage our own infrastructure. So we have 38+ ground stations that we use. We have, of course, a platform for tracking the satellites and managing the satellites and commissioning what the satellites are doing at any given time. We, of course, have a large facility for manufacturing, for our own asset needs. And we said, "Hey, let's bring the customers and leverage all of that." Our first thing was, "Okay, we need to also have the working capital to do all of that." So the customer should be willing, if we give them the right price, to fund the development, to fund the manufacturing, and to fund the launch. And in most cases, that's the case. We unfortunately or fortunately for us cannot give them access to the assets because the assets carry a license. And to operate effectively that asset, you need to own the license. So if they want us they want us to operate the asset, we need to own it. That's good and to a certain extent, great because at the end of the day, the customer only cares about the data that they get and not so much the asset. So we end up owning the asset as the fees come in. The fees fund the cost of the build and the launch. All of that gets except for R&D gets capitalized into the asset, and we're, I would say, cash net zero. So all the fees cover the outgoings of cash for the build and the R&D. The R&D flashes through the P&L. The revenue accounting is following 606, so for the geeky accountants. Performance obligations split in two, pre-space, and then the data subscription and pre-space with milestone revenue accounting. We have price allocated to these performance obligations for design and build and flight worthiness and launch and commissioning and checkout. 30% of the total contract value from a revenue standpoint falls in these 18-24 months. Then in the three to four year of data provision, the other 70% gets spread over that period of time, ratably because it's access to the API. Again, more visibility. We had a different space tech company here earlier, Redwire, and one of the topics that's coming up is national security and the demand from that sector. A sense of urgency with other international counterparts maybe perceived to be ahead. So maybe you could talk about how that's affecting or bolstering your customer base, your demand opportunity for Spire. Yeah. That's clearly the second secular trend that we saw, right? So climate change and weather one, and the second one is basically the geopolitical and the security and intelligence-related needs. And we benefited a little bit from that last year because, as NOAA for a period of time went with one of our competitors for the radio occultation, we repurposed our assets to turn them into radio frequency geolocation-generating assets. And that effectively what it did is opened up a huge window to what we would call the intelligence arena where there's interest in identifying where GPS jamming is taking place. So, I'd say actors that are not, I don't want to say good or bad, but they're basically on the other side of the fence if you want, are jamming or incapacitating the GPS signals and then limiting the use of some of the assets that our intelligence community or our defense community can operate in those areas. So there's a, I'd say, large interest in identifying exactly where that's taking place, and with our technology, we can do that. Right. I think the term we use was be as bad actors for them. That's. Bad actors, yeah. Let's see if there's any questions from the audience. Everybody's looking forward to the music. I can tell. Maybe you can give a case study or, or, you know, one maybe maritime or aviation. That'll maybe kind of crystallize what, what you do for folks. Yeah. So with, I'd say let's focus maybe on maritime. So maritime, we don't only sell the data to the shipping companies, right? So in most cases, what we do is capture data once and sell it multiple times where we sell it to the ecosystem. So think about a port authority that wants to track where a ship is high seas and when they're going to come into the port to repurpose basically assets, cranes, and people to servicing that. They can basically communicate with the shipping company, and they will give them an estimate, or they can come to us, and we will give them our estimate, which is basically based on, you know, the heading and the speed and the winds and everything else that is happening with that ship. So we do that. We do effectively a combination of radio frequency geolocation and AIS signaling. So some of the bad actors on the shipping industry, there's a lot of dark shipping, tinker with their AIS transmitter so that the GPS positioning that they declare is not exactly where they are. So they may be heading towards Venezuela to refuel their tankers with banned oil, and they report that they're close to Africa. And then at some point, they come back, and when they're close, they're basically going to change the GPS metrics. So we can effectively identify where they really are. We have a lot of shipping that or fishing that happens in illegal areas that we can also identify. And there's a lot of contraband where two ships get together. One ship is only emitting the AIS signal, and they move the cargo for the contraband, and then they declare something else. So those kind of applications are really valuable for the intelligence community, the enforcement community. Okay. Any last questions from the audience?