Spire (US:SPIR)2025-03-03 21:16Revenue Performance - Revenue for the three months ended June 30, 2024, was $25.4 million, a decrease of 9% from the same period in 2023[168]. - Total revenue for the three months ended June 30, 2024, decreased by $2.7 million, or 9%, compared to the same period in 2023, primarily due to a decline in Weather and Climate data subscription contracts[204]. - Total revenue for the six months ended June 30, 2024, increased by $8.9 million, or 17%, driven by increased ARR with existing customers and growth in Space Services Contracts revenue[207]. - Revenue from subscription arrangements constituted 78% of total revenue for the three months ended June 30, 2024, compared to 72% for the same period in 2023[206]. Annual Recurring Revenue (ARR) Metrics - The number of Annual Recurring Revenue (ARR) Solution Customers decreased to 702 as of June 30, 2024, from 813 as of June 30, 2023[172]. - The company's ARR as of June 30, 2024, was $111,893,000, a decrease of 1% from $112,818,000 in 2023[181]. - The number of ARR Customers decreased by 16% from 785 in 2023 to 663 in 2024, while ARR Solution Customers decreased by 14% from 813 to 702[184]. - The ARR Net Retention Rate was 85% for the three months ended June 30, 2024, compared to 112% for the same period in 2023[172]. - The ARR Net Retention Rate for the three months ended June 30, 2024, was 85%, down 27% from 112% in 2023, indicating a decline in customer contract value[186]. - The ARR Net Retention Rate for the six months ended June 30, 2024, was 93%, a decrease of 17% from 110% in 2023[186]. Cost and Expenses - Total cost of revenue for the three months ended June 30, 2024, decreased by $0.8 million, or 5%, while gross profit decreased by 15% to $10.9 million[209]. - Gross margin for the three months ended June 30, 2024, was 43%, down from 46% in the same period of 2023, primarily due to higher depreciation expenses[211]. - Research and development spending decreased by $0.1 million, or 2%, for the three months ended June 30, 2024, compared to the same period in 2023[176]. - Sales and marketing expenses decreased by $1.6 million, or 23%, for the three months ended June 30, 2024, compared to the same period in 2023, primarily due to reductions in bonuses, personnel costs, and marketing expenses[223]. - General and administrative expenses decreased by $0.7 million, or 7%, for the three months ended June 30, 2024, compared to the same period in 2023, mainly driven by lower bonus and insurance costs[227]. Financial Position and Cash Flow - As of June 30, 2024, the company had cash and cash equivalents and marketable securities totaling $45.8 million, an increase from $40.9 million as of December 31, 2023[258]. - The company reported net cash used in operating activities of $13.2 million, reflecting a net loss of $42.1 million and adjustments for non-cash items of $30.9 million[289]. - Net cash used in investing activities was $22.7 million for the six months ended June 30, 2024, driven by purchases of short-term investments of $30.1 million and property and equipment of $12.6 million[292]. - The company reported net cash provided by financing activities of $28.4 million for the six months ended June 30, 2024, primarily from proceeds of $37.9 million from securities purchase agreements[295]. Debt and Financing - The Blue Torch Financing Agreement provides for a term loan facility of up to $120.0 million, with a maturity date of June 13, 2026[268]. - As of June 30, 2024, the interest rate on the term loan was 13.6084%, based on the Term SOFR rate[270]. - The company has failed to meet leverage ratio and minimum liquidity covenants under the Blue Torch Financing Agreement, raising substantial doubt about its ability to continue as a going concern for at least 12 months[262][267]. - The company made a repayment of $10.0 million in principal to Blue Torch on April 8, 2024, plus an early termination fee of $0.2 million[280]. Losses and Adjusted EBITDA - The company reported a net loss of $16.6 million for the three months ended June 30, 2024, compared to a net loss of $18.4 million for the same period in 2023[254]. - Adjusted EBITDA for the six months ended June 30, 2024, was a loss of $2.4 million, compared to a loss of $13.2 million for the same period in 2023[254]. Market and Economic Conditions - The macroeconomic environment has led to longer sales cycles and additional customer discounts, impacting revenue from U.S. federal government orders[166]. - Approximately 33% of revenues were generated in currencies other than the U.S. Dollar, which had a marginal positive impact on revenue due to a modest decrease in the U.S. Dollar's strength[178]. - The company is exposed to inflation risk, particularly from increases in component parts, labor, and overhead expenses[306]. - Recent inflation increases have not significantly impacted the company's results of operations for the three and six months ended June 30, 2024 or 2023[306].