Spire Global, Inc. (NYSE: SPIR) Third Quarter 2022 Results Conference Call November 9, 2022 5:00 p. m. Eastern Time
Participating companies
Ben Hackman – Boss, RI
Peter Platzer – CEO, President and Director
Tom Krywe – Chief Financial Officer
Conference Call Participants
Ric Prentiss-Raymond James
Stefanos Crist – CJS Securities
Scott Deuschle – Credit Suisse
Elizabeth Grenfell – Bank of America
Operator
Greetings and welcome to Spire’s call for the third quarter of 2022. At this time, all participants are in listen-only mode. A question and answer query will be the official presentation. [Operator Instructions] Please note that this convention is recorded.
Now I will talk to our host Ben Hackman, Head of IR. You can get started.
Ben Hackman
Hello everyone and thank you for joining us on our third quarter 2022 earnings convention call. Our results, press releases, and SEC filings are available on our IR en ir. spire. com website. A replay of today’s call will also be available to have Joining me today are Peter Platzer, CEO, and Tom Krywe, Chief Financial Officer.
As a reminder, our discussion will include non-GAAP elements. The reconciliations between our GAAP and non-GAAP results, as well as our guidance, can be discovered in our earnings press release.
Some of our comments may involve forward-looking statements that are subject to risks, doubts and assumptions. In particular, our expectations regarding the effects of our operations and monetary situations are doubtful and subject to change.
If any such piece does not materialize or if our assumptions prove incorrect, the Company’s actual effects may differ materially from those forward-looking statements. A description of those risks, uncertainties and assumptions, as well as other points that may justify our monetary policy. effects, is included in our filings with the SEC.
With that, let me pass the message on to Peter.
Pierre Platzer
Thank you, Ben, and thank you for joining us on today’s call. I know there’s a lot going on. Spire continued to gain momentum in the third trimester and the effects speak for themselves. We delivered record profit generation, achieved approximately $100 million in ARR, and met our operating margin and non-GAAP EBITDA margin targets.
This evidence illustrates our continued trajectory toward the positive flow of loose money. Being on track to succeed at $100 million in ARR just five years since we got our first million ARRs puts us among the fastest developing underwriting corporations to succeed at this point and is a testament to the exceptional price our knowledge and responses bring to our customers.
Driven by the growing demand and popularity of the price of space information to contribute to climate refresh and global security, Spire is ready to operate in those expanding markets and continue its expansion trajectory. There was no shortage of protection events and global climate that attracted attention. the 3rd quarter.
Florida experienced one of the strongest hurricanes ever to hit the state, the same hurricane that wreaked havoc and destroyed Cuba’s power grid days earlier. Pakistan experienced record rainfall and back-to-back flooding, while a third of the country was under water.
As Pakistan grew, primary rivers in Europe and the United States were at such low levels that they hampered advertising barge traffic, adding to the chain of origin of demanding situations facing the world.
King crab and snow crab harvests in Alaskan waters were canceled due to declining trout populations, the maximum maximum likely due to stressors in warmer waters. This source of drinking water in parts of the United States is threatened because saltwater from the Gulf of Mexico submerges the Lower Water of the Mississippi River.
Asia and New Zealand had their fourth and momentary warmest month of August, respectively, while Arctic sea ice extent hit a record for the month. And when the world wasn’t witnessing or reading about climate change, geopolitics grabbed headlines. shipments from Ukraine feeding the world were and continued to be heavily monitored.
Oil and herbal combustible materials are being heavily watched as sanctions are maintained, winter approaches, and calls for an increase in heating fuels. The saber-rattling of nuclear weapons has captured the world’s attention. peoples who fight for their lands, rights and freedoms.
Although this is the global we want, it is the global in which we are located. At Speyer, we only try to provide data on the global as it exists today, but we also provide data to make the global a safer position for us and in the long term. run generations.
As we dive deeper into climate change, the world is witnessing an increased number of climate-related events that cause significant damage and costs. This speed has only accelerated in recent years.
According to the National Oceanic and Atmospheric Administration and EM-DAT, the foreign crisis database, between 1980 and 1990, the world experienced 3 mega errors, causing more than $20 billion in damage. In the 10 years from 2010 to 2020, that number nearly quintupled to 14. However, in 2021, in a single year, the world experienced five mega errors, which caused more than $20 billion in damage. In damage or condition, and then in some other way, the world saw on average, a billion dollar climate crisis once one and both 8 days.
Against this backdrop of severe weather situations, the Spire team is working tirelessly to provide insights and answers to particularly adjust the existing trajectory.
We reject the concept of the state without doing anything in the face of climate change, and the call from visitors shows that we are not alone in this concept. Since the inception of the company, our purpose has been to use the area to have a definite effect on life on Earth. . Our team of talented engineers has been innovating for over 10 years, overcoming the barriers of what was once a possible concept.
It is with this in mind that we are doing our part to combat climate change, empowering our government and commercial clients to offer insights and solutions that are used to reduce economic impact, while helping humanity measure and learn, adapt and mitigate. the impacts. climate change.
During the quarter, we continued to position our weather product infrastructure to enable enhanced functionality, power and scalability. We heard from the International Working Group on Radio Occultation, an organization of scientists co-sponsored through the World Meteorological Organization, that Speyer radio occultation information had a definitely positive effect on numerical weather prediction.
We announced an award of approximately $10 million from NOAA to provide six months of weather knowledge. This is knowledge that will be used only through NOAA, however, knowledge that is open to scientists around the world as they collaborate to locate new climates and significant climates. information.
What’s remarkable is that this is NOAA’s third multimillion-dollar award in 2022, highlighting the diversity of instances of use we can solve and executing our expansion and progression strategy.
Shortly after the award announcement, we announced a separate two-year, $4 million contract with NOAA for the expansion, integration testing and demonstration of microwave hyperspectral sensor payloads. Balloon platform. However, due to Speyer’s shown area functions and our partnership with RAL Space, Spire has presented to expand the prototype in the real environment, it will be used in the area. This is a vital differentiator, as well as our proven track record of delivering high-quality advertising knowledge that allowed NOAA to choose us for this competitive and challenging mission.
The HIMS instrument, as it is called, is a next-generation instrument that provides microwave sounding data to measure atmospheric humidity in critical measurements for more accurate numerical weather forecasting.
In addition, the quarter we announced a NASA award, which focuses on demonstrating a new remote sensing strategy to measure soil moisture. As a component of the mission, Spire carried out traditional collection of activated signals through a software update of our orbiting satellites.
Decreasing the frequency of some of the signals allows radio emissions to penetrate deeper into the ground, allowing the team to offload measurements deeper below the surface to other techniques.
These deeper measurements provide greater insight for programs such as crop production forecasting and flood forecasting. As we continue our knowledge set, we’ve noticed that consumers are using our solution to adapt to climate change.
Our Dynamic AIS products collect real-time information from thousands of ships on the best seas. We provide the most applicable attributes that add positions, speed, heading, destination and ETA.
Given our differentiated product offerings, we can also overlap the weather. With the increasing frequency of severe weather events, the ability to know where a shipment is, where it is headed, and weather forecasting along its course can be a life-saving combination. . And that is precisely what one of our consumers told us recently.
With tropical storms in the immediate vicinity of their ships, this visitor used our knowledge of dynamic AIS to track their ships and keep their workers out of harm’s way and their shipment safe. This is a harsh example of AIS and increased weather in a 24/7 fleet tracking and advisory tool.
Another Spire Weather Data is used through a power company
Based on Spire’s weather data, meteorologists will alert site officials when nearby weather situations may just be operations to discuss risks, trade-offs and make operational recommendations.
With more than $29 billion in climate-related errors through September 2022, the trend of an increasing number of devastating weather events we’ve observed in recent years continues. Provide relevant organizations, large and small, so that they can perceive and act with a little luck and time to mitigate the effects of climate change on business effects and operations.
During the quarter, we announced that GHGSat chose Spire to build, deploy and operate a constellation of 3 space sensors to monitor greenhouse fuel emissions.
According to the Intergovernmental Panel on Climate Change, greenhouse gases from human activities have been the main driving force of climate replacement observed since the mid-twentieth century. weather occasions.
Companies like GHGSat are experts in tracking greenhouse gases and Spire is adept at building and managing a giant constellation. By working together, we can excel at what we do best. Area offer.
Another of our consumers uses our meteorological knowledge to generate demand for electrical energy for analysis, taking into account the climate such as temperature, radiation and wind, this visitor can forecast demand for electricity at a regional or national level.
Once the demand aspect is understood, energy companies can get the right amount of electrical power with an optimal mix of renewable and classic energy. from renewable sources such as wind and solar.
Let us now turn to global security. The events of February 24 have highlighted the harsh reality, the fragility of freedom, and the importance of global security. The world witnessed Ukraine’s unprovoked attack, an attack that killed thousands and displaced millions. The world can and has replaced overnight.
In these dynamic times, reality and transparency have never been more important. In Spire, we have about 14 satellites with geolocation capability in orbit that can stumble upon interference, phishing or the location of objects, such as ships or aircraft sanctioned through the use of radio frequency. Our satellites were smart day and night in good weather or bad weather and observed the entire Earth’s surface a hundred times a day, offering valuable data in a conversion environment.
Given the investments and technological advances made in the personal sector in recent years, the need for public-to-people partnerships is identified to address complex global challenges.
Government agencies noted that dating with the advertising satellite industry is vital, a varied architecture, including government and advertising satellites, in other constellation sizes and orbits, provides resilience to the local ecosystem.
With over a hundred satellites, Spire is a vital member of this ecosystem. We have noticed changes in the way knowledge is used. What we hear today is that our consumers are looking for actionable insights faster. Knowledge of advertising satellites that can collect data in the dark of night and under the cloud canopy several times a day. This application is designed for Spire.
We’re also seeing the emergence of new markets that simply didn’t exist just a few years ago. With the expansion of the electromagnetic intelligence market, and tens of billions of dollars, and the space-space sector developing within this market, Spire is able to meet the desires of the market with our constellation of satellites that is in a position to serve today.
As a testament to Spire’s new market dynamics and functions, we were recently awarded a contract through the National Reconnaissance Office, or NRO. to this marriage in the years to come as spouses to create a safer world.
The invasion of Ukraine also served as a backdrop for other nefarious activities. Beyond the tragic reports of activities that have occurred in the region, the fighting has also affected populations outside the region. Ukraine is known as the breadbasket of Europe, a call that highlights the amount of grain produced.
As a global player in agricultural raw materials, Ukraine produces about 10% of the world’s wheat, 15% of the world’s maize and 50% of the world’s sunflower oil. Buyers of these cereals come from countries in the Middle East and North Africa, such as Egypt, Lebanon and Tunisia. After the invasion of Ukraine, the United Nations World Food Programme estimates that the cost of purchasing food will amount to $23 per month per month.
While this would not seem like a significant construct for rich countries, it is a catastrophic construct for about 10% of the world’s population living on less than $2 a day, or about $60 per month, and can also contribute to political and social unrest.
Recently, several research hounds have been tracking the sea shipment of Ukrainian exports. The Associated Press estimates that at least $530 million worth of Ukrainian grain was stolen. This Financial Times knowledge of Speyer and others documented how Russia is secretly taking grain from the occupied territories. Ukraine. All ships entering and leaving port must have their Automatic Identification System or AIS activated. This is a formula designed to help avoid collisions at sea.
Spire satellites track those signals from space. Ships involved in illicit activities can manipulate the formula by turning off the transponder to turn off or falsifying the AIS to report false positions. Speye’s near real-time global location validation service can uncover suspicious activity and locate a vessel without needing an approximate location. This data can be combined with other Spire products that may imply how high up a vessel is in the water. This is a knowledge point that involves whether the vessel is loaded or not.
These datasets are critical to the efforts of governments, intelligence and security agencies, and nonprofits to identify and vessels that violate foreign law.
For a long time, having teams to identify and track vessels seeking to hide their activities or location has been the key missing to prevent sanctions evasion and many other social upheavals such as illegal fishing or human trafficking.
Spire recently introduced a particular product designed to provide information on these activities. Our adoption detection builds on the breadth of our maritime tracking responses and underscores Spire’s project to use knowledge that can only be gathered from area to life on Earth.
Speyer’s long-term remains brighter than ever. Awareness and interest in Spire’s responses continue to grow, driven by global climate replacement trends and the development of global safety requirements.
During the quarter, we added 25 new ARR customers, bringing our tally to more than 700. We posted record earnings in the quarter, our first quarter of quarter-over-quarter earnings expansion since our initial public offering.
We have executed and delivered our effects as we continue this strong trend towards the positive flow of loose money. We have added teammates and now have over 400 talented people representing 46 nationalities. With a generation deployed, other bright and passionate people on our team, and an addressable market of approximately $100 million and 200,000 potential consumers in the coming years, we are well placed to have built a brighter long-term through our truly extensive scale, competitive advantage, diversified responses, and market leadership in our key vertical markets.
And with that, I pass it on to Tom.
Tom Krywé
Thank you, Pierre. The third quarter, another quarter of false performance with effects that were at or above our projections. Third quarter revenue increased 114% year-over-year to $20. 4 million, reaching the peak of our guidance.
ARR at the end of the quarter was $98. 1 million, up 117% from a year earlier. The strong ARR expansion was due to additional expansion with existing consumers such as NOAA, but also through the addition of 25 net new ARR consumers in the third quarter.
We ended the quarter with 717 ARR customers, up 219% year-over-year and above the midpoint of our guidance. Our biological net retention rate for TAR in the third quarter was 135%, compared to 108% in the current quarter. of 2022 and the 12-month biological net retention rate for 12 moving months 115%, compared to 108% compared to the current quarter of 2022.
We continue to execute our location and expansion strategy, having added approximately 120 net new consumers of ARR solutions so far in fiscal 2022. As we have seen, our net retention rates increased each quarter for the last 3 consecutive quarters. Fixing those additions, combined with our developing net retention rate, constitutes an important long-term profit opportunity.
Next, I’ll talk about non-GAAP monetary measures, unless otherwise noted. We have provided a reconciliation of GAAP and non-GAAP monetary knowledge in our press release that deserves to be considered in conjunction with this earnings call.
Spire has methodically progressed on a forged path to profitability and has achieved positive loose cash flow. We increased our operating margin through 86 issues to minus 56% from minus 142% a year ago, and our operating loss in the third quarter increased to $2. 2 million a year ago to $11. 4 million.
Total adjusted EBITDA for the negative third quarter $8. 3 million, compared to $11. 5 million a year ago. We ended the quarter with money, money equivalents, limited money and short-term marketable securities of $82. 2 million.
We used $13. 7 million of loose funds in the quarter, representing a nearly 50% relief in loose fund usage compared to the last quarter and the same quarter last year. By reducing net money inflows is in line with our purpose of generating positive loose money for 16 to 22 months.
This is also a good time to deal with the S-3 shelf we recorded in the third quarter. We have been a public company for over a year, so we have met the requirements to register an S-3. We will look for the deposit as a means of intelligent control of the business. On-shelf recording provides flexibility and an option for longer-term planning. We are currently very careful with our registration. And as a reminder, we have only about $20 million in an escrow account under our existing investment agreement that is expected to go live in the fourth quarter of fiscal 2022.
Due to availability and investment and a trajectory of continuous improvement towards positive loose cash flow, we have not yet used the ATM and do not have any goals in the near future.
Now let’s move on to our outlook for the fourth quarter and full year 2022. For the fourth quarter, we expect year-over-year earnings to expand 54% over the medium term, with a diversity of $22. 1 million to $24. 1 million for the quarter and $80 million and $82 million for the full year.
The sequential accrual in our fourth quarter 2022 revenue reflects the additional ARR added in the first 3 quarters of fiscal 2022, taking into account the timing of project-based revenue and any refunds for ongoing currency headwinds. We expect to end the year with more than $100 million in ARR and 46% annual ARR expansion at the midpoint, with a diversity of $102 million to $104 million.
The number of ARR consumers for the fourth quarter is expected to be between 735 and 745. For the fourth quarter, we expect non-GAAP gross margins to have an exit rate of nearly 60%. expecting a negative non-GAAP operating margin of 41% at the midpoint of non-GAAP operating profit and loss, to a negative operating margin of 86% in the prior year quarter.
Non-GAAP operating loss is expected to range from $10. 4 million to $8. 4 million, representing an average improvement of $2 million over the third quarter 2022 effects of $11. 4 million.
For the full year 2022. We expect non-GAAP operating margin to be negative by 54% at the midpoint of non-GAAP operating profit and loss, representing a 51-point improvement over the full year 2021.
Non-GAAP operating loss for the full fiscal year 2022 is expected to range from $44. 7 million to $42. 7 million, an average improvement of $1. 3 million over past expectations set in August 2022. and infrastructure in our 4 solutions.
Adjusted EBITDA for the fourth quarter is expected to range from minus $7. 2 million to minus $5. 2 million and we expect our non-GAAP loss consistent with the consistent percentage for the fourth quarter to be between minus $0. 11 and minus $0. 09, assuming a fundamental weighted average consistent with a percentage of approximately $140. 2 million consistent with percentages.
For the full year, we expect adjusted EBITDA to be in the range of minus $32. 5 million to minus $30. 5 million and we expect our non-GAAP loss consistent with consistent percentage to be between minus $0. 42 and minus $0. 41, assuming a fundamental weighted average consistent with a percentage of approximately $139. 7 million shares.
Upon completion, Spire had an excellent quarter of execution. Corporate ARR particularly increased to nearly $100 million and showcased the benefits of our implementation and expansion strategy with new ARR solution visitor additions and higher ARR net retention rates. At the same time, we continue to decline net money inflows as we approach profitability.
Thank you for joining us today. Now I would like to open the for questions.
Q&A session
Operator
At that time, we will have a response and response session. [Operator Instructions] And the first comes from the line of Ric Prentiss with Raymond James. Please, we’ll see which one yours is. Ok
Eric Prentiss
Hello, afternoon everyone.
Pierre Platzer
Yes, I did.
Tom Krywé
Great.
Eric Prentiss
Hey, some questions. First, I just need to make sure we’re on the same timeline. On the positive trajectory of loose cash flow, which we are all watching very closely and which you manage well. With month 16 as February 2024 and month 22, August 2024. Just hunting to think about what they’re doing. Do we start counting to make sure we’re looking for everything correctly?
Tom Krywé
Yes, Ric, March 2024 would be the starting point of 16 months and then the next six months. Thank you.
Eric Prentiss
It is ok. Yes. Great. So the end of the first quarter and the end of the third quarter of 2024 are a kind of calfinishar, who cared?
Tom Krywé
Correct. Bring forward this date for you.
Eric Prentiss
When do we think of a positive adjusted EBITDA trajectory?How much faster than that? And if you can only get on to that query, how do you handle the inflation costs, the high interest costs, the exchange rates you call headwinds?How do we think adjusted EBITDA is positive?And how do you cope in all those challenging macro environments?
Tom Krywé
So, the timeline of the 2023 monetary statements that we will publish. We will do that next quarter. So we will give all the intensity and breadth as we will next quarter. But you may assume that we’re going to dig a little deeper into some of those elements before we succeed in positive loose money flow. But we will give indications for 2023 in the next quarter and all those details. And then when it comes to the macro environment, we see other people coming to us. And we’ve noticed it thanks to COVID. We see that now.
People come to us and we solve instances of use that, in difficult times, they want to solve, right?They can turn to us in those difficult moments, which we have seen. I think the only domain that we have already described as any, since there can also be threats in some domains, is only for very large transactions, some of those deals rarely take a little longer to close because the consumer would possibly have difficulty obtaining financing or their cycle to get approvals may be a little longer.
Eric Prentiss
It is ok. But to the extent that you are able to produce on the way to a positive loose cash flow, you probably feel pressure on inflation that is costing you pressure on exchange rates, pressure on interest rates, but you are still aiming for the same kind of turnaround time to positive?
Tom Krywé
Exactly.
Eric Prentiss
It is ok. Some of the other operators have told us, and you mentioned this a bit in your previous answer, that some of the government agencies have been slow to make slow decisions to signal contracts with some of the other satellite operators. How do you see the government specifically to the extent that, obviously, NOAA has been a success for you, but how do you see the government, specifically, being able to respond and point out contracts?
Pierre Platzer
I would argue that where there are lasting relationships, Rick, the speed of signing contracts hasn’t necessarily slowed down. So in fact, we see the benefits of being a trustworthy spouse for governments that are complying, that are there, that still have a marriage-based technique to things. And I think this quarter, in particular, highlighted NOAA’s effects as one of our oldest customers. So I think it’s based on the relationships that he’s built with government clients. they’re in a prime position in some cases to have relationships with government clients, NOAA, NASA, ECMWF, Umeda, UKSA, LSA and others for many, many years and I think that’s really an advantage for us, I would say, at this specific time. Moment.
Eric Prentiss
It is ok. So, in terms of balance of money, money, etc. , discussed about $82 million in money, it can vary from quarter to quarter. There are also tradable securities on the balance sheet. And I think he was right when he argued that $20 million liquidity will be held in part of his debt when he gets into the fourth quarter of 2022 in the ARR.
Tom Krywé
Therefore, we are looking to get the cash you are waiting for the approximately $20 million escrow that will be activated this quarter based on our address we published for ARR. So, we’re looking at the balance sheet for this particular quarter, in a different way, liquidity can potentially arrive next year, but it’s skyrocketing this quarter. Therefore, it seems really strong.
Eric Prentiss
And so with respect to negotiable securities, is it about negotiable securities?
Tom Krywé
Yes, that’s what we have, so we’re clearly looking to cash in on interest rates and those activities, and we’re putting some things into tradable securities. It is a liquid event. I mean, so we can take it out and convert it into coins in a jiffy. But we don’t have, as you see there, there aren’t many coins as a percentage of our total.
Eric Prentiss
Súper. Eh, well, congratulations on expanding ARR so significantly. Obviously, this is a great detail to see income increase, but also to exploit your money.
Tom Krywé
Thanks.
Operator
Our next one comes from Jeff Miller’s lineage with Baird.
unidentified analyst
Hello. Thank you. Tim Pollock [ph] for Jeff. I hope you can analyze the business side of your visitor base. I guess that’s the combination of industry and government today. And what do you see there in terms of initial contracts and upsells and improving NRR there?
Tom Krywé
Of the advertising that the government divided into three-quarters, two-thirds was advertising, one-third of the government, which is a little different number than we had in the last two years, our profit was 50-50. With the acquisition of exactEarth, the combination has replaced somewhat. However, we expect that, based on the pipeline and some of the deals we just signed with NOAA and others, hopefully it will get a little closer to 50-50 in the coming quarters. So we expect it to balance around 50-50.
unidentified analyst
And then, what do you see there in terms of, as I said, increasing sales?I was very lucky with government contracts and notorious expansions there. So I wonder if you see the same thing on the commercial side.
Tom Krywé
if both. It definitely is: as we get to the 50-50 division, we also see the same landing and expansion methods implemented across the board. All of our consumers take advantage of those instances that we can solve, and we have 4 solutions, right?Therefore, cross-selling between them does not only apply to the government. That also applies to the advertising aspect.
unidentified analyst
It is ok. And then, did the NOAA contract have, I guess, 135% of NRR that you talked about?And I guess 130% is somehow, I’ll call it, an expectation for the future.
Tom Krywé
Ouais. La NOAA actually contributed to that, however, many other consumers did, Peter discussed how Umisat and some of the others, we had big increases due to the improvement of their contract in the quarter. In fact, we had minimal dropout rates in the quarter. It was a fantastic quarter for us at all levels, not only with the expansion with consumers, but also with the minimal churn rate, which shows the acceptance we have with our solution. This shows that once consumers come with us, we obviously solve use cases. Otherwise, obviously, it will seem to stir over time. So we’ve noticed a very clever combination on both sides of unsubscribing and thing.
In terms of tariffs, I mean, clearly, we have the ability to make those kinds of rates. We’ve had innovations in the last two quarters. We have noticed those increases. So we still have the ability to be in that range. But okay, the possibility that it can fluctuate, of course, from quarter to quarter, we have other fluctuations from time to time.
unidentified analyst
Enjoy the color.
Operator
Our next one comes from the Stefanos Crist line with CJS Securities. Continue with yourArray
Stefanos Christ
Hello, thank you for answering my questions. I just sought to stick to NOAA contracts. You talked about 3 new contracts this year. Can you maybe tell us about the products you’re buying from lately and maybe describe other products you offer that you think might be for the future?
Pierre Platzer
So, there were 3 other products that they contracted with us. The most important was, of course, the aspect of radio occultation, which is a specific type of meteorological knowledge focused on temperature and pressure. This is a fact that is more than two decades old. of history in the global metrological network, very well understood. We continue to get fair reports from this global network on the effectiveness of knowledge in the accuracy of weather forecasts.
The knowledge set so far was for microwave probing. And if you think about the giant knowledge sets that move into global numerical weather forecasting, microwave soundings are one of those knowledge sets. There is a preference expressed very, very obviously over the global network component to have this kind of knowledge at a higher temporal resolution, which is difficult to achieve with the exquisite but very few tools and satellites that historically make up the global observing system. And so, NOAA is a vanguard force here in the world. stage, promoting the progression of this source of knowledge from a more proliferating constellation capacity.
And their PR assumes this will have to be demonstrated first on an aerial platform. And it was a very welcome positive wonder for them and a great differentiator for Spire that, because of our flexibility, reliability and speed, we can say simply: let’s do it to the end, and we’re putting it in the environment you need to use it in the sense that they’re getting what they’re looking for. This allows them to have a much greater path to having another source of data.
And then, the third source of knowledge was space weather. And it is necessarily the activity of the Sun that drives interactions with the environment or, if it needs to be precise, the effect of the ionosphere and thermosphere on everything from the networks of force on Earth. to satellites in orbit.
Now the Sun has what’s called the solar cycle, and that means it’s a very busy bee and other times it’s a little sleepy. In recent years he has been sleepier, but as solar activity has accelerated and the solar cycle continues to climb towards the maximum, global interest in knowledge of the area’s climate has increased significantly. And again, the giant constellation that Spire has deployed has allowed us to offer an exclusive product with high added value that we can offer there.
When we communicate about other products that we may only supply to NOAA, I will focus on climate-related products. And there is a great diversity of products that we are already generating in an initial phase or that we are in process. to generate. We are talking about soil moisture, which has a massive effect on the progression of storms on earth. We’re talking about winds at the ocean surface which, of course, are applicable when we think of hurricanes and hurricane trajectories.
We are talking about sea ice content which, again, through interaction with the atmosphere, has an effect on weather forecasts. We’re talking about rainfall content, which can be derived from a generation called radiopolarimetric occultation that Spire deploys. These are just a few of the types of knowledge that are applicable to metrology organizations, in particular, positions like NOAA that Spire has on its roadmap or already in orbit or already deployed that we believe will eventually end in organizations like NOAA at scale. , similar to how radio occultation has increased from a very small amount to quantity. the amount now more applicable, from the point of view of weather forecasting, as well as from the point of view of profit for Speyer through helping the global network adapt to an increasingly violent climate trend around the world, which will come and we will perceive that we just want more knowledge.
Stefanos Christ
is a color Thank you.
Operator
The next one comes from Scott Deuschle’s line with Credit Suisse. Continue with yourArray
Scott Deuschle
Hey, smart afternoon. Thank you for answering my questions. Tom, I think you’ve said in the afterlife that business deserves to be resilient in the event of a macroeconomic downturn, because your knowledge is helping to get those activities up and running. I guess your enjoyment so far in the current environment proves that this is right?Or, to put it another way, do you still see a smart expansion of business customers?
Tom Krywé
Yes. We are seeing smart business growth. Of course, we also see that in the government aspect. So yes, I noticed it in any of the aspects. And like I said, in those difficult times, a lot of consumers come to us and want to solve some of their complicated problems. And our unique knowledge that we can provide about the fact that it comes from the area is very valuable, obviously, and then it can continue as new additions. And then, obviously, we’re doing really well with expanding with our existing consumers.
Scott Deuschle
It is ok. And then Tom, and I’m sorry, I joined a little late, so I missed it. But are the sequential decreases in G?
Tom Krywé
I will have takeaway there. We celebrate our birthday for our insurance D
Scott Deuschle
It is bien. Super. Et then, the investigation of deterioration of the surplus value in the exact land, will be done in the fourth quarter?
Tom Krywé
We are looking, we have conducted goodwill research on this. So all this was reflected in the third quarter and also in the fourth quarter.
Scott Deuschle
It is ok. Super. Sorry, last query for Peter. I think I communicated sales quotas of about $2 million for your sales force in the past. Can you update us on the knowledge problems there? For example, does the average representative answer that query?, a kind of overview, but anything you can communicate about sales productivity would be helpful. Thank you.
Pierre Platzer
Well, we simply increased the ARR to $98 million in the quarter. So in fact, I don’t have much influence to tell my salespeople that they want to work harder at this point, I have to admit it. So, consistent productivity with the head of sales is definitely something we’re pretty proud of. And it’s definitely in a very, very healthy number. A very, very rarefied domain with productivity consistent with the capita for subscription companies.
Scott Deuschle
It is ok. Super. Thanks guys.
Operator
[Operator Instructions] The next one comes from Elizabeth Grenfell’s line with Bank of America. Continue with your. . .
Elizabeth Grenfell
Hello. Good night.
Pierre Platzer
hello.
Elizabeth Grenfell
What is the engine that reduces the top finish of the third row on all levels?
Tom Krywé
And you mean: it kept the same midpoint of the ARR. We just adjusted the range.
Elizabeth Grenfell
But the earnings consultant is down at the high end, the loss consistent with the consistent percentage that disagrees with GAAP is down $0. 01 at the high end. I’m curious to know who the driving force was.
Tom Krywé
Yes. We have just reduced the range of the source of income. But we increased non-GAAP operating loss by $1. 3 million. So we thought it was a really smart compromise for unit margins. And that’s all we’ve gained through this continuous and additional leverage of our business and our charge structure. But in reality, income was only adjusting in the range.
Pierre Platzer
I think the right way to look at it, Elizabeth, I think, from our perspective, from the third quarter to the fourth trimester is the middle ground, right. And he tightened the hairpins and the midpoint is still the same, and that’s pretty much what you see everywhere.
Elizabeth Grenfell
Was there anything expressed on the front line weaker than a quarter ago?
Pierre Platzer
As I said, you squeeze the back and squeeze the most sensible. And to make the most sensible line, the middle point equal, it is mathematical that you go from the 3rd quarter to the fourth quarter, you squeeze both sides. , as I think smart corporations do, staying at the midpoint almost exactly the same or exactly the same as it’s happening towards the end of the year.
Elizabeth Grenfell
It is ok. Thank you so much.
Pierre Platzer
Of course.
Operator
And come to the end of the question and answer session. I now give the floor to Peter Platzer for final comments.
Pierre Platzer
In closing, I must thank our more than 700 customers, 400 employees, and many suppliers for partnering with us as we continue on a truly extensive expansion trajectory. Without our customers, workers and business partners, we simply wouldn’t be where we are today. . And on a daily basis, existing events remind us that climate change replaces and geopolitical events are shaking the already very fragile world we live in. But with our knowledge and our solutions, we try every day to provide transparency and stability. to this World Cup.
And I literally couldn’t be more excited about Speyer’s customers as we work together to create a more sustainable, equitable, and disgustingly rich long-term for all of us here on planet Earth.
Operator
And that concludes today’s conference. And you can disconnect your at that time. Thank you for your participation.