Please stand by. Good day, ladies and gentlemen, and welcome to the Spire Global Third Quarter 2021 Earnings Conference Call. All lines have been placed in a listen-only mode, and the floor will be open for questions and comments following the presentation. If you should require assistance throughout the conference, please press Star then zero on your telephone keypad to reach a live operator. At this time, it is my pleasure to turn the floor over to your host, Head of Communications and Investor Relations, Hillary Yaffe. Ma'am, the floor is yours.
Thank you. Hello, everyone, and thanks for joining us for our third quarter conference call. Our results press release and SEC filings can be found on our IR website at ir.spire.com. A replay of today's call will also be made available. With me on the call today is Peter Platzer, Chief Executive Officer, and Thomas Krywe, Chief Financial Officer. As a reminder, our commentary today will include Non-GAAP items.
Reconciliations between our GAAP and Non-GAAP results, as well as our guidance, can be found in our earnings press release. Some of our comments today may contain forward-looking statements that are subject to risks, uncertainties, and assumptions. In particular, our expectations around the impact of the pending acquisition, results of operations, and financial conditions are uncertain and subject to change. Should any of these materialize or should our assumptions prove to be incorrect, actual company results could differ materially from these forward-looking statements.
A description of these risks, uncertainties, and assumptions, and other factors that could affect our financial results is included in our SEC filings. With that, let me hand the call over to Peter.
Thank you, Hillary. Good afternoon, and thank you for joining us today. I am truly excited to be sharing with you the team's progress along our four growth pillars and our mission to leverage space to solve problems on Earth. This has been a very busy quarter where we became a public company, we listed on the New York Stock Exchange and signed a definitive agreement to acquire exactEarth, a leader in the maritime data space with over 150 customers and over $18 million in last twelve months revenue, all while growing our ARR solution customers 69% year-over-year. This would not have been possible without our exceptional team of over 330 professionals from over 40 different countries that is relentlessly executing with a true sense of urgency every single day.
I'm truly fortunate to be part of such a globally diverse, collaborative, and dedicated team. I wanna take this opportunity to relay my heartfelt thanks to each and every one of them. Winning is a team sport, as we say, and we would not be here today without you. Thank you. Since we started the company in 2012, we had a simple yet powerful mission: to leverage data from space to solve global problems on Earth. Today, Spire owns and operates the world's largest multipurpose satellite constellation. Our fully deployed constellation and vertically integrated data platform provides our over 200 customers with unique and comprehensive data and analytics, assisting them in fulfilling their missions and solving their business problems. Be it port operations, commodity trading, route optimization, weather risk mitigation, renewable energy production, logistics planning, or hundreds of other use cases.
Our customers rely on our data to help them solve some of their most vexing business challenges and grow their business faster, more profitably, and more sustainably. Serving 225 global ARR solution customers out of an estimated potential target pool of over 200,000 customers, we believe we have barely scratched the surface of this estimated $90 billion a year market opportunity. Adoption of data and analytics from space has been increasing rapidly by both the commercial and the government sector. We share the conviction from a prominent analyst that in the not too distant future, space might touch and potentially disrupt every industry in the same way that computers and internet have, thanks to the transformation from the mainframe computer to the PC.
Today, there is a very analogous transformation happening in space, and Spire sits at the very crest of this massive wave of disruption, leveraging space to solve problems on Earth. At its core, this is powered by constellations of small satellites whose capabilities increase exponentially every year and the increase in launch opportunities. We are extremely excited about our role in this global transformation and how it impacts industries and humanity. Spire's leverage here, of course, starts with our cutting-edge space technology, where we continue to innovate and invest. In July of this year, we successfully completed our 31st launch campaign, which put two LEMUR satellites into orbit with new optical ISL capabilities or inter-satellite links.
The successful incorporation of ISL capabilities will have a meaningful impact on the next generation of our constellation, enabling more secure data transfers, reducing data latency and expanding the data and solution that we are able to offer our current and future customers. We also invested in our software. Leveraging the software-defined nature of our constellation, we increased data production across the board, and in particular, reached 20,000 RO profiles, a world-leading amount of crucial weather data, affording our customers more accurate weather predictions. Next, I want to spend a minute and highlight again Spire's four growth pillars. These are the four core strategies that we execute against to drive our business growth over the next several years. They are, number one, invest in sales, marketing, and product. Number two, expand into new geographies and use cases. Number three, expand the capabilities of our data and analytics.
Four, executing strategic acquisitions to strengthen our market position. During the third quarter, we made great progress on each of these pillars. On today's call, I'd like to focus on two pillars specifically. First, on executing strategic acquisitions to strengthen our market position. On September 14th, we signed a definitive agreement to acquire exactEarth, a leading provider of global maritime data. We expect the transaction to close in late Q4, and if not in Q4, then no later than in Q1 2022. exactEarth has approximately 150 customers across numerous countries to whom we then would be able to offer additional Spire solutions. As mentioned in exactEarth's latest earnings release, their last 12-month revenue was $18.2 million, and their fiscal year-to-date year-over-year growth rate was 30%.
Once closed, we believe this transaction will add meaningfully to our customer base and ARR as we head into 2022, strengthening our leadership position in the maritime data and analytics market. This is a market opportunity estimated to be $4 billion annually, growing at a low teens CAGR over the next five years, powered by the digitalization of the global maritime economy. Even combined, our penetration in this market would still be very small, affording us tremendous upside for gains in market share based on our growing leadership position. The second pillar that I want to cover is expanding the use cases for our data analytics. One of Spire's core datasets is in weather, where we produce more radio occultation or RO data for temperature, pressure, and moisture than anyone else, public or private.
This data, in general, drives over 70% of global weather forecast accuracy, according to a recent analysis by ECMWF, the European Centre for Medium-Range Weather Forecasts. They also studied and documented the highly beneficial nature of RO data, in particular, to global weather forecast accuracy. Based on an intensive testing and trial period, Spire was able to win a contract covering up to three years with EUMETSAT to provide our RO data. This is a first of its kind for them. Now, EUMETSAT, the European organization for the exploitation of meteorological satellites, is in many aspects the European sister organization to NOAA, the National Oceanic and Atmospheric Administration from the U.S. Spire was also able to win a follow-on subscription contract with NOAA for our RO data.
With these two contracts combined, Spire's RO weather data is now used by public agencies providing weather predictions to protect lives and prevent the loss of property for almost a billion people and almost half of global GDP. With the impact of climate change being increasingly felt all across the world, from extreme floods in Europe to freezing temperatures in Texas, frequent hurricanes, and blistering wildfires, Spire is truly proud to be able to collaborate with our customers to help humanity adapt to climate change. Before I turn it over to Tom, who will discuss our Q3 financial results and provide an update on our Q4 and fiscal year 2021 guidance, I want to reiterate our confidence that Spire is on the cusp of an enormous opportunity in the market for space-based data and analytics.
While the market today might be somewhat nascent, the speed of development and the adoption of new applications is accelerating. We believe that we're years ahead of the competition with our fully deployed constellation, our proprietary ground station network, and our integrated data and analytics offering. Serving over 200 customers today and soon almost 400 customers, we have tremendous resilience in the business. As we focus and execute on our four growth pillars, we expect to increase our market share in this vast and growing market opportunity. Drive significant growth in revenue and ultimately help our customers across the world grow more profitably and more sustainably. With that, I'll turn it over to Tom.
Thank you, Peter. Before I kick off a review of our third quarter results and our outlook for Q4 and fiscal year 2021, I would like to point you to our earnings release sent over the wire today after market close. In the release, you will find both the detail of our GAAP to Non-GAAP reconciliation and our outlook for Q4 and fiscal year 2021. Q3 2021 was a solid quarter for us on the top line, with the revenue increasing 33% year- over- year to $9.6 million and ARR increasing 51% year- over- year to $45.2 million, with ARR representing a very nice sequential jump of $8.6 million versus Q2 2021 ending ARR of $36.6 million.
The year-over-year increase in revenue was driven by the addition of 92 net new ARR solution customers versus the prior period, a 69% increase, highlighting our focus during the second half of the year on adding new ARR customers and our last 12- month net retention rate of 119%. Q3 net retention rate was 111%. As mentioned earlier in the year, this reflects a lower rate compared to the rates in 2020 due to delays in existing customers buying decisions and some non-subscription-based business taking longer to deliver due to launch delays and customer work stream delays. Based on the concentration of new versus existing customer activity and having a larger overall base, we expect net retention rate to generally be lower than what we had in 2020.
As this rate can fluctuate per quarter, ranges are likely to be between 100%-135%, depending on the quarter. We ended Q3 with 225 ARR solution customers, representing a 69% year-over-year growth from the prior year period. We track ARR solution customers as a key metric, a good indicator of growth in our recurring revenue base. We define an ARR solution customer as an entity that has a maritime, aviation, weather, or space services contract with us that is either a binding and renewable agreement for our subscription solutions or a binding multi-year contract as the measurement date. We count every solution the customer has with us separately. Two of these new ARR solution customers in the third quarter represented deal values of over seven figures.
We saw strength in the third quarter across all four of our solutions. Our weather solution saw the highest increase in ending ARR year-over-year with key wins such as EUMETSAT and NOAA that Peter had mentioned earlier. Space services also had a strong quarter with solid traction in year-over-year ARR growth. Space services bookings benefited not only from the growth within existing customers, but also from the addition of new space service customers like Myriota, a leader in space-based provision of IoT services. Q3 GAAP gross profit was $4.2 million, and Non-GAAP gross profit, which excludes stock-based compensation, was $4.3 million, a decrease of 11% year-over-year. The decrease year-over-year was impacted by the timing of revenue recognition on several non-subscription-based contracts and our decision to accelerate certain technology investments to support future revenue growth.
We expect gross margins to return to the range of 59%-65% in the fourth quarter as we continue to scale revenue relative to our level of investment. Q3 GAAP operating loss was $17.4 million, and Non-GAAP operating loss, which excludes stock-based compensation, merger and acquisition related expenses, and other unusual one-time costs, was $13.6 million. Our Q3 GAAP operating loss was impacted by a number of large one-time costs related to our merger with NavSight Holdings and other financing related transactions, in addition to general increases in expenditures to support the rapid growth of our business. The Non-GAAP increase in operating loss of $8.3 million year- over- year was driven by increased spend on sales and marketing to align with our 2021 growth plan.
Further funding of our research and development teams to enhance our solution offerings and customer data sets and increase costs in general and administrative to support our transition to being a public company. EBITDA was negative $28 million in the third quarter, and adjusted EBITDA, which excludes stock-based compensation, merger and acquisition related expenses and other unusual one-time costs, change in fair value of warrant liabilities and other income or expense, net was negative $11.5 million for the quarter. Q3 GAAP net loss was $32.7 million, and our Q3 Non-GAAP net loss, which excludes stock-based compensation, merger and acquisition related expenses, other unusual one-time costs, change in fair value of warrant liabilities and other income or expense, net was $16.3 million.
Q3 GAAP net loss per share was $0.49 based on the basic weighted average share count of approximately 67.3 million shares. Our Q3 Non-GAAP net loss per share, which excludes stock-based compensation, merger and acquisition related expenses, other unusual one-time costs, change in fair value of warrant liabilities and other income or expense net was $0.24. Lastly, we ended the quarter with cash equivalents and restricted cash of $259 million. We anticipate using approximately $110 million of cash to complete the exactEarth transaction, and in Q4, we'll use an additional approximate $20 million of cash to cancel outstanding warrants to purchase approximately 1.6 million shares pursuant to the warrant agreement with the European Investment Bank. Previously described in our public filings.
Now I'll provide guidance for the fourth quarter as we expect total revenue to range between $11.6 million and $13.6 million. The sequential increase in Q4 revenue reflects the incremental ARR of $8.6 million from Q2 FY 2021- Q3 FY 2021, along with Q4 FY 2021 having just over $1 million more of potential non-subscription-based revenue than Q3 FY 2021. We anticipate Q4 Non-GAAP gross profit to be between $6.8 million and $8.8 million. The Q4 Non-GAAP gross profit primarily reflects the increase in the expected Q4 revenue. Non-GAAP operating loss for Q4 is expected to range between $15.9 million and $11.8 million. Our Non-GAAP operating loss guidance reflects increased hiring expenses and costs from operating as a public company.
We expect EBITDA to range from -$15.4 million to -$12.4 million and adjusted EBITDA to range from -$13.3 million to -$10.3 million. Non-GAAP loss per share for Q4 is expected to range from -$0.14 to -$0.11 and assumes a basic weighted average share count of approximately 133.7 million shares. Now, turning to the outlook for the full fiscal year, we're on track to hit our previously issued guidance for total revenue to range between $40 million-$42 million. We are also maintaining our guidance for year-ending ARR and year-ending ARR solution customers. We expect year-ending ARR to range between $48.4 million-$52 million, and the year-ending ARR solution customers to range between 240 customers-252 customers.
We expect fiscal year 2021 Non-GAAP gross profit to be between $22.9 million and $24.9 million. This is a reduction from our previously issued guidance and as I explained earlier in the call, is primarily the result of our decision to accelerate the investment in our infrastructure to support future revenue growth. Despite the reduction in guidance in Non-GAAP gross profit, we are maintaining our previously issued Non-GAAP operating loss guidance range for the full year of $48.5 million and $44.4 million. We expect full-year EBITDA to range from -$79.8 million to -$76.8 million. The change from prior guidance primarily driven by the significant increase in the fair market value of warrant liabilities and stock-based compensation that resulted from our merger with NavSight.
Adjusted EBITDA is expected to be between -$40.3 million and -$37.3 million, a reduction from our previously issued guidance. This is a result of both our decision to accelerate investment in our infrastructure to support future revenue growth and certain general and administrative expenses related to operating as a public company being higher than expected. Non-GAAP loss per share for fiscal year 2021 is expected to range from negative $0.99 to negative $0.92, which assumes a basic weighted average share count of approximately 61.7 million shares. As a reminder, our guidance excludes any potential impact from the exactEarth transaction that could close in Q4. According to exactEarth's earnings release, their last twelve-month revenue was $18.2 million, and their fiscal year to date year-over-year growth rate was 30%.
Once closed, the transaction would add quite meaningfully to Spire's ARR as well as about 150 customers. The close of the transaction would also add approximately 5.2 million shares to our basic and fully diluted share counts. In summary, as previously stated by Peter, we continue to deliver solid growth in revenue, ARR and ARR solution customers by relentlessly executing on our four growth pillars. Our technology leadership delivers innovative solutions that position us well for continued capture of market share. With that, I'd like to open the call up for questions.
Thank you. The floor is now open for questions. If you do have a question, please press star then one on your telephone keypad to join the queue. If you're using a speakerphone, please pick up your handset to provide the best sound quality. Again, ladies and gentlemen, if you do have a question or comment, please press star then one on your telephone keypad at this time. We take our first question from Jeff Meuler at Baird. Please go ahead.
Yeah. Thank you. Would love any additional detail you can provide on the ARR progression. Obviously, the nice jump, and you called out the two sizable wins, but it sounds like it's probably broader than that, and the Q4 guidance implies a fairly nice further sequential increase. Would just love any additional color on the breadth of the strength and the pipeline, beyond the two mega wins that you discussed.
Sure. I'll start with the first one with the ARR and the sequential jump of $8.6 million from Q2- Q3. As you mentioned, we did land some really good wins within the quarter. We had customers like EUMETSAT, Myriota, and Hancom as new wins. And not only did we have some really good new wins within the quarter, we had some upselling with existing customers with NASA and NOAA. We did see some really positive activity in all those fronts from customers, from new and also on the upselling front. You know, we added 71 net new ARR solution customers from the beginning of the year to Q3, and we had 69% on a year-over-year standpoint for our ARR solution customers. Heavy focus on that front.
Awesome. On the accelerated investment to support future revenue growth, I understand that you just raised a lot of capital to do just that, but I guess you had a business plan that was already assuming increased investment and now you're also acquiring exactEarth, and you're gonna onboard headcount and other capabilities from that. Can you just help me understand relative to the prior growth plan and investment plan, like what are you incrementally spending on or investing in?
There are two areas, Jeff, that we're investing in. One of them is in the pure technology side, right? Where the optical inter-satellite links is really a technology that we are quite excited about of what it can bring to our customers. There are certainly investments that we had to take there. The other one is really related to a dramatic change in the availability of resources to run a public company. By roughly the middle of the year, we had an over 190% increase in IPOs in the U.S. year-over-year. What that means is that it really stressed the labor market and the services market, be that accountants, be that lawyers, be that financial professionals.
To give you just one small example, you know, the directors and officers insurance came in, I think it's over 30% higher than what the original quote was because that market was so stressed by this massive increase in IPOs. Investing in the infrastructure of being a public company is the other element where we have invested and had to contend with that increase in the cost base due to the high increase of IPOs.
Got it. last one for me before I hand it over. your constellation, as I understand it, has full coverage and, has the frequency that you need. The exactEarth capabilities, can you just help me understand, is there some reason why the data aggregation or something about their capabilities is complementary, or should there also be expense synergies at some point in addition to the cross-selling opportunity and, the onboarding of talent and headcount and everything else that comes with the acquisition?
The exactEarth transaction, once it closes, really supports all four of our growth pillars, right? It expands our investment in sales and marketing, bringing on a highly experienced sales force and marketing team that has been operating in the market for maritime data analytics. On the product side, it expands our capability twofold. Number one, it affords us lower-latency data. Number two, the transaction will come with about a 10-year database of maritime tracking data that will allow us to drive more value for our customers with more efficient and effective use of AI and machine learning.
The transaction also, of course, you know, affords us with the additional customers that Tom had mentioned earlier, over 150 customers, that we can offer our additional products and services to. Of course, it brings certain amounts of revenue. Tom mentioned over $18 million year to date, last 12 months revenue that had been growing at 30% over the last 12 months or the year to date, which will meaningfully add to our ARR. It really supports all four of our growth pillars, which is why we engaged in the definitive agreement sometime on September of this quarter.
All right. Thank you very much.
Our next question or comment comes from the line of Josh Sullivan with The Benchmark Company. Please go ahead.
Good evening. Can you hear me?
Yes.
Yes, Josh.
Yeah, just to put a finer point on that last question, just as far as the sales force build out here is, you know, with exactEarth and what they bring on the marketing and sales front, is there any way to kind of just help us think about what the sales force needs would have been versus what they will be with exactEarth, just how we're, you know, modeling that going forward?
Of course. Maritime is one of our four segments. With the transaction once we close, you know, it adds quite meaningfully to our global coverage, both in the direct sales force that has done this for many years, as well as through distributors, which exactEarth also has for many years. It wouldn't impact our investment in sales in our other markets, aviation, weather, our space services, but it certainly augments our coverage globally in our sales force in the maritime segment quite substantially.
On the aviation market, as you know, markets are reopening here, are you seeing an increase in demand out of global airline activity?
We do. We absolutely do see, yes, the markets are opening, but the cost pressure on the industry is still pretty high. While the aviation industry in general, we feel is a bit further along in the digitalization of its economy as compared to, for example, the maritime industry, those cost pressures still drive adoption of data and analytics at an accelerated pace, and we are definitely a beneficiary of that trend.
Were you represented at COP26? Any specific engagements there that you can tease out for us or conversations that you've had coming out of those meetings?
I just had two meetings today about COP26. Being right there in Glasgow and having a focus on weather and climate change, you know, clearly there's been a number of engagements and conversations that we were part of. In all honesty, I don't have all of them on top of my head right now. We'll be happy to follow up with the detailed engagements and some of the potential follow-ups that have come out of our engagement in COP26.
Just one on Myriota, if I'm saying that right, relationship. As far as the ownership that came with exactEarth, and then I believe you mentioned they're also a customer, can you just help us understand how that relationship moves forward?
Myriota is a fantastic customer, and we are extremely focused on making them very successful. That's really the focus. Yes, we'll get a front row seat in the IoT from space industry as well. As a company, the focus is clearly and definitively on making the customer successful by delivering our service to them.
Thank you for the question.
Our next question or comment comes from the line of Weston Twigg with Piper Sandler. Please go ahead.
Hey, thanks for taking my question. You had really good ARR traction this quarter, and I'm just wondering if you could help translate that into visibility or revenue growth thoughts through next year. You know, I haven't been using the long-term model that was a pre-SPAC model, but I would love some visibility into your growth expectations through next year.
Yeah. The one piece with the $8.6 million of incremental from Q2- Q3, you know, that's now gonna translate into the revenue out into the next four quarters, right? We'll get that flow through for Q4 all the way through roughly Q3 of next year. That piece. Along with adding all those new ARR solution customers, now we have that opportunity to go expand with them and gain some further growth out there. You know, we're not providing any 2022 guidance at this point, but yeah, we're really excited about those ARR solution adds we had, plus that incremental piece quarter- over- quarter that flows that revenue into the future.
Well, I guess, maybe what I'm getting at, is this kind of ARR growth sustainable through the next few quarters?
You know, again, we're not giving any 2022 guidance, 'cause the reason being also, if we close the transaction with exactEarth in the fourth quarter, we're gonna combine that guidance and combine that consolidated and really go out looking at what's going on there. We'll provide that in the fourth quarter earnings.
If I may to augment Tom's statement here. You know, we got 200 customers, over 200 customers today. You add in the customers that exactEarth might bring to the table once the transaction closes. Even that is still a very small percentage of the estimated 200,000 customers that make up the totality of our estimated $90 billion market. The penetration rate that we see is still actually quite low relative to the opportunity set that we have in front of us.
Okay, perfect. That makes sense. Just to clarify, too, on the sort of the pre-SPAC model that was, I think, last referenced in June, that is not something we should reference any longer, correct?
I think the best information to use is always the most recent and latest information. I think we've provided solid numbers to use today that could help you understand how the company operates today.
Okay, perfect. Another question I had was around gross margin progress through next year. I know you're not giving out your guidance, but it looks like even the guidance for next quarter was slightly lower than at least I expected. I'm just wondering, you know, you talked about the higher investment. Do you see that gross margin getting back to stabilizing in the mid-60% range, or do you think it would be sort of in that kind of high 50s%-mid 60s% level that you outlined for Q4?
Yeah, 'cause that guidance for Q4 is ranging between $59-$65. We are getting back up into the $60s, a big uptick from the third quarter, and that's, you know, mainly around some timing issues that we had on the third quarter, but also that revenue growth that we're kicking in from the ARR increase that will now flow into the revenue, which will drive up that business. Plus, we continually have that leverage cost structure model with our CapEx and all those different fronts that we're able to increase that over the course of time. We'll be able, like I said-
Okay
... provide you, some guidance in 2022 once we get that exactEarth built in and we build that model out for both companies combined, and then we'll be able to provide that in the next quarter earnings.
That's helpful. Just last question from me. Can you split out the data solutions and space services revenue in Q3 and the split for Q4 guidance as well?
Yeah, we're unable to split out our
Pieces, just because the way our contracts are in nature is, a lot of things are combined since we have four solutions, multiple customers buy multiple things, so we have a hard time breaking all that stuff out. Also, with our leverage technology, we're providing ultimate solutions to customers solving multiple use cases, so we're unable to break those things out.
Understood. All right. Thank you.
We go next to Ric Prentiss with Raymond James. Your line is open.
Thanks. Good evening.
Hey, Ric.
Couple questions for y'all. First, it's been about two months since you announced the exactEarth acquisition. Have you heard anything from your own customers on how they feel about the acquisition? Or have you been hearing any feedback from exactEarth customers about coming into your fold about what it might mean to them? Any customer interactions in the last two months from either side.
The two companies have to operate very separately until the transaction closes. The simple answer is, Rick, no, we have not. It's just a very separate operation. We have not seen people on our side, right? I can't talk to anything which refers to customers on the exactEarth side, right? On our side, you know, our business has been growing nicely. The customer interactions have been positive. Unfortunately, I can't tell you anything more. We're a public company, and so they are a public company. I just can't talk to more because we can't, you know, talk with each other until the transaction closes.
Okay. No, I understand that. I just had a big transaction in this space this week with Inmarsat and Viasat, and there was talk about how some customers were excited to see the acquisition, not crossing over public company to public company lines, just sometimes customers call in and go, "Hey, I like what I see." I wasn't sure if you had any of those kind of incoming calls, not anything about operating separately or anything like that. Okay, second question on my side is, obviously everybody's anxious for 2022 guidance. You can't give it yet. Maybe just flip the question this way on how you feel about your visibility into 2022. As you're coming here into mid-November, looking into 2022, how visible is 2022 from the standpoint of half-year, full year, not giving any numbers, but just how comfortable are you getting on the visibility?
Yeah. We've been spending quite a bit of time with the executive team, with the sales force, and the leaders that run the sales teams huddling together quite often, talking about all the opportunities, the pipeline. We're, you know, again, yeah, can't give any specifics on the 2022 yet as we go through the activity with, hopefully when exactEarth closes and combine everything. You know, we're feeling very confident about 2022, about the pipeline and the four solutions that we have to go sell and all those use cases that we're solving for our customers. The key wins that we had and that keeps carrying forward. We're excited.
Okay. Final one for me, a little more of a housekeeping one. You mentioned obviously the G&A public costs came in higher. How should we think about? Is this a good run rate third quarter, or is there more to come as you think through the impact in fourth quarter? Just kind of where's a good run rate number on the G&A side of things?
Yeah, the one thing that will be hard is, you know, we're gonna go through this acquisition, so, you know, we'll have to sense out all this third party, you know, as Peter mentioned, this activity with, you know, all these IPOs, all these third parties are taking advantage of it, unfortunately for us, which is marking up their prices on everything. So, you know, we'll—It's gonna be hard to tell if these third parties keep raising prices and keep making things a little bit harder for us. But, you know, I think, you know, you know, there'll be similar activity again this quarter 'cause we'll have another transaction to go through.
Okay. Appreciate it. Stay well.
We go next to the line of Colin Canfield with Barclays. Please proceed.
Good evening, guys. A bit of a higher level question here, earlier this week, we got the NGA's commercial Earth intelligence strategy. Can you maybe talk a little bit about what that means for you guys and how you expect to sell into the government customer, whether it's subscription-based or imagery data or anything else?
Of course, Colin. Happy to talk about that. We have a pretty nice mix between commercial and government revenue. The reason for that is that there are long-term fundamental trends that drive the demand on both sides, right? You have ESG adapting to climate change, digitalization of the global economy on one side, and you have an intensification of the space contestedness, security concerns, all of that on the other side. If you listen to the talks that are coming out of the U.S. government, you know, you just mentioned one of them, but there are many others, not least the creation of the Space Force. You can see that the interest in technologies and solutions that Spire has is absolutely increasing.
You know, we have a specific team that is serving the United States government. We have teams globally that is serving, you know, I would say, friendly governments all across the world, and we do indeed see an increase in the demand from those types of customers, helping them solve their use cases.
Got it. I understand the SPAC slides are probably a little bit dated, but if we think about your CapEx estimates and kind of what you're assuming on launch costs, can you maybe just talk us through how you're thinking about procuring launches, whether it's going to be ride-share services versus small sat launchers, and the premium that you're putting on kind of direct orbit insertion versus a ride-share service.
Spire just completed its 31st launch campaign. We have launched with nine different launch vehicle. We certainly have an extremely diverse relationship with launch providers and experience working with them. That has really helped us a lot. As I look forward, it seems that almost everyone and their grandmother is starting a launch company, and we certainly appreciate that. We love working with them. We love that more and more of those capabilities are coming online, be that, dedicated launch vehicles, as you mentioned, or be that orbital transfer vehicles that take advantage of very big rockets with extremely low cost per kilogram launch prices. The way that our constellations are structured is that we have, probably more flexibility than some others, right?
You know, we certainly want to be in a particular area, a particular orbit, a particular inclination, but it's not that tight. For us, we look at the launch place as one that is getting better, every single month. Is it today where I would like it to be? No, it's not. You know, rockets still blow up and are delayed, but it is getting better.
Got it. The last question from me. You talked a little bit about inflation, corporate costs, but maybe if you can just discuss kind of the labor costs that you're experiencing within your AI and machine learning build-out and how that's impacting your ability to ramp kind of delivering complete solutions to the customer versus a raw data sale?
Spire, from its very early days, has set up as a global company, which means that we can take advantage of, like, a large number of labor markets and not just a concentrated or maybe more contested one. We certainly see that benefit accruing to us as we can hire in different labor markets. With the pending close of the exactEarth transaction, once it closes, we are having access to yet another location in Canada, right in this Cambridge Waterloo University area, where there is a highly educated, highly motivated workforce, where we can offer them a unique type of experience. What we have found is that those people that are in the AI and machine learning space and that can choose where they work, when you offer them to work with space data, their eyes light up just a little bit more.
It's fair to assume that you're not having any issues with getting headcount onboarded?
I've always said that the largest, you know, execution risk for us is hiring, right? You know, finding the right people at the right point in time, in the right location with the right skill set and the right cultural mix is absolutely a challenge because we are pretty proud of the culture that we have in the company, and so we want to stick with that and grow with that. Hiring. Anyone who says hiring is easy, I think, is just lying to themselves. I'm not gonna tell you that hiring is easy, but we are a space company, and that helps a great deal.
Got it. Thank you so much for the questions.
This concludes our question and answer session. We return to Chief Executive Officer Peter Platzer for closing remarks.
Thank you. In closing, we're immensely positive about the momentum we see in the business and recognizing the fortunate position we occupy at the very crest of this massive transformational wave of leveraging space to solve problems on Earth. The team and I are highly encouraged by the progress we continue to make against our four growth pillars. We execute with our typical sense of urgency, like signing a definitive agreement to acquire exactEarth just weeks after becoming a public company. We relentlessly drive for growth. Leveraging our cutting-edge technology and innovation, we endeavor to help our customers and humanity solve often truly global challenges and strive for a more sustainable and equitable future. With that, I thank you for your time, interest, and questions.
This concludes today's teleconference. We thank you for your participation. You may disconnect your lines at this time. Have a great day.