Ashley Johnson: I mean, I’d say, coming off of the Agri-Tech conferences earlier this month, I’d say you’re right. The sector is starting to pick its head up, and we had a lot of exciting conversations with both customers and potential customers. That said, we’re counterbalancing our long-term optimism for that sector with the continued inflationary pressures and commodity prices for the sector as a whole. So, we remain very bullish on the opportunity for us in agriculture and commercial at large, but for this year in particular, we’re tempering our expectations, just given some of the dynamics in the sector.
Kevin Weil: I’ll just add a tiny thing. If you want a little bit of color of how we help here, there was a great blog release, or Bayer released one of our customers a few weeks ago, and it just tells the story of how the use case is strong there. Commercially, it’s not just agriculture, of course. We do have insurance, energy, and others too. You were speaking about maturity of solutions. I think that is critical, but we now do have some solutions that are really clear. Now, we are being more focused in on that parametric agriculture insurance product, which we are scaling now. We have a few toeholds into a serious market there, as well as the fundamentals that are very strong.
Jeff Van Rhee: Got it. Okay, thanks for taking my questions.
Ashley Johnson: Great, thanks, Jeff.
Operator: Thank you for your question. Our next question comes from the line of Flora Li with Deutsche Bank. Your line is now open.
Flora Li: Hey, thank you for taking our question. And just a quick one from us. So, what’s your initial view on the SpaceX Starshield?
Will Marshall: Initial on SpaceX what?
Flora Li: The SpaceX Starshield, the…
Will Marshall: Yes. Are you referring to the reports that came out recently about one of their programs with the Starshield? Is that what you’re referring to?
Flora Li: Yes.
Will Marshall: Yes. I mean, look, that’s a government built. These are large government contracts, basically, for government-owned and operated satellites. So, they’re playing a sort of classic role of a defense contractor. It’s very different from our business. The government will always procure satellites for their own internal uses, if you like, especially in the security domain, like they are doing with SpaceX. But that doesn’t, I think, in any way change the market for on the commercial and commercial-first side of supplying to government. Does that make any sense?
Flora Li: Okay. Yes, I appreciate that.
Operator: All right. Thank you for your question, Flora. Our next question comes from the line of Chris Quilty with Quilty Space. Your line is now open.
Chris Quilty: Under the wire, I didn’t think I would get it in. Ashley, follow-up on your CapEx discussion. Yes, I know. It was close. On the CapEx discussion, you talked about the growth versus maintenance capital. What do you consider Pelican? And if it’s the former, when do we start sort of folding in the growth CapEx associated with that program?
Ashley Johnson: Yes. So, I would say Pelican is definitely in a growth CapEx phase. Obviously, we’ve introduced the first tech demo, and then we’ll begin launching our operational fleet. And we’ve talked in the past about this being a really important lever for us as we think about managing our cash. We can move at a more maintenance replacement rate with the SkySat fleet after we’ve gotten through the initial operational launches. And then we can launch more faster, so stay in a growth CapEx phase if we’re feeling high demand and the revenue supports it. If we’re seeing demand kind of at the same pace as the growth that we’ve been experiencing today, we can shift more quickly into a maintenance CapEx mode. So, that is an important lever available to us that enables us to manage our cash versus our CapEx investments.
Chris Quilty: Great explanation. Next question, the budget. Did we pass a defense budget or did we extend the CR? Does that mean we’re in a CR? I honestly don’t have the mental capacity for it. But from your perspective, obviously, you got lots of contracts on the horizon here, and there’s a lot of budget melees going on. Two specific questions, can you start new programs, and are new program starts important to close some of these opportunities? And the second one, kind of what sort of a system response are you seeing? I mean, CRs are nothing new. We do them every year. But are you seeing anything where, you know, it’s freezing up more than normal? Or is this just like, okay, just punch the clock, same old thing?
Will Marshall: No, I mean, the government is particularly dysfunctional this year. No, I mean, we have, of course, been tracking that and commercializing. It’s complicated. Yeah, you’re right. But anyway, of course, we do track exactly where our contracts require larger upticks in budgets versus just the CR will do. Look, the budget has passed for both on the civil side, so affecting things like NASA, and on the defense side, affecting things like the NRO and our partnership with the ACL. And that’s good, because it generally enables them to put increases where they have increased things. And in general, these program areas for commercial satellite data buyers are increasing. And just end by saying that, we’re really proud to serve the government clients that we work with. We think we do some really important services, and I think they do too. And we’re glad to be working with them.
