Spire Global Inc

Previous wording

Spire also offers research and development services (“R&D Services”) to third parties, for the advancement of contracted satellite technologies. In addition to providing research and development services, we grant the counterparty a license to the developed intellectual property.

Current wording

Spire also offers research and development services (“R&D Services”) to third parties, for the advancement of contracted satellite technologies. In addition to providing R&D Services, we grant the counterparty a license to the developed intellectual property.

Previous wording

On November 13, 2024, we entered into a Share Purchase Agreement (the “Purchase Agreement”) with Kpler Holding SA, a Belgian corporation (“Buyer”), pursuant to which we agreed to sell our maritime business to Buyer and enter into certain ancillary agreements (the “Transactions”). The maritime business to be sold pursuant to the Transactions does not include any part of our satellite network or operations. The purchase price to be paid by Buyer to us at the closing of the Transactions is a cash payment based upon an enterprise value of $233.5 million, subject to certain adjustments. The Transactions also include a twelve-month transition service and data provision agreement for $7.5 million. The Purchase Agreement provides that the closing of the Transactions is subject to the satisfaction or waiver of certain closing conditions set forth in the Purchase Agreement.

Current wording

On November 13, 2024, we entered into a Share Purchase Agreement (the “Purchase Agreement”) with Kpler Holding SA, a Belgian corporation (“Buyer”), pursuant to which we agreed to sell our maritime business to Buyer and enter into certain ancillary agreements (the “Transactions”). The maritime business sold pursuant to the Transactions did not include any part of our satellite network or operations. The purchase price agreed to be paid by Buyer to us at the closing of the Transactions was a cash payment based upon an enterprise value of $233.5 million, subject to certain adjustments. The Transactions also included a twelve-month transition service and data provision agreement for $7.5 million.

Previous wording

Over the past two years, we have been impacted by the macroeconomic environment, such as fluctuations in foreign currencies, increasing interest rates, and geopolitical conflicts like the Russian invasion of Ukraine, Israel's war with Hamas, and the increased tensions between China and the United States.

Current wording

Over the past two years, we have been impacted by the macroeconomic environment, such as fluctuations in foreign currencies, elevated interest rates, and geopolitical conflicts like the Russian invasion of Ukraine, Israel's war with Hamas, and the increased tensions between China and the United States.

Previous wording

We report in U.S. Dollars, and the functional currency of our foreign operating subsidiaries is the local currency, including the Euro, the British Pound Sterling, the Singapore Dollar and the Canadian Dollar. The U.S. Dollar exhibited a decrease in strength against the local functional currencies of our foreign subsidiaries for the three and nine months ended September 30, 2024, as compared to the three and nine months ended September 30, 2023. The U.S. Dollar's decrease had a positive impact on our revenue, as approximately one-third of our sales are conducted in foreign currencies. Conversely, the decrease in the value of the U.S. Dollar had a unfavorable impact on our expenses, given that a majority of our workforce resides in countries other than the United States. Approximately 38% of our revenues were generated in currencies other than the U.S. Dollar. The financial statements of these subsidiaries are translated into U.S. Dollars using exchange rates in effect at each balance sheet date for assets and liabilities and average exchange rates during the period for revenues and expenses. To the extent we experience significant currency fluctuations, our results of operations may be impacted.

Current wording

Our reporting currency is the U.S. Dollar. The U.S. Dollar exhibited a decrease in strength against the local functional currencies of our foreign subsidiaries for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. The U.S. Dollar's decrease had a positive impact on our revenue, as approximately one-third of our sales are conducted in foreign currencies. Conversely, the decrease in the value of the U.S. Dollar had an unfavorable impact on our expenses, given that a majority of our workforce resides in countries other than the United States. Approximately 30% of our revenues were generated in currencies other than the U.S. Dollar. The financial statements of these subsidiaries are translated into U.S. dollars using exchange rates in effect at each balance sheet date for assets and liabilities and average exchange rates during the period for revenues and expenses. To the extent we experience significant currency fluctuations, our results of operations may be impacted.

Previous wording

The macroeconomic environment has caused existing or potential customers to re-evaluate their decision to purchase our offerings, at times resulting in additional customer discounts, extended payment terms, and longer sales cycles. Particularly, government agency delays in accepting requests for proposal negatively impacted the timeliness of some of our U.S. federal government orders and revenues expected in the third quarter of 2024.

Current wording

The macroeconomic environment has caused existing or potential customers to re-evaluate their decision to purchase our offerings, at times resulting in additional customer discounts, extended payment terms, and longer sales cycles. Particularly, government agency delays in approving appropriations bills negatively impacted the timeliness of some of our U.S. federal government orders. Additionally, recent changes to tariffs could cause interruptions in our supply chain and increase spending to meet our obligations. Tariff changes could also cause greater volatility in the Company’s cash flows, as the Company may have to cover expenses related to importing materials into the United States from other affiliated entities, even if it recovers some or all of those costs at a later date.

Previous wording

We track our progress landing new customers by measuring the number of ARR Solution Customers (as defined below) we have from one fiscal period to the next. The number of ARR Solution Customers decreased to 606 as of September 30, 2024, from 827 as of September 30, 2023. We track our increases and decreases in our customer contract values by measuring our ARR Net Retention Rate (as defined below). Our ARR Net Retention Rate was 90% and 92% for the three and nine months ended September 30, 2024, respectively, and 86% and 101% for the three and nine months ended September 30, 2023, respectively.

Current wording

We track our progress landing new customers by measuring the number of ARR Solution Customers (as defined below) we have from one fiscal period to the next. The number of ARR Solution Customers decreased to 620 as of March 31, 2025, from 708 as of March 31, 2024. We track our increases and decreases in our customer contract values by measuring our ARR Net Retention Rate (as defined below). Our ARR Net Retention Rate was 97% and 102% for the three months ended March 31, 2025 and 2024, respectively.

Previous wording

A stronger solar cycle has the potential to impact some of our satellites, accelerating their deorbiting and shortening their useful lives. The solar cycle is the cycle that the Sun’s magnetic field goes through approximately every 11 years. In 2019, the National Oceanic and Atmospheric Administration (“NOAA”), NASA, and the International Space Environment Services panel forecasted that Solar Cycle 25 (December 2019 to approximately 2030) would be relatively weak after a relatively weak Solar Cycle 24 (December 2008 to December 2019). Subsequently, NOAA noted that Solar Cycle 24 was the weakest cycle in 100 years with sunspots reaching a maximum of 116 – below the average of 179. In October of 2023, NOAA updated their projection for the strength and duration of Solar Cycle 25, stating that the cycle is expected to be more intense than Cycle 24, and predicting that the peak of the cycle would be earlier, by the end of 2024. A stronger solar cycle has accelerated the deorbiting of our satellites sooner than expected or planned. Our ability to minimize the solar cycle impact, our ability to replenish our existing constellation in a timely manner and the costs associated with these actions may adversely affect our results of operations.

Current wording

A stronger solar cycle has the potential to impact some of our satellites, accelerating their deorbiting and shortening their useful lives. The solar cycle is the cycle that the Sun’s magnetic field goes through approximately every 11 years. In 2019, the National Oceanic and Atmospheric Administration (“NOAA”), National Aeronautics and Space Administration, and the International Space Environment Services panel forecasted that Solar Cycle 25 (December 2019 to approximately 2030) would be relatively weak after a relatively weak Solar Cycle 24 (December 2008 to December 2019). Subsequently, NOAA noted that Solar Cycle 24 was the weakest cycle in 100 years with sunspots reaching a maximum of 116 – below the average of 179. NOAA's October 2023 projection that Solar Cycle 25 would be more intense than Cycle 24 and would peak by the end of 2024 has since been confirmed. A stronger solar cycle has accelerated the deorbiting of our satellites sooner than expected or planned. Our ability to minimize the solar cycle impact, our ability to replenish our existing constellation in a timely manner and the costs associated with these actions may adversely affect our results of operations.

Previous wording

We continue investing in growing our business and capitalizing on our market opportunities while balancing the uncertainties from the macroeconomic environment and geopolitical factors. We intend to continue to add headcount to our global sales and marketing teams to acquire new customers and to increase sales to existing customers. We also intend to continue to add headcount as needed to our research and development teams and otherwise invest to improve and innovate our nanosatellite, ground station and data analytics technologies. Our spending on research and development decreased by $2.3 million, or 29%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. Our total headcount across all functions increased to 442 employees as of September 30, 2024, from 420 employees as of September 30, 2023. The costs of these investments may adversely affect our results of operations, but we believe that these investments will contribute to our long-term growth.

Current wording

We continue investing in growing our business and capitalizing on our market opportunities while balancing the uncertainties from the macroeconomic environment and geopolitical factors. We intend to continue to add headcount to our global sales and marketing teams to acquire new customers and to increase sales to existing customers. We also intend to continue to add headcount as needed to our research and development teams and otherwise invest to improve and innovate our nanosatellite, ground station and data analytics technologies. Our total headcount across all functions increased to 439 employees as of March 31, 2025, from 430 employees as of March 31, 2024. The costs of these investments may adversely affect our results of operations, but we believe that these investments will contribute to our long-term growth.

Previous wording

We define ARR as our expected annualized revenue from customers that are under contracts with us at the end of the reporting period with a binding and renewable agreement for our subscription solutions or customers that are under a binding multi-year contract that can range from components of our Space Services solution to a project-based customer solution. Customers with Space Services Contracts are considered recurring when there is a multi-year binding agreement that has a renewable component in the contract. Customers are also considered recurring when they have multiple contracts over multiple years. Customer contracts for data trials and one-time transactions are excluded from the calculation of ARR.

Current wording

We define ARR as our expected annualized revenue from customers that are under contracts with us at the end of the reporting period with a binding and renewable agreement for our subscription solutions or customers that are under a binding multi-year contract that can range from components of our Space Services solution to a project-based customer solution, regardless of remaining term. Customers with Space Services contracts are considered recurring when there is a multi-year binding agreement that has a renewable component in the contract. Customers are also considered recurring when they have multiple contracts over multiple years. Customer contracts for data trials and one-time transactions are excluded from the calculation of ARR.

Previous wording

The increase in our ARR for the three months ended September 30, 2024 was primarily driven by obtaining new ARR Customers. Our ARR has fluctuated from period to period in the past due in part to the timing of some of our Space Services Contracts, including when engagements start and stop. We expect our ARR to continue to fluctuate from period to period in the future. ARR is a leading indicator and accordingly, will tend to outpace the impact on our revenue as we recognize the contract value of various agreements over time.

Current wording

The increase in our ARR for the three months ended March 31, 2025 was primarily driven by acquiring new high-value customers and increasing business with our existing customer base. Our ARR has fluctuated from period to period in the past due in part to the timing of some of our Space Services contracts, including when engagements start and stop. We expect our ARR to continue to fluctuate from period to period in the future. ARR is a leading indicator and accordingly, will tend to outpace the impact on our revenue as we recognize the contract value of various agreements over time.

Previous wording

We calculate our ARR Net Retention Rate for a particular fiscal period end by dividing (i) our ARR from those ARR Customers at that fiscal period end that were also customers as of the last day of the prior fiscal period end by (ii) the ARR from all customers as of the last day of the prior fiscal period. This calculation measures the overall impact from increases in customer contract value (upsells), the decreases in customer contract value (downsells) and the decreases in customer value resulting from customers that have chosen not to renew their contracts with us (lost customers).

Current wording

We calculate our ARR Net Retention Rate for a particular fiscal period end by dividing (i) our ARR from those ARR Customers at that period end that were also customers as of the last day of the prior fiscal period end by (ii) the ARR from all customers as of the last day of the prior fiscal period. This calculation measures the overall impact from increases in customer contract value (upsells), the decreases in customer contract value (downsells) and the decreases in customer value resulting from customers that have chosen not to renew their contracts with us (lost customers).

Previous wording

The following table summarizes our ARR Net Retention Rate for the three and nine months ended September 30, 2024 and 2023:

Current wording

The following table summarizes our ARR Net Retention Rate for the three months ended March 31, 2025 and 2024:

Previous wording

Our ARR Net Retention Rate can be impacted from period to period by large increases or decreases in customer contract value and large decreases in contract value from customers that have not renewed their contracts with us. An ARR Net Retention Rate greater than 100% is an indication that we are growing the value of the solutions our customers are purchasing from us at a fiscal period end versus the prior fiscal period end. An ARR Net Retention Rate less than 100% is an indication that the value of the solutions our customers are purchasing from us declined at a fiscal period end versus the prior fiscal period end. Our ARR Net Retention Rate increased by 4% for the three months ended September 30, 2024 and decreased by 9% for the nine months ended September 30, 2024. The increase during the three months ended September 30, 2024 was driven by our “land and expand” strategy of providing existing customers with additional coverage, data sets, and a variety of enhanced features and services. The decrease during the nine months ended September 30, 2024 was driven primarily by the reduced value of NOAA's RO weather award as compared to the value of the corresponding award in the nine months ended September 30, 2023.

Current wording

Our ARR Net Retention Rate can be impacted from period to period by large increases or decreases in customer contract value and large decreases in contract value from customers that have not renewed their contracts with us. An ARR Net Retention Rate greater than 100% is an indication that we are growing the value of the solutions our customers are purchasing from us at a fiscal period end versus the prior fiscal period end. An ARR Net Retention Rate less than 100% is an indication that the value of the solutions our customers are purchasing from us declined at a fiscal period end versus the prior fiscal period end. Our ARR Net Retention Rate decreased by 5% for the three months ended March 31, 2025. The decrease was primarily driven by the reduced value of NOAA’s radio occultation technology (“RO”) weather award in the three months ended March 31, 2025, as compared to the value of the corresponding award in the three months ended March 31, 2024.

Previous wording

Cost of revenue consists primarily of personnel costs, depreciation, hosted infrastructure costs, high-power computing costs, third-party operating and royalty costs associated with delivering our data and services, to our customers and costs associated with contracts in our customer-funded or co-funded research and development arrangements (the “R&D Services Contracts”). In addition, cost of revenue includes the amortization of purchased intangibles associated with our acquisition of exactEarth in November 2021 (the “Acquisition”). Personnel costs are primarily related to the cost of our employees supporting and managing our constellation operations including satellite operations, ground station control and launch management. Personnel costs also include the cost of our employees supporting and managing projects for our research and development services. Costs associated with the manufacture and launch of our satellites, including personnel costs, are capitalized and depreciated upon placement in service, typically over a four-year expected useful life. As satellites reach the end of their expected useful life, they are generally replaced with replenishment satellites to maintain our constellation at optimal performance. Costs associated with the acquisition and development of new ground stations, including the bill of materials and labor to install the ground station, are capitalized and depreciated upon placement in service typically over a four-year to ten-year expected useful life. We anticipate ongoing capital spending to repair and replenish ground stations as they reach the end of their expected useful life to keep our ground station network at optimal performance. Our proprietary ground station network is primarily located in third-party locations where we incur lease and other operational charges. Cost of revenue also includes royalties associated with third-party data sets that we integrate into our data solutions.

Current wording

Cost of revenue consists primarily of personnel costs, depreciation, hosted infrastructure costs, high-power computing costs, third-party operating and royalty costs associated with delivering our data and services to our customers, and costs associated with R&D Services contracts. In addition, cost of revenue includes the amortization of purchased intangibles associated with our acquisition of exactEarth in November 2021 (the “Acquisition”). Personnel costs are primarily related to the cost of our employees supporting and managing our constellation operations including satellite operations, ground station control, and launch management. Personnel costs also include the cost of our employees supporting and managing projects for our research and development services. Costs associated with the manufacture and launch of our satellites, including personnel costs, are capitalized and depreciated upon placement in service, typically over a four-year expected useful life. As satellites reach the end of their expected useful life, they are generally replaced with replenishment satellites to maintain our constellation at optimal performance. Costs associated with the acquisition and development of new ground stations, including the bill of materials and labor to install the ground station, are capitalized and depreciated upon placement in service typically over a four-year to ten-year expected useful life. We anticipate ongoing capital spending to repair and replenish ground stations as they reach the end of their expected useful life to keep our ground station network at optimal performance. Our proprietary ground station network is primarily located in third-party locations where we incur lease and other operational charges. Cost of revenue also includes royalties associated with third-party data sets that we integrate into our data solutions.

Previous wording

Loss on Decommissioned Satellites. Loss on decommissioned satellites consists of the write-off of the remaining capitalized costs associated with the manufacture and launch of our satellites prior to the end of the satellite’s useful life. We contract with third-party companies to launch, carry, and deploy our satellites into space. A loss could result from a third-party launch or deployer failure, a technical failure of the satellite, or the deorbit or decommissioning of a satellite before the end of the satellite’s useful life. A technical failure could include a satellite that is not able to communicate with our network of ground stations or fulfill its intended technical mission for a duration greater than one month. The loss amount is presented net of any insurance proceeds received. Due to the nature of these events, we cannot predict the magnitude or frequency of future satellite deorbit and launch failure losses. We sometimes purchase launch insurance when financially practical; however, the proceeds from these insurance policies will typically only cover a portion of our launch loss. We incurred a $0.2 million and $1.0 million loss on decommissioned satellites for the three and nine months ended September 30, 2024, respectively, and a $0.2 million and $0.6 million loss on decommissioned satellites for the three and nine months ended September 30, 2023, respectively.

Current wording

Loss on Decommissioned Satellites. Loss on decommissioned satellites consists of the write-off of the net book value associated with the manufacture and launch of our satellites prior to the end of the satellite’s useful life. We contract with third-party companies to launch, carry, and deploy our satellites into space. A loss could result from a third-party launch or deployer failure, a technical failure of the satellite, or the deorbit or decommissioning of a satellite before the end of the satellite’s useful life. A technical failure could include a satellite that is not able to communicate with our network of ground stations or fulfill its intended technical mission for a duration greater than one month. The loss amount is presented net of any insurance proceeds received. Due to the nature of these events, we cannot predict the magnitude or frequency of future satellite deorbit and launch failure losses. We sometimes purchase launch insurance when financially practical; however, the proceeds from these insurance policies will typically only cover a portion of our launch loss.

Previous wording

Interest Income. Interest income includes interest earned on our cash balances and short-term marketable securities.

Current wording

Interest Income. Interest income includes interest earned on our cash balances and note receivable.

Previous wording

Three and Nine Months Ended September 30, 2024, Compared to Three and Nine Months Ended September 30, 2023

Current wording

Three Months Ended March 31, 2025, Compared to Three Months Ended March 31, 2024

Previous wording

Total revenue increased $6.4 million, or 29%, for the three months ended September 30, 2024, primarily due to increased ARR from our existing customers and growth in revenue recognized for both Space Services Contracts and R&D Services Contracts, partially offset by a decrease in our RO-based revenue primarily from the reduced value of NOAA's RO weather award during the three months ended September 30, 2024 as compared to the prior year period. Our ARR Customers decreased 29% to 565 as of September 30, 2024, from 794 as of September 30, 2023. The decrease in ARR Customers was aligned with our stated move to de-emphasize sales to customers with very low ARR or revenue and instead focus on high ARR or revenue customers. Our ARR Net Retention Rate was 90% and 86% for the three months ended September 30, 2024 and 2023, respectively. The increase in ARR Net Retention Rate was driven by our “land and expand” strategy of providing existing customers with additional coverage, data sets, and a variety of enhanced features and services.

Current wording

Total revenue decreased $10.9 million, or 31%, for the three months ended March 31, 2025, primarily due to items that occurred in the three months ended March 31, 2024 that did not repeat in the three months ended March 31, 2025, including a one-time performance obligation for a space services customer of $9.6 million. Additional drivers include a reduction in year-over-year RO-based revenue primarily from the reduced value of NOAA’s RO weather award during the three months ended March 31, 2025 as compared to the prior year period, partially offset by increased ARR from our existing customers and growth in revenue recognized for both Space Services contracts, excluding the impact of the aforementioned 2024 performance obligation, and R&D Services contracts. Our ARR Customers decreased 15% to 570 as of March 31, 2025, from 672 as of March 31, 2024. The decrease in ARR Customers was aligned with our stated move to de-emphasize sales to customers with very low ARR or revenue and instead focus on high ARR or revenue customers. Our ARR Net Retention Rate was 97% and 102% for the three months ended March 31, 2025 and 2024, respectively. The decrease in ARR Net Retention Rate was driven primarily by the reduced value of NOAA’s RO weather award in the three months ended March 31, 2025, as compared to the value of the corresponding award in the three months ended March 31, 2024.

Previous wording

We derived 50% of our revenue from the Americas, 43% of our revenue from Europe, Middle East, Africa (“EMEA”), and 7% of our revenue from Asia Pacific (“APAC”) for the three months ended September 30, 2024. We derived 43% of our revenue from EMEA, 40% of our revenue from the Americas, and 17% of our revenue from APAC for the three months ended September 30, 2023. We derived 71% of our revenue from subscription arrangements for the three months ended September 30, 2024, compared to 75% for the three months ended September 30, 2023. The distribution of our revenue can fluctuate significantly from period to period driven primarily by the timing of the non-subscription revenue recognition in our contracts. Revenue from subscription-based contracts was $20.2 million, or 71%, of total revenue, for the three months ended September 30, 2024, and was $16.6 million, or 75%, of total revenue, for the three months ended September 30, 2023. The proportional decrease in revenue from subscription arrangements was driven by higher revenue recognized for Space Services Contracts within the period.

Current wording

We derived 57% of our revenue from the Americas, 34% of our revenue from Europe, Middle East, Africa (“EMEA”), and 9% of our revenue from Asia Pacific (“APAC”) for the three months ended March 31, 2025. We derived 65% of our revenue from the Americas, 29% of our revenue from EMEA, and 6% of our revenue from APAC for the three months ended March 31, 2024. We derived 82% of our revenue from subscription arrangements for the three months ended March 31, 2025, compared to 52% for the three months ended March 31, 2024. The distribution of our revenue can fluctuate significantly from period to period driven primarily by the timing of the non-subscription revenue recognition in our contracts. Revenue from subscription-based contracts was $19.5 million, or 82%, of total revenue, for the three months ended March 31, 2025, and was $18.2 million, or 52%, of total revenue, for the three months ended March 31, 2024. The proportional increase in revenue from subscription arrangements was driven by higher revenue recognized for Space Services contracts within the prior-year period.

Previous wording

Cost of revenue increased $14.7 million, or 36%, primarily driven by an increase in depreciation expense of $4.9 million, an increase in satellite operation expense of $4.4 million, an increase in personnel expenses of $4.0 million, an increase in downlink data service expenses of $1.3 million, and an increase in other miscellaneous expenses of $0.1 million. The increase in depreciation expense was primarily driven by a reset of the estimated useful lives of our satellites to account for the impact of increased solar activity related to the current solar cycle. The increase in satellite operation expense was driven by recognition of launch costs associated with a Space Services Contract. The increase in personnel costs was driven by increased work related to R&D Services Contracts during the period. The increase in downlink data service expenses was primarily driven by the purchase of supplemental data to support a RFGL contract.

Current wording

Cost of revenue decreased $10.5 million, or 41%, primarily driven by a decrease in satellite operation expense of $8.9 million, a decrease in personnel expenses of $2.5 million, a decrease in depreciation expense of $1.9 million, and a decrease in other miscellaneous expenses of $0.1 million, partially offset by an increase in downlink data service expenses of $2.9 million. The decrease in satellite operation expense was driven by the recognition of increased launch costs associated with a Space Services contract in the prior year period that did not recur during the three months ended March 31, 2025. The decrease in personnel costs was driven by decreased work related to R&D Services contracts during the period. The decrease in depreciation expense was primarily driven by the acceleration of depreciation, resulting in fully depreciated satellites in the prior year period to account for the impact of increased solar activity related to the current solar cycle. The increase in downlink data service expenses was primarily driven by the purchase of supplemental data to support a radio frequency geolocation contract.

Previous wording

Gross margin was 37% and 44% for the nine months ended September 30, 2024 and 2023, respectively. The decrease was driven primarily by the higher expenses described above. Our gross margin can fluctuate significantly from period to period driven primarily by the timing of the revenue as well as the timing of our technology investments to support future growth.

Current wording

Gross margin was 37% and 27% for the three months ended March 31, 2025 and 2024, respectively. The increase was driven primarily by the expenses as described above. Our gross margin can fluctuate significantly from period to period driven primarily by the timing of the revenue as well as the timing of our technology investments to support future growth.

Previous wording

Research and development expenses decreased $2.3 million, or 29%, primarily due to a decrease in personnel expenses. The decrease in personnel costs was driven by increased work related to R&D Services Contracts during the period, which causes a greater proportion of costs to be allocated to cost of revenue.

Current wording

Research and development expenses increased $2.5 million, or 41%, primarily due to an increase in personnel expenses. The increase in personnel costs was driven by decreased work related to R&D Services contracts during the period, which causes a lower proportion of costs to be allocated to cost of revenue.

Previous wording

We expect sales and marketing expenses to generally grow in absolute dollars in the future, primarily due to increased employee-related expenses as we grow our headcount, to support our sales and marketing efforts and our continued expansion of our sales capacity across our solutions. However, we expect sales and marketing expenses as a percentage of revenue to decrease in future periods as our revenue growth exceeds our increases in sales and marketing spend.

Current wording

We expect sales and marketing expenses to generally grow in absolute dollars in the future primarily due to increased employee-related expenses to support our sales and marketing efforts and our continued expansion of our sales capacity across our solutions. However, we expect sales and marketing expenses as a percentage of revenue to decrease in future periods as our revenue growth exceeds our increases in sales and marketing spend.

Previous wording

General and administrative expenses increased $1.1 million, or 10%, primarily driven by an increase in stock-based compensation expense of $1.0 million, an increase in professional services expenses of $0.7 million and an increase in other miscellaneous operating expenses of $0.2 million, partially offset by a decrease in bonus expenses of $0.5 million and a decrease in insurance costs of $0.3 million. The increase in stock-based compensation expense was driven by higher stock grants which resulted in a higher total value of stock-based awards recognized in the current period. The increase in professional services fees was driven by higher third-party accounting, legal and other consulting services relating to the restatement. The decrease in bonus expenses was driven by lower bonus accruals for management. The decrease in business insurance costs was driven by an improvement in annual rates particularly on directors and officers insurance.

Current wording

General and administrative expenses increased $6.0 million, or 61%, primarily driven by an increase in professional services expenses of $4.9 million, an increase in stock-based compensation expense of $0.6 million, an increase in other miscellaneous operating expenses of $0.3 million, and an increase in bonus expenses of $0.2 million. The increase in professional services fees was primarily driven by higher third-party accounting, legal and other consulting services relating to the restatement of our previously issued financial statements and the Transactions. The increase in stock-based compensation expense was driven by higher stock grants which resulted in a higher total value of stock-based awards recognized in the current period. The increase in bonus expenses was driven by higher bonus accruals for management.

Previous wording

Interest income decreased by $0.1 million, or 25%, primarily driven by lower interest earned on cash and cash equivalents and marketable securities.

Current wording

Interest income decreased by $0.4 million, or 96%, primarily driven by lower cash held in marketable securities.

Previous wording

Interest expense increased by $0.1 million, or 2%, for the three months ended September 30, 2024, primarily due to higher amortized debt issuance costs associated with our Blue Torch Finance LLC (“Blue Torch”) term loan.

Current wording

Interest expense increased by $0.7 million, or 13%, for the three months ended March 31, 2025, primarily due to higher amortized debt issuance costs and interest rate associated with our Blue Torch term loan.

Previous wording

Change in fair value of contingent earnout liability was a gain of $0.5 million for the three months ended September 30, 2024, compared to an immaterial gain for the three months ended September 30, 2023. The gain in the three months ended September 30, 2024, was primarily due to a decrease in the fair value of the liability driven by the decline of the underlying stock price, partially offset by a higher volatility rate used in the model. For additional information, see Notes 2 and 8 to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q and Notes 3 and 9 to our consolidated financial statements included in our 2023 Form 10-K/A.

Current wording

Change in fair value of contingent earnout liability was a gain of $1.0 million for the three months ended March 31, 2025, compared to an immaterial loss for the three months ended March 31, 2024. The gain in the three months ended March 31, 2025, was primarily due to a decrease in the fair value of the liability driven by the decline of the underlying stock price, partially offset by a higher volatility rate used in the model. For additional information, see Notes 2 and 9 to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Previous wording

Change in fair value of warrant liabilities was a gain of $0.9 million for the three months ended September 30, 2024, compared to a loss of $0.1 million for the three months ended September 30, 2023, a change of 818%. The $0.9 million gain for the three months ended September 30, 2024, was primarily due to a decrease in the fair value of the warrant liabilities driven by the decline of the underlying stock price, partially offset by a higher volatility rate used in the model. The $0.1 million loss for the three months ended September 30, 2023, was primarily driven by a reduction in the per share exercise price of the 2022 Blue Torch Warrants (as defined below under “Liquidity and Capital Resources”) in connection with an amendment executed on September 27, 2023.

Current wording

Change in fair value of warrant liabilities was a gain of $5.8 million for the three months ended March 31, 2025, compared to a loss of $4.2 million for the three months ended March 31, 2024, a change of 239%. The $5.8 million gain for the three months ended March 31, 2025, was primarily due to a decrease in the fair value of the warrant liabilities driven by the decline of the underlying stock price, partially offset by a higher volatility rate used in the model. The $4.2 million loss for the three months ended March 31, 2024, was primarily due to the appreciation of the underlying stock valuation for the warrants issued to Blue Torch and subsequently amended in July 2023.

Previous wording

Issuance of stock warrants was a net loss of $2.4 million for the nine months ended September 30, 2024, compared to no such expense for the nine months ended September 30, 2023. In March 2024, we entered into a definitive Securities Purchase Agreement with institutional investors that included the issuance of stock warrants.

Current wording

There was no issuance of stock warrant expense for the three months ended March 31, 2025. Issuance of stock warrants was a net loss of $2.4 million, relating to a definitive Securities Purchase Agreement with institutional investors during the three months ended March 31, 2024.

Previous wording

We recognized a foreign exchange gain of $2.6 million for the nine months ended September 30, 2024, compared to a foreign exchange loss of $1.3 million for the nine months ended September 30, 2023, a change of 296%. The $2.6 million gain for the nine months ended September 30, 2024, was primarily due to the remeasurement of intercompany balances between our Luxembourg entity and the U.S. entity denominated in U.S. Dollars. The strengthening of the U.S. Dollar for the period ended September 30, 2024, relative to the Euro at December 31, 2023, triggered the remeasurement and unrealized losses. The loss of $1.2 million for the nine months ended September 30, 2023, was primarily due to the remeasurement of intercompany balances between our United Kingdom entity and the U.S. entity denominated in U.S. Dollars. The weakening of the U.S. Dollar for the period ended September 30, 2023, relative to the British Pound Sterling at December 31, 2022, triggered the remeasurement and unrealized gains.

Current wording

We recognized a foreign exchange gain of $3.8 million for the three months ended March 31, 2025, compared to a foreign exchange loss of $1.8 million for the three months ended March 31, 2024, a change of 314%. The $3.8 million gain for the three months ended March 31, 2025, was primarily due to the remeasurement of intercompany balances between our Luxembourg entity and our U.K. entity with our U.S. entity denominated in U.S. Dollars. The weakening of the U.S. Dollar for the period ended March 31, 2025, relative to the Euro and British Pound Sterling at December 31, 2024, triggered the remeasurement and unrealized gain. The loss of $1.8 million for the three months ended March 31, 2024, was primarily due to the remeasurement of intercompany balances denominated in U.S. dollars between our Luxembourg entity and the U.S.

Previous wording

Other expense, net was a loss of $0.5 million for the three months ended September 30, 2024, an increase of 37% compared to $0.4 million for the three months ended September 30, 2023, primarily driven by loss on impairment of assets during the three months ended September 30, 2024.

Current wording

Other expense, net was a loss of $0.2 million for the three months ended March 31, 2025, a decrease of 58% compared to $0.5 million for the three months ended March 31, 2024, primarily driven by loss on disposal of assets during the three months ended March 31, 2025.

Previous wording

EBITDA. We define EBITDA as net income (loss), plus depreciation and amortization expense, plus interest expense, and plus the provision for (or minus benefit from) income taxes.

Current wording

We define EBITDA as net income (loss), plus depreciation and amortization expense, plus interest, net, and minus income tax benefit.

Previous wording

Adjusted EBITDA. We define Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, further adjusted for any loss on decommissioned satellites, launch failure and decommissioning, change in fair value of warrant liabilities, change in fair value of contingent earnout liability, issuance of stock warrants, other (expense) income, net, stock-based compensation, loss on extinguishment of debt, foreign exchange gain/loss, other acquisition accounting amortization, mergers and acquisition related expenses, and other unusual costs. We believe Adjusted EBITDA can be useful in providing an understanding of the underlying results of operations and trends, an enhanced overall understanding of our financial performance and prospects for the future. While Adjusted EBITDA is not a recognized measure under GAAP, management uses this financial measure to evaluate and forecast business performance. Adjusted EBITDA is not intended to be a measure of liquidity or cash flows from operations or a measure comparable to net income as it does not take into account certain requirements, such as capital expenditures and related depreciation, principal and interest payments, and tax payments. Adjusted EBITDA is not a presentation made in accordance with GAAP, and our use of the term Adjusted EBITDA may vary from the use of similarly titled measures by others in our industry due to the potential inconsistencies in the method of calculation and differences due to items subject to interpretation.

Current wording

We define Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, further adjusted for any change in fair value of contingent earnout liability, change in fair value of warrant liabilities, issuance of stock warrants, foreign exchange (gain) loss, other expense, net, stock-based compensation, loss on decommissioned satellites, other unusual and infrequent costs, and other acquisition accounting amortization. We believe Adjusted EBITDA can be useful in providing an understanding of the underlying results of operations and trends, an enhanced overall understanding of our financial performance and prospects for the future. While Adjusted EBITDA is not a recognized measure under GAAP, management uses this financial measure to evaluate and forecast business performance. Adjusted EBITDA is not intended to be a measure of liquidity or cash flows from operations or a measure comparable to net income as it does not take into account certain requirements, such as capital expenditures and related depreciation, interest payments, tax benefits, stock-based compensation, other unusual and infrequent costs, and other acquisition accounting amortization.

Previous wording

Change in fair value of warrant liabilities and contingent earnout liabilities. We exclude this as it does not reflect the underlying cash flows or operational results of the business.

Current wording

Change in fair value of contingent earnout liabilities and warrant liabilities. We exclude this as it does not reflect the underlying cash flows or operational results of the business.

Previous wording

Other (expense) income, net. We exclude other (expense) income, net because it includes unusual items that do not reflect the underlying operational results of our business. Examples of such expenses include prepayment penalties on outstanding debt and vendor dispute legal settlements.

Current wording

Other expense, net. We exclude other expense, net because it includes items that do not reflect the underlying cash flows or operational results of our business. Examples of such expenses include equity investment loss and vendor dispute legal settlements.

Previous wording

Other unusual and infrequent costs. We exclude these as they are unusual items that do not reflect the ongoing operational results of our business. Examples of these types of expenses include accounting, legal and other professional fees associated with the financial restatement, the Transactions, and customer contract enforcement.

Current wording

Other unusual and infrequent costs. We exclude these as they are unusual items that do not reflect the ongoing operational results of our business. Examples of these types of expenses include accounting, legal and other professional fees associated with the financial restatement and the Transactions.

Previous wording

Other acquisition accounting amortization. We incur amortization expense for purchased data rights in connection with the acquisition of exactEarth and certain technologies. Amortization of this asset is a non-cash expense that can be significantly affected by the inherent subjective nature of the assigned value and useful life. Because this cost has already been incurred and cannot be recovered, and is a non-cash expense, we exclude this expense for our internal management reporting processes. Our management also finds it useful to exclude this charge when assessing the appropriate level of various operating expenses and resource allocations when budgeting, planning and forecasting future periods. It is important to note that while this expense is excluded for purposes of non-GAAP presentation, the revenue of the acquired companies is reflected in the non-GAAP measures and that the assets contribute to revenue generation.

Current wording

Other acquisition accounting amortization. We amortize prepaid expense for purchased data rights in connection with the acquisition of exactEarth and certain technologies. The prepaid amortization of this asset is a non-cash expense that can be significantly affected by the inherent subjective nature of the assigned value and useful life. We exclude this amortized prepaid expense for our internal management reporting processes because it has already been incurred and is a non-cash expense. Our management also finds it useful to exclude this charge when assessing the appropriate level of various operating expenses and resource allocations when budgeting, planning and forecasting future periods. It is important to note that while this expense is excluded for purposes of non-GAAP presentation, the revenue of the acquired companies is reflected in the non-GAAP measures and that the assets contribute to revenue generation.

Previous wording

We entered into the Purchase Agreement with Buyer, pursuant to which we agreed to complete the Transactions. The maritime business to be sold pursuant to the Transactions does not include any part of our satellite network or operations. The purchase price to be paid by Buyer to us at the closing of the Transactions is a cash payment based upon an enterprise value of $233.5 million, subject to certain adjustments. The Transactions also include a twelve-month transition service and data provision agreement for $7.5 million. The Purchase Agreement provides that the closing of the Transactions is subject to the satisfaction or waiver of certain closing conditions set forth in the Purchase Agreement.

Current wording

On November 13, 2024, we entered into the Purchase Agreement with Buyer, pursuant to which we agreed to complete the Transactions. The maritime business sold pursuant to the Transactions did not include any part of our satellite network or operations. The purchase price agreed to be paid by Buyer to us at the closing of the Transactions was a cash payment based upon an enterprise value of $233.5 million, subject to certain adjustments. The Transactions also included a twelve-month transition service and data provision agreement for $7.5 million.

Previous wording

On June 13, 2022, we, as borrower, and certain of our subsidiaries, as guarantors, entered into a financing agreement (the “Blue Torch Financing Agreement”) with Blue Torch Finance LLC, as administrative agent and collateral agent, and certain lenders (the “Lenders”). The Blue Torch Financing Agreement provides for, among other things, a term loan facility in an aggregate principal amount of up to $120.0 million (the “Blue Torch Credit Facility”). A portion of the proceeds of the term loan was used to repay our then-existing $70.0 million credit facility with FP Credit Partners, L.P., and the remainder of the proceeds of the term loan may be used for general corporate purposes.

Current wording

On June 13, 2022, we, as borrower, and certain of our subsidiaries, as guarantors, entered into the Blue Torch Financing Agreement with Blue Torch, as administrative agent and collateral agent, and certain lenders (the “Lenders”). The Blue Torch Financing Agreement provided for, among other things, a term loan facility in an aggregate principal amount of up to $120.0 million (the “Blue Torch Credit Facility”). A portion of the proceeds of the term loan was used to repay our then-existing $70.0 million credit facility with FP Credit Partners, L.P., and the remainder of the proceeds of the term loan may be used for general corporate purposes.

Previous wording

The $120.0 million term loan was available and drawn at closing, of which $19.7 million was placed in an escrow account by Blue Torch with such amount to be released upon our achieving certain metrics related to annualized recurring revenue and a total annualized recurring revenue leverage ratio. These metrics were achieved and the $19.7 million was released from the escrow account and delivered to us in February 2023. The term loan accrues interest at a floating rate, to be based, at our election, on either a reference rate or a 3-month Term Secured Overnight Financing Rate (“SOFR”) rate (subject to a 1.0% floor), plus an interest rate margin of 7.0% for reference rate borrowings and 8.0% for 3-month Term SOFR borrowings, plus an incremental Term SOFR margin of 0.26161%. We elected the Term SOFR rate which was 13.1929% as of September 30, 2024. Principal on the term loan is only payable at maturity and interest on the term loan is due and payable quarterly for Term SOFR borrowings. We are also required to pay other customary fees and costs in connection with the Blue Torch Credit Facility, including a commitment fee in an amount equal to $2.4 million on the closing date, a $0.3 million agency fee annually and an exit fee in an amount equal to $1.8 million upon termination of the Blue Torch Financing Agreement.

Current wording

The $120.0 million term loan was available and drawn at closing, of which $19.7 million was placed in an escrow account by Blue Torch with such amount released upon our achieving certain metrics related to annualized recurring revenue and a total annualized recurring revenue leverage ratio. These metrics were achieved and the $19.7 million was released from the escrow account and delivered to us in February 2023. The term loan accrued interest at a floating rate based, at our election, on either a reference rate or a 3-month Term Secured Overnight Financing Rate (“SOFR”) (subject to a 1.0% floor), plus an interest rate margin of 7.0% for reference rate borrowings and 8.0% for 3-month Term SOFR borrowings, plus an incremental Term SOFR margin of 0.26161%. We elected the Term SOFR rate which was 15.0604% as of March 31, 2025. Principal on the term loan was only payable at maturity and interest on the term loan was due and payable quarterly for Term SOFR borrowings. We were also required to pay other customary fees and costs in connection with the Blue Torch Credit Facility, including a commitment fee in an amount equal to $2.4 million on the closing date, a $0.3 million agency fee annually and an exit fee in an amount equal to $1.8 million upon termination of the Blue Torch Financing Agreement.