Spire (US:SPIR)2025-11-03 23:20Financial Performance - Annual Recurring Revenue (ARR) decreased by 31% to $77.4 million as of June 30, 2025, down from $111.9 million in 2024 [161]. - The number of ARR Customers dropped by 76% to 160 as of June 30, 2025, compared to 663 in 2024 [165]. - The number of ARR Solution Customers also decreased by 76% to 170 as of June 30, 2025, down from 702 in 2024 [165]. - Total revenue for the three months ended June 30, 2025, was $19.182 million, a decrease of 24% compared to $25.399 million in the same period of 2024 [184][185]. - Total revenue decreased by $17.2 million, or 29%, for the six months ended June 30, 2025, primarily due to the sale of the maritime business [187]. - Subscription-based revenue was $14.6 million, or 76% of total revenue, for the three months ended June 30, 2025, down from $19.7 million, or 78%, for the same period in 2024 [186]. - The company's ARR Net Retention Rate decreased to 83% for the three months ended June 30, 2025, down from 85% in the same period of 2024, primarily due to decreased value from NOAA's radio occultation technology weather award [167][168]. - For the three months ended June 30, 2025, the net income was $119.6 million compared to a net loss of $16.6 million for the same period in 2024 [239]. Expenses and Costs - Gross profit for the three months ended June 30, 2025, was $9.376 million, compared to $10.911 million for the same period in 2024 [183]. - Research and Development expenses increased to $10.195 million for the three months ended June 30, 2025, from $7.517 million in the same period of 2024 [183]. - Operating expenses totaled $32.903 million for the three months ended June 30, 2025, compared to $23.263 million in the same period of 2024 [183]. - General and administrative expenses rose by $7.2 million, or 72%, for the three months ended June 30, 2025, largely due to increased stock-based compensation and professional services expenses [205]. - Sales and marketing expenses decreased by $0.8 million, or 15%, for the three months ended June 30, 2025, primarily due to a reduction in personnel costs [201]. - The company incurred $6.2 million in stock-based compensation expenses for the three months ended June 30, 2025 [239]. Business Transactions - The sale of the maritime business was completed for approximately $238.9 million, reflecting an increase in the purchase price due to contributions toward a settlement [145]. - The gain on the sale of the maritime business was $154.305 million, contributing significantly to the income before income taxes [183]. - The company completed the sale of its maritime business for approximately $238.9 million on April 25, 2025 [247]. - Gain on sale of a business was $154.3 million for the three months ended June 30, 2025, with no comparable amount for the same period in 2024 [215]. Cash Flow and Investments - As of June 30, 2025, cash and cash equivalents totaled $117.6 million, a significant increase from $19.2 million as of December 31, 2024 [244]. - Net cash used in operating activities for the six months ended June 30, 2025, was $43.5 million, compared to $13.2 million for the same period in 2024 [256]. - Net cash provided by investing activities was $145.3 million for the six months ended June 30, 2025, driven by proceeds from the sale of the maritime business of $238.9 million [261]. - Net cash used in financing activities was $76.2 million for the six months ended June 30, 2025, primarily due to payments on long-term debt of $105.7 million [264]. Market and Economic Conditions - The impact of the macroeconomic environment has led to longer sales cycles and customer re-evaluations of purchasing decisions [150]. - Inflationary factors have not had a substantial impact on the company's results of operations for the three and six months ended June 30, 2025 [274]. Future Outlook - The company plans to continue investing in growth, including adding headcount to sales and marketing teams [157]. - The company expects research and development expenses to increase in absolute dollars in future periods, but decrease as a percentage of revenue as revenue growth exceeds R&D spending increases [199]. - The company anticipates that general and administrative expenses will grow in absolute dollars in future periods, but decrease as a percentage of revenue as revenue growth outpaces administrative spending increases [207]. - The company will lose its "emerging growth company" status beginning with the Annual Report for the year ending December 31, 2025 [270]. Other Financial Metrics - Interest income for the three months ended June 30, 2025, was $646,000, compared to $571,000 in the same period of 2024 [183]. - Interest income increased by $0.1 million, or 13%, for the three months ended June 30, 2025, primarily due to higher average balances held in marketable securities [214]. - Interest expense decreased by $3.1 million, or 65%, for the three months ended June 30, 2025, primarily due to the payoff of the Blue Torch loan [214]. - Foreign exchange gain was $7.0 million for the three months ended June 30, 2025, compared to a loss of $0.5 million for the same period in 2024, a change of 1,458% [220]. - Income tax provision increased to $1.8 million for the three months ended June 30, 2025, compared to $67,000 for the same period in 2024, a change of 2,588% [230]. - Adjusted EBITDA for the six months ended June 30, 2025, was a loss of $18.1 million, compared to a loss of $2.4 million for the same period in 2024 [239].