Artist rendition of Spire’s Lemur-2 satellite. Photo: Spire

Space-based data company Spire Global released financial results reporting a roughly 35% increase in revenue in the first half of the year, compared to the same time period in 2020 — offset by costs related to its ongoing merger. The company is going through a special purpose acquisition company (SPAC) merger, which will be voted on on Aug. 13. 

In the first half of 2021, Spire reported revenue in the range of $18.6 million and $19.0 million. Gross profit was in the range of $11.2 million and $12 million, an increase of between 30% and 39% from the same time period in 2020. 

Yet Spire posted a heavy loss due to costs associated with the SPAC merger. Spire reported a net loss in the range of $46.6 million and $47.5 million, an increase of between 223% and 217% from the same time in 2020. The company said this involves “significant one-time and recurring expenses.”

Of these losses, $4 million was attributed to operating loss and approximately $5.3 million associated with one-time charges from the “settlement of certain debt obligations.”

In a June 2021 Via Satellite column, PwC Space Practice consultants Mathieu Luinaud and William Ricard described some of the costs that go along with SPAC mergers. They highlighted that SPACs are designed to be cheaper than the process of going public through an IPO in the long-term, but can be more expensive in the short term. For an IPO, underwriting fees vary between 1% and 7%, whereas a SPAC typically has 5.5% underwriting fees, plus roughly 20% of the stock of the startup for the SPAC, leading to a cost of roughly one-fourth of the capital raised by the startup, Luinaud and Ricard wrote.

Although revenue grew, Spire lowered its guidance for the full year, adjusting projected revenue to between $40 million and $42 million. This is down from previously disclosed projected revenue of $54 million. If Spire is to hit that revenue target, it will be an increase around 40% from 2020. 

The company said it lowered anticipated revenue because certain contracts are experiencing delays with customers or third-party launch providers. The company is also experiencing delays closing several large new customer contracts. 

Read more: CEO Peter Platzer: SPAC Puts Spire on a Clear Path to $1 Billion Target

In terms of customer growth, Spire added 33 net new annual recurring revenue customers during the second quarter of 2021, and ended the period with just over 200 such customers. This is a 73% growth in annual recurring revenue customers over the prior year period. 

“We are encouraged by our customer and pipeline growth as well as other market and industry activity, particularly due to our strengthened market position once we become a public company,” commented Peter Platzer, CEO of Spire.