Spire Global Achieves Financial Milestone; Provides Update on Revenue Recognition Review and Restatement
Spire Global (NYSE: SPIR) reported its highest quarterly bookings of $40.0 million in Q3 2024. The company's cash position decreased from $45.8M to $36.6M after making a $10.0M loan payment to Blue Torch Finance. Spire is conducting an accounting review focusing on revenue recognition practices for Space Services and R&D contracts. The company will restate previous financial statements, recognizing Space Services revenue over the data delivery period rather than pre-space activities. Most satellites don't qualify for embedded lease treatment. R&D contract revenue will shift to a percentage-of-completion methodology. The company expects to file restated financials and Q2/Q3 2024 reports by February 19, 2025.
Spire Global (NYSE: SPIR) ha riportato il suo più alto numero di prenotazioni trimestrali pari a 40,0 milioni di dollari nel terzo trimestre del 2024. La posizione di liquidità dell'azienda è diminuita da 45,8 milioni a 36,6 milioni di dollari dopo aver effettuato un pagamento di prestito di 10,0 milioni di dollari a Blue Torch Finance. Spire sta conducendo una revisione contabile focalizzata sulle pratiche di riconoscimento dei ricavi per i servizi spaziali e i contratti di ricerca e sviluppo. L'azienda ripresenterà i precedenti bilanci, riconoscendo i ricavi dei servizi spaziali nel periodo di consegna dei dati piuttosto che nelle attività pre-spaziali. La maggior parte dei satelliti non è idonea per il trattamento degli affitti incorporati. I ricavi dei contratti di R&S passeranno a una metodologia basata sulla percentuale di completamento. L'azienda prevede di presentare i bilanci rettificati e i rapporti del secondo e terzo trimestre del 2024 entro il 19 febbraio 2025.
Spire Global (NYSE: SPIR) reportó sus mayores reservas trimestrales de 40,0 millones de dólares en el tercer trimestre de 2024. La posición de efectivo de la empresa disminuyó de 45,8 millones a 36,6 millones de dólares tras realizar un pago de préstamo de 10,0 millones de dólares a Blue Torch Finance. Spire está llevando a cabo una revisión contable centrada en las prácticas de reconocimiento de ingresos para los servicios espaciales y los contratos de I+D. La empresa rectificará los estados financieros anteriores, reconociendo los ingresos de los servicios espaciales durante el periodo de entrega de datos en lugar de las actividades previas al lanzamiento. La mayoría de los satélites no califican para el tratamiento de arrendamiento incorporado. Los ingresos de los contratos de I+D se trasladarán a una metodología de porcentaje de completación. La empresa espera presentar los estados financieros rectificados y los informes del segundo y tercer trimestre de 2024 para el 19 de febrero de 2025.
스파이어 글로벌(뉴욕증권거래소: SPIR)은 2024년 3분기에 4천만 달러의 분기 최고 예약액을 보고했습니다. 회사의 현금 위치는 블루 토치 파이낸스에 1천만 달러의 대출금을 지급한 후 4,580만 달러에서 3,660만 달러로 감소했습니다. 스파이어는 우주 서비스 및 연구 개발 계약의 수익 인식 관행에 중점을 두고 회계 검토를 진행하고 있습니다. 회사는 이전 재무 제표를 수정하여 우주 서비스 수익을 사전 우주 활동이 아닌 데이터 전달 기간에 인식할 것입니다. 대부분의 위성은 임대 포함 처리의 자격이 없습니다. 연구 개발 계약 수익은 완료 비율 방법론으로 전환됩니다. 회사는 2025년 2월 19일까지 수정된 재무 제표와 2024년 2분기/3분기 보고서를 제출할 것으로 예상합니다.
Spire Global (NYSE: SPIR) a annoncé ses plus importantes réservations trimestrielles de 40,0 millions de dollars au troisième trimestre 2024. La position de trésorerie de la société a diminué de 45,8 millions à 36,6 millions de dollars après avoir effectué un paiement de prêt de 10,0 millions de dollars à Blue Torch Finance. Spire réalise une revue comptable axée sur les pratiques de reconnaissance des revenus des services spatiaux et des contrats de R&D. L'entreprise va réviser ses états financiers précédents, en reconnaissant les revenus des services spatiaux sur la période de livraison des données au lieu des activités pré-spatiales. La plupart des satellites ne sont pas admissibles au traitement de location incorporé. Les revenus des contrats de R&D passeront à une méthodologie sur la base du pourcentage d'achèvement. L'entreprise s'attend à soumettre les états financiers révisés et les rapports du T2/T3 2024 d'ici le 19 février 2025.
Spire Global (NYSE: SPIR) hat im 3. Quartal 2024 die höchsten Quartalsbuchungen von 40,0 Millionen Dollar gemeldet. Die Liquiditätsposition des Unternehmens sank von 45,8 Millionen Dollar auf 36,6 Millionen Dollar, nachdem eine Darlehenszahlung von 10,0 Millionen Dollar an Blue Torch Finance geleistet wurde. Spire führt eine Rechnungsprüfungsüberprüfung durch, die sich auf die Praktiken zur Umsatzrealisierung bei Raumfahrt-Dienstleistungen und F&E-Verträgen konzentriert. Das Unternehmen wird frühere Finanzberichte neu ausstellen und die Einnahmen aus Raumfahrt-Dienstleistungen über den Zeitraum der Datenauslieferung anstelle von Aktivitäten vor dem Raumflug anerkennen. Die meisten Satelliten kommen nicht für die Behandlung eingebetteter Leasingverträge in Frage. Die Einnahmen aus F&E-Verträgen werden auf eine Methode basierend auf dem Fortschritt umgestellt. Das Unternehmen plant, die neu gefassten Finanzberichte sowie die Berichte für Q2/Q3 2024 bis zum 19. Februar 2025 einzureichen.
- Record quarterly bookings of $40.0 million in Q3 2024
- Maintained substantial cash position of $36.6M at quarter end
- Reduced debt through $10.0M loan payment to Blue Torch
- Cash position decreased by $9.2M during Q3 2024
- Required financial restatements due to accounting practice review
- Delayed filing of Q2 and Q3 2024 quarterly reports
- Risk of non-compliance with Blue Torch financing agreement due to delayed filings
Insights
The $40.0 million in new contract bookings marks a significant milestone, but the accounting review raises serious concerns. The cash position declined from
- Space Services revenue will now be recognized over the satellite data delivery period rather than including pre-space activities
- R&D contract revenue will shift to a percentage-of-completion model, likely accelerating recognition
- Cost reclassification from R&D to cost of revenue will affect gross margin metrics
While these changes won't affect cash flow, the delayed financial filings and potential covenant breach with Blue Torch create significant near-term risks. The extended timeline for restating financials until February 2025 adds uncertainty for investors.
The revenue recognition changes represent material accounting policy shifts that will substantially alter Spire's financial presentation. The most significant change involves Space Services contracts being recognized solely during the data delivery phase rather than splitting revenue between pre-launch and operational periods. This more conservative approach better aligns with ASC 606 principles by identifying a single performance obligation. The shift to percentage-of-completion for R&D contracts and reclassification of related costs from operating expenses to COGS will provide better visibility into true project economics. While these changes don't impact cash flows, they'll create temporary turbulence as historical results are restated.
During the third quarter, the Company brought in
Spire entered the third quarter of 2024 with a cash and marketable securities balance of
The Company has been making progress in its review of its accounting practices and procedures, which has focused on:
- revenue recognition related to certain Space Services contracts;
- the possible existence of embedded leases within certain Space Services contracts; and
- revenue recognition for certain research and development contracts.
As previously disclosed, the Company determined that its accounting practices and procedures with respect to revenue recognition related to certain Space Services contracts should be restated. Previously, the Company identified two performance obligations in these contracts: a pre-space performance obligation for asset design, manufacturing, and launch; and a second performance obligation related to data provision during the operation of the satellite. After re-evaluating the contractual terms, the Company concluded data provision is the only distinct performance obligation in these contracts. The Company will restate certain previously issued financial statements to remove certain previously recorded pre-space mission activity revenue from the period in which pre-space mission activities were performed under the contracts, and instead, record that revenue over the period in which data is delivered, which begins on the commissioning of a satellite and ends at the termination of a contract or the decommissioning of the satellite, whichever occurs first.
The Company has concluded that most of its satellites do not qualify for embedded lease treatment. The Company’s satellites are multi-purpose, and due to the nature of their design, customers do not have the right to substantially all of the economic benefit produced by the satellites.
Separately, the Company recently initiated a review of certain research and development contracts, including technology development contracts that are funded or co-funded by government agencies like NASA and the European Space Agency. The agencies receive a license, and pay the Company a license fee, to use the intellectual property (IP) developed through these contracts and as such, these contracts are classified as revenue. However, the Company concluded that its previous revenue recognition practice under these contracts, which recognized revenue upon the completion of each contractual milestone in the amount prescribed in the contract for that milestone, was not appropriate as the achievement of a milestone was not a good representation of the pattern of control transfer for the related IP. The Company concluded that the pattern of control transfer for the IP occurs over time as the Company performs its research and development activities. The Company will revise its revenue recognition practice for these prior contracts to use a percentage-of-completion methodology to more accurately measure the pattern of control transfer and for revenue recognition. The percentage-of-completion measurement methodology will generally result in earlier revenue recognition as the Company’s performance precedes the related milestone. In its previously filed financial statements, the Company classified the costs associated with its research and development contracts as part of “research and development” within operating expenses on its Consolidated Statements of Operations. The Company will reclassify the entire costs associated with its research and development contracts from “research and development” to “cost of revenue” within gross profit.
The Company is in the process of quantifying the amount of the corrections to revenue recognition and classification of related costs for the changes in its accounting policies, which will be included in the restatements of the same previously issued financial statements affected by the change in revenue recognition of the Space Services contracts described above. There will be no cash impact as a result of the adjustments.
The most recent amendment of the Company’s financing agreement with Blue Torch required that the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2024 be filed by October 31, 2024. The Company was unable to timely file the report with the SEC by October 31, 2024, as a result of its review of its accounting practices not yet being complete. The Company is in active dialog with Blue Torch regarding potential waivers and/or amendments to the financing agreement.
The Company also will not be able to file timely its Quarterly Report on Form 10-Q for the period ended September 30, 2024, and as a result, has filed a Form 12b-25 with the SEC. The Company is working to complete the review of its accounting practices as soon as practical. The Company expects to file restated prior period financial statements, its second quarter Form 10-Q, and its third quarter Form 10-Q within the previously disclosed six-month cure period provided by the New York Stock Exchange, which will end on February 19, 2025. The Company plans to hold a call to discuss the results of its third quarter of 2024 after financial statements are filed.
About Spire Global, Inc.
Spire (NYSE: SPIR) is a global provider of space-based data, analytics and space services, offering unique datasets and powerful insights about Earth so that organizations can make decisions with confidence in a rapidly changing world. Spire builds, owns, and operates a fully deployed satellite constellation that observes the Earth in real time using radio frequency technology. The data acquired by Spire’s satellites provides global weather intelligence, ship and plane movements, and spoofing and jamming detection to better predict how their patterns impact economies, global security, business operations and the environment. Spire also offers Space as a Service solutions that empower customers to leverage its established infrastructure to put their business in space. Spire has nine offices across the
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or the Company’s anticipated financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “would,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “project,” “potential,” “seek” or “continue” or the negative of these words or other similar terms or expressions that concern the Company’s expectations, strategy, plans or intentions. Forward-looking statements contained in this press release include, but are not limited to, statements about recent contracts entered into by the Company, including the ability to complete the services and realize the anticipated value under such agreements; the preparation of the Company’s condensed consolidated financial statements as of June 30, 2024 and September 30, 2024, and for the three and six months ended June 30, 2024 and the three and nine months ended September 30, 2024; the annual and interim periods affected by the matters discussed above and subject to restatement; the cause of the delay in preparing and filing the late Form 10-Qs; the timing to restate the Company’s financial statements and to file the late Form 10-Qs; the potential scope and impact of the issues discussed above, which are estimates as of the date hereof; the Company’s compliance with the covenants in the Blue Torch financing agreement; and the ongoing discussions between the Company and Blue Torch regarding the financing agreement, including the possibility of obtaining waivers and/or amendments to the financing agreement and the terms of any such waivers or agreements.
The Company cautions you that the foregoing list may not contain all of the forward-looking statements made in this press release. You should not rely upon forward-looking statements as predictions of future events. Factors that may cause future results to differ materially from the Company’s current expectations include, among other things, the performance of Spire and its partners under the contracts discussed above, the timing and nature of the resolution of the issues discussed in this press release, any further delay in the filing of required periodic reports, the timing and results of the Company's review of the effectiveness of internal control over financial reporting and related disclosure controls and procedures, whether a restatement of financial results will be required for other accounting issues and adverse effects on the Company related to the disclosures made in this press release. For other risk factors affecting the Company, see “Risk Factors” in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Moreover, the Company operates in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for the Company to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this press release. The Company cannot assure you that the results, events, and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements.
Neither the Company nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. Moreover, the forward-looking statements made in this press release relate only to expectations as of the date on which the statements are made. The Company undertakes no obligation to update any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law. The Company may not actually achieve the plans, intentions or expectations disclosed in the forward-looking statements and you should not place undue reliance on the forward-looking statements.
View source version on businesswire.com: https://www.businesswire.com/news/home/20241104428998/en/
For Media:
Kristina Spychalski
Head of Communications
Kristina.Spychalski@spire.com
For Investors:
Benjamin Hackman
Head of Investor Relations
Benjamin.Hackman@spire.com
Source: Spire Global, Inc.
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