Q4 2024 Planet Labs PBC Earnings Call

Operator: Good afternoon. Thank you for attending the Planet Labs PBC fiscal fourth quarter and full year 2024 earnings call. My name is Victoria, and I'll be your moderator today.

Good afternoon. Thank you for attending the planet Labs P. B C fiscal fourth quarter and full year 2024 earnings call. My name is Victoria and I'll be your moderator today, all lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end I would.

Operator: All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. I would now like to pass the call over to your host, Chris Genualdi, VP of Investor Relations. Thank you. You may proceed, Chris. Thanks, Operator. And hello, everyone.

Christian Jim: I'd now like to pass the call over to your host Christian Jim You. All D V. P of Investor Relations. Thank you you May proceed Chris.

Christian Jim: Thanks, Operator, and Hello, everyone. This is Christian you already Vice President of Investor Relations at Planet Labs, PBC welcomed the planet's fiscal fourth quarter and full year 2024 earnings call.

Christopher Genualdi: This is Chris Genualdi, Vice President of Investor Relations at Planet Labs PBC. Welcome to Planet's fiscal fourth quarter and full year 2024 earnings call. I'm joined today by Will Marshall and Ashley Johnson, who will provide a recap of our results and discuss our current outlook, as well as Kevin Weil, who is joining us for the Q&A portion of today's call. We encourage everyone to please reference the earnings press release, the 8K filing, and the earnings update presentation for today's call, which are available on our Investor Relations website. Before we begin, we'd like to remind everyone that we may make forward-looking statements related to future events or our financial outlook. We refer to the Qualified Pipeline, which represents potential sales leads that have not yet executed contracts.

Speaker Change: I'm joined today by well Marshall and Ashley Johnson, who will provide a recap of our results and discuss our current outlook as well as Kevin Weil, who is joining us for the Q&A portion of today's call.

Speaker Change: We encourage everyone to please reference the earnings press release, 8-K filing and earnings update presentation for today's call, which are available on our Investor Relations website.

Speaker Change: Before we begin we'd like to remind everyone that we may make forward looking statements related to future events or our financial outlook. We referenced qualified pipeline, which represents a potential sales leads that have not yet executed contracts for the customer contracts referenced during this call. Please note that the revenue figures, we say will generally be recognized over the term of the contract which can last multiple.

Christopher Genualdi: For the customer contracts referenced 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, and we may not realize all expected revenue. 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 us that 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.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.

Speaker Change: Years further the terms of these contracts can vary and we may not realize all expected revenue 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 such forward looking statements are subject to <unk>.

Speaker Change: Risks and uncertainties and assumptions as detailed in our SEC filings, which can be found at www dot FCC 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.

Speaker Change: The occurrence of unanticipated events.

Christopher Genualdi: During the call, we will also discuss historic and forward-looking non-GAAP financial measures. We use these non-GAAP financial measures for financial and operational decision-making 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. For more information on these non-GAAP financial measures, please see the reconciliation tables provided in our press release issued earlier this afternoon.

Speaker Change: During the call. We will also discuss historic and forward looking 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 and allow.

Speaker Change: 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 further throughout this call. We provide a number of key performance indicators used by management and often used by competitors in our industry.

Christopher Genualdi: Furthermore, 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 and our earnings update presentation, which are intended to accompany our prepared remarks. At this time, I'd now like to turn the call over to Will Marshall and its CEO, chairperson, and co-founder. Over to you, Will. Thanks, Chris. And hello, everyone.

Speaker Change: These and other key performance indicators are discussed in more detail in our press release and our earnings update presentation, which are intended to accompany our prepared remarks at this time I'd now like to turn the call over to Bill Marshall and its CEO chairperson and cofounder over to you well.

William Spencer Marshall: Thanks, Chris and Hello, everyone. Thanks for joining the call today.

William Spencer Marshall: Thanks for joining the call today. Planet delivered a strong fourth quarter to cap off the year. For the full fiscal year 2024, we generated a record $220.7 million in revenue, representing 15% year-on-year growth; non-capital gross margin for the full year was 54%, and adjusted EBITDA loss was $55.3 million. We continue to make progress towards our target of reaching adjusted EBITDA profitability by Q4 of this fiscal year. We also surpassed 1,000 customers during the fourth quarter of fiscal 2024, an exciting milestone for Planet. Growth for the year was led by the government sector.

Planet delivered a strong fourth quarter to cap off the year.

William Spencer Marshall: For the full fiscal year 'twenty 'twenty, four we generated a record $227 million in revenue, representing 15% year on year growth.

William Spencer Marshall: non-GAAP gross margin for the full year was 54%.

William Spencer Marshall: Justice EBITDA loss was $55 $3 million.

William Spencer Marshall: We continue to make progress towards our target of reaching adjusted EBITDA profitability by Q4 of this fiscal year.

William Spencer Marshall: We also surpassed 1000 customers during the fourth quarter of fiscal 2024 and exciting milestone for the planet.

William Spencer Marshall: Most of the year was led by the government sector.

William Spencer Marshall: During fiscal 24, our revenue in the defense and intelligence vertical grew over 30% year over year, while revenue in the civil government vertical saw solid growth as well. In the near term, we expect growth will continue to be driven by the government sector, particularly during the period of heightened security, increased sustainability priorities, and climate risk. In the defense and intelligent market, our businesses have historically been led by our differentiated high resolution tasking fleet, a business which continues to grow year over year. However, recently, we've seen increased demand from defense customers for our PlanetScope daily scanning capabilities, particularly when enhanced by AI enabled partner solutions. While the unique value of our PlanetScope daily scan has always been clear, recent advances in AI are leading to new solutions that extract critical value from our proprietary data set.

William Spencer Marshall: During fiscal 'twenty for <unk> revenue in the defense and intelligence physical grew over 30% year over year, while revenue in our civil government verticals saw a solid growth as well.

William Spencer Marshall: In the near term, we expect growth will continue to be driven by government sector.

William Spencer Marshall: Particularly during the period of heightened security increase sustainability priorities and climate risks.

William Spencer Marshall: In the defense and intelligence market.

William Spencer Marshall: Businesses has historically been led by our differentiated high resolution tasking fleet business, which continues to grow year over year.

William Spencer Marshall: However, recently, we've seen increased demand from defense customers for our planet scope daily scanning capabilities, particularly when enhanced by AI enabled partner solutions.

While the unique value of our planet Skype Daily scan has always been clear recent advances in AI are leading to new solutions extract critical value from a proprietary dataset. We are seeing new scan and search capabilities developed based on our proprietary data scan, which enable critical applications such as broad.

William Spencer Marshall: We are seeing new scan and search capabilities developed based on our proprietary daily scan, which enable critical applications such as broad area threat monitoring for national security purposes. These AI-based solutions help lower customer barriers to entry and speed customer time to value. This shift is just beginning, but we're already starting to see it in our bookings and pipeline. As an example, we were recently awarded a competitive seven-figure ACV contract by the U.S. Navy's Naval Information Warfare Center, NIWC-Pacific, for vessel detection and monitoring over key areas throughout the Pacific Ocean. NIWC-Pacific will integrate planet data and AI capabilities from our partner CIMAX into their Sea Vision platform to help improve maritime domain awareness and support broad area monitoring throughout the region.

William Spencer Marshall: Third area threat monitoring Vanessa security purposes.

William Spencer Marshall: These AI based solutions help lower customer barriers to entry and speed customer time to value. This shift is just beginning but we already starting to see it in our bookings and pipeline.

William Spencer Marshall: As an example, we were recently awarded a competitive seven figure ACB contract by the U S. Navy's Naval information warfare Center.

William Spencer Marshall: And I and WC specific for vessel detection and monitoring of our key areas throughout the Pacific Ocean, and Iwc Pacific will integrate planet data and AI capabilities from our partner <unk> into their C vision platform to help improve maritime domain awareness and support broad area monitoring.

Throughout the region.

William Spencer Marshall: China is the prime contractor for the Ward and Cinemax is a Houston based satellite analytics and intelligence companies, whose advanced AI solutions do vessel monitoring and classification.

William Spencer Marshall: Planet is the prime contractor for the award, and CINMAX is a Houston-based satellite analytics and intelligence company whose advanced AI solutions do vessel monitoring and classification. As you may recall, we previously partnered with CINMAX to provide energy and maritime intelligence solutions, and we recently expanded our strategic partnership with CINMAX, increasing the breadth of opportunities we can pursue together, and we are already seeing demand from other governments for our combined capabilities. Additionally, we have multiple seven-figure pilot programs in flight or in procurement with forward-leaning defense agencies which, if successful, have the potential to scale significantly. Similar to the NIWC Pacific Award, these pilots include AI-based partner solutions sold alongside their data, enabling broad area monitoring applications. These pilots are primarily focused on monitoring land-based locations.

William Spencer Marshall: As you May recall, we previously part of SMS to provide energy and Maritime intelligence solutions, and we recently expanded our strategic partnership with <unk>, increasing the breadth of opportunities. We can pursue together and we're already seeing demand from other governance for our combined capabilities.

Additionally, we have multiple seven figure pilot programs in flight or in procurement with forward leaning defense agencies, which if successful has the potential to scale significantly similar to the N. Iwc Pacific Award. These pilots include AI based partner solutions sold alongside the data enabling board area monitoring.

William Spencer Marshall: <unk>.

William Spencer Marshall: These pilots are primarily focused on monitoring land based locations. This is part of a growing trend the signals increased customer interest in purchasing and science with our data we are pursuing many of these large pilots this year.

William Spencer Marshall: I'll turn now to the civil government vertical where we are also seeing solid traction for solution sell alongside our data. So there's just this vertical includes those built by customers leveraging our internally developed planetary variables product line as well as solutions developed by partners.

William Spencer Marshall: This is part of a growing trend that signals increased customer interest in purchasing insights based on our data. We are pursuing many of these large pilots this year. I'll turn now to the civil government vertical, where we are also seeing solid traction for solutions sold alongside our data. Solutions for this vertical include those built by customers leveraging our internally developed planetary variables product line, as well as solutions developed by partners. In Q4, we closed over 50 new and expansion opportunities in the quarter, with governments ranging from large federal agencies to state and local governments, which is more civil government opportunities than in any quarter during fiscal 24.

William Spencer Marshall: In Q4, we closed over 50, new and expansion opportunities in the quarter with governments ranging from large federal agencies to state and local governments, which is more civil government opportunities than in any quarter during fiscal 'twenty four.

William Spencer Marshall: Recent wins include an expansion with Bolivia's Institute of National Agrarian reform, which is expanding its use of planetary variables and our central hub platform to manage public land and enforced property titling regulations and an expansion with the ministry of natural resources, and environmental sustainability of Malaysia, which is using pan escape and sky that data to monitor.

William Spencer Marshall: Large forested areas for policy planning and management purposes.

William Spencer Marshall: As you recall from our Investor Day last October the civil government market makes up a significant portion of the six figure opportunities and the majority of the seven figure opportunities and our qualified pipeline.

William Spencer Marshall: Recent wins include an expansion with Bolivia's Institute of National Agrarian Reform, which is expanding its use of planetary variables and our Sentinel Hub platform to manage public land and enforce property titling regulations, and an expansion with the Ministry of Natural Resources and Environmental Sustainability of Malaysia, which is using PlanetScope and SkySat data to monitor large forested areas for policy planning and management purposes. As you recall from our investor day last October, the civil government market makes up a significant portion of the six-figure opportunities and the majority of the seven-figure opportunities in our qualified pipeline. It's a large and reliable stream of opportunities for our sales team to close. As we previously shared, the ROI for civil government customers can be many multiples greater than their investment in our data, such as the Indian state of Odisha, which saved over $200 million through fraud elimination in its first year, and Brazil's government, which has collected billions of dollars in fines, seized goods, and assets frozen, aided by China's data.

William Spencer Marshall: It's a large and reliable stream of opportunities for our sales team to close.

William Spencer Marshall: As we previously said the Rois for civil government customers can be many multiples greater than the investment in our data such as the Indian State of addition, which saved over $200 million through forward elimination in that first year and Brazil's government, which is collected billions of dollars in fines sees because in assets frozen aided by times data.

William Spencer Marshall: With both in house and partner developed solutions as well as central hubs platform capabilities, we see opportunity to unlock additional segments of the civil government market by speeding time to value and driving expansions with existing customers looking to enhance their ability to manage broad areas of land.

William Spencer Marshall: Shifting to the commercial vertical during the fourth quarter, we signed expansions with large customers in the agriculture and energy sectors.

William Spencer Marshall: However budget constraints and the completion of the large legacy contract, which we've previously discussed on prior calls resulted in an overall year over year decrease in revenue from this vertical.

William Spencer Marshall: During Q1 of fiscal 'twenty, five we will lap the difficult year over year comparison, but continue to anticipate that the commercial market will be slower to develop based on budgetary constraints, particularly in the AG sector.

William Spencer Marshall: With both in-house and partner-developed solutions, as well as Sentinel Hub's platform capabilities, we see opportunity to unlock additional segments of the civil government market by speeding time to value and driving expansions with existing customers looking to enhance their ability to manage broad areas of land. Shifting to the commercial vertical, during the fourth quarter, we signed expansions with large customers in the agriculture and energy sectors. However, budget constraints and the completion of a large legacy contract, which we've previously discussed on prior calls, resulted in an overall year-over-year decrease in revenue from this vertical.

William Spencer Marshall: Our strategy for the commercial sector centered around partner led opportunities and our efficient platform sales. We see strong indications that this is the best way to serve commercial customers and grow the addressable market for our solutions.

To highlight some of our recent wins and the commercial sector. We closed a three year expansion with Swiss re Swiss re continues to be a great partner and we're proud of how our relationship is growing the expansion as planets land surface temperature planetary variable to Swiss re's two about in addition to us our water content flagship variable that which they already.

William Spencer Marshall: Yes.

William Spencer Marshall: To support Swiss re as parametric insurance products by feeding pricing models validating claims.

William Spencer Marshall: During Q1 of Fiscal 25, we will face the difficult year-over-year comparison but continue to anticipate that the commercial market will be slower to develop based on budgetary constraints, particularly in the ag sector. Our strategy for the commercial sector is centered around partner-led opportunities and our efficient platform, Sayov. We see strong indications that this is the best way to serve commercial customers and grow the addressable market for our solutions. To highlight some of our recent wins in the commercial sector, we closed a three-year expansion with Swiss Re. Swiss Re continues to be a great partner, and we're proud of how our relationship is growing. The expansion adds Planet's land surface temperature planetary variable to Swiss Re's tool belt, in addition to our soil water content planetary variable, which they already use.

William Spencer Marshall: Credit.

Forecasting potential risk and identifying opportunities within new markets.

We also closed a large new multi year deal with an agricultural focused insurance company in Canada, which is leveraging planets board area monitoring solutions and plan to variables to modernize its insurance program and for crop insurance claim validation.

William Spencer Marshall: We also announced the planned script data is now available on Google cloud marketplace, allowing tcp's existing customers purchase planet data using TCP credits, so that they can easily onboard and analyze process and derive meaningful insights from our data at scale.

William Spencer Marshall: We've already had a customer in the commercial side to make a purchase for a seven figure renewal through the marketplace.

Shifting gears to our business update that spans across verticals as you might have seen in the press release. This afternoon. We recently signed an eight figure data license agreement with carbon Napa to provide hyper spectral CT imagery to the nonprofit and his partners until 2030.

William Spencer Marshall: These tools support Swiss Re's parametric insurance products by feeding pricing models, validating claims, and credit. Forecasting Potential Risk and Identifying Opportunities Within New Markets, We also closed a large new multi-year deal with an agriculture-focused insurance company in Canada, which is leveraging Planet's broad area monitoring solutions and planetary variables to modernize its drought insurance program and for crop insurance claim validation. We also announced that PlanetScope data is now available on Google Cloud Marketplace, allowing GCP's existing customers to purchase Planet data using GCP credits so that they can easily onboard and analyze, process, and derive meaningful insights from our data at scale.

William Spencer Marshall: As a reminder, carbon Napa has been a key part and that's a planet and developing the Canada hyper spectral constellation.

William Spencer Marshall: This contract is an extension of an existing arrangement and we would expect revenue under this contract to begin in 2026 importantly, this agreement demonstrates our shared confidence around the program and our shared mission to improve understanding and accelerated reductions in global methane and carbon dioxide emissions. We continue to expect to launch the first tenant satellite later this year.

William Spencer Marshall: Sure.

William Spencer Marshall: Now, let me turn to product at a S.

William Spencer Marshall: Our first Pelican demo, which we launched in November.

William Spencer Marshall: Continues to perform excellently.

William Spencer Marshall: The hundreds of system test that we've conducted over the 10 subsystems of the satellite have gone well.

William Spencer Marshall: Gaining valuable on orbit learnings are making solid progress towards operationalized the pelican platform.

William Spencer Marshall: We've already had a customer in the commercial sector make a purchase for a seven-figure renewal through the Marketplace. Shifting gears to share a business update that spans across verticals, as you may have seen in the press release this afternoon, we recently signed an eight-figure data license agreement with Carbon Mapper to provide hyperspectral core imagery to the non-profit and its partners until 2030. As a reminder, Carbon Mapper has been a key partner for Planet in developing the Panagia hyperspectral constellation.

William Spencer Marshall: As we've shared previously our agile aerospace approach with rapid deterioration of capabilities in OLED enables fast improvement cycles to a spacecraft designs, we expect to launch additional pelicans, including the first production sidelines during the next 12 months.

William Spencer Marshall: Turning now to software and platform our pace.

William Spencer Marshall: Monitor our approach and spacecraft repurchase rapid iteration and constant improvement of our software products as well.

William Spencer Marshall: We recently launched our field boundaries analytics, which is the latest addition to our suite of planetary variable solutions field boundaries provides the spatial context necessary to better understand planted acres for different crop types and growth throughout agricultural season, enabling more accurate yield estimation for our customers at global level.

William Spencer Marshall: This contract is an extension of an existing arrangement, and we would expect revenue under this contract to begin in 2026. Importantly, this agreement demonstrates our shared confidence in the program and our shared mission to improve understanding and accelerate reductions in global methane and carbon dioxide emissions. We continue to expect to launch the first Tanander satellite later this year.

William Spencer Marshall: We've also recently upgraded our crops biomass plants are variable with Tom's script data as well as made meaningful improvements to erode and building detection solution.

William Spencer Marshall: Consistent improvements in our AI powered analytic solutions are helping make our data more accessible and speed customer client value.

William Spencer Marshall: Now let me turn to product updates. Our first Pelican Tech demo, which we launched in November, continues to perform excellently. The hundreds of system tests that we've conducted on the 10 subsystems of the satellite have gone well.

William Spencer Marshall: In summary demand in the government sector is very strong we are seeing a shift in our business towards selling solutions alongside of the data.

William Spencer Marshall: <unk> is enabling board area, such a top of our unique data scan and his opening use cases and markets with exciting early traction in the defense and intelligence vertical we.

William Spencer Marshall: We are gaining valuable on-orbit learnings and making solid progress towards operationalizing the Pelican platform. As we shared previously, our agile aerospace approach with rapid iteration of capabilities in orbit enables fast improvement cycles for our spacecraft designs. We expect to launch additional Pelicans, including the first production satellites, during the next 12 months.

We are prioritizing investment behind these areas I want to emphasize that we remain committed to striking the right balance between growth initiatives and operational discipline. So that we can achieve our adjusted EBITDA profitability by Q4 of this year, which is an important milestone on the path to building a high margin sustainable cash flow generating business.

William Spencer Marshall: Turning now to software and platform updates. Similar to our approach in SpaceCraft, we practice rapid iteration and constant improvements of our software products as well. We recently launched Field Boundaries Analytics, which is the latest addition to our suite of planetary variable solutions. Field Boundaries provides the spatial context necessary to better understand planted acres for different crop types and growth throughout the agricultural season, enabling more accurate yield estimation for our customers at a global level.

William Spencer Marshall: Growth for fiscal 2025 will be driven by closing the large deals in front of us and scaling our platform and solutions partners globally across vertical markets.

William Spencer Marshall: Our product and engineering teams continue to make incredible strides on both our agile space technologies and equally agile software stack and I couldnt be more excited about the developments here and theres more to come we are hosting a milestone platform launch which will be webcast virtually on April 11, So I encourage you to tune in.

None: Before I hand, the mic over to Ashleigh I'd like to discuss the management transition announced earlier today.

William Spencer Marshall: We've also recently upgraded our crop biomass planetary variable with PlanetScope data, as well as made meaningful improvements to our road and building detection solution. Consistent improvements in our AI-powered analytic solutions are helping make our data more accessible and speed customer time to value. In summary, demand in the government sector is very strong, we are seeing a shift in our business towards selling solutions alongside our data, AI is enabling broad area search atop our unique daily scan and is opening use cases and markets with exciting early traction in the defense and intelligence vertical. We are prioritizing investment behind these areas.

Kevin Weil: Sure Kevin Weir's role is evolving to be an appliance that's a planet labs CVC and a member of the Federal Board and Ashley will be taking on the role of president.

Ashleigh: I first want to express my thanks to Kevin who is here on the call with US today for all of his impact that panel and I look forward to continuing to work with them I'm very glad that panel will continue to benefit from his partnership and guidance in this new way.

Ashleigh: I'd like to congratulate and recognize Ashley here for the expandable sheath will be taking on our planet.

Ashleigh: I am pleased to share that you would be assuming the responsibilities of leading our go to market and business strategy as president and CFO.

Ashley Whitfield Fieglein Johnson: Im excited about taking on this new role because as you know.

Ashley Whitfield Fieglein Johnson: <unk> leadership and depth of experience or an incredible asset to planet. She has over 20 years of experience scaling technology businesses driving financial performance and building operational excellence at global organizations.

William Spencer Marshall: I want to emphasize that we remain committed to striking the right balance between growth initiatives and operational discipline so that we can achieve our adjusted EBITDA profitability by Q4 of this year, which is an important milestone on the path to building a high-margin, sustainable, cash flow-generating business. Growth for Fiscal 2025 will be driven by closing the large deals in front of us and scaling our platform and solutions partners globally across vertical markets. Our product and engineering teams continue to make incredible strides on both our agile space technologies and equally agile software stack, and I couldn't be more excited about the developments here, and there is more to come. We are hosting a milestone platform launch which will be webcast virtually on April 11th, so I encourage you to tune in. Before I hand the mic over to Ashley, I'd like to discuss the management transition announced earlier today. As we shared, Kevin Weil's role is evolving to be an advisor to Planet Labs PBC and a member of the Planet Federal Board. And Ashley will be taking on the role of president.

Ashley Whitfield Fieglein Johnson: Our results driven focus and deep understanding of planet makes the right person to lead our go to market and business execution. During this next chapter.

Additionally, Robert had a chest panic federal and the former head of the National Geospatial Intelligence Agency, who continues to bring a wealth of knowledge understanding and relationships in the national security domain.

Ashley Whitfield Fieglein Johnson: He is taking on a larger role overseeing strategy for our defense and intelligence business globally.

Ashley Whitfield Fieglein Johnson: I'll now turn it over to Ashley for a review of the financials and our outlook over to Ashley.

Ashley Whitfield Fieglein Johnson: I really appreciate the tank remarks, I'm truly honored to take on this new role excited to partner with the global go to market and product leaders and ready to build on this incredible Foundation for my next chapter with planet.

Ashley Whitfield Fieglein Johnson: I'm also pleased to report that all of our results for the fourth quarter and full year fiscal 2024 were in line with or better than the guidance. We provided on our last earnings call.

Ashley Whitfield Fieglein Johnson: Revenue for the quarter ending January 31st came in at a record $58 $9 million, which represents 11% year over year growth growth.

Ashley Whitfield Fieglein Johnson: Growth in the fourth quarter was led by the defense and intelligence vertical which grew over 20% year over year, driven by the end iwc specific wins and expansions with customers in both domestic and international markets. We also saw solid year over year growth in civil government vertical where our broad area management capabilities and solutions our support.

William Spencer Marshall: I first want to express my thanks to Kevin, who is here on the call with us today, for all of his impact at Planet, and I look forward to continuing to work with him. I'm very glad that Planet will continue to benefit from his partnership and guidance in this new way. I'd like to congratulate and recognize Ashley here for the expanded role that she'll be taking on at Planet. I'm pleased to share that she will be assuming the responsibilities of leading our go-to-market and business strategy as President and CFO. I'm excited about her taking on this new role because, as you know, Ashley's leadership and depth of experience are an incredible asset to Planet.

Ashley Whitfield Fieglein Johnson: <unk> strong customer adoption and expansion.

Ashley Whitfield Fieglein Johnson: From a geographic perspective during the fourth quarter EMEA revenue grew more than 20% year over year, Latin America has grown more than 30% year over year and Asia Pacific grew over 15% year over year.

Ashley Whitfield Fieglein Johnson: She has over 20 years of experience scaling technology businesses, driving financial performance, and building operational excellence at global organizations. Her results-driven focus and deep understanding of the planet make her the right person to lead our go-to-market and business execution during this next chapter. Additionally, Robert Cardillo, Chair of Planet Federal and the former head of the National Geospatial Intelligence Agency, who continues to bring a wealth of knowledge, understanding, and relationships in the national security domain, is taking on a larger role overseeing strategy for our defense and intelligence business globally. I'll now turn it over to Ashley for a review of the financials and our outlook. It's over to you, Ashley.

Ashley Whitfield Fieglein Johnson: North America revenue stayed roughly flat on a year over year basis, primarily impacted by the discontinuation of the legacy contract that we've discussed pay per se.

Ashley Whitfield Fieglein Johnson: For the full fiscal year EMEA revenue grew more than 50% year over year Latin America grew more than 20% Asia Pacific in the mid single digits, while North America revenue grew less than 5% year over year.

Ashley Whitfield Fieglein Johnson: As of the end of Q4 or end of period customer count was 1018 customers.

Ashley Whitfield Fieglein Johnson: Recurring ACB or annual contract value was 93% of our end of period ACB book of business and over 90% of our end of period ACB because business consists of annual or multiyear contracts. Our average contract length continues to be approximately two years weighted on an ACB basis.

Ashley Whitfield Fieglein Johnson: Net dollar retention rate at the end of FY 'twenty four was 101% and net dollar retention rate with when Max was 103%.

Ashley Whitfield Fieglein Johnson: Thanks, Will. I really appreciate the kind remarks. I'm truly honored to take on this new role, excited to partner with the global go-to-market and product leaders, and ready to build on this incredible foundation for my next chapter with Planet. I'm also pleased to report that all of our results for the fourth quarter and full year, fiscal 2024, were in line with or better than the guidance we provided on our last earnings call. Revenue for the quarter ending January 31st came in at a record $58.9 million, which represents 11% year-over-year growth.

During the year as well noted we saw strong expansions with government customers, partially offset by slower uptake in the budget constrained commercial vertical.

Ashley Whitfield Fieglein Johnson: New customer additions were stronger in FY 'twenty for it than we had previously expected and gross retention sorry year over year improvement, reflecting the stickiness of our solutions.

Ashley Whitfield Fieglein Johnson: Our lower than expected net dollar retention rate for fiscal 'twenty four primarily reflects less expansion than we had expected for the year, but it is not indicative of higher churn.

Ashley Whitfield Fieglein Johnson: Turning to gross margin non-GAAP gross margin for the fourth quarter of fiscal 'twenty, four was 58% and for the full year was 54%.

Ashley Whitfield Fieglein Johnson: Growth in the fourth quarter was led by the defense and intelligence vertical, which grew over 20% year over year, driven by the NIWC Pacific win and expansions with customers in both domestic and international markets. We also saw solid year-over-year growth in the civil government vertical, where our broad area management capabilities and solutions are supporting strong customer adoption and expansion. From a geographic perspective, during the fourth quarter, EMEA revenue grew more than 20 percent year-over-year, Latin America grew more than 30 percent year-over-year, and Asia Pacific grew more than 15 percent year-over-year. North America revenue stayed roughly flat on a year-over-year basis, primarily impacted by the discontinuation of the legacy contract that we've discussed previously. For the full fiscal year, EMEA revenue grew more than 50% year over year, Latin America grew more than 20%, Asia Pacific grew in the mid-single digits, while North America revenue grew less than 5% year over year. As of the end of Q4, our end-of-period customer count was 1,018 customers.

Ashley Whitfield Fieglein Johnson: Adjusted EBITDA loss was $9 $8 million for the quarter and for the full fiscal year was $55 $3 million.

Ashley Whitfield Fieglein Johnson: Adjusted EBITDA losses narrowed quarter over quarter throughout the fiscal year 2024, driven by operational efficiency and focus across the company.

Ashley Whitfield Fieglein Johnson: Capital expenditures, including capitalized software development were $10 $1 million for the quarter and 42 $4 million for the year or approximately 17% of revenue for the quarter and 19% of revenue for the full year.

Ashley Whitfield Fieglein Johnson: Turning to the balance sheet, we ended the quarter with $298 $9 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 achieve cash flow breakeven without needing to raise additional capital and we still have no debt.

Ashley Whitfield Fieglein Johnson: Shannon.

Ashley Whitfield Fieglein Johnson: At the end of Q4, our remaining performance obligations or Rps, where approximately $133 million.

Ashley Whitfield Fieglein Johnson: Approximately 86% apply to the next 12 months and 98% through the next two years.

Our backlog, which includes contracts with a termination for convenience clause, which is common in our U S. Federal contracts and occasionally found another customer contracts was approximately $242 million of which approximately 67% applied to the next 12 months and 85% to the next two years.

Ashley Whitfield Fieglein Johnson: Recurring ACV, or annual contract value, was 93% of our end-of-period ACV book of business, and over 90% of our end-of-period ACV book of business consists of annual or multi-year contracts. Our average contract length continues to be approximately two years weighted on an ACB basis. Net dollar retention rate at the end of FY24 was 101%, and net dollar retention rate with windbacks was 10

Let me turn now to our guidance for the first quarter of fiscal 'twenty five.

Ashley Whitfield Fieglein Johnson: <unk> revenue to be between 58% and $61 million, which represents growth of approximately 10% to 16% year over year.

We expect non-GAAP gross margin for Q1 to be between 50% and 52%.

Ashley Whitfield Fieglein Johnson: Gross margin for Q1 is expected to be impacted by the inclusion of partner solutions and some of our larger government sales, which we anticipate will have an approximately three percentage point impact during the quarter.

Ashley Whitfield Fieglein Johnson: During the year, as Will noted, we saw strong expansions with government customers, partially offset by slower uptake in the budget-constrained commercial vertical. However, new customer additions were stronger in FY24 than we had previously expected, and gross retention saw year-over-year improvement, reflecting the stickiness of our solutions. Our lower-than-expected net dollar retention rate for FY24 primarily reflects less expansion than we had expected for the year, but it is not indicative of higher churn. Turning to gross margin, non-GAAP gross margin for the fourth quarter of fiscal 24 was 58%, and for the full year was 54%. Adjusted EBITDA loss was $9.8 million for the quarter, and for the full fiscal year, it was $55.3 million.

Ashley Whitfield Fieglein Johnson: Guidance also reflects an anticipated five percentage point impact from higher depreciation expense related to the shortened estimated useful life for the <unk> satellites, which we expect to lower and reenter the Earth's atmosphere within the fiscal year.

Ashley Whitfield Fieglein Johnson: We expect our adjusted EBITDA loss for the first quarter to be between $11 million and $9 million.

Ashley Whitfield Fieglein Johnson: We are planning for capital expenditures of approximately $14 million to $17 million in Q1, reflecting our continued capex investment in next generation fleets as well as the maintenance capex for replenishment of our plants the constellation.

Ashley Whitfield Fieglein Johnson: Turning to the year ahead, we recognize that we are seeing an increase in large contracts and partner solutions in our existing business and pipeline opportunities.

Ashley Whitfield Fieglein Johnson: Adjusted EBITDA losses narrowed quarter over quarter throughout the fiscal year 2024, driven by operational efficiency and focus across the company. Capital expenditures, including capitalized software development, were $10.1 million for the quarter and $42.4 million for the year, or approximately 17% of revenue for the quarter and 19% of revenue for the full year. Turning to the balance sheet, we ended the quarter with $298.9 million of cash, cash equivalents, and short-term investments, which we continue to believe provides us with sufficient capital to invest in our core growth accelerating initiatives and achieve cash flow break-even without needing to raise additional capital. And we still have no debt outstanding. At the end of Q4, our remaining performance obligations, or RPOs, were approximately $133 million, of which approximately 86% apply to the next 12 months and 98% to the next two years.

Ashley Whitfield Fieglein Johnson: As you've heard we are pursuing many promising large government contracts, including multiple seven figure pilots in flight or in procurement that have the potential to convert into very large operational contracts. This year.

Ashley Whitfield Fieglein Johnson: In addition, we are seeing significant progress with new solutions that we're providing with partners enabled by recent advancements in AI.

Ashley Whitfield Fieglein Johnson: The signals, we are receiving from existing and potential customers give us confidence in the power of these solutions and our position to win.

Ashley Whitfield Fieglein Johnson: We believe these opportunities have the potential to drive significant scale and upside in our business. However, the timing size and structure of such opportunities can be difficult to predict that's why we're going to hold off on guiding for the full year until we gain more clarity on how these opportunities develop.

Ashley Whitfield Fieglein Johnson: As we gain visibility on these opportunities through the year.

We will provide more color to our outlook, our long term financial targets for the business have not changed further I'd like to emphasize our commitment to reaching our target of adjusted EBITDA profitability by the fourth quarter of this fiscal year.

Ashley Whitfield Fieglein Johnson: Our backlog, which includes contracts with a termination for convenience clause, which is common in our U.S. federal contracts and occasionally found in other customer contracts, was approximately $242 million, of which approximately 67% applied to the next 12 months and 85% to the next two years. Let me turn now to our guidance for the first quarter of fiscal 25. We're expecting revenue to be between $58 and $61 million, which represents growth of approximately 10% to 16% year over year. We expect non-gap gross margin for Q1 to be between 50 and 52 percent. Gross margin for Q1 is expected to be impacted by the inclusion of partner solutions in some of our larger government sales, which we anticipate will have an approximately three percentage point impact during the quarter. Guidance also reflects an anticipated five percentage point impact from higher depreciation expense related to the shortened estimated useful life for the three SkySat satellites, which we expect to lower and reenter the Earth's atmosphere within the fiscal year. We expect our adjusted EBITDA loss for the first quarter to be between $11 million and $9 million.

Ashley Whitfield Fieglein Johnson: As will mentioned, we are prioritizing investment behind core areas to capture the market opportunity unfolding in front of us and.

Ashley Whitfield Fieglein Johnson: In parallel we will reduce expenses where necessary to deliver on adjusted EBITDA profitability, which we view as a key milestone on our journey to building a high margin sustainable cash flow generating business.

In summary, the government sectors are strong and we are seeing demand shift to solutions alongside our data enabled by the revolution happening in AI.

Ashley Whitfield Fieglein Johnson: We are investing behind these trends to capture market share and drive customer adoption, while streamlining our cost base to ensure we deploy our cash efficiently and align our operations to profitable growth.

Ashley Whitfield Fieglein Johnson: Simultaneously, our engineering teams continue to make great progress towards launching our next generation fleets and we have an exciting platform launch coming in just a few weeks.

Ashley Whitfield Fieglein Johnson: Incredibly proud of the accomplishment of our teams around the globe in fiscal 2024, and even more excited for the year ahead.

None: Operator that concludes our comments, we can now take questions.

None: Of course, we will now begin the question and answer session. If you'd like to ask a question. Please press star followed by one on your telephone keypad. If for any reason you would like to remind that question. Please press star followed by two again to ask a question Press Star one as a reminder, if you are using it.

Ashley Whitfield Fieglein Johnson: We are planning for capital expenditures of approximately $14 to $17 million in Q1, reflecting our continued CapEx investments in next-generation fleets, as well as the maintenance CapEx for replenishment of our PlanetScope constellation. Turning to the year ahead, we recognize that we are seeing an increase in large contracts and partner solutions in our existing business and pipeline opportunities. As you've heard, we are pursuing many promising large government contracts, including multiple seven-figure pilots in flight or in procurement that have the potential to convert into very large operational contracts this year. In addition, we are seeing significant progress with new solutions that we are providing with partners enabled by recent advancements in AI. The signals we are receiving from existing and potential customers give us confidence in the power of these solutions and our position to win. We believe these opportunities have the potential to drive significant scale and upside in our business. However, the timing, size, and structure of such opportunities can be difficult to predict.

None: Speaker phone, please remember to pick up your handset before asking a question.

None: Our first question comes from the line of Mike Latimore with Northland.

Michael James Latimore: Your line is now open.

Michael James Latimore: Is that right.

Michael James Latimore: Sales site.

Michael James Latimore: Yes.

Michael James Latimore: And sales cycles in new deal sizes, how are they trending now versus four to five months ago.

None: I'd say on an <unk> cell sizes, we're definitely seeing.

None: The opportunities for.

For sales our.

Sales to sorry average sales size has to increase.

None: And just given what we alluded to with some of the larger contracts some of which have been awarded some had been awarded in the fall of pilots.

None: With government contracts.

None: As you know that those sales cycles tend to be longer although on the pilot side, we can see shortened turnaround. So net net I would say stable to seeing.

None: Seeing positive signals.

None: Got it.

None: And then I think there was a.

None: Figure expansion deal that was kind of in that effectively in the pipeline last quarter any update on that one.

Ashley Whitfield Fieglein Johnson: That's why we're going to hold off on guiding for the full year until we gain more clarity on how these opportunities develop. As we gain visibility on these opportunities through the year, we will provide more color to our outlook. Our long-term financial targets for the business have not changed.

None: So on the pipeline nothing to share.

None: Yes.

None: Got it and just last.

None: Do you have an update.

None: Net promoter score NPS.

None: Yes.

None:

None: At this time, we will have to circle back to you with that.

None: Okay. Thanks, a lot.

None: Great. Thank you.

None: Thank you for your question.

None: The next question comes from the line of Jason Gursky with Citigroup. Your line is now open.

Ashley Whitfield Fieglein Johnson: Further, I'd like to emphasize our commitment to reaching our target of a just balance without profitability by the fourth quarter of this fiscal year. As Will mentioned, we are prioritizing investment behind core areas to capture the market opportunity unfolding in front of us. In parallel, we will reduce expenses where necessary to deliver on a justness without profitability, which we view as a key milestone on our journey to building a high margin, sustainable, and cash flow-generating business. In summary, the government sectors are strong, and we are seeing demand shift to solutions alongside our data, enabled by the revolution happening in AI. We are investing behind these trends to capture market share and drive customer adoption while streamlining our cost base to ensure we deploy our cash efficiently and align our operations to profitable growth.

Yeah.

Great. Thanks, everybody.

Jason Gursky: Well, maybe this is a question for you.

Jason Gursky: Talk a little bit about the sky sets in the transition to the pelicans.

Jason Gursky: <unk>.

Jason Gursky: If for whatever reason there is a delay or GAAP.

Jason Gursky: GAAP and <unk>.

Jason Gursky: Capabilities set that comes about.

Jason Gursky: Retire some of these guys had its before the pelicans get up there.

Jason Gursky: Do you have any contracts that would be at risk today. We are currently performing on a contract and.

For whatever reason there was a gap in that capability set.

Jason Gursky: You would not be able to perform on.

None: Yes sure answer is no.

None: So.

None: We have plenty of capacity to provide for our customers at the present time.

None: I've seen some accelerated.

None: Depreciation of those <unk>.

None: From the level that but generally.

And that sort of offset by the fact that actually we increased the capacity on those satellites, we routinely with software improvements. So just to give you a sense of that in the last year, we improved the capability capacity for soft line by 40%.

Ashley Whitfield Fieglein Johnson: Simultaneously, our engineering teams continue to make great progress toward launching our next generation fleets, and we have an exciting platform launch coming in just a few weeks. I'm incredibly proud of the accomplishments of our teams around the globe in fiscal 2024 and even more excited for the year ahead. Operator, that concludes our comments. We can now take questions. Of course. 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, for any reason, you would like to remove that question, please press star followed by two.

None: They are offered more than doubling the prior year.

None: With software improvements so.

None: And the longevity of those sidelines remaining in the high over it looks good and Pelican is on track.

None: I said, a little bit about pelican and attack them.

None: Really well we're planning for the first operational satellites in the next 12 months as I also mentioned in and really pleased.

None: With the results so far.

Operator: Again, to ask a question, press star one. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking a question. Our first question comes from Michael Latimore with Northland. Your line is now open. You there, mate?

None: The incredible work that team does pull that all together because it's because of the commission.

None: Uh-huh, maybe asked a different way same topic.

None: How many sky's sets.

None: Thanks, guys says after these three go.

Unknown Executive: site. But on sales cycles and new deal sizes, how are they trending now versus, you know, four to five months ago? I'd say on sales sizes, we're definitely seeing opportunities for average sales sizes to increase, just given what we alluded to with some of the larger contracts, some of which have been awarded, some of which have been awarded in the form of pilots with government contracts. As you know, those sales cycles tend to be longer, although on the pilot side, we can see shortened turnarounds. The net-net, I'd say, is stable on seeing positives.

None: Retire.

None: And how many do you need.

None:

To perform on your existing contracts.

Yes, we will have approximately 15.

None: Remaining and.

None: <unk>.

None: I think the.

None: That's plenty for the revenue not just the revenue that we have but for the revenues to continue to grow.

None: Again with that sort of capacity improvements of the kind that I just said.

None: Year on year.

None: And we still see potential.

None: And that is all my years capped out we're going to continue to.

Unknown Executive: Yeah. And then I think there was an 8-Figure Expansion Deal that was kind of effectively in the pipeline last quarter. Any update on that one?

None: Work on improving that further this year and so.

None: Yes, we think 15 is planning.

None: Mhm.

None: Okay, great. Thanks.

None: And then initially a couple for you.

Unknown Executive: still in the pipeline; nothing to share. And just last, you haven't updated your Net Promoter Score, NPS. Not at this time. We'll have to circle back to you with that. Thanks a lot.

None: Can you get.

To break EBITDA breakeven with your current revenue run rate, which you got your projected in the in the first quarter 'twenty five.

None: Yeah, I'd say that the way that we're thinking about this year and obviously I alluded to the fact that.

Unknown Executive: Great, thank you. Thank you for your question. The next question comes from the line of Jason Gursky with Citigroup. Your line is now open.

None: And there are a number of opportunities in flight.

Hum.

Unknown Executive: Great. Thanks, everybody. Well, maybe this is a question for you. Talk a little bit about the sky boxes and the transition to the pelicans.

Very large deals and work with partners that are making full year guidance.

None: More difficult than usual, but I'd say generally it is.

Unknown Executive: If, for whatever reason, there's a delay or a gap in the capability set that comes about as you retire some of these guys' hats before the telecoms get up there, do you have any contracts that would be at risk? today where you're currently performing on a contract, and If, for whatever reason, there was a gap in that capability set that you would not be able to perform on, the short answer is no. So, we have plenty of capacity to provide to our customers at the present time. We have seen some accelerated depreciation of those SkySats from the lower orbit, but generally that is sort of offset by the fact that we increase the capacity on those satellites routinely with software improvements.

None: Because of the.

None: The fact that we do have so much opportunity that makes it hard as opposed to the opposite what I can share is that for our own internal budgeting purposes.

None: Even though we're very confident in our position to compete and win in these opportunities we're investing behind them.

None: We're not assuming acceleration in our year over year growth rate as we progress through the year.

None: We are aligning our costs accordingly.

None: Mhm.

None: I guess the question is it roughly $60 million a quarter.

None: Can the business be EBITDA breakeven.

None: There is no reason why it couldn't be.

None: Yes.

None: And then.

Yeah Okay.

None: And then on cash flow, maybe talk a little bit about expectations around.

Unknown Executive: So, just to give you a sense of that, in the last year, we improved the capacity per satellite by 40 percent, and that bill offered more than doubling the prior year, and that's all with software improvements. And the longevity of those satellites remaining in the higher orbit looks good, and Pelican is on track. I shared a little bit about Pelican and the tech demo.

None: With the cash flow number.

None: It gets to breakeven and turns positive.

None: The timing of drivers of that.

None: I guess the way that I talked to it is we are balancing a number of different factors and managing our cash balance. So one is we want to maintain a healthy balance sheet. We've got very large government customers that we will look to us to.

Unknown Executive: It's going really well. We're planning for the first operational satellites in the next 12 months, as I also mentioned, and I'm really pleased with the results so far and the incredible work of that team that has pulled that all together. Mm hmm. Maybe that's a different way.

None: Sustain a a nine.

None: <unk> figure balance cash.

None: Cash balance on our books and to know that they can continue to invest behind us as a key provider of.

None: Critical services that we provide.

None: So that's one factor the other is we're making investments in our next generation fleet.

Unknown Executive: Same topic. How many SkySats, how many SkySats after these three go, you know, retire? Will you have left? And how many do you need?

None: Or any what we would call it growth Capex mode.

None: And we want to make sure that we continue to invest behind those so that we can sustain our space and data advantage.

Unknown Executive: to, you know, perform on near existing. Yeah, we'll have approximately 15 remaining, and I think that's plenty for the revenue, not just for the revenue that we have, but for the revenue to continue to grow. Again, with that sort of capacity improvement of the kind that I just said, year on year, and we still see potential growth in that, it's not like it's capped out; we're going to continue to work on improving that further this year. So, yeah, we think 15 is plenty. Mm-hmm. Okay, great. Thanks. And then Ashley, I have a couple for you.

None: And all of that.

None: Combined with the operational efficiencies that we've continued to drive quarter after quarter.

None: And we are prioritizing internally so that we're investing in things like our core platforms that are enabling the solutions that are driving the exciting opportunities that we talked about earlier and making sure that you know as we as we think about our own internal operations that we're freeing up our capacity to continue those investments.

None: So it's a balancing act obviously if revenue accelerates that gives us more flexibility, but we're not relying on acceleration beyond where we are and in order to achieve our profitability goals and ultimately our cash flow.

Ashley Whitfield Fieglein Johnson: Can you get to break even with your current revenue run rate, which you've got here projected for the first quarter? Yeah, I'd say the way that we're thinking about this year, and obviously, I alluded to the fact that there are a number of opportunities in flight that, you know, from very large deals and work with partners that are making full-year guidance more difficult than usual, but I'd say, you know, generally it's because of the fact that we do have so many opportunities that makes it hard as opposed to the opposite. What I can share is that, you know, for our own internal and budgeting purposes, even though we're very confident in our position to compete and win in these opportunities and we're investing behind them, we're not assuming acceleration in our year-over-year growth rate as we progress through the year and are aligning our costs accordingly. Mm hmm. But I guess the question is, you know, roughly $60 million a quarter. Can the business be EBITDA breakeven? There's no reason why it couldn't be.

None: Okay.

None: Well last one for me.

None: Large government opportunities that you've got there on slide 23, which is the outlook slide can you talk a little bit about the geographic demand.

None: With the government customers and where the sources of those opportunities are.

None: Yes.

None: A little bit about some of the big deals.

None: Looking to today.

None: That's the NGA has the Luna.

None: Our procurement, which is a 300 million ish.

None: Mechanism.

None: For analytics on top of satellite data that will be going after and competing for this year.

None: NASA has had an expansion of the budget for the CSA program that the commercial space data.

And we'll be competing for more dollars there.

None: Globally, we have a few really important international customers.

Ashley Whitfield Fieglein Johnson: Yes. Yes. Okay. And then, yeah, okay.

None: Ed.

None: In the active pursuit of partnerships with significant expansions and then.

Ashley Whitfield Fieglein Johnson: And then on cash flow, maybe talk a little bit about, you know, expectations around when the cash flow number gets to break even and turns positive, you know, the timing and driver. I guess the way that I talk about it is that we are balancing a number of different factors in managing our cash balance. So, you know, one thing we want to maintain is a healthy balance sheet. We've got very large government customers that will look to us to sustain a 9-figure cash balance on our books to know that they can continue to invest behind us as a key provider of the very critical services that we provide. So that's one factor.

None: I mentioned, a number of the fact that a lot of RCI into seven figure deals a civil government, so that sort of thing.

None: Season, as well so there's a lot that we're going after right now I feel very good.

None: Out the deals and opportunities that we get.

None: Assuming this year.

None: And yes if.

None: Feeling pretty solid about that.

None: Right. Okay. Thank you very much for the time guys.

None: Great. Thanks, Jason.

None: Thank you for your question.

None: The next question comes from the line of Trevor Walsh with JMP Securities. Your line is now open.

Trevor James Walsh: Great. Thanks for taking the questions.

Maybe I'll start with you if that's okay could you maybe talk a little bit more about the <unk> specific contract from the perspective.

Ashley Whitfield Fieglein Johnson: The other is that we're making investments in our next-generation fleet. We are in what we would call a growth capex mode, and we want to make sure that we continue to invest behind those so that we can sustain our space and data advantage. And all of that, you know, is combined with the operational efficiencies that we've continued to drive quarter after quarter.

I think you had mentioned that other governments might be able to operationalize kind of a similar type of use case I guess, how sensitive is the U S. Navy's program around this whereas you might not be able to kind of share all the learnings from that particular.

Trevor James Walsh: Contract and then replicate it for other governments and then secondarily kind of around that contract what's the opportunity for expansion within that would that just be kind of broadening the area of interest kind of beyond the Pacific into other geos or is there additional kind of imagery services that could come.

Ashley Whitfield Fieglein Johnson: And we are, you know, prioritizing internally so that we're investing in things like our core platforms that are enabling the solutions that are, you know, driving the exciting opportunities that we talked about earlier, and making sure that, you know, as we think about our own internal operations, we're freeing up our capacity to continue those investments. So it's a balancing act, obviously, if revenue accelerates, that gives us more flexibility. But we're not relying on acceleration beyond where we are in order to achieve our profitability goals and, ultimately, our cash flow. Okay, um, well, that's one for me on the large government opportunities that you've got there. 23, which is the out.

Trevor James Walsh: Along with it.

Trevor James Walsh: Give us a little sense of how that might expand over time that'd be great.

Yes happy to.

None: Im really excited by that contract overall.

None: It was a.

None: Yes, that's an example, where AI on top of our planet Skype data can enable new capabilities there.

None: It's a movie maritime domain awareness MDA as it's called in the sector.

None: The need is large area frequent monitoring right and obviously our planet Skype data scan is ideal for that.

None: AI on top really holds out things like.

William Spencer Marshall: Can you talk a little bit about the geographic demand from government customers and where the sources of those opportunities are? Yeah, actually, I can elaborate a little bit about some of the big deals we're looking at today. NGA has the LUNO procurement, which is a $300 million-ish procurement mechanism for analytics on top of satellite data that we'll be going after and competing for this year.

None: Vessel Detections vessels identifications tracking.

None: Useful for situation awareness, that's what this guy is getting that.

None: I also will note that that was a competitive win.

None: An incumbent that had a system, but there is was based on a tasking satellite fleet and obviously a scan is more well suited for that and so it was great to see our team put up that competitive win now as the expansion in the U S and about.

William Spencer Marshall: NASA has had an expansion of their budget for the CSCA program, that's the Commercial Space Data Layer there, and we'll be competing for more dollars there. Globally, we have a few really important international customers that we're in the active pursuit of partnerships with significant expansions. And then I mentioned the fact that a lot of our seven-figure deals are civil government, so that sort of ties in as well. So yeah, there's a lot that we're going after right now. I feel very good about the deals and opportunities that we're pursuing this year. Yeah, we're feeling pretty solid about that. All right. Okay. Thank you very much for your time, guys. Thanks, Jeff.

None: That's certainly possible within that in fact.

None: So far the performance of that contract has been really strong and we've got good initial indications from a customer very excited by that and then more broadly.

None: To your question, yes. It can this go to other customers absolutely in fact, we already have several conversations ongoing for that capability.

None: It is for us.

And there's nothing that restricts us from doing that with other countries.

None: And any more than any other products.

None: If I could add onto that I think it's worth noting.

None: Well I said this in his prepared remarks that this is a solution that was initially developed in the commercial sector for energy and financial markets.

None: Has <unk>.

Unknown Executive: Thank you for your question. The next question comes from the line of Trevor Walsh with JNP Security. Your line is now open.

None: Applicability to the defense and intelligence sector, So often things start and government and then go out commercial as it relates to geospatial data, but this is actually one way or the opposite direction.

Unknown Executive: Great. Thanks, team, for taking the questions. Will, maybe I'll start with you, if that's okay.

None: Awesome. Thanks, Paul for the color on that good segue for me. So thanks on that on the commercial business front.

William Spencer Marshall: Could you maybe talk a little bit more about the NIWC-Pacific contract from the perspective of, I think you had mentioned that other governments might be able to operationalize kind of a similar type of use case. I guess, how sensitive is the U.S. Navy's program around this, where you might not be able to kind of share all the learnings from that particular, you know, contract and then replicate it for other governments? And then, secondarily, kind of around that contract, what's the opportunity for expansion within that? Would that just be kind of broadening the area of interest kind of beyond the Pacific into other geos? Or is there just additional kinds of imagery services that could come along? Just, I guess, give us a little sense of how that might expand over time. Yeah, I'm happy to too.

None: You talked about kind of the budget constraints.

None: Leading to some of the results for the year within that part of the business.

None: What are I guess.

None: Outside of just the broader kind of macro things that we've all been talking about for the last 18 24 months are there any other just technical hurdles or things for that part of the business to just really start going in kind of getting getting back to Fuller health or is it really just.

None: Once people feel like interest rates are kind of normalizing or whatever that looks like then.

None: Are available and it's just a flip of the switch or are there other kind of convincing I guess that you would need to do around just kind of the value by.

None: The solutions.

William Spencer Marshall: I'm really excited by that contract overall. It was an example of how AI on top of our PlanetScope data can enable new capabilities. It's maritime domain awareness, or MDA, as it's called in the sector.

None: Well I'd say fundamentally nothing has changed the need proposition in agriculture in any of these other sectors remains the same is mainly the economy.

None: It is affecting that and so there's been a lot of pressure on the AG sector in particular, which was our biggest part of our commercial segment first today and it is.

William Spencer Marshall: The need is large area, frequent monitoring, right? And obviously, our PlanetScope daily scan is ideal for that. AI on top really pulls out things like vessel detections, visual identifications, and tracking that is useful for situation awareness.

None: That has had its challenges.

None: However.

Our data fundamentally can enable improved crop yield.

William Spencer Marshall: That's what this is getting at. I also note that that was a competitive win over an incumbent that had a system, but theirs was based on a tasking satellite fleet. And obviously, our scan is more well suited for that. And so, it was great to see our team pull off that competitive win.

None: Decrease in fertilizer use and other things.

None: <unk>.

Which actually can use meaning.

None: Meaningful improvements in profitability for that multi trillion dollar sector Theres No reason why we shouldn't be doing that long term.

William Spencer Marshall: Now, as to the expansion that you asked about, that's certainly possible within that. In fact, so far, the performance of that contract has been really strong, and we've got good initial indications from that customer. We are very excited by that.

None: So so the fundamentals of that and I would say the same in other.

None: Commercial sectors like insurance and other things they've been less weight on this I would say, there's still a lot of work for us to do as well on solutions right. So we are building solutions, we have some.

William Spencer Marshall: And then more broadly, to your question, yeah, can this go to other customers? Absolutely. In fact, we already have several conversations ongoing about that capability. It is being discussed. And there's nothing that restricts us from doing that with other countries any more than any other product.

We mentioned in the Swiss re example, how.

None: Adding the extra planetary variable Atlanta.

None: Land surface temperatures, enabling and reinforcing their ability to do parametric agriculture insurance, that's the kind of thing we need to do to enable their customers to get immediate value without having to have complex understanding of geospatial data right. So the more we do that the more that opens up markets.

Ashley Whitfield Fieglein Johnson: If I could add to that, I think it's worth noting, and Will said this in his prepared remarks, that this was a solution that was initially developed in the commercial sector for energy and financial markets that has applicability to the defense and intelligence sector. So, you know, often things start in government and then go out commercial as it relates to geospatial data, but this is actually one where it went in the opposite direction. It was awesome. Thanks both for the color on that and a good segue for me.

None: Fundamentally.

None: The effect is.

Because of the economy and nothing has changed about our outlook about those sectors being very strong long term.

None: Got it Okay. That's helpful actually maybe just a couple of last quick ones for you if I if I can.

Ashley Whitfield Fieglein Johnson: So thanks. On the commercial business front, you talked about the kind of budget constraints leading to some of the results for the year within that part of the business. What are, I guess, the outside of just the broader kind of macro things that we've all been talking about for the last 18, 24 months, are there any other just technical hurdles or things for that part of the business to just really start going and kind of getting back to fuller health, or is it really just, you know, once people feel like interest rates are kind of normalizing or whatever that looks like, then budgets and dollars are available, and it' The need for position in agriculture and these other sectors remains the same.

None: The acceleration in new customer logos was great in the quarter was there can you provide just any was there anything in particular that you think kind of helped to achieve that and I know you've been talking about the greater efficiencies around your go to market processes I'm, assuming that kind of helps but was there anything else just out of the ordinary in the quarter that also.

None: Can you kind of contributed to that that metric.

None: Nothing that jumps out at me as being out of the ordinary and I would say that we have an incredible global commercial organization that has been building these relationships and really.

None: Educating the market on the.

None: Opportunity for plant out to drive value with these end customers.

None: And some of these sales have taken time, but the team has been persistent and it was great to see them bring in some new logos.

William Spencer Marshall: It is mainly the economy that is affecting them. There's been a lot of pressure on the ag sector in particular, which was our biggest part of our commercial segment to this day, and that has its challenges. However, our data fundamentally can enable improved crop yield, a decrease in fertilizer use, and other things, and inputs, as they call them, which can actually yield meaningful improvements in profitability for that multi-trillion dollar sector. There's no reason why we shouldn't be doing that in the long term. So the fundamentals of that, and I would say the same in other commercial sectors like insurance and other things, but they've been less weighed in this.

None: Because obviously land and expand is a core part of our sales motion so and.

None: While we typically expect to see the majority of our growth in any given year coming from expansions just by the nature of the way these deals tend to progress.

None: It was interesting to see that last year was much more balanced between new business and expansion business and that just speaks to more opportunity in front of us.

None: Great.

None: And then lastly.

None: The the LDR.

None: <unk> number and it looks like kind of I'm just looking on your on the slide decks that were working on the same sheet of music.

William Spencer Marshall: I would say there's still a lot of work for us to do as well on solutions, right? So we are building solutions. We have some. We mentioned in the Swiss re-example how adding the extra planetary variable, land surface temperatures, enabled and reinforced the ability to do parametric agricultural insurance.

None: Looks like the kind of the delta between the pure <unk> number and the one with win backs.

None: Essentially converging converging, it's coming together does that make the win backs kind of less.

Kind of a less meaningful as a kind of a separate callout is that essentially happening lessen.

William Spencer Marshall: That's the kind of thing we need to do to enable the customer to get immediate value without having to have a complex understanding of geospatial data, right? So the more we do that, the more that opens up markets. But fundamentally, the effect is because of the economy, and nothing has changed about our outlook for those sectors being very strong in the long term. Okay, that's helpful. Ashley, maybe just a couple last quick ones for you, if I can.

Less and less as the numbers for a decade and that is that or is this more just.

That's something I guess Youll Youll continue to sort of report and look look into kind of on a quarterly or yearly basis.

None: And I'll tell you that nothing would make me happier than for that metric to become obsolete because the two numbers converge because that would tell me two things one that we're getting renewals and on time. So we don't need to report went back and we get renewals at the point of when the contract ends.

Ashley Whitfield Fieglein Johnson: The acceleration in new customer logos was great in the quarter. Was there, can you provide just any, anything in particular that you think kind of helped to achieve that? I mean, I know you've been talking about the greater efficiencies around your go-to-market processes, so I'm assuming that kind of helped. But was there anything else just, you know, out of the ordinary in the quarter that also could have kind of contributed to that metric? Nothing that jumps out at me as being out of the ordinary, you know, but I would say that we have an incredible global commercial organization that has been building these relationships and really educating the market on the opportunity for Planet to drive value with these end customers.

None: And two that would speak to just continuity of the business with a with the end customer and as you know there are some sectors of the market we serve ware.

None: Work with our data data tends to be more seasonal.

None: And so that can sometimes lead to two gaps between when our contract expires and when the customer focus is on the renewal.

None: That doesn't speak to the data not being valuable, but rather just the periodicity of being having similar spikes peaks and valleys.

None: And as we are driving more solutions and really are.

Educating our customers on more ways that they can be using our data to drive elements of their business.

None: We should see less of those peaks of peaks and valleys and more on time renewals across all of our contracts. So.

None: Well keep reporting it as long as it's relevant but as I said nothing would make me happier than to not need to report that number.

Ashley Whitfield Fieglein Johnson: And some of these sales have taken time, but the team's been persistent. And it was great to see them bring in some new logos, because, obviously, land and expand is a core part of our sales process. So while we typically expect to see the majority of our growth in any given year coming from expansions, just by the nature of the way these deals tend to progress, it was interesting to see that last year was much more balanced between new business and expansion business. And that just speaks to more opportunities. Right. And then lastly, the NDR, the NDRR number, it looks like, kind of, and I'm just looking at your on the slide deck, so we're working off the same sheet of music, it looks like the kind of delta between the pure NDRR number and the one with windbacks is essentially converging, converging, it's coming together. Does that make the windbacks kind of less, kind of less meaningful as a kind of separate call out?

None: Got it okay. Thanks al I appreciate the questions.

None: Alright.

None: Thank you for your question.

None: As a reminder.

None: It is star one to ask a question.

None: Our next question comes from the line of Ryan <unk> with Needham <unk> Company. Your line is now open.

Ryan: Great. Thanks for the question.

Ryan: Actually first just a little bit of housekeeping on the gross margin step down in Q1, if you can.

Ryan: Bridges, there I heard you mentioned the 300.

<unk> of impact from.

Ryan: Third party solutions kind of selling through your channel.

Ryan: I understood and then you talked about a 500 basis point hit from the accelerated appreciation. So my question is.

Ryan: But does that 500 basis point hit.

Ryan: Relative to the relative to Q4 or maybe your plan of record before.

Ashley Whitfield Fieglein Johnson: I mean, is that essentially happening less and less as the numbers sort of dictate? And is that, or is this more just, is that something I guess you'll continue to sort of report and look into kind of on a quarterly, yearly basis? I'll tell you that nothing would make me happier than for that metric to become obsolete because the two numbers converge, because that would tell me two things. One, that we're getting renewals in on time, so we don't need to report windbacks. We get renewals at the point when the contract ends.

None: So maybe you can just walk us through that.

None: That bridge good.

None: Yes, so the.

None: Numbers I was providing were specific to Q1 guidance. So just some context on on the year.

Gross margin for the full year will be impacted by.

None: Increased depreciation from the three satellites that will be de orbiting until about Q3, that's an approximate $5 million impact over that period and I gave you kind of that impact on Q1.

None: With respect to partners.

None: As I noted when we act as a prime rib pulling partners into that relationship then we get both revenue, but also the revenue that goes to the partner that's providing theyre part of the solution.

Ashley Whitfield Fieglein Johnson: And two, that would speak to just the continuity of business with the end customer. As you know, there are some sectors of the market we serve where the work with our data tends to be more seasonal. And so that can sometimes lead to gaps between when a contract expires and when the customer focuses on the renewal. That doesn't speak to the data not being valuable, but rather just the periodicity having spikes, peaks, and valleys.

None: And so that flow through our cost of goods sold.

So I quantified that impact on Q1, obviously, how that will impact the full year will depend on the mix of business that we can come in and how much of that are these government deals, where we're prime and pulling out a partner solution or how much of it is you know more of our traditional business, where a partner might sell side by side with us or or.

Ashley Whitfield Fieglein Johnson: And as we are driving more solutions and really educating our customers on more ways that they can be using our data to drive elements of their business, we should see less of those peaks and valleys and more on-time renewals across all of our contracts. So we'll keep reporting it as long as it's relevant, but as I said, nothing would make me happier than to not need to report that number. Got it. Okay. Thanks to all.

None: We are the partner might actually take time so.

None: A little hard to quantify at this point gave you Q1, and we are leaning into it. So we do expect that to continue.

None: But unable to give you an exact quantification at this time other than to say it you know we do expect this to help us drive scale until we are leaning into it.

Ashley Whitfield Fieglein Johnson: I appreciate the questions. All right. Thank you for your question. As a reminder, it is star number one to ask a question. Our next question comes from the line of Ryan Koontz with Needham and Company. Your line is now open.

None: Yeah.

None: Makes sense can you maybe explain where you are in the process of.

None: Building out solutions.

None: And how we should think about.

None: Partner prime versus sell with versus plan as prime like which weighs more common now and which way are you trending in the future.

Unknown Executive: Great, thanks for the question. Actually, first, just a little bit of housekeeping on the gross margin set down in Q1. Bridges there, I heard you mention the 300.

None: Yes, I mean, it's really both of those things I mean, both planets and solutions and.

Ashley Whitfield Fieglein Johnson: [inaudible] What is that 500 basis point? Relative to, is it relative to Q4? planet record before, so maybe kind of just walk.

None: Partner solutions typically we have been the prime.

None: Cases, where they didn't vote plant upon our partners.

Ashley Whitfield Fieglein Johnson: Yeah, so the numbers I was providing were specific to Q1 guidance, so just some context on the year. The gross margin for the full year will be impacted by increased depreciation from the three satellites that will be deorbiting until around Q3. So it's an approximate $5 million impact over that period, and I gave you kind of that impact in Q1. With respect to partners, as I noted, when we act as a prime, we're pulling partners into that relationship, then we get both the revenue, but also the revenue that goes to the partner that's providing their part of the solution. So that flows through our cost of goods sold. And I quantified that impact on Q1. Obviously, how that will impact the full year will depend on the mix of business that we see come in, and how much of that is these government deals where we're prime and pulling in a partner solution, or how much of it is more of our traditional business, where a partner might sell side by side with us or where the partner might actually be prime.

None: We're obviously looking primarily at what the customer needs, most and driving it from that.

None: But fundamentally.

None: AI is driving a lot of this in both our iron.

None: The partner solution AI is opening up the value proposition here.

Acting out more value from our data I think our planets dataset is particularly well suited to that because of the broad area and the fact that we revisit every area each day no matter, what which means that you have this consistent dataset.

None: Time series stack to train AI algorithms upon so it's a pretty unique.

None: Asset there that we have.

None: Differentiated and has high appeal to AI companies.

None: Anyway, the coastal space.

None: But anyway I don't see any particular trends I mean, we're seeing some very good take off with some of our partner.

Hum.

Partners.

None: The Navy example, that I mentioned, but there are others. We mentioned a couple of pilots that we're working on.

None: There is a distinction between most of the existing work has been on what we would call classical machine learning some of the pilots based on large language model type fundamentals capabilities, which is.

Ashley Whitfield Fieglein Johnson: So a little hard to quantify at this point. Gave you Q1, and we are leaning into it, so we do expect that to continue, but unable to give you exact quantification at this time, other than to say we do expect this to help us drive scale, and so we are leaning into it. Can you maybe explain where you are in the process?

None: Opening up more things I would say most of the growth right now is more to do with the classical stuff.

The <unk>.

William Spencer Marshall: Building out solutions and how we should think about partner prime and Planet S Prime, like which way is more common now and which way are you trending? Yeah, I mean, it's really both of those things.

None: There is a huge frontier opening up with large language models now tackling.

None: Both.

None: Text most of the multimodal pieces, a multimodal large language models are now doing text the imagery conversion and that fundamental capability is something that will become a more of a boon to us from my perspective, the extrapolated beyond answer that but I.

William Spencer Marshall: I mean, both planets and solutions and partner solutions. Typically, we have been the prime in those cases where they do involve planet partners. We're obviously looking primarily at what the customer needs most and driving it from there. But fundamentally, AI is driving a lot of this, and both our own AI and partner solution AI are opening up the value proposition here by extracting more value from our data. I think our PlanetScope data set is particularly well suited to that because of the broad area and the fact that we revisit every area each day, no matter what, which means that you have this consistent data set and time series stack to train AI algorithms on.

None: I think it's an exciting time in that domain.

None: Great well, thank you and just one more if I could on.

None: Any color you can give us on the <unk> contract how that's progressing.

Any of these strength in government that you see.

Seeing the result of that or maybe just a little update on how that how that's progressing thank you.

None: So far so good we feel very good about the implementation of our team against that contract.

None: I understand the customers satisfied.

None: We do have a renewal coming up with that contract and we feel very good about that prospect as to how it's affecting other areas I do think that the more we show that we are serious player in this space generally and that's one of the mainstays of that.

William Spencer Marshall: So it's a pretty unique asset that we have that is differentiated and has high appeal to AI companies anywhere close to this space. But anyway, I don't see any particular trends. We've seen some very good takeoff with some of our partners, like the Navy example that I mentioned. But there are others. We've mentioned a couple of pilots that we're working on. There is a distinction between most of the existing work, which has been on what we would call classical machine learning.

None: The reputation that planet is providing good services.

None: And reliably is important so in that sense I think it has a sort of indirect benefit yes.

None: Yeah.

None: Sure, Brian Alright, great guys. Thanks for the color that's all I've got.

None: Great. Thank you.

None: Thank you for your question.

None: The next question comes from the line of now a public Mark with Goldman Sachs. Your line is now open.

William Spencer Marshall: Some of these pilots are based on large language model fundamental capabilities, which is opening up yet more things. I would say most of the growth right now has more to do with the classical stuff. But there's a huge frontier opening up with large language models now tackling both text and the multimodal pieces; multimodal large language models are now doing text-to-picture conversion.

Mark: Hi, good evening.

Hi, Noah.

Mark:

Mark: It sounds like you're.

Mark: Saying that the decision to not provide full year 2025 annual guidance.

Is.

Mark: Less.

Mark: Downside uncertainty and more more upside uncertainty I guess as youre alluding to these large.

Mark:

Mark: Aspects, but where you don't know.

Mark: If and when they will land.

Mark: You've given the <unk> guidance, where the growth rate is somewhat consistent with full year 'twenty four.

William Spencer Marshall: And that fundamental capability is something that will become more of a boon to us, from my perspective. So I've extrapolated beyond the answer there, but I think it's an exciting time in that. Well, thank you. And just one more, if I could, on any code you can give us on the EOCL contract, how that's progressing. Is any of the strength in government that you're seeing coming as a result of that, or maybe just a little update on how that's working? So far, so good.

Mark: And thats on your toughest year over year compare that Youll face this year by far.

None: And so I guess is it a reasonable base case for all of us on the outside too.

None: I assume.

None: 2020, fives growth rate looking similar to 'twenty for.

None: As kind of a floor.

And then there is upside depending on when the large opportunities land if they land.

Or is that too optimistic are there scenarios, where the growth rate Decelerates is there a scenario where revenue was down.

None: Or is that too optimistic are there scenarios, where the growth rate Decelerates is there a scenario where revenue was down.

William Spencer Marshall: We feel very good about the implementation of our team against that contract. I understand the customer is satisfied. We do have a renewal coming up with that contract, and we feel very good about that prospect. I don't know as to how it's affecting other areas.

None:

None: So obviously a lot of this has to do with timing. So as we expressed we feel really good about the business opportunity that is in front of us and the business that we've landed the pilots that were working and the opportunity to convert some things that you know as we expressed last year.

William Spencer Marshall: I do think that the more we show that we're a serious player in this space generally, and that's one of the mainstays of that, the reputation that Planet is providing good services there and reliably is important. So in that sense, I think it has an indirect benefit. All right. Great. Thanks for calling.

None: I have been maturing in the pipeline.

None: And really have the teams have continued to progress them and just not at the pace that obviously, we had we had up to previously.

Unknown Executive: That's all I've got. Great, thank you. Thank you for your question. The next question comes from the line of Noah Poponak with Goldman Sachs. Your line is now open. Hi, good evening. Hey. Hey, Noah.

None:

None: The visibility is challenging to your point and in particular on the upside.

None: And when I think about just managing our overall cost base and making sure that where we're getting to profitability.

Unknown Executive: Sounds like you're saying that the decision to not provide full year 2025 annual guidance is less about downside uncertainty and more about upside uncertainty, I guess, as you're alluding to these large prospects, but where you don't know if and when they'll land. You've given the 1Q guidance where the growth rate is somewhat consistent with full year 24. And that's your toughest year-over-year comparison that you'll face this year by far. And so I guess, is it a reasonable base case for all of us on the outside to assume 2025's growth rate looking similar to 24, is kind of a floor, and then there's upside, depending on when the large opportunities land, if they land, or is that too optimistic? Are there scenarios where the growth rate decelerates?

None: As I mentioned, we're not assuming acceleration.

That year over year growth rate and that helps us kind of ring fence.

None: How much we have to invest and where we and determine where we best place it.

None: To drive the growth in the business beyond that and obviously I'm not giving a range of any sort for a reason, but you know I'd say you should be hearing a ton of confidence in the opportunity in front of us and uncertainty really around timing.

Okay.

Do you anticipate that you will have a range at some point through the year.

None: We will continue to give more color and obviously as we as we progress each quarter, we get more visibility into it as to how the news business lands will be translating into revenue on the year. So we do anticipate giving giving more color and EM.

Ashley Whitfield Fieglein Johnson: Is there a scenario where revenue is down? So obviously, a lot of this has to do with timing. So, as we expressed, we feel really good about the business opportunity that is in front of us, and the business that we've landed, the pilots that we're working on, and the opportunity to convert some things that, you know, as we expressed last year, have been maturing in the pipeline, and really, the teams have continued to progress them, just not at the pace that, obviously, we had hoped previously. So, visibility is challenging, to your point, in particular on the upside, and when I think about just managing our overall cost base and making sure that we're getting to profitability, you know, as I mentioned, we're not assuming acceleration on that year-over-year growth rate, and that helps us kind of ring fence, you know, how much we have to invest and determine where we best place it to drive growth in the business. Beyond that, obviously, I'm not giving a range of any sort for a reason, but, you know, I'd say you should be hearing a tone of confidence in the opportunity in front of us and uncertainty. Really, OK. Do you anticipate that you will have a range at some point through the year? We'll continue to give you more color.

None: They are progressing.

None: Okay.

None: And Ashley remind me over the past few years on average or maybe just kind of directionally as a framework.

Ashley Whitfield Fieglein Johnson: How much of your annual revenue.

Ashley Whitfield Fieglein Johnson: Do you book and deliver within the year.

Ashley Whitfield Fieglein Johnson: Versus it was in the backlog when you entered the year.

Ashley Whitfield Fieglein Johnson: Yeah. So we've talked in the past that we've typically seen.

Ashley Whitfield Fieglein Johnson: The amount that's in kind of Rps and backlogs, representing about 60% to 65% of revenue and then from there. It's a decent amount of the remainder comes from renewals and we.

Ashley Whitfield Fieglein Johnson: We tend to for internal purposes assume new bookings to be back half weighted and so.

Lesser percentage contributing to current year revenue and really more driving that extra revenue. So that's typically how we think about it is how we've talked about it in the past.

Ashley Whitfield Fieglein Johnson: Okay.

None: And then just last one I wanted to ask about is on the capital plan.

None: The 14% to $17 million for the first quarter is a pretty.

None: A pretty big number compared to the run rate, although last year, you had one quarter in.

None: The range I guess is that a is that anomalous or is that a run rate what's the full year look like them.

None: I guess, where do where do we how do we how does that sort of start to normalize as a percentage of revenue over time.

None: Well as a percentage of revenue is a metric that depends on quantifying the revenue, but I would say you know our long term target is unchanged for where we expect capex as a percentage of revenue to be in as we move out of this growth capex phasing into maintenance.

Ashley Whitfield Fieglein Johnson: Obviously, as we progress each quarter, we get more visibility into how the new business lands will be translating into revenue for the year. So we do anticipate giving more color as the year progresses. OK. And, Ashley, remind me, over the past few years, on average, or maybe just kind of directionally as a framework, how much of your annual revenue... do you book and deliver within the year? versus how much it was in the backlog when you entered the business.

None: Capex. This year is it growth capex year, and so Q1 levels.

None: Are not what I would characterize as anomalous, but I'm kind of more what we would expect to see as we're in this growth capex cycle.

None: Yeah.

Ashley Whitfield Fieglein Johnson: Yeah, so we've talked in the past that we typically see the amount that's in kind of RPOs and backlogs representing about 60 to 65% of revenue. And then from there, a decent amount of the remainder comes from renewals. And, you know, we tend to, for internal purposes, assume new bookings to be back half weighted. And so, you know, a lesser percentage contributing to current year revenue and really more driving next year revenue. So that's typically how we think about it, how we've talked about it in the past. OK. And then just the last one I wanted to ask about is the capital plan. The $14 to $17 million for the first quarter is a pretty big number compared to the run rate, although last year you had one quarter. In that range, I guess, is that an anomaly? Or is that a run rate?

None: Okay.

None: Okay. Thank you.

None: Great. Thanks Al.

None: Thank you for your question.

None: The next question comes from the line of Jeff Van <unk> with Craig Hallum.

Jeffrey Lee Van Rhee: Your line is now open.

Jeffrey Lee Van Rhee: Great. Thanks for taking the questions I guess this would probably be for Kevin nationally on the sales execution.

Jeffrey Lee Van Rhee: With the transition going on I think it would be good just to get a sense of where you feel you are now with respect to sales execution. So number one just where are you what's working what's not.

And generally speaking what needs to change.

None: Yes, why don't I jump in and Kevin If you want to add any color to it but.

None: And as we talked about a lot of the changes that we wanted to make in our go to market strategy, we initiated back in Q3.

Kevin: I'd say the team executed against that really thoughtfully in terms of thinking about where are we going direct customers and where do we want to really be.

Ashley Whitfield Fieglein Johnson: What's the full year look like? And, I guess, where do we, how does that sort of start to normalize as a percentage of revenue over time? Well, as a percentage of revenue, as a metric that depends on, you know, quantifying the revenue, but I'd say, you know, our long-term target is unchanged for where we expect CapEx as a percentage of revenue to be, and, you know, as we move out of this growth CapEx phase and into maintenance CapEx, this year is a growth CapEx year, and so, you know, Q1 levels are not what Okay, thank you. Great. Thanks, Noah.

Kevin: Evolving and leaning into our partner ecosystem and so a lot of those changes that implemented over the back half of the year. So that we were ready to start this year with those changes completed and everyone's focused on this year's numbers and getting out there and bringing the business and so on.

Kevin: And I would say.

Kevin: Yes.

<unk> done the heavy lifting on the organizational work and now we're excited for the upcoming sales kickoff.

Kevin: And you know continuing to see strong performance.

None: On the globe and additional color you would add there Kevin.

Kevin: I would say is.

Kevin: I have a lot of confidence and Charlie who leads our sales team and as we transition here in <unk> ability to continue.

Unknown Executive: Thank you for your question. The next question comes from a line from Jeff Van Ree with Craig Howell. Your line is now open.

Kevin: This execution.

None: Mhm, Okay got it.

Unknown Executive: Great. Thanks for taking the questions. I guess this would probably be for Kevin and Ashley.

None: And then.

None: With respect to the commercial and maybe more specifically.

Unknown Executive: On sales execution, with the transition going on, I think it'd be good just to get a sense of where you feel you are now with respect to sales execution. So, number one, just where are you? What's working? What's not? And generally speaking, what needs to change? Why don't I jump in, and Kevin, if you want to add any color to it, but as we talked about, a lot of the changes that we wanted to make in our go-to-market strategy, we initiated back in Q3. I'd say the team executed against that really thoughtfully in terms of thinking about where we were going direct to customers and where we wanted to really be evolving and leaning into our partner ecosystem. And so a lot of those changes got implemented over the back half of the year so that we were ready to start this year with those changes completed.

None: I mean in general AG names in the space have been lifting their head for a little while now.

None: Im curious if youre seeing the same.

None: Or any changes in behavior in the agg and just yes, just fundamentally trying to understand the weakness in AG and commercial in general.

None: Is it a is it a function of the solutions needing to be more I guess, I'd say product ties are easier to consume.

None: Maybe a more demonstrable ROI I mean, theres, both landing new customers and there is retaining.

None: And those two factors would obviously way, but just thoughts on commercial and AG and maybe why it's been as soft as it has.

None: Yes.

None: I'd say coming off of the aggregate tech conferences earlier this month.

Ashley Whitfield Fieglein Johnson: And everyone focused on just this year's numbers and getting out there and bringing in the business. So I would say we've done the heavy lifting on the organizational work, and now we're excited for an upcoming sales kickoff and continuing to see strong performance around the globe. Any additional color you would add there, Kevin?

None: I would tell you right the sector is starting to take a cut up.

None: And a lot we had a lot of exciting conversations with our customers and potential customers.

Kevin Weil: All I'd say is I have a lot of confidence in Charlie, who leads our sales team, and as we transition here, and Ash's ability to continue this execution. Okay. And then, with respect to the commercial, and maybe more specifically ag, I mean, in general, ag names in the space have been raising their heads for a little while now. I'm curious if you're seeing the same, or any changes in behavior in ag, and just, yeah, just fundamentally trying to understand the weakness in ag and commercial in general. You know, is it a function of the solutions needing to be more, I guess I'd say, productized or easier to consume?

That said, we're counterbalancing, our optimism our long term optimism for that sector with the continued inflationary pressures on commodity prices for the sector as a whole so.

None: We remain very bullish on the opportunity for us in agriculture and commercial at large.

None: But for this year in particular, where we're tempering our expectations, just giving given some of the dynamics in the in the sector.

None: Just to add the kind of thing.

None: A little bit of color of how we help here there was a great blog.

Unknown Executive: Maybe a more demonstrable ROI? I mean, there's both landing new customers and there's retention, and those two factors would obviously weigh in, but just thoughts on commercial and agriculture, and maybe why it's been as soft as it has.

<unk> released by released one of our customers. It is a few weeks ago and it was.

None: It just tells the story of how the used cases strong there.

Unknown Executive: I'd say, coming off of the AgriTech conferences earlier this month, I'd say you're right. The sector is starting to pick its head up. We had a lot of exciting conversations with both customers and potential customers. That said, we're counterbalancing our long-term optimism for that sector with the continued inflationary pressures and commodity prices for the sector as a whole. We remain very bullish on the opportunity for us in agriculture and commerce at large, but for this year in particular, we're tempering our expectations, just given some of the dynamics in the sector. I'll just add one tiny thing.

None: And.

None: Yes.

None: Commercially it's not just agriculture of course, we do have insurance energy and others too and I.

None: You were speaking about maturity of solutions I think that that is critical and but we can now do you have some solutions that are really clear and so now we are being more focused in on that like that parametric agriculture insurance products, which we are scaling now so.

None: We have a few.

William Spencer Marshall: If you want a little bit of color on how we help here, there was a great blog release or buyout release from one of our customers a few weeks ago, and it just tells the story of how the use case is strong there. And commercially, it's not just agriculture, of course. We do have insurance, energy, and others, too, and you were speaking about the maturity of solutions. I think that that is critical, but we now do have some solutions that are really clear, and so now we are more focused on them, like that parametric agriculture insurance product, which we are scaling now. So we have a few toeholds into a serious market there, as well as the fundamentals that are very strong.

None: Toehold into a serious market, there and as well as the fundamentals are very strong.

None: Got it okay. Thanks for taking my questions.

None: Great. Thanks, Jeff.

None: Thank you for your question.

None: Our next question comes from the line of Laura Lee with Deutsche Bank. Your line is now open.

Laura Lee: Hey, Thank you for taking our question just a quick one from us so what's your initial view.

Laura Lee: Gotcha.

Laura Lee: In this space as well.

Laura Lee: Gotcha.

None: Uh huh.

None: Yes.

None: Okay.

Unknown Executive: Okay, thanks for taking my question. Great. Thanks, Jeff.

None: Yeah, you're referring to the reports came out recently about one of their programs with the star shows is that what youre referring to.

Unknown Executive: Thank you for your question. Our next question comes from the line of Laura Lee with Deutsche Bank. Your line is now open.

None: Yeah.

None: Yes.

Unknown Executive: Hey, thank you for taking our question. And just a quick one from us. So what's your initial view of the SpaceX Starship? And this is on SpaceX 1. This is SpaceX Starship, the calculations for the empty barrel.

None: That's a that's a government.

None: Bill.

None: These are large government contracts basically for government owned and.

None: <unk> operated satellites.

William Spencer Marshall: Yeah, are you referring to the reports that came out recently about one of their programs with the Starshields? Is that what you're referring to? Yeah. Yeah, I mean, look, that's a government bill. These are large government contracts, basically for government-owned and operated satellites. So they're playing a sort of classic role of a defense contractor that's very different from our business. And the government will always procure satellites for their own internal uses, if you like, especially in the security domain, like they are doing with SpaceX. But that doesn't, I think, in any way change the market for on the commercial and, and commercial first side of supplying to governments. Does that make any sense?

None: That thing is sort of classic road of AR.

None: A defense contractor, that's very different from our business.

None: The government will always secure sightlines for their own.

None: Internal users if you like especially in the security domain like they are doing with Spacex.

None: But that doesn't I think in.

None: In any way change the market for on the commercial end and commercial first side of supplying to government.

None: That makes sense.

None: Okay, Yeah yeah.

None: Appreciate it.

None: Alright. Thank you for your question Laura.

None: Our next question comes from the line of Chris Quilty with Quilty space.

Unknown Executive: Okay, yeah, I appreciate it. All right, thank you for your question, Laura. Our next question comes from the line of Chris Quilty with Quilty Space. Your line is now open, on. Under the wire, I didn't think I would get it in.

Christopher David Quilty: Your line is now open.

Christopher David Quilty: Oh.

Christopher David Quilty: Under the wire I didn't think I would get it in.

On your cabinet Lucky discussion.

Christopher David Quilty: Okay.

Christopher David Quilty: Yes.

Unknown Executive: Ashley, follow up on your cafeteria discussion. I know, it was close. On the CapEx discussion... Unknown Speaker We talked about growth. What do you consider a pellet?

Christopher David Quilty: It's close.

Christopher David Quilty: On the Capex discussion you talked about the growth versus maintenance capital.

Christopher David Quilty: What do you consider pelican and if it's the former when do we start sort of folding in the growth capex associated with that program.

Ashley Whitfield Fieglein Johnson: Transcription by CastingWords: Yeah, so I would say Pelican is definitely in a growth CapEx phase. Obviously, we've introduced the first tech demo, and then we'll begin launching our operational fleet. And we've talked in the past about this being a really important lever for us as we think about managing our cash. We can move at a lower maintenance replacement rate with the SkySat fleet after we've gotten through the initial operational launches. And then we can launch more faster, so stay in a growth CAPEX phase if we're feeling high demand and the revenue supports it. If we're seeing demand kind of at the same pace as the growth that we've been experiencing to date, we can shift more quickly into a maintenance CAPEX mode.

Christopher David Quilty: Yeah. So I would say Pelican is definitely in a growth Capex phase obviously, we've introduced the first tech demo and then we'll begin launching our operational fleet.

Christopher David Quilty: And we've talked in the past about this being a really important lever for us as we think about managing our cash.

Christopher David Quilty: We can move at a more maintenance replacement rate with the Sky sat fleet after we've gotten through the initial.

Christopher David Quilty: Initial operational launches.

Christopher David Quilty: And then we can launch more faster so stay on a growth capex phase if we're feeling high demand and the revenue supports it.

Christopher David Quilty: If we're seeing demand kind of at the same pace as.

Christopher David Quilty: The growth that we've been experiencing today, we can shift more quickly into a maintenance capex mode. So that is an important lever available to us it enables us to manage our cash and versus are our capex investments.

Ashley Whitfield Fieglein Johnson: So that is an important lever available to us that enables us to manage our cash versus our CAPEX investment. Next question: did we pass a defense budget, or did we extend the CR? Does that mean we're in a CR? I honestly don't. But from your perspective, obviously, you've got lots of contracts on the horizon, a lot of budget melees going on. Well, I have two questions, specific questions. Can you start new programs in our new program startup environment? Some of these are: The second one.

Christopher David Quilty: Yeah.

Great explanation next question.

Christopher David Quilty: Budget did we pass a defense budget or did we extend the CR cri.

None: Honestly, you don't have the mental capacity for it but [laughter] perspective, obviously, you've got lots of lots of contracts on the horizon here and Theres a lot of budget may lease going on well.

None: Two quick questions.

None: Questions.

None: Can you start new programs in our new program starts important to close some of these opportunities and the second one.

Unknown Executive: I don't know what sort of a sponsor CERs are nothing new; we do them every year, but are you seeing that it's freezing up more than normal, like No, I mean, the government is particularly dysfunctional this year. And no, I mean, we have, of course, been tracking that thing. It's complicated.

None: Kind of what sort of a system response are you seeing I mean <unk>.

Or is there nothing new we do them every year.

None: Are you seeing anything where it's.

None: It's freezing up more than normal or is this just like okay. Just punch a clock same old thing.

No I mean like the covenants, particularly dysfunctional this year.

None: No I mean, we have of course been tracking that not surprising.

None: David.

William Spencer Marshall: Yeah, right. And you're right. But anyway, of course, we do track exactly where our contracts require larger upticks in budgets versus just the CR will do. Look, the budget has passed for both on the civil side, so affecting things like NASA, and on the defense side, affecting things like the NRO and our partnership with the ACL. And that's good because it generally enables them to put increases where they have increased things. And, in general, these program areas for commercial satellite data buys are increasing. And just end by saying that we're really proud to serve the government clients that we work with. And final question, SolarCycle, I guess is real. I mean, yes, you but several other companies. [inaudible] Satellite. I mean, you probably got some good data out of that event and were, point, looking back.

David: Yeah, Yeah right.

David: And youre right, but anyway, because we we do track exactly where we're where our contracts require larger.

Upticks in budgets versus just the CR will do.

David: Budget has passed for both on the civil science are affecting things that NASA.

David: And on the defense side effects or things like that and our partnership with ESL.

David: And that's good because it generally in nabors them.

Increases were where they have increased things and in general These program areas for commercial satellite data buys are increasing.

And just end by saying that we're really proud to serve the government clients that we work with.

We think they do some really important services.

David: And I think they do too and.

David: We got to be working with them.

David: Great.

David: Final question Solar cycle, I guess is real I mean, yes, you, but several other companies in the industry.

David: Awesome some older satellites.

David: Go to an early demise.

David: I mean, you've probably got some good data out of that event and was it at this point looking back was it kind of an event that happened I haven't seen anything pointing to that yet, but clearly higher on the solar cycle and do you have good enough data to say yeah.

William Spencer Marshall: [inaudible] U.S. Department of Labor, I feel really good about it, satellite. Well, look, as I mentioned earlier, the solar cycle has been affecting us. It isn't, you know, from an anomaly standpoint, it is anonymously high. There's an 11-year cycle that is normal, but this went significantly higher in the high part of the normal phase than was normal.

If we see higher.

David: So order activity level, which I think is what they are predicting for the next couple of years.

David: Still feel really good about where the satellites are operating.

Hello.

David: As I mentioned earlier.

David: Yes.

David: The cycle has been affecting us it isn't it.

David: From a nominees happen. It is anomalously high there's an 11 year cycle that as normal this went significantly higher than the high part of the normal phase.

David: Was normal but we have adapted our teams have been really great that thing all capabilities generally awfully is very very well the redundancy in our fleet is inherently helped us in this situation.

William Spencer Marshall: But we have adapted; our teams have been really great at adapting our capabilities. Generally, our fleet has survived very well. The redundancy in our fleet has inherently helped us in this situation. But then, we have seen a little bit of an accelerated decrease in life for a few sky sats.

David: Then.

David: We have seen a little bit of et cetera.

David: The decrease of life with a few Sky science I'm pleased to say that the final ones in the low orbit that we have.

William Spencer Marshall: I'm pleased to say that the final ones in the low orbit that we had are now done with this present increase in the depreciation, and that's done for now. So, you know, going forward, we will be, I think there'll be a lot of scientists trying to figure out how to not make that mistake again and be able to predict this. And there are already papers out there that show how to predict this going forward, but it certainly caught the scientific community off guard in this case.

David: Had.

David: Now with this present increase in the.

David: Depreciation and that's done for now so.

Going forward, we will be I think there'll be a lot of science is trying to figure out how to not make.

That mistake again and be able to predict this and they're already papers out there that show how to predict going forward, but it was certainly a caught the scientific community off guard in this case, but largely our satellite fleet and redundancy has enabled us to do very very well, despite it and the agility of our operations.

William Spencer Marshall: But largely, our satellite fleet and redundancy has enabled us to do very well despite it. And the agility of our operations to raise some of the satellites and so on has meant that our services have continued to improve, and we've learned a lot. Great, here's to a better year. Thank you. Thanks, Chris. Thank you. Thank you for your question. There are no additional questions waiting at this time.

<unk> raised some of those headlines and so on has has meant that our services have continued to improve and we've learned a lot.

David: Yeah.

David: Great.

David: To better weather.

David: [laughter].

None: Thank you thanks, Chris.

None: Thank you for your question there are no additional questions waiting at this time I would now like to pass the conference back to well Marshalls CEO for any closing remarks.

I would now like to pass the conference back to Will Marshall, CEO, for any closing remarks. Yeah, I would just like to end by saying that I feel we're in a really strong position for the year ahead, with the big deals that we're pursuing in particular. Obviously, you see that we had significant growth in the government sector last year, and their demand continues to grow. We're increasingly selling solutions enabled, and in particular enabled, by the revolution happening in AI. And we've seen some early adoption of that turning into real partnerships. Also, I'm very proud of our teams on the product side that have been executing on the Pelican satellite through to the Earthdata platform. And as I mentioned, there's a platform milestone announcement on the 11th of April if you want to tune in. But we are overall really heads down and focused on executing on the big deals in front of us, and look forward to updating you on the next call. That concludes today's call. Thank you for your participation, and enjoy the rest of your day.

None: Yes.

William Spencer Marshall: Like to end by saying that I feel we're in a really strong position for the year ahead.

William Spencer Marshall: But the big deals that we're pursuing in particular.

William Spencer Marshall: Obviously you see.

William Spencer Marshall: We've had significant growth in the government sector last year and that demand continues to grow.

William Spencer Marshall: We're selling increasingly the solutions enabled and in particular enabled by the evolution happening in AI and we've seen some early adoption of that turning into real partnerships.

William Spencer Marshall: Also I am very proud of our.

William Spencer Marshall: Teams on the product science have been executing on the Pelican sidelines through to the <unk> data platform and as I mentioned, there's a there's a platform milestone.

William Spencer Marshall: Announcement on the 11th of April if you want to tune in.

We overall are really heads down and focused on executing on the big deals in front of us and I look forward to updating you on the next call.

None: That concludes today's call. Thank you for your participation and enjoy the rest of your day.