Q2 2024 Planet Labs PBC Earnings Call
Good afternoon.
Speaker 1: Good afternoon. Thank you for attending today's Planet Labs, PBC Second Quarter of fiscal 2024 earnings conference call. My name is Alexis and I will be your moderator for today's call. Online will be minted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star one on your telephone key.
For today's planet Labs, PBC second quarter of fiscal 2024 earnings conference call.
My name is Alexis and I will be your moderator for today's call.
All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end.
If you would like to ask a question. Please press star one on your telephone keypad.
Speaker 1: I would now like to pass the conference over to Chris Genwaldi, VP of Investor Relations. He may have cursed...
I would now like to pass the conference over to Chris <unk> VP of Investor Relations you May proceed.
Speaker 2: Thanks operator and hello everyone. Welcome to Planet's second quarter of 2024 earnings call. Before we begin today's call, we'd like to remind everyone that we may make forward-looking statements related to future events or our financial outlook. We also reference qualified pipeline which represents potential sales leads that have not yet executed contracts. Any forward-looking statements are based on management's current outlook, plans, estimates, expectations and projections. The inclusion of such forward-looking information should not be regarded as a representation by planet.
Thanks, Operator, and Hello, everyone. Welcome to plan in second quarter of 2024 earnings call before we begin todays call wed like to remind everyone that we may make forward looking statements related to future events or our financial outlook. We also referenced qualified pipeline, which represents potential sales leads that have not yet executed.
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Forward looking statements are based on management's current outlook plans estimates expectations and projections.
<unk> of such forward looking information should not be regarded as a representation by planet.
Speaker 2: The future plans, estimates, or expectations will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions as detailed in our SEC filings, which can be found at www. SEC dot gov. Our actual results are performed made different materially from those indicated by such forward-looking statements, and we undertake new responsibility to update such forward-looking statements to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. During the call, we will also discuss non- GAAP financial measures.
The future plans estimates or expectations will be achieved such forward looking statements are subject to various risks and uncertainties and assumptions as detailed in our SEC filings, which can be found at www dot SEC dot Gov. Our actual results or performance may differ materially from those indicated by such forward looking statements and we undertake no responsibility to update such forward looking statements to reflect events or circumstances.
After the date on which the statement is made or to reflect the occurrence of unanticipated events during.
During the call. We will also discuss non-GAAP financial measures. We use these non-GAAP financial measures for financial and operational decision, making and as a means to evaluate period to period comparisons. We believe that these measures provide useful information about operating results enhance the overall understanding of past financial performance and future prospects allow for greater transparency with respect to key metrics.
Speaker 2: We use these non- GAAP financial measures for financial and operational decision making, and as a means to evaluate period to period comparisons. We believe that these measures provide useful information about operating results and enhance the overall understanding of past financial performance and future prospects and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making. For more information on the non- GAAP financial measures, please see the reconciliation tables provided in our press release issued earlier this afternoon.
<unk> used by management in its financial and operational decision, making for more information on the non-GAAP financial measures. Please see the reconciliation tables provided in our press release issued earlier. This afternoon further throughout this call. We provide a number of key performance indicators used by management and often used by competitors in our industry. These and other key performance indicators are discussed in more detail in our press release before we jump.
Speaker 2: Further throughout this call, we provide a number of key performance indicators used by management and often used by competitors in our industry. These and other key performance indicators are discussed in more detail in our press release.
Speaker 2: Before we jump in, I'd like to encourage everyone to reference the slides we've posted on our investor relations website, which are intended to accompany our prepared remarks. Finally, for each of the customer contracts reference during this call, please note that the revenue figures we cite will generally be recognized over the term of the contract, which can last multiple years. Further, the terms of these contracts can vary. We may not realize all expected revenue. At this time, I'd now like to turn the call over to Will Marshall, Planet CEO , Chairperson, and CoFounder. Over to you, Will. Thanks, Chris, and hello everyone. Thanks.
And I'd like to encourage everyone to reference the slides we have posted on our Investor Relations Web site, which are intended to accompany our prepared remarks finally for each of the customer contracts referenced during this call. Please note that the revenue figures. We site will generally be recognized over the term of the contract which can last multiple years. Further the terms of these contracts can vary we may not realize all expected revenue at this time I would now like to turn the call over to <unk>.
Marshall plant CEO chairperson and cofounder over to you well.
Thanks, Chris and Hello, everyone. Thanks for joining the call today.
Speaker 3: For the second quarter of fiscal year 2024, we generated a record $53.8 million in revenue representing 11% year-over-year growth in line with our expectations. Not only did the Hongkamp gross margin came in at 52% above the high end of our expected range, our adjusted e-rida loss of the quarter was $14.5 million, also better than expected, reflecting company-wide focus on operational efficiency.
For the second quarter of fiscal year 2024, we generated a record $53 $8 million in revenue, representing 11% year over year growth in line with our expectations.
non-GAAP gross margin came in at 52% above the high end of our expected range.
Adjusted EBITDA loss for the quarter was $14 5 million also better than expected, reflecting company wide focus on operational efficiency.
Speaker 3: We ended the second quarter with 944 unique customers spanning across defense, civil government, and commercial markets. Today we'll cover a number of items, including recent organizational changes, M&A, sales wins and product developments.
We ended the second quarter with 944 unique customers spending across defense civil government and commercial markets today will cover a number of items, including recent organizational changes M&A.
Operator: Good afternoon. Thank you for attending today's Planet Labs PBC second quarter of fiscal 2024 earnings conference call.
<unk> wins and product developments, so let's dive in.
Speaker 3: Starting with organizational changes, in Q2, we undertook significant efforts to focus and optimize resources in support of sustainable, long-term growth and profitability. Firstly, on August 1st, we announced a head count reduction that led to an approximately 10% reduction in force. This was a difficult decision, but one that ultimately better positions planet for the opportunity ahead of us.
Starting with the organizational changes in Q2, we undertook significant efforts to focus and optimize resources in support of sustainable long term growth and profitability. Firstly on August 1st we announced a head count reduction that led to an approximately 10% reduction enforce this was a difficult decision, but one that ultimately better.
Operator: My name is Alexis and I will be your moderator for today's call. Online will be minted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star one on your telephone keypad.
Christopher Genualdi: I would now like to pass the conference over to Chris Genualdi, VP of investor relations. You may proceed.
<unk> planet so the opportunity ahead of us.
Speaker 3: Our businesses go rapidly over the last 18 months and while we see the market for our solutions continuing to expand and increase breadth of projects and people resulted in increased cost and complexity, we expect this action will support greater focus, agility and operational efficiency across our organisation.
Our business has scaled rapidly over the last 18 months and while we see the market for our solutions continuing to expand and increase breath of projects and people resulted in increased cost and complexity.
Christopher Genualdi: Thanks operator and hello everyone. Welcome to plan a second quarter of 2024 earnings call. Before we begin today's call, we'd like to remind everyone that we may make forward looking statements related to future events or our financial outlook. We also reference qualified pipeline which represents potential sales leads that have not yet executed contracts. Any forward looking statements are based on management's current outlook plans estimates expectations and projections. The inclusion of such forward looking information should not be regarded as a representation by planet. The future plans estimates or expectations will be achieved.
Christopher Genualdi: Such forward looking statements are subject to various risks and uncertainties and assumptions as detailed in our SEC filings, which can be found at www. SEC dot gov.
We expect this action will support greater focus agility and operational efficiency across our organization.
Speaker 3: On Potter Engineering priorities, we are pacing the build out of our next generation satellite fleet to optimize our resources and support our one-year payback targets for the satellite.
And product engineering priorities, we are pacing the build out of our next generation satellite fleets to optimize our resources and support a one year payback targets for the sidelines.
Christopher Genualdi: Our actual results are performance made different from those indicated by such forward looking statements and we undertake new responsibility to update such forward looking statements to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.
Speaker 3: I'll cover recent milestones achieved in our Pelican and Talents Program shortly. And one area we're investing more behind.
I will cover recent milestones achieved in our Pelican antenna to program shortly.
And one area, we are investing more behind US we are seeing promising signs of commercial opportunity in AI, which I'll cover in a moment.
Speaker 3: We are seeing promising signs of commercial opportunity in AI, which I'll cover in a moment. We're also actively strengthening our go-to-market.
Also actively strengthening our go to market strategy. This is health has three components, one aligning our teams and investments behind our core opportunities defense and intelligence Civil government and agriculture solutions. Our direct sales team is focused on serving high value large customer opportunities within these markets. This includes selling our daily planet scopes.
Speaker 3: This is self-hatred three components. One, aligning our teams and investments behind our core opportunities, defend intelligence, civil government, and agricultural solutions. Our direct sales team is focused on serving high value large customer opportunities within these markets. This includes selling our daily planet-scope scan with AI-enabled analytics to defend an intelligence customer, selling our area monitoring for regulatory enforcement for civil government customers, and selling agricultural solutions that utilize our planetary variables.
Christopher Genualdi: During the call, we will also discuss non-gap financial measures. We use these non-gap financial measures for financial and operational decision making and as a means to evaluate period to period comparisons. We believe that these measures provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making.
<unk> with AI enabled analytics to defense and intelligence customers, sending all area monitoring for regulatory enforcement for civil government customers and selling agricultural solutions that utilize our planetary variables.
Speaker 3: We plan to serve customers in other industries primarily through our growing network of partners around the globe.
Christopher Genualdi: For more information on the non-gap financial measures, please see the reconciliation tables provided in our press release issued earlier this afternoon. Further throughout this call, we provide a number of key performance indicators used by management and often used by competitors in our industry. These and other key performance indicators are discussed in more detail in our press release.
We plan to serve customers in other industries, primarily through our growing network of partners around the globe.
Speaker 3: Two, we will shift towards supporting smaller opportunities via our platform enabled by the Synodized Acquisition which will discuss momentary.
Two we will shift towards supporting smaller opportunities via our platform enabled by the synergize acquisition, which will discuss momentarily.
Speaker 3: These changes will allow our commercial teams to focus on high ROI large opportunities in our pipeline.
Christopher Genualdi: Before we jump in, I'd like to encourage everyone to reference the slides we have posted on our investor relations website, which are intended to accompany our prepared remarks. Finally, for each of the customer contracts reference during this call, please note that the revenue figures we cite will generally be recognized over the term of the contract, which can last multiple years. Further, the terms of these contracts can vary. We may not realize all expected revenue.
These changes will allow our commercial teams to focus on high ROI large opportunities in our pipeline.
Three we're taking steps to streamline and simplify our sales processes.
Speaker 3: Three, we're taking steps to streamline and simplify our service processes. We expect these actions will increase sales efficiency and shorten customer time to value. Ultimately, these organizational changes and programmatic focus have sharpened our effort on key priorities and reinforced our path to profitability. To finish up the organizational updates, in early August , we closed the acquisition of Synagise, which will be a foundational element and excelement of our Earth data platform.
We expect these actions will increase our efficiency and shorten customer time to value. Ultimately these organizational changes and programmatic focus have sharpened our efforts on key priorities and reinforced our path to profitability.
William Marshall: At this time, I'd now like to turn the call over to Will Marshall, Planet CEO, Chairperson, and co-founder. Over to you, Will. Thanks, Chris, and hello, everyone. Thanks for joining the call today. For the second quarter of fiscal year 2024, we generated a record $53.8 million in revenue, representing 11% year-over-year growth in line with our expectations. Not only on Gap, Gross Margin came in at 52% above the high end of our expected range. Our adjusted EBITDA loss of the quarter was $14.5 million, also better than expected, reflecting company-wide focus on operational efficiency. We ended the second quarter with 944 unique customers spanning across defense, civil government, and commercial markets.
To finish up the organizational updates in early August we closed the acquisition of synergize, which will be a foundational element an accelerant of our data platform.
Speaker 3: We see synergised as an enabler to broad geospatial adoption and enhance ease of use for customers, both speedening and widening customer adoption.
We see synergize as an enabler to broad geospatial adoption and enhanced ease of use for customers with speed inning and widening customer adoption.
Speaker 3: We're making our data easier to work with by enabling customers to analyze data and create applications directly on our platform.
We're making our data easier to work with by enabling customers to analyze data and create applications directly on our platform.
Speaker 3: Today our customers and partners typically build their own custom workflows to download, analyze, and integrate our imagery. With Synodized, they will be more easily able to do this in our cloud platform, leveraging the geospatial power tools that Synodized has created.
Today, our customers and partners typically build their own custom workflows to download analyze and integrate our imagery with synergize, though be more easily able to do this in a cloud platform leveraging the geospatial power tools that synergize that's created.
William Marshall: Today, we'll cover a number of items, including recent organizational changes, M&A, sales wins, and product developments. So, let's dive in. Starting with organizational changes. In Q2, we undertook significant efforts to focus and optimize resources in support of sustainable, long-term growth and profitability. Firstly, on August 1st, we announced a hair count reduction that led to an approximately 10% reduction in force. This was a difficult decision, but one that ultimately better positions planet for the opportunity ahead of us.
Speaker 3: There's a speed time to value for our customers in addition to more deeply integrating our platform into critical customer operations.
This will speed time to value for our customers. In addition to more deeply integrating our platform into critical customer operations.
Speaker 3: Leveraging Sentinel Hub, synergizes self-serve platform, which already serves thousands of users, we were shift towards supporting small deals through a lower touch channel. We're excited about the step function expansion of our platform that this acquisition can enable and the incredible talent joining planet. We're going to more detail and provide a demo of synergizes capabilities, our own investor day in October .
Leveraging central hub synergize as self serve platform, which already thousands of users we will shift towards supporting small deals through a lower touch channel. We're excited about the step function expansion of our platform that this acquisition can enable and the incredible talent joining planet will.
We will go into more detail and provide a demo of synergizes capabilities at our Investor day in October .
William Marshall: Our businesses scale rapidly over the last 18 months, and while we see the market for our solutions continuing to expand, an increased breadth of projects and people resulted in increased cost and complexity, we expect this action will support greater focus, agility and operational efficiency across our organization. On product engineering priorities, we are pacing the build out of our next generation satellites to optimize our resources and support our one-year payback targets for the satellites.
Okay.
Let's turn to recent sales highlights.
Speaker 3: Starting with the defense and intelligence market, we recently closed an expansion with the US Space Force. This 12 month extension will enable support of coalition partners military training exercises around the globe, utilizing responsive commercial space capabilities.
Starting with the defense and intelligence market. We recently closed an expansion with the U S space Force.
This 12 month extension will enable.
<unk> of coalition partners military training exercises around the globe utilizing responsive commercial space capabilities.
Speaker 3: Through our work together, they have been leveraging SkySat images, SkySat video, and AI-based vessel detection to support the US Department of Defense's commercial satellite capabilities.
Through our work together they have been leveraging sky images, Scott that video and AI based vessel detection to support the U S Department of Defense's commercial satellite capabilities.
William Marshall: Our cover, recent milestones achieved in our pelican and talented programs shortly, and one area we're investing more behind is AI. We are seeing promising signs of commercial opportunity in AI, which I'll cover in a moment. We're also actively strengthening our go-to-market strategy. This itself has three components. One, aligning our teams and investments behind our core opportunities, dependent intelligence, civil government, and agriculture solutions. Our direct sales team is focused on serving high value large customer opportunities within these markets.
Speaker 3: We also recently received a new seven-figure ACV awards from a US government agency for higher resolution sky-set tasking solutions. This award was won through one of our...
We also recently received a new seven figure ACB Award from a U S government agency for high resolution Sky Tasking solutions.
This award was won through one of our planet partners.
Speaker 3: We're proud of the work we do to support multiple agencies across the US government.
We're proud of the work, we do to support multiple agencies across the U S government.
Speaker 3: Additionally, we recently won a 7-figure ACV contract to provide our data to administrative foreign affairs in Asia. There's a new customer for us and the contract was won through one of our partners in the region.
Additionally, we recently won a seven figure ACB contract to provide our data to a ministry of Foreign Affairs in Asia. There is a new customer for us and the contract was one to one of our partners in the region.
William Marshall: This includes selling our daily planet-scope scam with AI-enabled analytics to defense and intelligence customers, selling our area monitoring for regulatory enforcement for civil government customers, and selling agriculture solutions that utilize our planetary variables. We plan to serve customers in other industries primarily through our growing network of partners around the globe. Two, we will shift towards supporting smaller opportunities via our platform enabled by the synergized acquisition which will discuss momentarily. These changes will allow our commercial teams to focus on high ROI large opportunities in our pipeline.
Speaker 3: Within the civil government sector, we are seeing increased demand driven by disaster prevention emergency response, as well as land management and permitting.
Within the civil government sector, we are seeing increased demand driven by disaster prevention emergency response, as well as land management and targeting.
Speaker 3: For example, we recently expanded our contracts with multiple provincial governments in Canada. We closed a large expansion with the government of British Columbia.
For example, we recently expanded our contracts with multiple provincial governments in Canada, we closed a large expansion with the government of British Columbia.
A six figure ACB expansion contract with the Northwest Territory Center for Jim Ethics, and a six figure ACB expansion with Quebec's Ministry of natural resources and for Us.
Speaker 3: A fixed-figure ACV expansion contract with the Northless Territory Center for Geomatics and a fixed-figure ACV expansion with Quebec's Ministry of Natural Resources and Forests.
Speaker 3: Our data and solutions are being used to support critical disaster response efforts during the wildfire season to monitor the impacts of climate change on the ecosystems and to support land rights across Canada.
Data and solutions are being used to support critical disaster response efforts during the wildfire season to monitor the impacts of climate change and the ecosystems and to support land rights across Canada.
William Marshall: Three, we're taking steps to streamline and simplify our sales processes. We expect these actions will increase sales efficiency and shorten customer time to value. Ultimately, these organizational changes and programmatic focus have sharpened our effort on key priorities and reinforced our path to profitability.
Similarly here in California.
Speaker 3: Similarly, here in California, I data is being used by authorities to identify areas at risk of wildfires and to inform prevention efforts. During Q2, we signed a new deal to provide planetscape monitoring, basemaps, archive access, sky-set tasking, and synergized platform access to support wildfire fuel reduction programs.
<unk> is being used by authorities to identify areas at risk of wildfires and to inform prevention efforts.
During Q2, we signed a new deal to provide clients get monitoring base maps archive access sky tasking and synergize platform access to support wildfire fuel reduction programs.
William Marshall: To finish up the organizational updates, in early August, we closed the acquisition of synergized, which will be a foundational element and accelerant of our Earth-Data platform. We see synergized as an enabler to broad geospatial adoption and enhanced ease of use for customers, both speedening and widening customer adoption. We're making our data easier to work with by enabling customers to analyze data and create applications directly on our platform. Today, our customers and partners typically build their own custom workflows to download, analyze, and integrate our imagery.
Speaker 3: As the frequency and scale of wildfires increase, causing tens of billions of dollars in worldwide damages annually, and broader natural disasters, causing hundreds of billions of dollars in damages, our solutions help government customers around the globe prevent and respond to these disasters. In the case of wildfires, this can save significant costs, through prevention and reducing severity, as well as help save lives.
As the frequency of scale of wildfires increase, causing tens of billions of dollars in worldwide damages annually and broader natural disasters, causing hundreds of billions of dollars in damages our solutions help government customers around the globe prevent and respond to these disasters in the case of Wi Fi. This can save significant costs through prevention and reducing <unk>.
Parity as well as help save lives.
Speaker 3: In Europe , we were recently awarded the new 7-figure ACV multi-year contract, delivering environmental monitoring to the UK's rural payments agency with our partner Earth Eye.
In Europe , we were recently awarded a new seven figure ACB multi year contract delivering environmental monitoring so the UK rural payments agency with our partner <unk>.
William Marshall: With synergized, there will be more easily able to do this in our cloud platform leveraging the geospatial power tools that synergized as created. This will speed time to value for our customers in addition to more deeply integrating our platform into critical customer operations. Leveraging Sentinel Hub synergizes self-serve platform, which already serves thousands of users, we will shift towards supporting small deals through a lower touch channel. We're excited about the step-function expansion of our platform that this acquisition can enable and the incredible talent joining planet.
Speaker 3: The UK government will use our data to support its environmental and management scheme, allowing for country-wide detection of a wide range of biophysical parameters. It's worth noting that the rural payments agency is an early example of a customer accessing our fusion data via Synergizer's platform.
The UK, Kevin we'll use our data to support its environmental land management scheme, allowing for countrywide detection of a wide range of biophysical parameters.
It's worth noting that the rural payments agency is an early example of a customer accessing our fusion data via Synergizes platform.
Speaker 3: In the commercial market, we continue to add great customers across the agricultural solutions, energy, energy.
In the commercial market, we continue to add great customers across the agricultural solutions.
Energy and insurance sectors.
William Marshall: We're going to more detail and provide a demo of synergized capabilities our own investor day in October.
Speaker 3: Now I want to spend a moment on how AI, especially new generative AI and large language models, are enabling planets, business traction. Planet has a deep proprietary archive of Earth data that grows by terabytes every day. A treasure trove for generative AI models to extract, insolence, and create value.
Now I want to spend a moment on how AI, especially in degenerative AI and large language models are enabling tenants business traction.
William Marshall: Let's turn to recent sales highlights. Starting with the defense and intelligence market, we recently closed an expansion with the US Space Force. This 12 month extension will enable support of coalition partners military training exercises around the globe, utilizing responsive commercial space capabilities. Through our work together, they have been leveraging skyset images, skyset video, an AI based vessel detection to support the US Department of Defense's commercial satellite capabilities. We also recently received a new seven figure ACV awards from a US government agency for higher resolution skyset tasking solutions.
<unk> has a deep proprietary archive of dataset grows by terabytes everyday.
Treasure trove for generative AI models to extract in science and create value.
Speaker 3: We've seen significant interest in this recently. And I'm pleased to report that last quarter, we've found our first deal in this area, a fixed figure three month pilot to explore the potential to unleash the value of planets daily data with large language models. And we continue to see real world impact that AI models and planets data can make together.
We've seen significant interest in this recently and I am pleased to report that last quarter, we signed our first deal in this area a six figure three months pilot to explore the potential to unleash the value of planets daily data with large language models.
And we continue to see real world impact of AI models and planets data can make together.
Speaker 3: The latest example of this was in response to the recent wildfire in Maui. In continued collaboration with Microsoft, together we created an AI-based building damage assessment.
The latest example of this was in response to the recent wildfires in Maui and.
<unk> continued collaboration with Microsoft together, we create an AI based building damage assessment.
William Marshall: This award was one through one of our planet partners. We're proud of the work we do to support multiple agencies across the US government. Additionally, we recently won a seven figure ACV contract to provide our data to administrative foreign affairs in Asia. There's a new customer for us and the contract was one through one of our partners in the region.
Speaker 3: Within 24 hours of being notified of the fire, this was delivered to the Red Cross, who used it to quickly rearrange work in the field to respond to the most urgent priorities first, better supporting first responders on the ground. Damage assessment information is vital as it is used to make operational decisions, such as where to focus response efforts. It can also be the first step in validating addresses for residents that may qualify for financial assistance, for instance.
Within 24 hours are being notified of the file this was delivered to the Red Cross who use it to quickly re arrange work in the field to respond.
So the most urgent priorities first better supporting first responders on the ground.
Damage assessment information is vital as it is used to make operational decisions such as where to focus response efforts.
William Marshall: Within the civil government sector, we are seeing increased demand driven by disaster prevention, emergency response, as well as land management and permitting. For example, we recently expanded our contracts with multiple provincial government in Canada. We closed a large expansion with the government of British Columbia, a six figure ACV expansion contract with the Northwest Territories Center for Geomatics, and a six figure ACV expansion with Quebec's Ministry of Natural Resources in Canada. Our data and solutions are being used to support critical disaster response efforts during the wildfire season to monitor the impacts of climate change on the ecosystems and to support land rights across Canada.
And also be the first step in validating addresses for residents that may qualify for financial assistance for instance.
Speaker 3: As you recall, we recently partnered with Microsoft to support a building damage assessment solution in response to the war in Ukraine and the earthquake in Turkey and Syria. Together, we've shortened the time it takes to deploy the building damage assessment in each event from months to days to hours.
As you'll recall, we've recently partnered with Microsoft to support building damage assessment solution in response to the war in Ukraine, and the earthquake in tuck in Syria together.
Together, we've shortened the time it takes to deploy that building damage assessment.
Each event from months to days to hours.
Speaker 3: where the human conflict or natural disaster access to timely, reliable data is critical to supporting quick and effective humanitarian responses and in some cases avoidance and prevention. This important work has already led to interest in our solutions from other countries and organizations. In all, we see AI as a powerful force that can unlock the potential of our deep data archive and accelerate the adoption of our solutions.
Where the human conflict or natural disaster access to timely reliable data is critical to supporting quick and effective humanitarian responses and in some cases avoidance intervention. It is important work has already led to interest in our solutions from other countries and organizations.
William Marshall: Similarly, here in California, I data is being used by authorities to identify areas at risk of wildfires and to inform prevention efforts. During Q2, we signed a new deal to provide planet-skipped monitoring, base maps, archive access, skyset tasking, and synergized platform access to support wildfire fuel reduction programs. As the frequency and scale of wildfires increase, causing tens of billions of dollars in worldwide damages annually and broader natural disasters, causing hundreds of billions of dollars in damages, our solutions help government customers around the globe prevent and respond to these disasters. In the case of wildfires, this can save significant costs through prevention and reducing severity as well as help save lives.
So we see AI as a powerful force that can unlock the potential of our deep data archive and accelerate the adoption of our solutions.
Speaker 3: Before I turn it over to Ashley, I'd like to highlight a few recent product development.
Before I turn it over to Ashleigh I'd like to highlight a few recent product developments.
Speaker 3: We're continuing to make great progress on our next generation missions, Pelican and TANager. I'm excited to announce that our first Pelican Tech demo, TD1, is now fully built and being ready for launch later this year.
We're continuing to make great progress on our next generation of emissions Pelican and Tanja.
I'm excited to announce that our first Pelican Tech demo TD. One is now fully built and being ready for launch later this year.
Speaker 3: While this first pelican is truly an R&D satellite, whose primary mission is to test the satellite platform and operational systems that are common between pelican and tango. It's a critical milestone in our program and I'm a credibility part of our team's progress developing the unprecedented capabilities to his new fleet promises.
While this first Pelican is truly an R&D sidelines, whose primary mission is to test the satellite platform and operational systems that are common between Pelican and tanja.
Milestone in our program and I'm incredibly proud of our team's progress developing the unprecedented capabilities. This new fleet promises.
William Marshall: In Europe, we recently awarded the new seven figure ACV multi-year contract, delivering environmental monitoring to the UK's rural payments agency with our partner, Earth Eye. The UK government will use our data to support its environmental and management scheme, allowing for country-wide detection of a wide range of biophysical parameters. It's worth noting that the rural payments agency is an early example of a customer accessing our fusion data via synergizes platform.
Speaker 3: Further, Tanaja's imaging spectrometer developed and built by NASA JPL is nearing readiness for integration onto our Tanaja 1 satellite, which we expect to have ready for launch next year.
Further tonnages imaging spectrometer developed and built by NASA JPL is nearing readiness for integration onto our tonnage of one satellite, which we expect to have ready for launch next year.
Speaker 3: To spectrometer is the instrument that will allow us to detect pinpoint and quantify point source emissions and methane and carbon dioxide, which we've discussed before has huge potential to support for global sustainability transition.
The spectrometer is the instrument that will allow us to detect pinpoint and quantify point source emissions of methane and carbon dioxide, which we've discussed before has huge potential to support global.
Sustainability transition.
Speaker 3: Continuing that vein, we recently shared our concrete plans for the upcoming release of our Forest Carbon Planetary Variable. This groundbreaking data set aims to provide insights into forest change and carbon capture at nearly the individual tree level, serving voluntary carbon markets, forest related supply chains, conservation and regulators.
Continuing in that vein, we recently shared our concrete plans for the upcoming release of our first carbon planetary variable. This groundbreaking dataset aims to provide insights into forest change in carbon capture at nearly the individual tree level <unk> voluntary carbon markets first related supply chain conservation and regulators.
William Marshall: In the commercial market, we continue to add great customers across the agricultural solutions, energy and insurance sectors.
William Marshall: Now I want to spend a moment on how AI, especially in new generative AI and large language models, are enabling planets, business, traction. Planet has a deep proprietary archive of our data that grows by terabytes every day, a treasure trove for generative AI models to extract insights and create value. We've seen significant interest in this recently, and I'm pleased to report that last quarter we signed our first deal in this area, a fixed figure three month pilot to explore the potential to unleash the value of planet's daily data with large language models, and we continue to see real world impact AI models and planets data can make together.
Speaker 3: Frequent and board area yet granular data are crucial tools to ensure successful carbon monitoring.
Frequent and board area, yet granular data are crucial tools to ensure a successful carbon monitoring.
Speaker 3: Current offerings in this market are often based on data that is used out of date or significantly lacking in accuracy. Our forest carbon product has the potential to match the accuracy of physical or airborne measurements at a fraction of the cost, covering the entirety of the earth's landmass. We plan to launch a global 30 meter resolution product this year and a global 3 meter resolution product updated on a quarterly basis in 2024. I want to underscore the significance here.
Current offerings in this market are often based on data that is years out of date or significantly lacking accuracy off forest carbon product has the potential to match the accuracy of physical or airborne measurements at a fraction of the cost covering the entirety of the Earth's landmass, we plan to launch our global 30 meter resolution product this year and at global.
Three meter resolution product updated on a quarterly basis in 2024, I want to underscore the significance there with this capability, we hope to underpin global carbon markets accelerating our ability to tackle climate change and supporting the Multitrillion dollar transition to a sustainable economy in summary, this quarter one of sharpening focus.
William Marshall: The latest example of this was in response to the recent wildfire in Maui. In continued collaboration with Microsoft, together we created an AI based building damage assessment. Within 24 hours of being notified of the fire, this was delivered to Red Cross who used it to quickly rearrange work in the field to respond to the most urgent priorities first, better supporting first responders on the ground. Damage assessment information is vital as it is used to make operational decisions such as where to focus response efforts. It can also be the first step in validating addresses for residents that may qualify for financial assistance, for instance.
Speaker 3: With this capability, we hope to underpin global carbon markets, accelerating our ability to tackle climate change and supporting the multi-trillion dollar transition to a sustainable economy.
Speaker 3: In summary, this quarter marked one of sharpening focus, increased operational efficiency and improving execution.
Increased operational efficiency and improving execution.
Speaker 3: While the economic climate has been challenging for many companies, including Planet, we also have clear opportunities for changes within our business to support faster growth and a significant and growing pipeline of opportunities to pursue. We expect the changes we're making will make Planet a stronger, more agile, a more efficient organisation. We continue to feel the pull from customers for our insights that our business enables.
While the economic climate has been challenging for many companies, including planet. We also have clear opportunities for changes within our business to support faster growth and a.
And growing pipeline of opportunities to pursue we expect the changes, we're making will make <unk>, a stronger more agile and more efficient organization.
William Marshall: As you recall, we recently partnered with Microsoft to support a building damage assessment solution in response to the war in Ukraine and the earthquake in Turkey and Syria. Together we've shortened the time it takes to deploy the building damage assessment in each event from months to days to hours, where the human conflict or natural disaster access to timely, reliable data is critical to supporting quick and effective humanitarian responses and in some cases avoidance and prevention. This important work has already led to interest in our solutions from other countries and organizations.
We continue to feel the pull from customers for insights to our business enabled us.
Speaker 3: Our focus is on improving execution across the board to prioritization and simplification. I'll now turn over to Ashley for a review of the financials and our outlook. Over to you, Ashley. Great, thank you, Will. And thanks, everyone, for...
Our focus is on improving execution across the board to prioritization and simplification.
I'll now turn it over to Ashley for review of the financials and our outlook however to yesterday.
Thank you will and thanks, everyone for joining today.
Speaker 4: As we'll mentioned, our revenue for the second quarter of fiscal 24 ending in July 31 came in at a record $53.8 million, which represents 11% year of year growth.
As will mentioned our revenue for the second quarter of fiscal 'twenty four ending July 31st came in at a record $53 $8 million, which represents 11% year over year Grant.
William Marshall: In all, we see AI as a powerful force that can unlock the potential of our deep data archive and accelerate the adoption of our solutions.
Speaker 4: A revenue for Q2 does not include any revenue from the synergized acquisition, which closed in August , a little later than we had originally anticipated.
Our revenue for Q2 does not include any revenue from Synergize acquisition, which closed in August a little later than we had originally anticipated.
William Marshall: Before I turn it over to Ashley, I'd like to highlight a few recent product developments. We're continuing to make great progress on our next generation of missions, Pelican and Tannerja. I'm excited to announce that our first Pelican tech demo, TD-1, is now fully built and being ready for launch later this year. While this first Pelican is truly an R&D satellite whose primary mission is to test the satellite platform and operational systems, but are common between Pelican and Tannerja.
Speaker 4: On our prior call, we highlighted the record amount of qualified pipeline opportunities generated in Q1, which was more than double the quarterly average of the prior year.
On our prior call we highlighted the record amount of qualified pipeline opportunities generated in Q1, which was more than double the quarterly average of the prior year.
Speaker 4: We remain pleased with the pace of qualified pipeline generation during the second quarter, reflecting the growing demand we continue to see for our solutions. In particular, civil government pipeline growth has been especially robust, driven by applications such as disaster prevention and emergency response, fueled unfortunately by the climate crisis that continues to unfold around the planet. In addition to agriculture and land use management and permitting, as we'll mentioned earlier.
We remain pleased with the pace of qualified pipeline generation during the second quarter, reflecting the growing demand we continue to see for our solutions in particular civil government pipeline growth has been especially robust driven by applications such as disaster prevention and emergency response field. Unfortunately by the climate crisis that continues to unfold.
William Marshall: It's a critical milestone in our program and incredibly proud of our team's progress, developing the unprecedented capabilities to new fleet promises. Further, Tannerja's imaging spectrometer developed and built by NASA JPL is nearing readiness for integration onto our Tannerja-1 satellite, which we expect to have ready for launch next year. The spectrometer is the instrument that will allow us to detect pinpoint and quantify point source emissions and methane and carbon dioxide, which we've discussed before has huge potential to support for global sustainability transition.
Around the planet in addition to agricultural and land use management and permitting as will mentioned earlier. We are also seeing emerging opportunities in several government for water monitoring and management applications, which are planetary valuable solutions address directly.
Speaker 4: We're also seeing emerging opportunities in civil government for water monitoring and management applications, which are planetary variable solutions addressed directly. We were pleased to see a number of the seven figure deals in our pipeline closing Q2 across multiple vertical markets. And the teams continue to make progress against some of the even larger eight figure opportunities that have emerged both for AI and sustainability related use cases.
We were pleased to see a number of seven figure deals in our pipeline closing Q2 across multiple vertical markets and the teams continue to make progress against some of the even larger eight figure opportunities that have emerged for AI and sustainability related use cases.
William Marshall: Continuing that vein, we recently shared our concrete plans for the upcoming release of our Forest Carbon Planetary Variable. This groundbreaking data set aims to provide insights into forest change and carbon capture at nearly the individual tree level, serving voluntary carbon markets, forest-related supply chains, conservation and regulators. Frequent and broad area yet granular data are crucial tools to ensure successful carbon monitoring. Current offerings in this market are also based on data that is years out of date or significantly lacking in accuracy.
As of the end of Q2 recurring ACB or annual contract value was 92% of our book of business.
Speaker 4: As of the end of Q2, recurring ACV or annual contract value was 92% of our book of business. Over 90% of our book of business consists of annual or multi-year contracts. And our average contract length continues to be approximately two years weighted on an ACV basis.
Over 90% of our book of business consists of annual or multiyear contracts and our average contract length continues to be approximately two years weighted on an ACB basis.
Speaker 4: Net dollar retention rate, which we measure relative to the book of business at the beginning of each fiscal year was 102%. And net dollar retention rate with windbacks was 103%.
Net dollar retention rate, which we measure relative to the book of business at the beginning of each fiscal year was 102% and net dollar retention rate with win backs was 103%.
Speaker 4: The improvement in NDRR for Q2 relative to the prior quarter is driven by customer expansions, particularly in the government sector. It's important to understand that at this point in the year, our net dollar retention rate is reflective of only six months. If you look at our prior two years as detailed in our quarterly earnings investor presentation, our net dollar retention rate starts on day one of each fiscal year at 100%, then develops through the course of the year toward our final full year result.
<unk> in India are for Q2 relative to the prior quarter is driven by customer expansions, particularly in the government sector. It's important to understand that at this point in the year. Our net dollar retention rate is reflective of only six months.
William Marshall: Our Forest Carbon product has the potential to match the accuracy of physical or airborne measurements at a fraction of the cost covering the entirety of the Earth's land mass. We plan to launch a global 30 meter resolution product this year and a global 3 meter resolution product updated on a quarterly basis in 2024.
You look at our prior two years is detailed in our quarterly earnings Investor presentation. Our net dollar retention rate start on day, one of each fiscal year at 100% then develops through the course of the year toward our final full year results.
William Marshall: I want to underscore the significance here. With this capability, we hope to underpin global carbon markets, accelerating our ability to tackle climate change and supporting the multi-trillion dollar transition to a sustainable economy.
Speaker 4: For the full year, we are now targeting an approximate 115% net dollar retention rate, which is lower than we previously expected driven by the anticipated delay of one of our eight-figure ACV expansion opportunities with a large government customer.
For the full year, we are now targeting an approximate 115% net dollar retention rate, which is lower than we previously expected driven by the anticipated delay of one of our eight figure ACB expansion opportunities with large government customer.
William Marshall: In summary, this quarter marked one of sharpening focus, increased operational efficiency and improving execution. While the economic climate has been challenging for many companies including Planet, we also have clear opportunities for changes within our business to support faster growth and a significant and growing pipeline of opportunities to pursue. We expect the changes we're making will make Planet a stronger, more agile, and more efficient organization. We continue to feel the pull from customers for our insights to our business enables. Our focus is on improving execution across the board to prioritization and simplification.
Speaker 4: Turning the gross margin, our non-gap gross margin for the second quarter of fiscal 24 was 52%. Unchanged from the prior year, despite the accelerated depreciation of two SkySat satellites discussed on our prior call, which had an approximate 4 percentage points impact.
Turning to gross margin our non-GAAP gross margin for the second quarter of fiscal 'twenty four was 52% unchanged from the prior year. Despite the accelerated depreciation of <unk> satellites discussed on our prior call, which had an approximate four percentage point impact.
Speaker 4: The rest of our satellite fleet is operating well in spite of the continued height and solar activity. Thanks to the skill, expertise, and agility of our World Class Mission Operations team.
The rest of our satellite fleet is operating well in spite of the continued heightened solar activity. Thanks to the skill expertise and agility of our World class mission operations team.
Speaker 4: Adjusted EBITDA loss was $14.5 million for the quarter, which is better than we previously expected, reflecting our focus on driving operational efficiency across the business.
Adjusted EBITDA loss was $14 $5 million for the quarter, which is better than we previously expected, reflecting our focus on driving operational efficiency across the business.
Ashley Johnson: I'll now turn over to Ashley for review of the financials and our outlook over to you, Ashley. Thank you, Will, and thanks everyone for joining today. As Will mentioned, our revenue for the second quarter of fiscal 24 ending in July 31st came in at a record $53.8 million, which represents 11% year of year growth.
Speaker 4: As we'll mention, we recently announced that we have restructured our teams to align resources behind our high priority growth opportunities and to reinforce our path to profitability. We expect to incur a non-recurring restructuring charge of approximately $7 to $8 million, the majority of which will hit in Q3.
As will mentioned, we recently announced that we have restructured our teams to align resources behind our high priority growth opportunities and to reinforce our path to profitability.
Ashley Johnson: Our revenue for Q2 does not include any revenue from the synergized acquisition, which closed in August, a little later than we had originally anticipated. On our prior call, we highlighted the record amount of qualified pipeline opportunities generated in Q1, which was more than double the quarterly average of the prior year. We remain pleased with the pace of qualified pipeline generation during the second quarter, reflecting the growing demand we continue to see for our solutions.
We expect to incur a nonrecurring restructuring charge of approximately $7 million to $8 million the.
<unk> of which will hit in Q3.
Speaker 4: The estimated reduction in our androla operating expense run rate entering fiscal 25 is more than 35 million dollars versus the exit run rate we expected when we started this year.
The estimated reduction in our annual operating expense run rate entering fiscal 'twenty five.
More than $35 million versus the exit run rate, we expected when we started this year.
Well I already covered some of the changes we've made to our go to market strategy to increase sales efficiency and time to value for our customers on the product and R&D side, we focused our teams and resources behind our core initiatives, including the Pelican program Earth data platform and unleashing the potential of our data with AI.
Speaker 4: We'll already covered some of the changes we've made to our go-to-market strategy to increase sales efficiency and time to value for our customers. On the product and R&D side, we focused our teams and resources behind our core initiatives, including the Pelican program, our Earth Data Platform, and unleashing the potential of our data with AI.
Ashley Johnson: In particular, civil government pipeline growth has been especially robust driven by applications such as disaster prevention and emergency response, fueled unfortunately by the climate crisis that continues to unfold around the planet. In addition to agricultural and land use management and permitting, as Will mentioned earlier, we're also seeing emerging opportunities in civil government for water monitoring and management applications, which are planetary variables solutions addressed directly. We were pleased to see a number of the seven figure deals in our pipeline closing Q2 across multiple vertical markets, and the teams continue to make progress against some of the even larger eight figure opportunities that have emerged both for AI and sustainability related use cases.
Speaker 4: As part of the efficiencies we're achieving within our space system schemes, we have reassessed the cost to deliver on some of our funded R&D programs, which resulted in a one time increase in contra R&D expense recognized, reducing our R&D costs in the quarter by approximately $2 million.
As part of the efficiencies we are achieving within our space systems. James we have reassessed the cost to deliver on some of our funded R&D programs, which resulted in a one time increase in contra R&D expense recognized reducing our R&D costs in the quarter by approximately $2 million.
All of the changes we made across the business reinforce our commitment to achieve adjusted EBITDA profitability by no later than the fourth quarter and fiscal 'twenty five or calendar year end 2024, we are sharpening our focus and getting more efficient as a company, which we believe supports growth in our core markets and healthy bottomline expansion going.
Speaker 4: All of the changes we made across the business reinforce our commitment to achieve adjusted EBITDA profitability by no later than the fourth quarter of fiscal 25 for calendar year and 2024. We are sharpening our focus and getting more efficient as a company, which we believe supports growth in our core markets and healthy bottom line expansion going forward.
Ashley Johnson: As of the end of Q2, recurring ACV or annual contract value was 92% of our book of business. Over 90% of our book of business consists of annual or multi-year contracts, and our average contract length continues to be approximately two years, weighted on an ACV basis. Net dollar retention rate, which we measure relative to the book of business at the beginning of each fiscal year was 102%, and net dollar retention rate with windbacks was 103%.
Forward.
Speaker 4: Capital expenditures, including capitalized software development, were $16.6 million for the quarter, or approximately 31% of revenue. Above the guidance range we provided, primarily due to the timing of materials purchased related to the Pelican program.
Capital expenditures, including capitalized software development were $16 $6 million for the quarter or approximately 31% of revenue above the guidance range. We provided primarily due to the timing of materials purchase related to the Pelican program.
Speaker 4: Turning to the balance sheet, we ended the quarter with $368 million of cash equivalents and short-term investments, which we continue to believe provides us with sufficient capital to invest behind our core growth accelerating initiatives, and we still have no debt outstanding.
Turning to the balance sheet, we ended the quarter with $368 million of cash cash equivalents and short term investments, which we continue to believe provides us with sufficient capital to invest behind our core growth accelerating initiatives and we still have no debt outstanding.
Ashley Johnson: The improvement in NDRR for Q2 relative to the prior quarter is driven by customer expansions, particularly in the government sector. It's important to understand that at this point in the year, our net dollar retention rate is reflective of only six months. If you look at our prior two years as detailed in our quarterly earnings investor presentation, our net dollar retention rate starts on day one of each fiscal year at 100%, then develops through the course of the year toward our final full year result.
Speaker 4: At the end of Q2, our remaining performance obligations or RPOs were approximately $154.2 million, of which approximately 74% applied to the next 12 months, and 96% to the next two years.
At the end of Q2, our remaining performance obligations or Rps, where approximately $154 2 million of which approximately.
<unk>, 74% apply to the next 12 months and 96% to the next two years.
Speaker 4: The $16.2 million increase quarter of a quarter is primarily driven by recently signed large contracts with government customers. As we shared on prior calls, please keep in mind that RPOs can fluctuate quarter to quarter as multi-year contracts come up for renewal. Also remember that our reported RPOs exclude the value associated with the EOCL contract as well as other contracts that include a termination for convenience clause which is common in our U.S. federal contract.
$16 2 million dollar increase quarter over quarter is primarily driven by recently signed large contracts with government customers.
Ashley Johnson: For the full year, we are now targeting an approximate 115% net dollar retention rate, which is lower than we previously expected driven by the anticipated delay of one of our eight figure ACV expansion opportunities with a large government customer. Turning the gross margin, our non-gap gross margin for the second quarter of fiscal 24 was 52%, unchanged from the prior year despite the accelerated depreciation of two sky-satellites discussed on our prior call, which had an approximate four percentage points impact.
As we've shared on prior calls please keep in mind that Rps can fluctuate quarter to quarter as multiyear contracts come up for renewal also remember that our reported rps exclude the value associated with the <unk> CL contract as well as other contracts that include a termination for convenience clause, which is common in our U S federal contracts.
As we turn to guidance I'd like to first provide color on our revenue forecast, especially as we are adjusting our forecast down from our expectations at the end of Q1.
Speaker 4: As returned to guidance, I'd like to first provide color on our revenue forecast, especially as we are adjusting our forecast down from our expectations at the end of Q1.
Ashley Johnson: The rest of our satellite fleet is operating well in spite of the continued heightened solar activity, thanks to the skill, expertise and agility of our world class mission operations team. Adjusted EBITDA loss was $14.5 million for the quarter, which is better than we previously expected, reflecting our focus on driving operational efficiency across the business. As we'll mention, we recently announced that we have restructured our teams to align resources behind our high priority growth opportunities and to reinforce our path to profitability.
Speaker 4: During Q2, we saw delays with some of our large government opportunities, which impacted our expected revenue for the remainder of this fiscal year. While these opportunities remain active and advancing to account for elongated sales cycles, the low end of our range assumes that larger unsigned business contributes minimal revenue during this year.
During Q2, we saw delays with some of our large government opportunities, which impacted our expected revenue for the remainder of the fiscal year.
While these opportunities remain active and advancing to account for elongated sales cycles. The low end of our range assumes that larger unsigned business contributes minimal revenue during this year.
Speaker 4: We have also adjusted the revenue contribution from synergized to account for the timing and integration of the business.
We have also adjusted the revenue contribution from synergize to account for the timing and the integration of the business.
Speaker 4: The high end of our range assumes that our later stage pipeline opportunity sign is forecast and contribute revenue during the second half of the year.
Ashley Johnson: We expect to incur a non-recurring restructuring charge of approximately $7 to $8 million, the majority of which will hit in Q3. The estimated reduction in our annual operating expense run rate entering fiscal 25 is more than $35 million versus the exit run rate we expected when we started this year. We'll already covered some of the changes we've made to our go-to-market strategy to increase sales efficiency and time to value for our customers.
The high end of our range assumes that our later stage pipeline opportunities sinus forecast and contribute revenue during the second half of the year.
Speaker 4: We believe this approach to our forecast appropriately captures the revenue and impact of delays with some of our larger opportunities. As mentioned, these opportunities are advancing and we are competent in our position to win them.
We believe this approach to our forecast appropriately captures the revenue impact of delays with some of our larger opportunities as mentioned these opportunities are advancing and we are confident in our position to win them.
Speaker 4: For the third quarter of fiscal 24, we're expecting revenue of $54 to $56 million, which represents growth of approximately 11% year-over-year at the midpoint.
For the third quarter of fiscal 'twenty, four we're expecting revenue of $54 million to $56 million, which represents growth of approximately 11% year over year at the midpoint.
Ashley Johnson: On the product and R&D side, we focused our teams and resources behind our core initiatives, including the Pelican Program, our Earth Data Platform, and unleashing the potential of our data with AI. As part of the efficiencies we're achieving within our space system schemes, we have reassessed the cost to deliver on some of our funded R&D programs, which resulted in a one-time increase in contra-R&D expense recognized, reducing our R&D costs in the quarter by approximately $2 million.
Speaker 4: We expect non-gap gross margin for 2, 3, of 50% to 52%. We expect our Adjusted Evid DAW loss for the third quarter to be between negative 15 and negative $13 million.
We expect non-GAAP gross margin for Q3 of 50% to 52% we.
We expect our adjusted EBITDA loss for the third quarter to be between negative <unk> 15, and negative $13 million.
Speaker 4: We are planning for capital expenditures of approximately 12 to $14 million.
We are planning for capital expenditures of approximately $12 million to $14 million.
Speaker 4: For the full fiscal year ending January 31st, 2024, we expect revenue to be between $216 and $223 million, or growth of 13 to 17% year over year. We expect our non-GAP growth margin to be between 52 and 54%. We expect adjusted EBITDA loss to be between negative 63 and negative $55 million.
For the full fiscal year ending January 31, 2024, we expect revenue to be between 216 and $223 million or growth of 13% to 17% year over year.
Ashley Johnson: All of the changes we made across the business reinforce our commitment to achieve adjusted EBITDA profitability by no later than the fourth quarter of fiscal 25 or calendar year and 2024. We are sharpening our focus and getting more efficient as a company, which we believe supports growth in our core markets and healthy bottom line expansion going forward.
We expect our non-GAAP gross margin to be between 52 and 54%.
We expect adjusted EBITDA loss to be between negative <unk> 63, and negative $55 million.
Speaker 4: We expect our catbacks to be approximately $48 to $52 million, or approximately 22 to 23% of revenue.
We expect our capex to be approximately $48 million to $52 million or approximately 22% to 23% of revenue.
Ashley Johnson: Capital expenditures, including capitalized software development, were $16.6 million for the quarter, or approximately 31% of revenue, above the guidance range we provided, primarily due to the timing of materials purchased related to the Pelican Program. Turning to the balance sheet, we ended the quarter with $368 million of cash equivalence and short-term investments, which we continue to believe provides us with sufficient capital to invest behind our core growth accelerating initiatives, and we still have no debt outstanding.
Speaker 4: Before we turn to Q&A, I'd like to remind everyone that we are hosting an investor day on October 10, 2023 in San Francisco, as well as virtually. Please visit our investor relations website or reach out to our investor relations team if you would like to receive more details. We hope you're able to join us.
Before we turn to Q&A I'd like to remind everyone that we are hosting an investor day on October 10, 2023 in San Francisco as well as virtually please visit our Investor Relations website, a reach out to our Investor Relations team. If you would like to receive more details, we hope youre able to join us.
Speaker 4: In summary, it's been a challenging year in terms of the pacing of new business, which remains in contrast with the strong demand signals we continue to get from the market in the form of robust pipeline generation and high-grace retention and expansion opportunities with our customers.
In summary, it's been a challenging year in terms of the pacing of new business, which remains in contrast, with the strong demand signals. We continue to get from the market in the form of robust pipeline generation and high gross retention and expansion opportunities with our customers.
Ashley Johnson: At the end of Q2, our remaining performance obligations or RPOs were approximately $154.2 million, of which approximately 74% applied to the next 12 months and 96% to the next two years. The $16.2 million increased quarter of a quarter is primarily driven by recently signed large contracts with government customers. As we shared on prior calls, please keep in mind that RPOs can fluctuate quarter to quarter as multi-year contracts come up for renewal. Also remember that our reported RPOs exclude the value associated with the EOCL contract, as well as other contracts that include a termination for convenience clause, which is common in our U.S, federal contracts.
Speaker 4: We continue to make significant progress across our business, and the recent initiatives to refocus our operations reinforce our path to profitability and strong cash position. We're competent in the market opportunity ahead of us, and our team's ability to execute on our mission. Operator that concludes our comments, we can outtake questions.
We continue to make significant progress across our business and the recent initiatives to refocus our operations reinforce our path to profitability and strong cash position. We're confident in the market opportunity ahead of us and our team's ability to execute on our mission.
Operator that concludes our comments, we can now take questions.
We will now begin the question answer session. If you would like to ask a question. Please press star followed by one on your telephone keypad.
Speaker 1: We will now begin the question and answer session. If you would like to ask a question, please press star followed by one on your telephone keypad. If running reason you would like to move that question, please press star followed by two. Again to ask a question,
If for any reason you would like to leave that question. Please press star followed by <unk>.
Ashley Johnson: As we turn to guidance, I'd like to first provide color on our revenue forecast, especially as we are adjusting our forecast down from our expectations at the end of Q1. During Q2, we saw delays with some of our large government opportunities, which impacted our expected revenue for the remainder of the fiscal year. While these opportunities remain active and advancing to account for elongated sales cycles, the low end of our range assumes that larger unsigned business contributes minimal revenue during this year.
Again to ask a question press star one.
Speaker 1: As reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question.
As a reminder, if you are using a speakerphone. Please remember to pick up your handset before asking your question.
Speaker 1: The first question comes from the line of Michael Latamore with Northland. You may proceed.
The first question comes from the line of Michael Latimore with Northland You May proceed.
Yeah.
Thanks very much.
So on the you mentioned that.
Speaker 2: So on the, you mentioned the government vertical, maybe seeing a little delay there. Is that more international or US? Can you get some color on that? And if the US government gets back into kind of this continuing resolution pattern, how do you think about that? I guess, affecting business.
Government vertical maybe seeing a little delay there is that more international or U S. Can you give some color on that.
Ashley Johnson: We have also adjusted the revenue contribution from synergized to account for the timing and integration of the business. The high end of our range assumes that our later stage pipeline opportunities sign as forecast and contribute revenue during the second half of the year. We believe this approach to our forecast appropriately captures the revenue impact of delays with some of our larger opportunities. As mentioned, these opportunities are advancing and we are competent in our position to win them.
The U S government gets back into kind of a continuing resolution pattern. How do you think about that I guess.
Yeah.
Speaker 3: I think it is both. Just one point on that, just typically, government deals do take a little bit longer, because we've got so much of our pipeline on the government side, both civil government, which has a big fraction of it, as well as defense and intelligence. It does take a little bit longer to close, because the nature of those deals and those complex processes...
I think it is both but just just one point on that.
Typically.
Government deals do take a little bit longer than that.
Because we got so much of our pipeline on the government side, both civil government, which actually is a big fraction of it as well as defense and intelligence It does take a little bit longer.
To close because of the nature of those deals and those complex processes actually.
Ashley Johnson: For the third quarter of fiscal 24, we're expecting revenue of $54.56 million which represents growth of approximately 11% year-of-year at the midpoint. We expect non-gap growth margin for two-three of 50% to 52%. We expect our adjusted EBITDA loss for the third quarter to be between negative 15 and negative 13 million dollars. We are planning for capital expenditures of approximately 12 to 14 million dollars.
Speaker 3: Anything that had on that? Yeah, about the international versus domestic. I think we're seeing it on both for Will's point. The budget challenges in DC certainly don't help companies that are selling to the US government.
Yeah, the international versus domestic I think we are seeing it on both for her wells point the budget challenges in D. C. Certainly don't help companies that are selling to the U S government.
Speaker 4: But we still continue to win business there. And by example, we recently did win a deal with the Space Force and another US agency. So business is continuing and we'll continue to do so in spite of a continuing resolution. But nonetheless, we do see sales cycles elongating generally speaking in the government.
But we still continue to win business there and by example, we recently did win a deal with the space Force and another U S agencies, so businesses, continuing and will continue to do so in spite of a continuing resolution.
But nonetheless, we do see sales cycles elongated generally speaking in the government sector.
Ashley Johnson: For the full fiscal year ending January 31, 2024, we expect revenue to be between 216 and 223 million dollars or growth of 13 to 17% year-of-year. We expect our non-gap growth margin to be between 52 and 54%. We expect adjusted EBITDA loss to be between negative 63 and negative 55 million dollars. We expect our capex to be approximately 48 to 52 million dollars or approximately 22 to 23% of revenue.
Speaker 2: Okay. And then the, it seems like you're announcing, you know, a nice number of seven figure deals. Do you have the latest stats on the seven figure deal count now versus, you know, a year ago, something like that?
Got it.
And then.
It seems like you are announcing.
A nice number of seven figure deals in the latest stats on this.
Seven figure deal count now versus a year ago.
Speaker 3: Yeah, actually, I mean, we do have a huge pipeline of qualified opportunities. I can share that we've actually got 70 deals, seven or eight figure in our qualified pipeline today. And so we've got a huge opportunity to go after and be sort of that continued to expand that pipeline of opportunity in Q2.
Yes.
We do have a huge pipeline of qualified opportunities I can share that we've actually got.
70 deals seven or eight figure in our qualified pipeline today and so we got a huge opportunity to go after and so that continue to expand that pipeline of opportunity.
Unknown Executive: Before we turn to Q&A, I'd like to remind everyone that we are hosting an investor day on October 10, 2023 in San Francisco as well as virtually. Please visit our investor relations website or reach out to our investor relations team if you would like to receive more details. We hope you're able to join us.
In Q2.
Speaker 4: Yeah, and just in general, seven figure deals is in our business have grown year by year quite well. So we'll talk about more of those staff that are analyst. We're good.
Yes, and just in general seven figure deals.
And our business have grown year over year quite well. So we'll talk about more of those sets at our analyst day.
Unknown Executive: In summary, it's been a challenging year in terms of the pacing of new business, which remains in contrast with the strong demand signals we continue to get from the market in the form of robust pipeline generation and high-grace retention and expansion opportunities with our customers. We continue to make significant progress across our business and the recent initiatives to refocus our operations reinforce our path to profitability and strong cash position.
Okay.
Thank you.
Thank you.
Thank you for your question.
Speaker 1: The next question comes from the line of Jason Kursky with City Group. They proceed.
The next question comes from the line of Jason Gursky with Citigroup you May proceed.
Speaker 5: Good afternoon, everybody. Actually, a quick one for you. You continue to reiterate the profitability break even next fiscal year by the end of the year there.
Hey, good afternoon everybody.
Actually a quick one for you.
Continue to reiterate.
Unknown Executive: We're confident in the market opportunity ahead of us and our team's ability to execute on our mission operator that concludes our comments.
Profitability breakeven.
Next fiscal year by the end of.
End of the year there can.
Speaker 3: Can you update us on your assumption related to revenue growth that's tied to that statement?
Operator: We cannot take questions.
Can you update us on your assumption related to revenue growth that's tied to that statement.
Operator: We will now begin the question and answer session. If you would like to ask a question, please press star followed by one on your telephone keypad. If one reason you would like to move that question, please press star followed by two. Again, to ask a question, press star one. As reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question.
Well.
Speaker 4: Well, I'd say we're committed to that regardless of revenue growth for next year. And so it obviously getting to operating profitability is an important first step in getting to overall cash profitability.
I'd say, we're committed to that regardless of revenue growth for next year.
So obviously getting to operating profit the profitability is of an important first step in getting the overall cash profitability.
Speaker 4: But in terms of thinking about next year's growth.
But in terms of thinking about next year's growth.
Speaker 4: Well, we're not giving specific guidance at this point. I just remind you.
Michael Latimore: The first question comes from the line of Michael Latamore with Northland. You may proceed. Thanks very much. You mentioned the government vertical, maybe seeing a little delay there. Is that more international or U.S.? Can you give some color on that? If the U.S, government gets back into continuing resolution pattern, how do you think about that? I think it is both. Just one point on that. Just typically, government deals do take a little bit longer because we've got so much of our pipeline on the government side, both civil government, which actually is a big fraction of it as well as defense intelligence.
While we're not giving specific guidance at this point I'd just remind you that this year, we did have some pretty significant headwinds coming into the year that we talked about from a growth rate perspective, and that included the large legacy contract that was about $12 million last year and contributed very little revenue this year.
Speaker 4: that this year we did have some pretty significant headwinds coming into the year that we talked about from a growth rate perspective and that included the large legacy contract.
Speaker 4: that was about $12 million last year and contributed very little revenue this year, as well as some of the commercial customer contractions that we talked about just given the General Mac Roman economic environment that we saw coming into the year.
As well as some of the commercial customer contractions that we talked about just given the general macroeconomic environment that we saw coming into the year.
Speaker 4: So as we continue to build business this year, we'll be overcoming some of those difficult compares year every year as we think about next year and the potential to really see the growth rate reaccelerate. But as I said, we're not relying on
So as we continue to build business this year will be overcoming some of those.
Compares year over year, as we think about next year and the potential to really see the growth rate reaccelerate.
But as I said, we're not relying on.
Speaker 4: significant growth rate acceleration in order to get to that commitment to EBITDA break even.
Michael Latimore: It does take a little bit longer to close because the nature of those deals and those complex processes, actually anything that adds on that, about the international versus domestic. I think we're seeing it on both for Will's point. The budget challenges in DC certainly don't help companies that are selling to the U.S, government, but we still continue to win business there. By example, we recently did win a deal with the space force in another U.S, agency.
Growth rate significant growth rate acceleration in order to get to that commitment to EBITDA breakeven.
Okay.
Speaker 3: Okay, and then will on pelican you described.
Okay and then.
Will on Silicon you described.
Speaker 3: for lack of a bit of frames here, I guess unit one as a little bit more than R&D.
For lack of a better phrase here I guess unit one.
As.
A little bit more of an R&D prototypes.
Speaker 3: or a prototype, I mean, that was the word that you used to take them out of the similarities. Yeah, yeah, well, there we go, that's the word. Yeah, so that you can make sure that, you know, whatever you've got going on there, it's gonna work with the manager as well. So is the expectation here that this initial launch won't have any revenue associated with it? And you're just using it as kind of a test bed.
The word that you used.
Thank you Matt.
Similarities.
Michael Latimore: So, businesses continuing and will continue to do so in spite of a continuing resolution. But nonetheless, we do see sales cycles elongating generally speaking in the government. And then the, it seems like you're announcing, you know, a nice number of seven figure deals. Do you have the latest stats on the seven figure deal count now versus, you know, a year ago, something like that? Yeah, actually, I mean, we do, do, do have a huge pipeline of qualified opportunities.
Yes.
Absolutely.
Yes, so that you can make sure that.
Whatever you got going on there is going to work with teenagers as well so is the expectation here.
This initial launch won't have any revenue associated with it and then you are just using it as kind of a testbed.
Speaker 6: I think that's correct. Yeah, I mean, these are tech demos. I mean, the way we do, we've described before agile aerospace approach, which is one of our core differentiators that they're neighbors us to rapidly improve capabilities over time and respond to demand from the customers, both in the sense of improving capabilities and...
I think that's correct, yes, I mean these are take them as I mean, the way we do we've described before agile aerospace approach, which.
<unk> is one of our core differentiator as it enables us to rapidly improve capabilities over time, and then respond to demand from the customers both in the sense of improving capabilities and and ramping up the number of spacecraft, we need for demand and continuity of our space cough mission and.
Michael Latimore: I can share that we've actually got 70 deals, seven or eight figure in our qualified pipeline today. And so we've got a huge opportunity to, to go after and be sort of that continued to expand that pipeline of opportunity in, in Q2. Yeah, and just in general, seven figure deals is in our business have grown year by year quite well. So we'll talk about more of those stats that are analysts. Thank you.
Speaker 6: and ramping up the number of spacecraft we need for demand and continuity of our space squad mission. And, you know, always into the history of developing new spacecraft, especially a new spacecraft, like the telecon, the bus that supports both telecon and TANIGER.
Unknown Executive: Thank you for your question.
Always through the history of developing new space clubs, especially new spacecraft bus like Pelican basket support both Pelican and tonnage.
Speaker 6: Those are complicated new spacecrafts, so the main thing we're doing on a first mission
It is a complicated use base after the main thing we're doing on our first mission.
Speaker 6: is establishing the spacecraft itself, all the aspects of it, the reaction wheels, and the solar panels, and the radios, and the computers, and everything work together. And that's the most important piece is getting data on all of that bus, and then subsequent ones will turn into operational space.
Is establishing.
The spacecraft itself over the aspects of it the reaction where it was in the solar panels in the radios and the computers and everything worked together and that's the most important piece is getting data on all of that path and then subsequent ones, who would turn into operational spacecraft.
Jason Gersky: The next question comes from the line of Jason Gersky with city group. You may proceed. Thank you.
Ashley Johnson: Good afternoon, everybody. Actually, a quick one for you, you continue to reiterate the profitability break even next fiscal year by the end of the end of the year there. Can you update us on your assumption related to revenue growth that's tied to that statement? Well, I'd say we're committed to that regardless of revenue growth for next year. And so it obviously getting to operating profitability is an important first step in getting to overall cash profitability.
Speaker 7: We're gonna go up with a letter optical sensor on it. You named everything but the sensor. Oh yeah, no, it's going up with the payload. It's just that the prime mission of the spacecraft to...
Is it going to go up with the electro optical sensor on it.
Everything, but the central yes. It is.
Going out with a payload.
The Prime time mission of the spacecraft too.
Speaker 6: It could drive that so much as to learn and to improve that space graph. But, and again, it will go up with a paleo, sorry, payload, i.e. the telescope, the higher resolution telescope. But it's mainly the bus that will also support the high-perfectural instrument for the Canada mission that we next year, that I also mentioned that the high-perfectural instrument is nearing readiness now. So we're close from that one.
To drive that so much has to learn and improve that space Scott back in again.
We will go out with a pelican bass payload I E. The telescope the high resolution telescopes.
It's mainly the bus that will also support the hyper spectral instrument for the tonnage a mission that will be next.
Next year I also mentioned that the hypersexual instrument is nearing readiness now so we're close on that one too.
Ashley Johnson: But in terms of thinking about next year's growth while we're not giving specific guidance at this point, I just remind you that this year we did have some pretty significant headwinds coming into the year that we talked about. From a growth rate perspective and that included the large legacy contract that was about $12 million last year and contributed very little revenue this year, as well as some of the commercial customer contractions that we talked about just given the general macro economic environment that we saw coming into the year.
Speaker 3: Yeah, I guess last one, so that makes sense to, um, yes, herni, maybe it does.
And I guess the last one that makes sense.
Yes, Tony maybe just.
Yes, It does yes for sure I appreciate that.
Speaker 3: And then last one for me, just turning quickly to the commercial side of things.
And then last one for me just turning quickly to the commercial side of things.
Speaker 3: You know, we've got some new regulations going into effect in Europe to require companies that are bringing resources.
We've got some new regulations going into effect.
In Europe to require companies that are.
Bringing.
We are seeing.
Speaker 3: you know materials from other parts of the world to kind of prove out their supply chains. And now those impact deforestation that's going on around the world. And it's kind of curious as to how you see planet playing in this and supporting companies that need to demonstrate to the regulators that the materials that they're sourcing are not leading to the deforestation.
Materials.
From other parts of the world to kind of prove out.
Ashley Johnson: So as we continue to build business this year we'll be overcoming some of those difficult compares year every year as we think about next year and the potential to really see the growth rate reaccelerate. But as I said, we're not relying on growth rate, significant growth rate acceleration in order to get to that commitment to EBITDA break even. Okay. And then will on pelican you described. For lack of a bit of range here, I guess unit one as a little bit more than R and D for a prototype, I mean, that was the word that you used.
Their supply chain.
And how those impact deforestation, that's going on around the world I'm, just kind of curious as to.
You see planet playing in this in supporting companies that need to demonstrate to the regulators that the materials that they are sourcing or not leading to the deforestation.
Sort of areas of the world.
Speaker 6: Yeah, I mean, well, thank you for raising this because I mean it is.
Yes.
Thank you for raising this because that is where.
We're seeing this sort of regulation from the EU and particularly the EU. Dr. Deforestation regulation. There is looking at importing of commodities and ensuring that they think towards deforestation.
Speaker 6: EUDR, the DFT for a station regulation that is looking at importing of commodities and ensuring that they don't cause DFT for a station else. Well, there's not many ways, at least at scale, that you can do this without our data set. And our data set is primed to check whether or not a commodity from a source is causing DFT for a station or not. So how we plan to answer your question is really we have many agricultural companies that we're working to with who are trying to address this and how they will meet their regulatory requirements under this act, which by the way, I think comes into fourth next year. So it's not like it's not that far away. And the scale of the proposition really demands that are a solution. Also though we can work with regulators themselves, which is the other side of that because of course they want to check that the companies are doing what they say. So we can play both sides of that. Right.
There's not many ways at least at scale that you can do this without our dataset.
Ashley Johnson: To take them out of some of the similarities. Yeah, yeah, well, there we go, that's the word. Yeah, so that you can make sure that, you know, whatever you've got going on there is going to work with the manager as well. So is the expectation here that this initial launch won't have any revenue associated with it and you're just using it as kind of a test bed. I think that's correct. Yeah, I mean, these are tech demos.
Is primed to check whether or not.
Our commodity.
From a source is causing deforestation or not.
How we plan to add on to your question is really we have many agricultural companies that were working to with who are trying to address this and how they will.
Ashley Johnson: I mean, the way we do, we've described before as our aerospace approach, which, you know, is one of our core differentiators that their neighbors us to rapidly improve capabilities over time and respond to demand from the customers, both in the sense of improving capabilities and and ramping up the number of spacecraft we need for demand and continuity of our space craft mission. And, you know, always through the history of developing a new spacecraft, especially a new spacecraft, bass, like the Pelican, bass that supports both Pelican and Tanaja, those are complicated new spacecraft.
Meet the regulatory requirements under this act, which by the way I think comes into force next year. So it's not like it's not that far away.
And the scale of the proposition really demands.
Our solution.
Also though we can work with the regulators themselves which is the.
Other side of that because of course, they want to check that the companies.
<unk> are doing what they say so we can play both sides of that.
Alright, Okay, great I'll pass.
Speaker 3: Right, look at it, great. I'll love Aspeline. Appreciate the comments.
Paul I appreciate the comments.
Ashley Johnson: So the main thing we're doing on a first mission is establishing the spacecraft itself, all the aspects of it, the reaction wheels and the solar panels and the radios and the computers and everything work together. And that's the most important piece is getting data on all of that bass. And then subsequent ones will return into operational spacecraft. We're going to go up with the electrical sensor on it, named everything but the center.
Thanks, Jason.
Speaker 1: Thank you for your question. Again, if you would like to ask a question, please press star followed by one.
Thank you for your question.
Again, if you would like to ask a question. Please press star followed by one.
Speaker 1: Our next question will come from the line of Trevor Walsh with JMP Securities. You may proceed.
Our next question will come from the line of Trevor Walsh with JMP Securities You May proceed.
Speaker 8: Great, thanks for taking my questions. Will maybe for you, from your prepared remarks, you mentioned the unfortunate kind of, I guess, uptick or at least deals coming off of some of the natural disasters that we see lately, whether it's the fires in Maui or hurricanes and fires in Canada, et cetera.
Great. Thanks, Thanks for taking my questions maybe.
Maybe for you from your prepared remarks, you mentioned.
The.
Unfortunate kind of.
Ashley Johnson: Oh, yeah, no, it's going up with the payload, but it's just that the prime mission of the spacecraft to drive that so much as to learn and to improve that spacecraft. And again, it will go up with a Pelican bass, sorry, payload by the telescope, the higher resolution telescope. Okay, but it's mainly the bass that will also support the high-perfectural instrument for the Tanaja mission that we next year that I was to mention that the high-perfectural instrument is nearing readiness now.
Uptake or or at least deals.
Coming off of some of the natural disasters that we've seen lately, whether it's <unk>.
<unk> and Maui are hurricanes and fires in Canada et cetera.
Speaker 8: Do you get a sense or feel that those are state and local governments being very reactionary in their kind of use of turning the planet for the data that you could provide to help with those types of issues or do you also see governments taking a more proactive nature to sort of bring in your solutions beforehand before the problem actually becomes a problem.
You get a sense or feel that those are state and local governments being very reactionary and theyre kind of use of turning to plan. It for the data that you can provide to help with those types of issues or do you also see.
Government is taking a more proactive nature to start with sort of bringing your solution beforehand before the problem actually becomes a problem.
Ashley Johnson: So we're close on that one, too. I guess last one, so that makes sense. Yeah, for sure. I appreciate that. And then last one for me, just turning quickly to the commercial side of things, you know, we've got some new regulations going into effect in Europe to require companies that are bringing or sourcing materials from other parts of the world. To kind of prove out their supply chains. And now those impact deforestation that's going on around the world is kind of curious as to how you see planet playing in this and supporting companies that need to demonstrate to the regulators that the materials that they're sourcing are not leading to the deforestation of sensitive areas of the world.
Speaker 8: It's like your thoughts on kind of, it's more of a kind of one off thing where something that has to happen first for there to be an action.
I'm glad to hear your thoughts on kind of.
More of a kind of a one off thing or something that has to happen first for there to be an action taken.
Speaker 6: Well, look, governments are beginning to see the value of this to really help them both in response and prevention. Let me just touch on it a tiny bit. In the Maui case, I mean, this is a terrible event.
Governments are beginning to see the value of this to really.
Ashley Johnson: Yeah, I mean, well, look, thank you for raising this because I mean, it is, you know, we're seeing this sort of regulation from the EU and particularly the EU DR, the deforestation regulation that is looking at importing of commodities and ensuring that they don't cause deforestation elsewhere. There's not many ways, at least at scale, that you can do this without our data set. And our data set is primed to check whether or not a commodity from a source is causing deforestation or not.
And help them both in response and prevention, let me just touch on it a tiny bit maue case, I mean, it was a terrible event.
Speaker 6: Our maps really helped in practical ways. So the Red Cross was using our data on the ground in particular the map of all the building damage, as well as Hawaii state officials. And even the president had a map with our map in his hands when being briefed on this. So across the board we're seeing real use of that data.
That's really helped.
In practical ways. So the Red Cross was using our data on the ground in particular the <unk>.
Half of it was the building damage as well as.
Hawaii State officials and even the president had it.
With.
And as Hans win being briefed on this so across the board, we're seeing we will use of that data.
<unk>.
Speaker 6: And it's also, by the way, a great example of how AI can play a part because this is making that data more useful for the people on the ground. It's not just a picture, it is a map of the building with a damage and that can help in quick response and prioritization on the ground. But to your point, and one more issue, point on that, the Canadian wildfires, we're seeing a similar sort of reaction and that's why there were those three customer deals in Canada that I mentioned in my prepare for a month.
And it's also by the way a great example of how AI can play a part because this is in making that data more useful for the people on the ground is not just a picture. It is a map of the building with the damage and that can help and quick response and prioritization on the ground, but to your point.
And one more.
Point on that.
Canadian wildfires, we're seeing a similar sort of reaction in and Thats why those that were those three customer deals in Canada.
And in my prepared remarks, but to your point about prevention and I think that's a really critical one.
Speaker 6: But to your point about prevention, I think that's a really critical one.
Speaker 6: We can do work to help civil governments prevent and prepare for disasters. In fact, the work with the California, that I mentioned with California on fires is actually about to provide prevention by looking for the stocks for future fires that they can then do clearing in. Or, and we are also working with our soil water content on giving pre-warnings of potential drought risk.
We can do work to help civil governments prepare prevent and prepare for disasters in fact that work with the California, I mentioned that with the California fires is actually about five prevention by looking for the stocks for future fires that they can then do clearing in or.
Ashley Johnson: So how we play into it to answer your question is really we have many agricultural companies that we're working to with who are trying to address this and how they will meet their regulatory requirements under this act, which by the way, I think comes into force next year. So it's not like it's not that far away. And the scale of the proposition, you know, really demands that are a solution. Also, though, we can work with the regulators themselves, which is the, you know, the other side of that because of course they want to check that the companies are doing what they say. So we can play both sides of that. Thank you for your question. Again, if you would like to ask a question, please press star followed by one.
And and we have also.
Working with our soil water content on giving pre warnings of potential drought risk.
Speaker 6: Also you can help through that provide flooding risk.
Oh, so you can help through that provide flooding risk and so some of these data sets can enable getting ahead and as I mentioned civil governments are spending hundreds of billions of dollars a year with these events sadly climate changes, causing these extreme weather events to increase and so that one hundreds of billions is only going to go up.
Speaker 6: And so some of these data sets can enable getting ahead. And as I mentioned, civil government is spending hundreds of billions of dollars a year with these events, sadly, climate change is causing these extreme weather events to increase.
Speaker 6: And so that hundreds of billions is only going to go up. And we can help then say billions of dollars getting ahead of that. So it stands the reason. I mean, so the civil governments are taking a while to pick this stuff up, but the pace is increasing. And we've heard a significant fraction of that pipeline that I mentioned, the 70, 708 figure deals, is civil government.
And we can help them save billions of dollars getting ahead of that so it stands to reason.
Governments are taking a while to pick this stuff up but it is the pace is increasing and we've had we've put a significant fraction of that pipeline that I mentioned of 77 or eight figure deals is civil government.
William Marshall: Our next question will come from the line of Trevor Walsh with JMP securities. You may proceed. Great. Thanks for taking my questions. Will maybe for you, from your prepared remarks, you mentioned the unfortunate kind of, I guess, uptick or or at least deals coming off of some of the natural disasters that we've seen lately, whether it's the fires in Maui or hurricanes and fires in Canada, etc. Do you get a sense or feel that those are state and local governments?
Speaker 4: The other sector where obviously this data is of interest, especially around soil water content as well as soil temperature, is obviously the insurance sector. And that's both understanding risk models, as well as thinking about preparedness for business continuity and business disruption.
William Marshall: Is being very reactionary in their kind of use of turning the planet for the data that you could provide to help with those types of issues or do you also see governments taking a more proactive nature to sort of, you know, bring in your solutions beforehand before the problem actually becomes a problem just like your thoughts on kind of more of a kind of one off thing or something that has to happen first for there to be an action taken. Well, look, governments are beginning to see the value of this to really help them both in response and prevention.
The other sector, where obviously this data is of interest, especially around soil soil water content as well as.
Soil temperature is obviously the insurance sector and that's both understanding.
Risk models as well as thinking about preparedness for business continuity and business disruption.
Okay.
Speaker 8: Great, thank you both for that color on that. Super helpful. Maybe just one more for me. With respect to this energized acquisition closing, I appreciate the perspective or the additional detail that the revenues might be coming in from that a little bit later than expected.
Great. Thank you both for that.
On that Super helpful. Maybe just one more from me with respect to the Synergize acquisition closing.
I appreciate.
Perspective, or the additional detailed that the revenues might be coming in from that a little bit later than expected can you give us a sense of how customer numbers may may or may not be adjusted and I ask given the fact that you had some nice acceleration in terms of the customer new customer adds in the quarter.
Speaker 8: Can you give us a sense of how customer numbers may or may not be adjusted? And I ask, given the fact that you had some nice acceleration in terms of the customer, new customer ads in the quarter.
Speaker 8: and just curious that that is reflective of this energized acquisition at all or if those numbers are not necessarily included yet and how that might be.
And just curious if that is reflective of the synergize acquisitions at all or if those numbers are not necessarily included let yet and how that might.
William Marshall: Let me just touch on it a tiny bit. In the Maui case, I mean, which is a terrible event. Our maps really helped in practical ways. So the Red Cross was using our data on the ground in particular the map of all the building damage as well as Hawaii state officials. And even the president had a map with our map in his hands when being briefed on this. So across the board, we're seeing real real use of that data.
William Marshall: And it's also, by the way, a great example of how AI can play a part because this is making that data more useful for the people on the ground is not just a picture. It is a map of the building with a damage and that can help in quick response and prioritization on the ground. But to your point and and one more issue point on that the Canadian wildfires. We're seeing a similar sort of reaction and and that's why those there were those three customer deals in Canada that I mentioned in my paper mark.
Look thanks.
Speaker 4: None of the metrics that we provided from Q2 include synergized, you know, revenue or customer count.
None of the metrics that we provided from Q2 include synergize.
Revenue, where our customer counts.
Speaker 4: Obviously, Synergized has a very large number of users on their Sentinel Hub platform in addition to a number of enterprise customers that would be coming over and government customers. So we'll be updating those numbers and talking about how we roll those into our metrics at our annual stay.
And.
Synergize has.
A large number of users on their central hub platform. In addition to.
A number of enterprise customers that will be coming over and government customers. So we'll be updating those numbers and talking about how we will roll those into our metrics at our analyst day.
Speaker 6: And let me just broaden it out just a tiny bit to say that, you know, we are super excited by that acquisition closing. We really think it meaningfully accelerates our a theta platform strategy. And...
Let me just.
Jordan, just a tiny bit to say that we are super excited by the acquisition closing, we really think it meaningfully accelerates.
Data platform.
Our strategy.
Speaker 6: And to my point about small deals and automation and how that's one of the components of speeding up time to value for customers and sales cycles, especially in a way of dealing with smaller deals enabling our AES to focus on the big deals.
And to my point about small deals and automation and how that's one of the components of speeding.
Speeding up time to value for customers and sales cycles.
Especially in the way of dealing with smaller dealers, enabling our aes to focus on the big deals.
William Marshall: But to your point about prevention. I think that's a really critical one. We can do work to help civil governments prepare prevent and prepare for disasters. In fact, the work with the California that I mentioned with California on fires is actually about to fire prevention by looking for the stocks for future fires that they can then do clearing in. Or and and we are also working with our soil water content on giving pre warnings of potential drought risk.
Speaker 6: Synagized really helps with that as well. So it's a product accelerant and it's a failed accelerant.
<unk> really helps with that as well so it's a product.
Accelerant and its sales et cetera.
Great. Thank you both for taking my questions.
No problem. Thank you.
Thank you for your question.
Yeah.
Speaker 1: The next question comes from the line of just then ran he was Craig Hallam. He may proceed.
The next question comes from the line of Jeff Van <unk> with Craig Hallum. You May proceed.
William Marshall: Also, you can help through that provide flooding risk. And so some of these data sets can enable getting ahead. And as I mentioned, civil government is spending hundreds of billions of dollars a year with these events. Sadly, you know, climate change is causing these extreme weather events to increase. And so that hundreds of billions is only going to go up. And we can help and save billions of dollars getting ahead of that.
Great. Thanks, Thanks for taking my questions guys.
Speaker 3: Thanks for taking my questions, guys. A couple first just, on Synergize, the, I think the original number was around seven million was the expectation. I guess it's gonna be a little bit lower here, maybe a month lower, but what's the number there now in terms of expectation? I'm sorry. Sorry, I'm weird.?
First just.
On synergize the I think the original number was around $7 million was the expectation I guess going to be a little bit lower here, maybe a month lower but whats the number there now in terms of expectation.
Sorry, Andy.
William Marshall: So it stands to reason. I mean, so the civil governments are taking a while to pick this stuff up. But it is the pace is increasing. And we've heard we've got a significant fraction of that pipeline that I mentioned. And the seventy seven or eight figured deals is civil government. The other sector where obviously this data is of interest, especially around soil soil water content as well as soil temperature is obviously the insurance sector.
Thank you Barbara.
I would give a range of about $4 million to $6 million.
For the year.
For the remainder of the year okay.
Speaker 3: Okay, and then just curious, can it be overall progression of the quarters, you move through the three months of the quarter? I mean, obviously pipelines, massive as you've called out, but cycles, it seemed like they're stretching and stretching. Just talk about, you know, kind of how you progress and how the market felt as you move through the quarter.
Yes.
Okay and then.
Just curious Kennedy overall progression of the quarter as you move through the three months of the quarter I mean, obviously pipelines massive as you've called out but cycles seem like they are stretching and stretching just talk about kind of how you progressed and how the market felt as you moved through the quarter.
William Marshall: And that's both understanding risk models as well as thinking about preparedness for business continuity and business disruption. Great. Thank you both for that color on that. Super helpful. Maybe just one more from me. With respect to this energized acquisition closing, appreciate the perspective or the additional detail that the revenues might be coming in from that a little bit later than expected. Can you give us a sense of how customer numbers may or may not be adjusted?
And then we can say anything in particular about how it moved through the quarter.
Speaker 6: I think that we could say anything in particular about how it moves through the quarter, but what I've just
Speaker 6: Um, highlight is that you know, we are market making here and a lot of these governments have that we bring in a new capability to them
Highlights is that we are a market, making here and a lot of these governments.
Bringing a new capability to them.
Speaker 6: And they've never done this before. We don't understand that process fully. As we understand it, we are adapting. And that's why we're doing some of those changes to our go-to-market approach.
And they've never done this before and we understand that process fully as we understand it we are adapting and that's why we're doing some of those changes too.
Go to market approach. So I just want to emphasize that even civil government some of which who have used satellite data before that changing the motion here from buying satellites in buildings outlines to buying data.
Speaker 6: So I just want to emphasize that you know, even civil government, some of which who have used satellite data before, they're changing their motion here from buying satellites and building satellites to buying data. And in many cases, it's just a totally unique and new data product.
William Marshall: And I ask given the fact that you had some nice acceleration in terms of the customer, new customer ads in the quarter and just curious that that is reflective of the synergized acquisition at all or if those numbers are not necessarily included yet and how that might look. None of the metrics that we provided from Q2 include synergized revenue or customer counts. Obviously synergized has a very large number of users on their Sentinel Hub platform in addition to a number of enterprise customers that will be coming over and government customers.
And in many cases, it's just a totally unique new data product and so that you haven't done this before and so both we and they are learning through this so it's more about a few bigger deals taking a bit long guns slipping out of the quarter.
Speaker 6: And so, there you have done this before, so both we and they are learning through this. So it's more about a few bigger deals taking a bit longer and slipping out of the quarter.
Speaker 6: and we did have that some of that include too, although I'd point out one of the biggest ones that we had that slipped out of the quarter subsequently closed in the few weeks afterwards. So it's still happening, but we're learning and understanding and then adapting to those processes.
We did have that some of that in Q2, although I would point out one of the one of the biggest ones that we had slipped ethical to subsequently closed in a few weeks afterwards, so it's still happening, but we're learning and understanding and then adapting to those.
William Marshall: So we'll be updating those numbers and talking about how we roll those into our metrics at our annuals day. Let me just broaden it out just a tiny bit to say that we are super excited by that acquisition closing. We really think it meaningfully accelerates our theta platform strategy and to my point about small deals and automation and how that's one of the components of speeding up time to value for customers and sales cycles, especially and it's a way of dealing with smaller deals enabling our AEs to focus on the big deals. Synergized really helps with that as well. So it's a product accelerant and it's FAO's excellent. Great thank you both for taking my questions. Thank you.
Purchases.
Okay.
Speaker 3: And then I guess as it relates to, as a poll under that, is it relates to the guide? As I look through my numbers, the guide implicit for Q4 for the January 24 quarter is about 10 million give or take below me. I was roughly 68, looks like it's roughly 58.59 at the midpoint give or take, maybe a smidge lower, but close.
And then I guess as it relates to as a follow on to that as it relates to the guide.
I look through my numbers to guide implicit for Q4 for the January 24 quarter is about $10 million give or take below me I was roughly six to eight it looks like it's roughly 50 859 at the midpoint give or take maybe a smidge lower but close.
Speaker 3: Can you talk maybe even just to whatever degree you're willing to put some bands around it in terms of that call it 8 to 10 million to Q4 or revenue that went away? What were the drivers? I know you have the mega 8 figure deal that you've talked about that pushed out presumably. That's at play there, but even proportionally, can you talk about what's pushing out of Q4, kind of the breakdown of what's pushing out of Q4?
Can you talk maybe even just to whatever degree youre willing to put some bands around it in terms of that call it $8 million to $10 million in Q4 revenue that went away.
The drivers I know you had the Mega eight figure deal that you've talked about that pushed out presumably that's at play there, but even proportionately can you talk about what's pushing out of Q4 kind of the breakdown of what's pushing out of Q4.
Speaker 4: Yeah, Jeff, thanks for the question. And I tried to give a little bit of this color in my prepared remarks as we thought about guidance for the rest of the year. Obviously, as we get into the back half of the year, the timing of when deals close really impacts how much revenue we see from that business, especially if you factor in ramp time for new customers.
Yes, Jeff Thanks for the question and I tried to give a little bit of this color in my prepared remarks, as we thought about guidance for the rest of the year, obviously as we get into the back half of the year the timing of when deals close really impacts how much revenue, we see from that business, especially if you factor in ramp time for.
Trevor Walsh: Thank you for your question. The next question comes from the line of Ben Renhe with Craig Hallum. You may proceed. Great thanks. Thanks for taking my questions guys. A couple first just on Synergized, the I think the original number was around seven million was the expectation. I guess it's going to be a little bit lower here maybe a month lower but what's the number there now in terms of expectation? I would give a range of about four to six million dollars for the remainder of the year.
For new customers.
Speaker 4: So to take this into account and, you know, to avoid coming back again in a quarter and having subsequent changes in a similar way.
So to take this into account and you know.
Avoid coming back again in a quarter and having and subsequent changes and in a similar way.
Speaker 4: On the low end of our range, we basically just assume very late timing for the closing of new business.
On the low end of our range. We basically just assumes very late timing for the closing of new business. So very minimal revenue impact of these these larger deals and Thats why youre seeing so much of an impact on Q4, because obviously.
Speaker 4: So very minimal revenue impact of these larger deals. And that's why you're seeing so much of an impact on Q4 because obviously...
Speaker 4: You know, we do have business that we're continuing to progress and if those do close into three or an early Q4, we would see revenue from them.
We do have business that we're continuing to progress on if those do close in Q3 or in early Q4, we would see revenue from them. So really what we're attempting to do is look at what are the major drivers too.
Speaker 4: So really what we're attempting to do is look at what are the major drivers to revenue?
Trevor Walsh: Okay and then just curious can it be overall progression of the quarters you move through the three months of the quarter? I mean obviously pipelines massive as you've called out but cycles seem like they're stretching and stretching. Just talk about how you progress and how the market felt as you move through the quarter. I think we could say anything in particular about how it moves through the quarter but what I just highlight is that we are market making here and a lot of data then, and they've never done this before.
Revenue.
Speaker 4: And how can we take further timing changes into consideration, whether that's around very large renewals or very large new business? We've got strong line of sight to renewals, and I feel very good about that side of the business, as I mentioned, but the timing of new business just continues to be a source of frustration for us.
And how can we take that and take further timing changes under consideration, whether that's around very large renewals or very large new business. We've got strong line of sight to.
Renewals and I feel very good about that side of the business as I mentioned.
But the timing of new business just continues to be a source of frustration for us.
Speaker 4: The teams work really hard through the end of the quarter to try to bring that business in and subsequently driving at least one of those large deals to conclusion in August and getting it over the goal line. But as we thought about the range for revenue for the remainder of the year.
The teams.
Worked really hard through the end of the quarter to try to bring that business and subsequently driving at least one of those large deals to conclusion in August and getting it over the goal line and but as we thought about the range for revenue for the remainder of the year.
Trevor Walsh: We don't understand that process fully, as we understand it, we are adapting and that's why we're doing some of those changes to our go-to-market approach. So both we and they are learning through this. So it's more about a few bigger deals taking a bit longer and slipping out of the quarter and we did have that some of that include too, although I'd point out one of the biggest ones that we had that slipped out of the quarter subsequently closed in the few weeks afterwards.
Speaker 4: It felt prudent to suggest that some of this business continues to push to the right in the same way, even as the teams continue to work hard to close them.
Prudent to suggest that some of this business continues to push to the right in the same way even as the teams continue to work hard to close them.
Speaker 6: Yeah, let me just add that, so we are seeing as we've discussed, the sales cycle will still be long, although this quarter's menu, a few deals slipping out. And a lot of that sales cycle is to do with civil government and defense intelligence just being longer.
Yes.
Yes.
So we are seeing is as <unk>.
We've discussed the sales cycle is still be long.
This quarter's mania, if you do is slipping out.
And a lot of that sales cycle has to do with civil government and defense intelligence, just being longer but on the positive side.
Speaker 6: But on the positive side, we've also said last time that we had some
<unk> said last time.
We had some.
Speaker 6: impact on the size of deals coming in smaller, whereas actually we've seen that normalized back to what it was before, so that's a little bit of positive signal there. Bye.
The impact on the size of deals coming in smaller, whereas actually we've seen that normalize back to what it was before so that's a little bit of a positive signal that.
Trevor Walsh: So it's still happening but we're learning and understanding and then adapting to those processes. And then I guess as it relates to as a follow-on to that is as it relates to the guide, as I look through my numbers, the guide implicit for Q4 for the January 24 quarter is about 10 million give or take below me. I was roughly 68. It looks like it's roughly 5859 at the midpoint give or take maybe a smidge lower but close.
Got it okay. Thank you.
Thanks, Jeff.
Okay.
Thank you for your question.
Speaker 1: The next question comes from the line of Ryan Coons with Needham and Company. You may proceed.
The next question comes from the line of Brian <unk> with Needham <unk> Company you May proceed.
Speaker 9: The question, circle back to synergize, and I can sense the fact that you guys have for that in lowering friction and customer onboarding.
Thanks for the question.
Circling back to synergize and I can sense.
Trevor Walsh: Can you talk maybe even just to whatever degree you're willing to put some bands around it in terms of that call it 8 to 10 million Q4 revenue that went away. What were the drivers I know you have the mega 8 figure deal that you've talked about that pushed out presumably that's at play there but even proportionally can you talk about what's pushing out of Q4 kind of the breakdown of what's pushing out of Q4.
Second you guys have for that and lowering friction in customer onboarding.
Speaker 9: Maybe give us a perspective of how synergized has sold to date and where they are.
Can you maybe give us a perspective.
Synergize has sold to date and where they are now versus maybe where you wanted to take them at a high level in the future.
Relative to like 12, 18 months timeframe medium term. Thanks.
Speaker 6: Well, I can start actually at a high level. We do see that their platform being utilized by civil government, a fair bit. And we, in fact, even in our partnership prior to the acquisition, we're working quite regularly with them. I mentioned one other customer that we established this quarter in the UK rule payment agency. And they're another example of using synergized together. And so we were working on that, obviously, before closed.
But I can I can start actually at a high level.
Trevor Walsh: Yeah, thanks for the question and I tried to give a little bit of this color in my prepared remarks as we thought about guidance for the rest of the year. Obviously as we get into the back half of the year, the timing of when deals close really impacts how much revenue we see from that business, especially if you factor in ramp time for for new customers. So to take this into account and to avoid coming back again in a quarter and having subsequent changes in a similar way on the low end of our range, we basically just assume very late timing for the closing of new business.
We do see that platform being utilized by civil Government Affairs, and we in fact, even in a partnership prior to the acquisition, we're working quite regularly with them I mentioned, one other customer that we established this quarter in the U K Rural payments Agency and then another example of using synergize.
Trevor Walsh: So very minimal revenue impact of these larger deals and that's why you're seeing so much of an impact on Q4 because obviously we do have business that we're continuing to progress. And if those do close in Q3 or in early Q4, we would see revenue from them. So really what we're attempting to do is look at what are the major drivers to revenue and how can we take that and take further timing changes into consideration whether that's around, you know, very large renewals or very large new business.
Together and said we were working on that obviously before close that.
Speaker 6: that we've seen that in a number of deals.
We've seen that in a number of deals.
Speaker 6: But, so, civil government is one area, but I don't expect the historical mix of them if you want to mention anything about that. They do have a large number of small deals that they've done as a self-serve.
And but.
So civil government is one area, but I don't it's about the historical mixes and if you want to mention anything about that they do have a large number of small deals that they've done as a self serve.
Speaker 6: thousands in the thousands a smaller end keys, so that was part of the goal of the Sentinel hub effort that they have But I don't know if you've got anything anything that actually Yeah, what what I would highlight is this is a company that really did not have any type of sales or marketing force
And the thousands of smaller entities, so and that was part of the goal of.
The central hub effort that they have.
But I don't know if you've got anything to add.
Actually yes, what I would highlight is this is a company that really did not have any type of sales or marketing.
So a lot was done by a handful of key employees and.
Speaker 4: So a lot was done by a handful of key employees in pursuing our piece on the civil government side.
Pursuing rfps and on the civil government side, specifically as it related to Atlanta monitoring.
Trevor Walsh: We've got strong line of sight to renewals and I feel very good about that side of the business, as I mentioned. But the timing of new business just continues to be a source of frustration for us. The teams work really hard through the end of the quarter to try to bring that business in and subsequently driving at least one of those large deals to conclusion in August and getting it over the goal line.
Speaker 4: specifically as it related to land monitoring and some of the sustainable agricultural programs in the EU. And
And some of the sustainable agriculture programs and in the EU.
And we are excited to bring the power of our planet Salesforce to bear and expanding the reach of those kind of direct sales effort. Even as also the fact that central hub is as popular platform as it is without having had a lot of marketing or any marketing around it in fact, when we had.
Speaker 4: We're excited to bring the power of a planet sales force to bear in expanding the reach of those kind of direct sales efforts, even as also the
Speaker 4: Sentinel Hub is a popular platform as it is without having had a lot of marketing or any marketing around it. In fact, when we had our Explorer conference earlier in the year, we actually asked how many users in the audience were familiar with
Trevor Walsh: But as we thought about the range for revenue for the remainder of the year, it felt prudent to suggest that some of this business continues to push to the right in the same way, even as the teams continue to work hard to close them. Yeah, let me only add that so we are seeing as we've discussed the sales cycle will still be long although this this quarters menu a few deals slipping out and a lot of that sales cycle is to do with civil government and defense intelligence just being longer but on the positive side we've also said last time that we had some impact on the size of deals coming in smaller whereas actually we've seen that normalized back to what it was before so that's a little bit of positive signal there. Got it. Okay, thank you. Thanks, Chef. Thank you for your question.
Our explore conference earlier in the year and we actually asked how many users in the audience, we're familiar with it and a very large number of hands went up so it's exciting to us again to bring the power of planets platform.
Speaker 4: and a very large number of hands went up. So it's exciting to us again to bring the power of planets platform and sales engine to their capabilities and bringing their capabilities into our customers is very exciting. The opportunity to grow that business. Yeah, and their customers kept on wanting our data in their platform. So here we go, both of those.
And sales engines to their capabilities and bringing their capabilities into our customers is very very exciting opportunity to grow that business.
That customer has kept I'm wondering out data in that platform. So heavy so both of those.
Got it again at the conference on the circling back on the.
Speaker 9: on the so up the circle back on the
Speaker 9: Self-service customers would you say that the vast majority of the revenue is self-service today and you intend For it to remain that way or will you build some light touch or some kind of
Self service customers would you say that.
Vast majority of the revenue is self service today and you intend.
To remain that way or will you build some light touch or some kind of channels to feed that engine.
Do you feel like you have work to do on go to market for that and we think it's ready to go.
Ben Renhe: The next question comes from the line of Ryan Koontz with Needham and Company. You may proceed. Thanks for the question.
Plug into your traffic.
Yes, so we've actually been.
Speaker 4: Yeah, so we've actually been, you know, we signed a partnership with them ahead of, actually, then signing the acquisition agreement.
We signed a partnership with them ahead of actually been signing the.
Ryan Koontz: Circle back to synergize and you know I can sense the fact that you guys have for that in lowering friction and customer onboarding. Can you maybe give us a perspective of how synergize has sold to date and where they are now versus maybe where you want to take them at a high level you know in the future relative like 12, 18 months time for a medium term. Thanks, but I can start actually at a high level we do see that their platform being utilized by civil government a fair bit and we in fact even in our partnership prior to the acquisition we're working quite regularly with them.
The acquisition agreement.
Speaker 4: So our sales team is familiar with the synergized products and solutions. And so there's a lot of activity already going on. I'd say from a revenue, historical revenue perspective, it's been a blend of their, you know, larger direct business and then the smaller self-service business. And our intention, frankly, is to ramp both by bringing, you know, some of the
So our sales team is familiar with the synergize products and solutions and so there is there's a lot of activity already going on I'd say from a revenue historical revenue perspective, it's been a blend of there in a larger direct business and then the smaller self service business.
And our intention frankly is to ramp up by by bringing some of the.
Speaker 4: business that we have that are smaller deals that are more suited to a light touch approach, like synergizes had, but also, like I mentioned, bringing synergized solutions into some of our bigger opportunities both on the civil government side and on the enterprise side.
Business that we have that are smaller deals that are more suited to a light.
Touch approach.
Like synergize is hard.
Ryan Koontz: I mentioned one other customer that we we established this quarter in the UK rule payment agency and there another example of using synergize together and so we were working on that obviously before close that we've seen that in a number of deals but so civil government is one area but I don't expect the historical mixes and if you wonder mention anything about that they do have a large number of small deals that they've done as a self serve thousands in the thousands a smaller entities.
But also like I mentioned, bringing the synergize solutions into some of our bigger opportunities both on the civil government side and on the enterprise side.
Super helpful. Thank you.
Great. Thank you Ryan.
Thank you for your question.
Speaker 1: Again, if you would like to ask a question, please press star followed by one.
Again, if you would like to ask a question. Please press star followed by Gwen.
Speaker 1: The next question comes from the line of Greg Mesnias with West Park Capital. You may proceed. Yes, thank you.
Your next question comes from the line of Greg Macneil with West Park Capital You May proceed.
William Marshall: So that was part of the goal of the Sentinel hub effort that they have but I don't know if you've got anything anything that is actually. Yeah what what I would highlight is this is a company that really did not have any type of sales or marketing force so a lot was was done by a handful of key employees in pursuing our piece and on the civil government side specifically as it related to land monitoring and some of the sustainable agricultural you know programs in in the EU and we're excited to bring the power of a planet sales force to bear in expanding the reach of those kind of direct sales efforts.
Yes. Thank you for taking my question.
Speaker 3: In light of the crosscut cutting measures you've implemented, including the head counter reduction.
In light of the cost cutting measures you've implemented according to the head count reduction.
Speaker 3: How have those measures impacted your sales and marketing effort? Have you guys...
How have those measures impacted your sales and marketing effort have you guys.
Speaker 3: Perhaps shifted more of that effort to a third party, reseller model, or are you maintaining the current template with a different number of support staff? Any color would be great. Thanks.
Perhaps shifting more of that effort to a third party reseller model or are you maintaining the current.
Tom.
A different number of support staff.
Any color would be great. Thanks.
Speaker 6: Maybe you can start a high level. I mean, look, it's been that restructuring, which I could a deep look at all of the projects and programs and which ones were the most effective, especially in terms of the growth areas on our go-to market. And the same was true in our go-to market ever. And of course,
Well, maybe I can start a high level.
Has been that restructuring we took a deep look at all of the projects and programs and which ones were the most effective.
Especially in terms of the growth areas.
William Marshall: Even as also the fact that Sentinel hub is as popular a platform as it is without having had a lot of marketing or any marketing around it. In fact when we had our explore conference earlier in the year and we we actually asked how many users in the audience were familiar with it and a very large number of hands went up. So it's exciting to us again to bring the power of a planet's platform and sales engine to their capabilities and bringing their capabilities into our customers is very very exciting opportunity to grow that business.
Our go to market and same with <unk>.
At Geismar and of course.
Speaker 6: that the decision to make a thorough restructuring and the reduction in force is really hard, but I think it positions the company in the right place going forward. Yeah, on the go-to-market side, it's not a fundamental change in strategy, but it is operational focus on these core vertical markets, on streamlining small deals.
The decision to make it through restructuring and reduction in force is really hard but I think.
Positioning the company.
In the right place going forward.
Ken.
On the go to market side, it's not a fundamental change in strategy, but it is operational focus on these core vertical markets on streamlining small deals.
William Marshall: Yeah and their customers kept on wanting our data in their platform so here we tell both of those. Yeah, I remember that at the conference. On the circle back on the self-service customers, would you say that the vast majority of the revenue is self-service today and you intend for it to remain that way? Or will you build some light touch or some kind of channels to feed that engine? Do you feel like you have work to do on go-to-market for that or do you think it's ready to go?
Speaker 6: and other operational efficiencies which can
And other operational efficiencies, which can speed up time to value and speed up.
Speaker 6: speed up time to value and speed up sales vehicles. Yeah, that's what I would say to Hilowashri, anything that?
Sales cycles.
Yes, that's what I would say at a high level actually and I think that yeah and in terms of your question around do we see a shift is moving to more of a REIT.
Speaker 4: Yeah, in terms of your question around, you know, do we see a shift of moving to more of a reseller model? That's not really how I would think about the change in focus. Obviously...
Hello model.
That's not really how I would think about the the change in focus.
Lee.
Speaker 4: relying on our partner ecosystem for solution selling and for some of the smaller deal opportunities and really
Relying on our on our partner ecosystem for our solution selling and for some of the smaller deal opportunities and really.
Speaker 4: you know, more leveraging the capabilities of synergize and central hub.
More more leveraging the capabilities of synergize in central hub is the shift on the small deal side, but on the majority of our business certainly from an ACB perspective, the direct model continues to be the focus and really the it's been about narrowing the focus of our teams.
William Marshall: Yeah, so we've actually been, you know, we signed a partnership with them ahead of actually been signing the acquisition agreement. So our sales team is familiar with the synergized products and solutions and so there's a lot of activity already going on. I'd say from a revenue historical revenue perspective, it's been a blend of their larger direct business and then the smaller self-service business and our intention, frankly, is to ramp both by bringing, you know, some of the business that we have that are smaller deals that are more suited to a light touch approach, like synergizes had, but also, like I mentioned, bringing synergized solutions into some of our bigger opportunities both on the civil government side and on the enterprise side.
Speaker 4: is the shift on the small deal side, but on the majority of our business, certainly from an ACB perspective, the direct model continues to be the focus, and really it's been about.
Unknown Executive: Super helpful. Thank you.
Speaker 4: narrowing the focus of our teams around those markets that
Unknown Executive: Great.
Around those markets that the product market fit and the maturity of those markets is much farther along so that we can see acceleration in the deal cycles sales cycles.
Speaker 4: The product market fit and the maturity of those markets is much farther along so that we can see acceleration in the deal cycles, fail cycles. And, you know, do that through a focusing of the direct sales efforts. That may be.
And.
Did that through a focusing of the direct sales efforts that makes sense.
Yes got it thank you and just a quick follow up.
Speaker 3: Yes, got it. Thank you. Just a quick follow up.
You mentioned some slowdown obviously in the commercial sector.
Speaker 3: You mentioned some slowdown obviously in the commercial sector. With that,
With that.
Speaker 3: Have you guys changed or shifted any of the contract?
Have you guys changed or shifted any of the contract.
Speaker 3: terms to your customers, future contracts that would perhaps address any potential.
Terms to your customers future contracts that would perhaps.
Greg Mesniaeff: Thank you, Ryan. Thank you for your question. Again, if you would like to ask a question, please press star fold by one.
Russ any potential.
Cherry picking up deliverables or alternatively give some inducements.
Speaker 3: cherry picking of deliverables or alternatively, I give some inducements to increase the size of the...
Unknown Executive: The next question comes from the line of Greg Mesnius with West Park Capital. You may proceed. Yes, thank you for taking my question. In light of the cost cut cutting measures you've implemented, including a head count reduction, how have those measures impacted your sales and marketing effort? Have you guys perhaps shifted more of that effort to a third party, a reseller model, or are you maintaining the current template with a different number of support staff?
To increase the size of the contract.
Thanks.
Speaker 4: Yeah, so we're definitely as part of the efforts that we've been doing in assessing our go-to-market motion. Certainly looking at the packaging of our products.
Yes, so we're definitely.
Part of the efforts that we've been doing in assessing our go to market motion and certainly looking at the packaging of our products.
Speaker 4: obviously.
I am too.
And ensure that we continue to drive up average deal sizes as well said, we did see average deal sizes pick up again in Q2, so back to kind of what we had seen in our historical averages.
Speaker 4: ensure that we continue to drive up average field sizes. As Will said, we did see average field sizes take up again in Q2. So back to kind of what we had seen in our historical averages.
Speaker 4: But as we continue to focus on those opportunities and those markets.
Unknown Executive: Any car would be great. Thanks. Well, maybe you can start a high level. I mean, look, in that restructuring, we took a deep look at all of the projects and programs and which ones were the most effective, especially in terms of the growth areas on our go to market and the same was true in our go to market ever. And of course, the decision to make a do a restructuring and the reduction in force is really hard, but I think it positions the company in the right place going forward.
But as we continue to focus on those opportunities in those markets and where we have proof points and we know we drive value and we can drive value quickly. There's obviously an opportunity in the packaging of our installations to drive higher overall average deal sizes.
Speaker 4: where we have proof points and we know we drive value and we can drive value quickly. There's obviously an opportunity in the packaging of our solutions to drive higher overall average yield sizes. Thank you very much.
Great. Thank you.
Okay.
Thanks, Greg.
Thank you for your question.
There are currently no further questions at this time, so I'll now turn the line back to the management team for closing or additional remarks.
Speaker 1: There are currently no further questions at this time. So now turn the line back to the management team for closing or additional remarks.
Unknown Executive: On the go to market side, it's not a fundamental change in strategy, but it is operational focus on these core vertical markets on streamlining small deals and other operational efficiencies which can speed up time to value and speed up sales cycles. Yeah, that's what I would say a highlight of actually anything that. Yeah, in terms of your question around, you know, do we see a shift of moving to more of a reseller model?
Thanks, everyone for joining today.
Speaker 6: Actually, everyone for joining today. As you heard, the opportunity for our businesses were bust and our team is focused on executing. We're strengthening our go-to-market strategy and we've increased company-wide focus on operational efficiency.
You had the opportunity for our business is robust and our team is focused on executing.
We are strengthening our go to market strategy and we've increased company wide focus on operational efficiency.
Speaker 6: The tailwinds for our business, the sustainability, digital transformation, as well as peace and security are driving demand. And we see AI as a further accelerant.
The tailwind for our business the sustainability digital transformation as well as patient security on driving demand and.
And we see AI as a further accelerant.
Speaker 6: In all, we're confident in the market opportunity and our team's ability to execute. I look forward to seeing you at our investor day on October 10th, where we'll share lots of exciting details about our product and business strategy. Thanks for joining today.
And we're confident in the market opportunity and our teams ability to execute.
Unknown Executive: That's not really how I would think about the change in focus. Obviously, relying on our partner ecosystem for solution selling and for some of the smaller deal opportunities and really, you know, more more leveraging the capabilities of synergize and central hub is the shift on the small deal side, but on the majority of our business, certainly from an ACB perspective. The direct model continues to be the focus and really that it's been about narrowing the focus of our teams around those markets that the product market fit and the maturity of those markets is much farther along so that we can see acceleration in the deal cycle, fail cycles and, you know, do that through a focusing of the direct sales efforts.
Look forward to seeing you at our Investor Day on October 10th where we said lots of exciting details about our product and business strategy. Thanks for joining us today.
That concludes the planet Labs, PBC second quarter of fiscal 2024 earnings Conference call. Thank you for your participation you may now disconnect your line.
Speaker 1: second quarter of fiscal 2024 earnings conference call. Thank you for your participation. You may now disconnect your line.
Unknown Executive: Thank you. Just a quick follow-up. You mentioned, you know, some slow down obviously in the commercial sector. With that, have you guys changed, or shifted any of the contract terms to your customers, future contracts that would perhaps address any potential. So cherry picking of deliverables or alternatively give some inducements to increase the size of the contract. Thanks. Yeah, so we're definitely as, you know, part of the efforts that we've been doing and assessing our go-to-market motion.
Unknown Executive: Certainly looking at the packaging of our products to obviously ensure that we continue to drive up average deal sizes, as well said, we did see average deal sizes take up again in Q2. So back to kind of what we had seen in our historical averages. But as we continue to focus on on those opportunities and those markets, where we have proof points and we know we drive value and we can drive value quickly, there's obviously an opportunity in the packaging of our solutions to drive higher overall average deal sizes.
Unknown Executive: Great. Thank you. Thanks, Greg. Thank you for your question. There are currently no further questions at this time. So now turn the line back to the management team for closing or additional remarks. Thank everyone for joining today. As you heard, the opportunity for our business is robust and our team is focused on executing. We're strengthening our go-to-market strategy and we've increased company-wide focus on operational efficiency. The care wins for our business, the sustainability, digital transformation, as well as peace and security are driving demand, and we see AI as a further accelerant. In all, we're confident in the market opportunity and our team's ability to execute.
Unknown Executive: And I look forward to seeing you at our investor day on October 10th, where we'll share lots of exciting details about our product and business strategy. Thanks for joining today. We conclude to be Planet Labs, PBC's second quarter of fiscal 2024 earnings conference call. Thank you for your participation. You may now disconnect your line.