Q1 2025 Planet Labs PBC Earnings Call

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Sierra: Thank you for attending today's Planet Labs PBC first quarter and physical 2025 earnings call. My name is Sierra, and I'll be your moderator for today.

Hello, everyone.

Speaker Change: Thank you for attending today's planet Labs, PBC first quarter in fiscal 2025 earnings call.

Sierra: All lines will be muted during the presentation portion of the call, but there will be an opportunity for questions and answers at the end. If you would like to ask a question, please press star followed by 1 on your telephone keypad. I would now like to pass the conference over to our host, Chris Genualdi, VP of Investor Relations.

My name is here and I'll be your moderator for today.

Speaker Change: All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end.

Speaker Change: If you would like to ask a question. Please press star followed by one on your telephone keypad.

Kristen: I would now like to pass the conference over to our host Kristen you already VP of Investor Relations. Please proceed.

Christopher Genualdi: Thanks, Operator. And hello, everyone.

Kristen: Thanks, Operator, and Hello, everyone. This is Christian who all the vice President of Investor Relations at Planet Labs PBC.

Christopher Genualdi: This is Chris Genualdi, Vice President of Investor Relations at Planet Labs, PBC. Welcome to Planet's first quarter of fiscal 2025 earnings call. I'm joined today by Will Marshall and Ashley Johnson, who provide a recap of our results and discuss our current outlook.

Kristen: Welcome to the planets first quarter of fiscal 2025 earnings call.

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

Christopher Genualdi: We encourage everyone to please reference the earnings press release and 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 also may refer to qualified pipeline, which represents potential sales leads that have not yet executed contracts.

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 also may reference qualified pipeline, which represents potential sales leads that have not yet executed contracts any forward looking statements are based on management's current outlook plans estimates expectations and projections the inclusion of.

Christopher Genualdi: 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 that future plans, estimates, or expectations will be realized. 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: Such forward looking information should not be regarded as a representation by planning the future plans estimates or expectations will be achieved.

Speaker Change: Such forward looking statements are subject to various risks and uncertainties and assumptions as detailed in our SEC filings, which can be found at www dot SEC dot Gov. Our actual results or performance may differ materially from those indicated by such forward looking statements and we undertake no responsibility to update such forward looking statements tour.

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 the non-GAAP financial measures, please see the reconciliation tables provided in our press release issued earlier this afternoon.

Speaker Change: Afflict events or circumstances after the date on which the statement is made order reflect the occurrence of unanticipated events.

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.

Speaker Change: And allow for greater transparency with respect to key metrics used by management in its financial and operational decision making for.

Speaker Change: For more information on the non-GAAP financial measures. Please see the reconciliation tables provided in our press release issued earlier. This afternoon further throughout this call. We provide a number of key performance indicators used by management and often used by competitors in our industry. These and other key performance indicators are discussed in more detail in our press release and our earnings.

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, Planet's CEO, Chairperson, and Co-Founder.

Speaker Change: Update presentation, which are intended to accompany our prepared remarks at this time I'd now like to turn the call over to Wil Marshalls planet, CEO chairperson and cofounder over to you well.

William Spencer Marshall: Thanks Chris and hello everyone. Thanks for joining the call today. Planet delivered a solid quarter to start the year. For the first quarter of fiscal year 2025, we generated a record $60.4 million in revenue, representing 15% year-on-year growth, driven by the strength in the government sector. Non-GAP gross margin for the quarter was 55%, and adjusted EBITDA loss was $8.4 million.

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

William Spencer Marshall: Planet delivered a solid quarter to start the year.

William Spencer Marshall: For the first quarter of fiscal year 2025, we generated a record $64 million in revenue representing 15% year.

William Spencer Marshall: Yeah growth driven by the strength in the government sector.

William Spencer Marshall: These results were all in line with, or better than, the guidance provided on our last earnings call. Q1 marked our fourth consecutive quarter of quarter-over-quarter improvement in adjusted EBITDA as we progressed towards our target of achieving adjusted EBITDA profitability by Q4 of this fiscal year. We also launched the Planet Insights platform in April, which extends our market reach and empowers our customers and partners to easily access and build solutions with our data.

non-GAAP gross margin for the quarter was 55% and adjusted EBITDA loss was $8 $4 million.

William Spencer Marshall: These results were all in line with or better than the guidance provided on our last earnings call Q1 marked our fourth sequential quarter of quarter over quarter improvement in adjusted EBITDA as we progress towards our target of achieving adjusted EBITDA profitability by Q4 of this fiscal year. We also launched a ton of insights platform in April which acts.

William Spencer Marshall: Let's go into more detail in Q1, starting with the continued strength that we're seeing in the government sector. Heightened security needs, increased sustainability requirements, and global climate risks are fueling government customer demand for our broad area monitoring capabilities and solutions. In the defense and intelligence sector specifically, revenue grew approximately 25% year-over-year. We're pleased to share that the National Reconnaissance Office, NRO, has exercised the price option of their EOCL contract with Planet, which includes Planetscape monitoring, SkySat high-resolution tasking, and access to our data archive. As a reminder, a portion of our five-year base period contract with the NRO had price options that could be exercised by them at the two-year anniversary of the award.

And as our market reach and empowers our customers and partners to easily access and build solutions without data.

William Spencer Marshall: Let's go into more detail on Q1, starting with the continued strength that were seeing in the government sector.

Speaker Change: Heightened security needs increase sustainability requirements and global climate risks are fueling government customer demand for a broad area monitoring capabilities and solutions.

In the defense and intelligence sector, specifically revenue grew approximately 25% yeah of yet.

Speaker Change: We're pleased to share that the national reconnaissance office in a row has exercised the priced option of the <unk>.

Speaker Change: Seattle contract with planet, which includes planet escape monitoring Sky High resolution toss game and access to our data archive.

Speaker Change: As a reminder, a portion of our five year base period contract with Antero had priced options that can be exercised by them until you anniversary of the ward. We're pleased to have secured this important renewal and are proud to continue serving the U S government's needs, we see meaningful opportunity to expand our relationship with the U S government as E. S. L contract continue.

William Spencer Marshall: We're pleased to have secured this important renewal and are proud to continue serving the U.S. government's needs. We see meaningful opportunity to expand our relationship with the U.S. government as the EOCL contract continues, and we bring new solutions and capabilities online. You'll also recall from our Q4 earnings that we had multiple seven-figure pilot programs in flight or in procurement with the U.S. Department of Defense for our PlanetScope data enhanced with AI-based partner solutions. We're pleased to share that we've successfully completed two of these seven-figure pilots and anticipate additional follow-on pilots from these programs.

Speaker Change: News, and we bring new solutions and capabilities online.

Speaker Change: You'll also recall from our Q4 earnings that we had multiple seven figure pilot programs in flight or them to catch up with the U S Department of defense for Planet Skype data enhance with AI based partner solutions. We're pleased to share that we successfully completed two of these seven figure pilots and anticipate additional follow on pilots from these programs.

William Spencer Marshall: These pilots require broad area monitoring, detection, and reporting and reflect a growing trend towards acquiring focused insights from our global data. We're also pursuing additional larger pilots with other government agencies and believe our unique daily scan positions us favorably to win. We believe all of these pilots have the potential to convert into very large operational contracts over time.

Speaker Change: <unk>.

Speaker Change: These pilots required board area monitoring detecting and reporting and reflected growing trend towards acquiring focused insights from our global data.

Speaker Change: We're also pursuing additional larger pilots with other government agencies and believe our unique data scan positions us favorably to win.

William Spencer Marshall: During Q1, we also signed a contract with Rhombus to provide SkySat high-resolution data for their AI platform, which assists the strategic, operational, and tactical decisions of US national defense and security customers. And we recently expanded our contract with the Royal United Services Institute, RUCI, to provide the leading defense and security think tank with access to our PlanetScope monitoring, SkyFat high-resolution tasking, and archive data to conduct rapid and relevant analysis for policymakers.

We believe all of these pilots have the potential to convert into very large operational contracts overtime.

Speaker Change: During Q1, we also signed a contract with Rambus to provide sky high resolution data for AI platform, which assists the strategic operational and tactical decisions of the U S National defense and security customers.

Speaker Change: And we recently expanded our contract with the.

Speaker Change: Royal United Services Institute, Lucy to provide the leading defense and security think tank with access to our plants get monitoring skies at high resolution tasking and archived data to conduct rapid and relevant analysis for policymakers.

William Spencer Marshall: All in all, we're pleased with the strong results and trends that we're seeing in the defense and intelligence market and remain confident in our opportunity to win new accounts, gain share, and expand with customers over time. We're especially encouraged by the growing demand from some of our largest customers for our PlanetScope daily scanning capabilities enhanced by AI-based partner solutions. Turning to the civil government sector, where we continue to see strong growth in Q1.

Speaker Change: Oh, no. We're pleased with the strong results and trends that we're seeing in the defense and intelligence market and remain confident in our opportunity to win new accounts.

Speaker Change: And expand with customers over time.

Lucy: Actually encouraged by the growing demand with some of our largest customers for our planet script data scanning capabilities enhanced by AI based upon our solutions.

William Spencer Marshall: Demand for our broad area management solutions remains solid, and we continue to win new customers for applications such as compliance monitoring, regulatory enforcement, risk management, and disaster response. During Q1, we signed a contract for the UK EO Data Hub through our partner EarthEye, who offer Earth observation consultancy and program management services. The UK EO Data Hub will have access to the planet's data, platform, and training services to support the development and operation of a new centralized EO platform infrastructure for the UK's public institutions and commercial organizations looking to leverage Earth observation data.

Lucy: Turning to the civil government sector, where we continue to see strong growth during Q1.

Speaker Change: Demand for our broad area management solutions remains solid and we continue to win new.

Speaker Change: New customers for applications, such as compliance monitoring regulatory enforcement risk management and disaster response.

Speaker Change: During Q1, we signed a contract for the U K E O data hub through our partner <unk>, who offer Earth observation consultancy and program management services.

Speaker Change: K E O data hub will have access to planets data platform I'm training services to support the development and operation of a new centralized <unk> platform infrastructure for the UK as public institutions and commercial organizations looking to leverage Earth observation data.

William Spencer Marshall: During the quarter, we also won a new contract with the Kenyan Space Agency to provide PlanetScope data for policy and decision support in agriculture, urban development, spatial planning, disaster response, amongst other applications. Under the contract, the agency will also have access to daily data that can help with situational awareness in the event of disasters like the recent flooding in that country. We also recently won a new contract with the Sabah Forestry Department to provide data for forest carbon monitoring in North Borneo, Malaysia. Sabah Forestry is the state's forestry department whose aim is to efficiently plan and implement the management of state resources according to the principles of sustainable forest management.

Speaker Change: During the quarter. We also won a new contract with the Kenyan space agency to provide planet script data for policy and decision support in agriculture or in development spatial planning disaster response amongst other applications under the contract. The agency will also have access to daily data that can help with situational awareness in the event of disasters like the recent flooding.

Speaker Change: In that country.

Speaker Change: We also recently won a new contract with a subpar forestry to provide data for forests carbon monitoring in North Borneo, Malaysia.

Speaker Change: So Bob first is the state's first your department, whose aim is to efficiently plan and implement the management of state resources. According to the principles of sustainable Forest management.

William Spencer Marshall: Taking a step back, we continue to see regulatory-driven tailwinds supporting civil government customer adoption globally. We also see an opportunity to win new customers in the civil government sector by providing solutions and platform capabilities that support faster customer time to value and enhance customers' ability to efficiently manage broad areas of land and water. Moving to the commercial sector, where headwinds have continued, and we are refocusing our go-to-market strategy to align more closely with where we see the opportunity, particularly in the agricultural vertical.

Speaker Change: Taking a step back we continue to see regulatory driven tailwind supporting civil government customer adoption globally. We also see an opportunity to win new customers in the civil government sector by providing solutions and platform capabilities, which support faster customer time to value and enhance customers' ability to efficiently manage broad areas of law.

Speaker Change: Land and water.

Speaker Change: Shifting to the commercial sector, where headwinds have continued and we are refocusing our go to market strategy to align more closely with where we see the opportunity, particularly in the agricultural vertical for example, we see promising growth potential with our large AG customers, particularly well data is being used for precision AG applications like.

William Spencer Marshall: For example, we see promising growth potential with our large ag customers, particularly where our data is being used for precision ag applications like variable rate application and crop protection. That's an opportunity we're focused on. We've also seen softness with certain customers that provide digital agriculture apps, which in many cases represent lost leaders for those customers.

Speaker Change: Variable rate application and crop protection.

Speaker Change: There is an opportunity we're focused on.

Speaker Change: We've also seen softness with certain customers that provide digital agriculture apps, which in many cases represent loss leaders for those customers, we see potential for improvement as some of those digital AG pats shifts towards new business models with better aligns incentives.

William Spencer Marshall: We see potential for improvement as some of those digital ag apps shift towards new business models with better aligned incentives. These are the digital agriculture customers that we're focused on. More broadly, our go-to-market strategy for the commercial sector is centered around serving customers via our platform, both directly to end customers as well as through third-party solution partners. We believe this strategy can support durable revenue growth and higher ROI on customer acquisition costs over time.

Speaker Change: These are the digital agriculture customers that we're focused on.

Speaker Change: More poorly I'll go to market strategy for the commercial sector centered around serving customers via our platform both directly to end customers as well as through third party solution partners.

Speaker Change: We believe this strategy can support durable revenue growth and higher ROI on customer acquisition costs over time.

William Spencer Marshall: And as an example of a recent partner-led win, during Q1, we signed a three-year contract with a Brazilian utilities company, Electrobras. Electrobras will leverage planet data and alert systems from our partner SC-CON to monitor reservoirs and transmission lines impacted by environmental change and irregular occupations. As you may recall, we also partnered with SECON to serve the needs of the Brazilian Federal Police, particularly for identifying illegal deforestation and mining in the Amazon rainforest.

Speaker Change: And then as an example of a recent partner like win during Q1, we signed a three year contract with the Brazilian utilities company electro bras.

Speaker Change: Electric will leverage planet data and alert systems from our partner S. Econ to monitor reservoirs and transmission lines impacted by environmental change an irregular occupations.

Speaker Change: As you May recall, we also partner with Etsy com to serve the needs of the Brazilian federal police.

William Spencer Marshall: This brings us to our product updates. As I mentioned, an important part of our strategy for the commercial sector is the Planet Insights platform that we launched in April. The Planet Insights platform is designed as the destination for Earth data analytics and geospatial tools. It's built to enable an ecosystem serving as the home for both direct customers and partners to train and run models, build solutions, and turn data into insights. We believe the platform will support a more effective and efficient go-to-market strategy, leading to higher customer usage, retention, expansion, and ultimately higher revenue growth. We're also pleased to share today that our first hyperspectral satellite, Tanager 1, is ready for launch. The spacecraft arrived at Vandenberg Space Force Base on June 3rd in preparation for the liftoff scheduled for July.

Particularly for identifying illegal deforestation in mining in the Amazon rainforest.

Speaker Change: This brings us to our product updates as I mentioned, an important part of our strategy for the commercial sector is the kind of insights platform that we launched in April.

Speaker Change: The plant insights platform is designed as the destination for us data analytics and geospatial twos is built to enable an ecosystem serving as the home for both direct customers and partners to train them on models those solutions and turn data into insights. We believe the platform will support a more effective and efficient go to market strategy.

William Spencer Marshall: It will be joined by 36 Super Dove satellites on board a SpaceX Falcon 9 rocket. TANIGER-1 will be the second of our next generation satellites to take flight following the successful Pelican tech demo launch last November. These two satellites share a common bus, and TANIGER-1 has benefited from the many learnings gained in orbit from the Pelican tech demo. Tenergy One will be the first of our hyperspectral fleet. This will expand our capabilities by adding more than 400 spectral bands of data capturing phenomena that are visible to the human eye.

Speaker Change: Leading to higher customer usage retention expansion and ultimately higher revenue growth.

Speaker Change: We're also pleased to share today to our first hyper spectral satellite tonnage of one is ready for launch the spacecraft arrived at Vandenberg Space Force base on June 3rd and preparation for lift off scheduled for July it will be joined by 36, Superdog sidelines onboard a spacex Falcon nine rocket.

Speaker Change: <unk> one will be the second of our next generation satellites to take five following the successful Pelican Tech demo launched last November. These two satellite share common paths and tonnage of one has benefited from the many learnings gained on orbit from Pelican and tech demo.

Speaker Change: Tonnage of one will be our first of our hyper spectral fleet.

Speaker Change: This will expand our capabilities by adding more than 400 spectrum bands of data capturing phenomenon the invisible to the human eye.

William Spencer Marshall: We expect Tanager's imagery will be analyzed by expert scientists around the world, including our partner, Carbon Mapper, who plan to use Tanager's data to pinpoint methane and carbon dioxide super emitters globally. Tenez's hyperspectral data will also be commercially available to Planet customers for a variety of other applications, like defense and intelligence monitoring, biodiversity assessments, mineral mapping, and water quality assessments.

Speaker Change: We expect tonnages imagery will be analyzed by expert scientists around the world, including in our partner carbon Napa, who plan to use tenants this data to pinpoint methane and carbon dioxide supermajors globally.

Speaker Change: Tenants as hyper spectral data will also be commercially available to panic customers for a variety of other applications.

Speaker Change: Defense and intelligence monitoring biodiversity assessments mineral mapping and water quality assessments.

William Spencer Marshall: The Tanager program, which was funded through our partner Carbon Mapper, represents a great example of the opportunity we see to provide customer or partner-funded missions, leveraging our space systems capabilities and IP to scale the business efficiently. We view this as an attractive model we can use with our government relationships going forward. Finally, we continue to prioritise resources behind core, high ROI areas that support our ability to capture the market opportunity unfolding in front of us, while streamlining where necessary to support organizational efficiency and our profitability objectives.

Speaker Change: The tentative program, which is funded through our partner carbon matter represents a great example of the opportunity we see to provide customer or partner funded missions, leveraging our space systems capabilities and IP to scale the business efficiently. We view this as an attractive model, we can use without government relationships going forward.

Speaker Change: Finally, we continue to prioritize resources behind core high ROI areas that support our ability to capture the market opportunity unfolding in front of us while streamlining when necessary organizational efficiency and our profitability objectives, we remain committed to reaching our target of adjusted EBITDA profitability.

William Spencer Marshall: We remain committed to reaching our target of adjusted EBITDA profitability in the fourth quarter of this year, an important milestone on our journey to building a high-margin, sustainable cash flow generating business. In summary, we're pleased with our results for Q1. We are succeeding in the government sector and seeing increased demand for our data enhanced by AI-enabled partner solutions, which has opened up new use cases. We have a strong, qualified pipeline of large opportunities, and we're confident in our position to compete and win.

Speaker Change: In the fourth quarter of this year, an important milestone on our journey to building a high margin sustainable cash flow generating business.

Speaker Change: In summary, we're pleased with our results for Q1.

Speaker Change: We are succeeding in the government sector and seeing increased demand for our data enhanced by AI enabled partner solutions, which has opened up new use cases.

William Spencer Marshall: The Planet Insights platform has been launched, which enables us to serve a larger, more flexible market with a low-touch model, empowering customers and partners to access insights and build solutions. We're doing all of this while driving operational efficiency and aligning resources to our core opportunities. I'm proud of our teams across the company for their hard work and dedication to building a great business. I'll now turn it over to Ashley to review the financials and our outlook. Over to you, Ash. Thanks, Will.

Speaker Change: We have a strong qualified pipeline of large opportunities and we're confident in our position to compete and win.

Speaker Change: The planet insights platform is launched which enables us to serve a larger addressable market with a low touch model empowering customers and partners to access insights and build solutions.

Ashley Whitfield Fieglein Johnson: We're doing all of this while driving operational efficiency and aligning resources to our core opportunities I'm proud of our teams across the company for their hard work and dedication to building a great business I'll now turn it over to Ashley to review the financials and our outlook over to ash. Thanks for them to kick things off I'd like to share a quick reflection from my first couple of months.

Ashley Whitfield Fieglein Johnson: Thanks, Will. To kick things off, I'd like to share a quick reflection from my first couple months serving as Planets President. First of all, the go-to-market product and engineering teams at Planet are some of the most innovative and driven professionals I've had the privilege to work with during my career. I'm impressed every day by the work they are doing and the passion that they put behind it. In collaborating with these leaders and examining many of our key operating metrics together, we also see opportunities to enable these teams to work in ways that are better aligned to the markets and customers we're serving. We are focused on driving operational efficiency and efficacy to reaccelerate our growth and continue our path to profitability. We'll share more on these efforts over the course of the year.

Speaker Change: As planet's president fares.

Ashley Whitfield Fieglein Johnson: First of all the go to market product and engineering teams at planet are some of the most innovative and driven professionals.

Ashley Whitfield Fieglein Johnson: Had the privilege to work with during my career.

Ashley Whitfield Fieglein Johnson: And then pressed every day by their work, they're doing on the passion that they put behind it and collaborating with these leaders in examining many of our key operating metrics together. We also see opportunities to enable these teams to work in ways that are better aligned to the markets and customers we're serving.

Ashley Whitfield Fieglein Johnson: We are focused on driving operational efficiency and efficacy to reaccelerate, our growth and continue our path to profitability will share more on these efforts over the course of the year.

Ashley Whitfield Fieglein Johnson: Now turning to the quarter, revenue for the first quarter of fiscal 2025 came in at a record $60.4 million, which represents 15% year-over-year growth. As Will mentioned, revenue growth in the first quarter was led by government customers, while we continued to face headwinds in the commercial vertical, largely driven by contractions among agricultural customers. Our product and go-to-market teams are focused on fueling the momentum we're seeing in the government sector while shifting our investments in the commercial sector toward lowering our cost to acquire and serve these markets by leveraging our partner ecosystem and Insights Platform.

Speaker Change: Now turning to the quarter revenue for the first quarter and fiscal 2025 came in at a record $64 million, which represents 15% year over year aircrafts.

Will: As will mentioned revenue growth in the first quarter was led by government customers. While we continued to face headwinds in the commercial vertical largely driven by contractions among agricultural customers.

Will: Our product and go to market teams are focused on fueling the momentum we're seeing in the government sector, while shifting our investments in the commercial sector toward lowering our cost to acquire and serve these markets by leveraging our partner ecosystem and insights platform.

Ashley Whitfield Fieglein Johnson: From a geographic perspective, during the first quarter, North American revenue grew approximately 15% on a year-over-year basis. EMEA revenue grew approximately 11% year-over-year, and Asia-Pacific grew approximately 10% year-over-year, while our team in Latin America drove revenue growth of over 50% year-over-year. As of the end of Q1, our end-of-period customer count was 1,031 customers.

Will: From a geographic perspective during the first quarter North American revenue grew approximately 15% on a year over year basis, EMEA revenue grew approximately 11% year over year and Asia Pacific grew approximately 10% year over year, while our team in Latin America drove revenue growth of over 50% year over year.

Ashley Whitfield Fieglein Johnson: Recurring ACV, or annual contract value, was 95% 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 ACV basis. The net dollar retention rate at the end of Q1 was 100 percent. The net dollar retention rate with windbacks was

Will: As of the end of Q1, our end of period customer count was 1031 customers.

Will: Turing ACB or annual contract value was 95% of our endless period ACD that this business and over 90% of our end of period ACB is that this business can do.

Will: So of annual or multiyear contracts.

Will: Our average contract length continues to be approximately two years weighted on an ACB basis.

Will: Net dollar retention rate at the end of Q1 was 100%.

Ashley Whitfield Fieglein Johnson: As a reminder, at this point in the year, our net dollar retention rate reflects only three months of contract renewals. Our net dollar retention rate starts each year at 100 percent, then builds through the course of the year toward our final full year results. Turning to gross margin, non-GAAP gross margin for the first quarter was 55%, which was better than our guidance for the quarter, due in part to operational efficiencies in our cloud infrastructure. Adjusted EBITDA loss was $8.4 million for Q1.

Will: The dollar retention rate with win backs was 101% as a reminder, at this point in the year. Our net dollar retention rate reflects only three months of contract renewals are net dollar retention rate starts each year at a 100%.

Will: Then builds through the course of the year towards our final full year result.

Speaker Change: Turning to gross margin non-GAAP gross margin for the first quarter was 55%, which was better than our guidance for the quarter due in part to operational efficiencies in our cloud infrastructure.

Ashley Whitfield Fieglein Johnson: As Will mentioned, this marks another quarter of sequential improvement in adjusted EBITDA, driven by a focus throughout the company on managing costs and implementing operational improvements. Capital expenditures, including capitalized software development, were $11.4 million for the quarter. This came in below our guidance due to the timing of purchases and shipments received.

Speaker Change: Adjusted EBITDA loss was $8 $4 million for Q1 as will mentioned this marks another quarter of sequential improvement in adjusted EBITDA driven by focus throughout the company and managing costs and implementing operational improvements.

Speaker Change: Capital expenditures, including capitalized software development were $11 $4 million for the quarter. This came in below our guidance due to the timing of purchases and shipments received please keep in mind that we have multiple launches anticipated for this year and we expect capex to be higher in subsequent quarters than what we thought in Q1.

Ashley Whitfield Fieglein Johnson: Please keep in mind that we have multiple launches anticipated for this year, and we expect CAPEX to be higher in subsequent quarters than what we booked in Q1. Turning to the balance sheet, we ended the quarter with approximately $276 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 breakeven without needing to raise additional capital. And we still have no debt outstanding.

Speaker Change: Turning to the balance sheet, we ended the quarter with approximately $276 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 outstanding.

Ashley Whitfield Fieglein Johnson: At the end of Q1, our remaining performance obligations, or RPOs, were approximately $125 million, of which approximately 81% apply to the next 12 months and 98% to 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 in other customer contracts, was approximately $220 million, of which approximately 64% applied to the next 12 months and 85% to the next two years.

Speaker Change: At the end of Q1, our remaining performance obligations or Rps, where approximately $125 million of which approximately 81% applied to the next 12 months and 98% to the next two years.

Speaker Change: 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 $220 million of which approximately 64% applied to the next 12 months and 85% to the next two years.

Ashley Whitfield Fieglein Johnson: As a reminder, RPOs and backlog can fluctuate quarter to quarter as revenue is recognized against customer contracts and multi-year contracts come up for renewal. It's worth noting that the $25.5 million EOCL priced option renewal with the NRO is not yet reflected in the backlog, as it was received after the quarter end.

Speaker Change: As a reminder, RPM backlog can fluctuate quarter to quarter as revenue is recognized against customer contracts and multi year contracts come up for renewal.

Speaker Change: It's worth noting that the $25 5 million dollar EOC all priced option renewal with the NRL is not yet reflected in the backlog as it was received after the quarter end.

Ashley Whitfield Fieglein Johnson: Additionally, the annualized revenue potential of the large pilots we're running with defense customers is also not captured in backlog. Let me turn now to our guidance for the second quarter of fiscal 2025. We're expecting revenue to be between 59 and 63 million dollars, which represents growth of approximately 10 to 17 percent year over year. Additionally, we expect non-GAAP gross margin for Q2 to be between 51 and 53 percent.

Speaker Change: Additionally, the annualized revenue potential of the large pilots, we're running with defense customers is also not captured in backlog.

Ashley Whitfield Fieglein Johnson: Similar to Q1, gross margin is expected to be impacted by the inclusion of partner solutions in some of our government sales. In addition, we're making investments in our cloud infrastructure this quarter that we expect will lower our cloud costs in subsequent quarters and generate compounding efficiencies over time. Guidance also reflects an estimated $2.9 million impact from the higher depreciation expense related to three of our SkySat satellites, which we discussed on our prior call. We expect our adjusted EBITDA loss for the second quarter to be between minus $10 and minus $7 million.

Speaker Change: Let me turn now to our guidance for the second quarter of fiscal 2025.

Speaker Change: We're expecting revenue to be between 59% and $63 million, which represents growth of approximately 10% to 17% year over year.

Speaker Change: We expect non-GAAP gross margin for Q2 to be between 51 and 53%.

Speaker Change: Similar to Q1 gross margin is expected to be impacted by the inclusion of partner solutions and some of our government sales. In addition, we're making investments in our cloud infrastructure. This quarter that we expect will lower our cloud costs in subsequent quarters and generate compounding efficiencies over time.

Speaker Change: <unk> also reflects an estimated $2 9 million dollar impact from the higher depreciation expense related to three of our skies that satellites, which we discussed on our prior call.

Speaker Change: We expect our adjusted EBITDA loss for the second quarter to be between minus 10, and minus $7 million.

Ashley Whitfield Fieglein Johnson: We are planning for capital expenditures of approximately $14 to $17 million in Q2, reflecting our continued CapEx investments in next-generation fleets, as well as the maintenance CapEx for replenishment of our PlanetScope constellation. Turning to the full year, we continue to see an increase in large contracts and partner solutions in our existing business and pipeline opportunities. Recent wins, including the Naval Information Warfare Center announced earlier this year, the EOCL renewal with the NRO, and the success of the ongoing pilots we're running with the Department of Defense, are all positive indications of demand for our solutions and our ability to win such large contracts.

Speaker Change: We are planning for capital expenditures of approximately $14 million to $17 million in Q2.

Speaker Change: Our continued capex investments in next generation fleets as well as the maintenance capex for replenishment of our planet scrap constellation.

Speaker Change: Turning to the full year, we continue to see an increase in large contracts in partner solutions, and our existing business and pipeline opportunities recent wins, including the naval information Warfare Center announced earlier this year, the LCL renewal with the NRO and the success of the ongoing pilots, we're running with the department of defense.

Ashley Whitfield Fieglein Johnson: We are pursuing many additional large government opportunities that we believe can further increase revenue and gross margin visibility, as well as drive meaningful scale and upside in our business. Some of these include new solutions that we are providing with partners, enabled by recent advancements in AI. We remain confident in our position to win such opportunities. However, as we shared on our prior call, predicting the timing, size, and structure of such wins remains difficult.

Speaker Change: All positive indications of demand for our solutions and our ability to win such large contracts.

Speaker Change: We are pursuing many additional large government opportunities that we believe can further increase revenue and gross margin visibility as well as drive meaningful scale and upside in our business. Some of these include new solutions that we're providing with partners enabled by recent advancements in AI, we remain confident in our position to win such opportunities.

Speaker Change: However, I shared on our prior call predicting the timing size and structure of such wins remains difficult.

Ashley Whitfield Fieglein Johnson: In the commercial sector, we expect our recently launched Planet Insights platform and increased focus on partner-led opportunities will support efficient sales execution and durable growth over the long term. To sum up, we plan to capitalize on the momentum that we see in the government sector today while we position our platform to capture the broader market opportunity over the long term. Finally, before we turn to Q&A, I'd like to highlight that we have just published our second annual ESG report, which can be found on our website.

Speaker Change: In the commercial sector, we expect our recently launched planet insights platform and increased focus on partner led opportunities will support efficient sales execution and durable growth over the long term.

Speaker Change: To sum it up we plan to capitalize on the momentum that we see in the government sector today, while we position our platform to capture the broader market opportunity over the long term.

Speaker Change: Finally, before we turn to Q&A I'd like to highlight that we just published our second annual ESG report, which can be found on our website. It includes information on planets ESG programs and Furthermore, highlights the use of planets data by our customers and partners, we're especially proud of the fact that our day to day business enables an ecosystem of cuts.

Ashley Whitfield Fieglein Johnson: It includes information on PLANET's ESG programs and, furthermore, highlights the use of PLANET's data by our customers and partners. We're especially proud of the fact that our day-to-day business enables an ecosystem of customers and partners to further their own ESG initiatives and impact. We estimate that approximately half of Planet customers are using our data for impact use cases, including environmental, social, and humanitarian applications. We're proud to support the important work of our customers and partners around the world with our powerful global data set. Operator, that concludes our comments. We can now take questions.

<unk> and partners to further their own ESG initiatives and impact we estimate that approximately half of play that customers are using our data for impact to use cases, including environmental social and humanitarian applications. We're proud to support the important work of our customers and partners around the world with our powerful global.

Speaker Change: Dataset.

Operator: We will now begin the Q&A session. If you would like to ask a question, please press star 1 on your telephone keypad. If you would like to remove a question, press star 2. And if you are using a speakerphone, please pick up your handset before asking a question. Our first question today comes from Trevor Walsh with JNP.

Speaker Change: Operator that concludes our comments, we can now take questions.

Speaker Change: Absolutely.

We will now begin the Q&A session.

Speaker Change: If you'd like to ask a question. Please press star one on your telephone keypad.

Speaker Change: If you'd like to remove that question press star two.

Speaker Change: And if you are using a speakerphone. Please pick up your handset before asking your question.

Speaker Change: Our first question today comes from Trevor Walsh with JMP.

Trevor James Walsh: Great. Thanks, Dean, for taking my questions. Maybe I'll start, Will, with you. If you could just give a little bit of your thoughts around the Tanger One launch and where you might think the kind of immediate impacts to the business might come from that from a revenue perspective, and maybe just keeping it simple, breaking it out kind of between defensive intelligence, civil government, commercial, kind of just between those three buckets, where do you think you see kind of the immediate demand coming from?

Speaker Change: Please proceed.

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

Trevor James Walsh: Maybe I'll start with you.

Speaker Change: Could you just give a little bit of your thoughts around the Tanger, one launch and where you might think the kind of immediate impacts to the business might come from that from a revenue perspective, and maybe you can just keeping it simple breaking it out kind of between defense and intelligence Civil government commercial kind of just between those three buckets, where you think.

William Spencer Marshall: Yeah, absolutely. So we're very excited that that sounds like the launch site. We're looking forward to that launch scheduled for July. And yeah, we have an early access program with folks across defense intelligence, commercial like oil and gas, agriculture, as well as civil government. And we believe that there's strong interest there. It is early days of breaking it down by fractions, it's going to be impossible at this point but remember that it won't be starting from completely zero because of that early access program triangle in the synthetic data that we're developing and as we mentioned last time we do have a contract already that involves providing data on the messaging side that we have revenue to recognize that when when we deliver in data so it's not starting scratch so I would like to say the day one it will be a hundred percent that

Speaker Change: Do you see kind of the immediate demand coming from.

Speaker Change: Yes, sorry.

Speaker Change: Okay.

Speaker Change: It sounds like on the loan side.

Speaker Change: What's that launch scheduled for July.

Speaker Change: And yes.

Speaker Change: This program.

Speaker Change: Ross.

Ross: Commercial like oil and gas agriculture.

Speaker Change: As I said with government and we believe it is strong.

Net interest.

Yes.

Speaker Change: Thank you Sam by fashion.

Speaker Change: Impossible at this point.

Speaker Change: Remember when we started.

Speaker Change: Because of the early access program.

Speaker Change: Thank you that was developing.

Speaker Change: As we mentioned last time, we do have a contract already.

Speaker Change: Those providing.

Speaker Change: On the <unk> side that we have revenue recognized when we deliver a data center.

Speaker Change: It's not starting from scratch.

Speaker Change: I would like to say that <unk> will be 100%.

Trevor James Walsh: Great, thank you. I appreciate the color on that. Ashley, yeah, absolutely. And thank you.

Speaker Change: We have.

Speaker Change: Great. Thank you I appreciate the color on that.

Speaker Change: Yes, absolutely.

Thank you.

Ashley Whitfield Fieglein Johnson: Ashley, maybe just switching gears a little bit, understood the kind of softness around commercial customers and especially in the agricultural space. I guess there's a two-part question there. One is from a numbers perspective; it looked like the percentage of the business in the quarter ticked down in commercial from about 29% to 22, just looking at your investor deck charts you have there. Is that a combination of both the strength in the D&I business compounded by the kind of contractions in the agricultural space or just broadly within commercial, or is one outweighing the other there in terms of the contribution? And then, second question, can you maybe just double-click a little bit in terms of what's happening within that agricultural arena with customers either reducing spend or shifting gears a little bit on that?

Speaker Change: Maybe just switching gears a little bit understood.

Speaker Change: Kind of softness around <unk>.

Speaker Change: Commercial customers instruction in the agricultural space I guess, two part question there.

Speaker Change: One just from a numbers perspective, it looked like the percentage of the business in the quarter ticked down in commercial from about 29% to 22 I was just looking at your investor deck.

Speaker Change: Charles do you have there is that a combination of both the strength in the in the DNI business compounded by the rich kind of contractions in the agricultural space or just broadly within commercial or is it one outweigh any other there in terms of the contribution and then second question can you, maybe just double click a little bit in terms of.

Speaker Change: What what's happening within that agriculture.

Speaker Change: Arena to kind of dig.

Speaker Change: Have customers, either reducing spend or shifting gears, a little bit on that front.

William Spencer Marshall: Yeah, I'm happy to take that. I'd say, quarter over quarter, we definitely saw a downtick in the commercial sector, driven primarily by some of the larger agricultural contracts that we've referenced earlier, where we've seen our customers really facing their own challenges. Several of them are public companies, but it's easier to see more directly than the headwinds that are hitting them. Actually, I can turn it over to Will to talk about how we see the outlook in the agricultural space, because we do see this as an important sector for us in the medium to long term. Yeah, I'm exactly ahead of it and have very much believed in that market opportunity.

Speaker Change: Yes.

Speaker Change: I would say.

Speaker Change: Every quarter, we definitely saw an uptick in the commercial sector.

Speaker Change: Is it driven primarily by.

Speaker Change: On the larger agricultural contract that we've referenced earlier, where we see our customers really anything.

Speaker Change: Jim.

Speaker Change: Hum.

Speaker Change: Is it more directly.

Speaker Change: The headwinds there.

Speaker Change: It does.

This is really value these relationships and the long term.

Speaker Change: Our opportunity for the agricultural sector. So we work with these customers to figure out how to read.

Speaker Change: Joe.

Speaker Change: We offer to them.

Speaker Change: And maintain that at commercial relationship that also maintained.

Speaker Change: You have the opportunity to grow with them.

Speaker Change: Okay.

Speaker Change: Can you talk about kind of how we see the outlook in the agricultural space because we do see this as an important sector for us in.

William Spencer Marshall: Fundamentally, our data can enable improvement in crop yield and decrease in inputs, which enable real efficiency gains across that trillion-dollar sector. They're having struggled in the general sector, facing pretty strong headwinds, but fundamentally, those facts remain true. The problem, if there was any, is that they were using digital ag platforms that they were largely giving away, which was an underlying incentive model, and it's the kind of thing they cut when they're having a hard time.

Speaker Change: In the medium to long term, yes exactly.

Speaker Change: Very much believe in that market.

Nigel: That can enable increase in crop yield and decrease in input Nigel real efficiency gains.

Nigel: Having.

Struggled in downloads et cetera.

Nigel: From a headwind.

Nigel: Fundamentally remain true.

Nigel: It wasn't.

Nigel: You would use the digital platform, we will not be giving away, which wasn't underlying incentive model under the kind of thing.

William Spencer Marshall: Actually, now we're finding several partnerships, some of which we've talked about, and in fact, several of the big ag companies have even released videos and things showing useful data in these ways, but they're reforming their digital ag platforms such that they align incentives. That is, when the farmer benefits, they get the money. When they go get the money, we get the money.

Nigel: We're not having the pipeline actually now refinery several partnerships some of which we talked about that.

Speaker Change: That's a big relief.

Speaker Change: So utilization rate.

Speaker Change: Reforming that is behind platform SaaS DSA aligned incentives.

William Spencer Marshall: When you align incentives like that, we can really imagine that scaling. So, as Nancy was just saying, we're keeping those relationships strong so that they can come back up. I would just also note, and you were asking about the commercial sector slightly more broadly, we still see a lot of strength in that market more broadly. Agriculture was our biggest sector, but just to touch on a couple of other examples from the last quarter, Zespri, which we had previously mentioned, has just done an expansion.

Speaker Change: When the farmer benefit.

Speaker Change: Thanks, Good afternoon.

Speaker Change: Buying centers like that we can really imagine that sterling.

Speaker Change: So you're saying that keeping that relationship is strong.

Speaker Change: Again come back up and just North America.

Speaker Change: More broadly we still see a lot of strength in that market.

Speaker Change: Academic was a biggest factor.

Speaker Change: Just to touch on a couple of other examples from the last quarter really.

William Spencer Marshall: They're doing these automatic drought insurance products in Africa, and they got to their five-year milestone within the first two years, getting to, I think, 1.6 million pastoralists, which is huge. BSS, the so-called ag customer, did do an expansion to do sustainable agriculture monitoring. PG&E, outside the ag sector now, talking about how they were using our data for vegetative encroachment in power lines, and they did an expansion in Q1, and also showed some pretty good breakthroughs in the number of fires that were being started, something like a 70% reduction in fires started because of their efforts to reduce vegetation near their power lines.

Speaker Change: Mentioned.

Speaker Change: Just as an expansion.

Speaker Change: It wasn't that big.

Speaker Change: Insurance.

Speaker Change: For Us in Africa.

Speaker Change: And thank you for that by the amount that was in the past.

Speaker Change: One 6 million after this.

Speaker Change: Which is huge.

Speaker Change: Is that because of high investment.

Speaker Change: An expansion to the sustainable agriculture monitoring at <unk>.

Speaker Change: Now talking about me.

Speaker Change: Are you using.

Speaker Change: Encouragement and power line.

Speaker Change: Asian expansion also in Q1 and also.

Speaker Change: Showed some pretty good graces and number five we started.

Speaker Change: Yeah.

Speaker Change: 70% reduction in buying the stock.

William Spencer Marshall: So these are really important value propositions for these customers. A lot of that's small. I think that we, in terms of the outlook in agriculture, it's probably going to be relatively soft this year, but perhaps we can expect to see something grow more from that seed corn next year.

Speaker Change: Thanks.

Speaker Change: Reduce vegetation there that outlines the reason we have important value proposition for these customers a lot of that so.

Speaker Change: I think that we can kind of the outlook in agriculture is probably going to be.

Speaker Change: Relatively soft this year.

Speaker Change: We can expect to see something more.

Speaker Change: More from that vehicle in next year.

Trevor James Walsh: Great. Thank you both. I appreciate it.

Christine LaWalk: Our next question today comes from Christine LaWalk with Morgan Stanley. Please proceed.

Speaker Change: Great. Thank you both I appreciate it.

Speaker Change: Okay.

Speaker Change: Next question today comes from Cristina <unk> with Morgan Stanley. Please.

Christine LaWalk: Hey, good afternoon, everyone. Will and Ashley, in terms of the government opportunities you highlighted, you mentioned last quarter pursuing NGA's LUNO program, and it looks like since they've announced LUNO-B, and the A and B portions of the programs could be about $500 million in ceiling combined. So, I guess, how big of a focus is this for you? How do you think about positioning? Is this one of the big defense opportunities you had referenced? And when would you expect to make a decision or hear about a decision?

Cristina <unk>: Please proceed.

Speaker Change: Hey, good.

Speaker Change: Good afternoon, everyone will it nationally.

Speaker Change: In terms of the government opportunities you highlighted.

Speaker Change: You mentioned last quarter pursuing nga's lunar program and it looks like since they've announced Lou the Ob and the ENB portions of the programs could it could be like about $500 million and ceiling combined so I guess, how big of a focus is this for you. How do you think about positioning is this one of the big defense opportunities.

Speaker Change: You had had referenced and when would you expect to make a decision or hear about a decision.

William Spencer Marshall: Yeah, that's certainly an opportunity we're pursuing. You're right, it's a track budget. That's right.

William Spencer Marshall: They recently announced at GEOINT that they increased that budget from $290 million to $490 million. So obviously, the NGA has a strong interest in this sort of analytics and AI on top of satellite imagery. We believe we're in a unique position with our daily scan to be able to search large areas. No one else can do it, frankly. And that's very exciting. So we're definitely competing for that, and we'll keep you up to date.

Speaker Change: Yes.

Speaker Change: We are seeing.

Speaker Change: That's right.

Speaker Change: Zero.

Speaker Change: Okay.

Speaker Change: $419 million.

Speaker Change: Obviously, the NCI has a strong interest in this.

Speaker Change: Analytics and AI on top of satellite imagery, we believe.

Speaker Change: Unique position without a big span.

Speaker Change: Loss areas.

Speaker Change: No one else can do frankly, and very exciting so definitely competing for that move.

Christine LaWalk: Great. If I could speak to a second question here,

Speaker Change: Great.

Speaker Change: Great if I could sneak a second question here.

Speaker Change: It's great to hear that you've been making progress on AI. That's clearly a big driver of growth I mean, a few months ago, we saw aspire announced a collaboration with Nvidia to advance AI driven weather prediction I guess can you provide.

Speaker Change: Provide more context regarding the AI opportunities you're pursuing and is there an opportunity for you to also collaborate with Nvidia and what could that look like.

William Spencer Marshall: You know, it's great to hear that you've been making progress on AI. That's clearly a big driver of growth. I mean, a few months ago, we saw Spire announce a collaboration with NVIDIA to advance AI-driven weather prediction. Can you provide more context regarding the AI opportunities you're pursuing? And is there an opportunity for you to also collaborate with NVIDIA? And what could that look like?

William Spencer Marshall: Yeah, I'm very excited by all the prospects in AI, and obviously, we use it in some of our core products today. You know, we've mentioned previously some of the incredible results of our load detection for buildings. Load detection enables us to work with Brazil on the BPCB workstation.

Speaker Change: Yes, very good.

Speaker Change: I think by all the processing AI, obviously, we're using some of our core products today.

As mentioned previously some of the increase.

Speaker Change: Results of our buildings.

Christine LaWalk: And some of our new products, like you were asking about LUNO, of course, they're interested in the use of AI on top of our forward scan, which is unlocking new potential. So both present products and new products that we're working on involve AI. We're very excited about collaboration with a lot of different large players. But we've got nothing to announce today regarding India.

Speaker Change: <unk> enables us because what we've done.

<unk> <unk>.

Speaker Change: Our station.

Speaker Change: And.

Speaker Change: And some of our new products that youre asking about lunar.

Speaker Change: Yeah.

Speaker Change: Using AI on of course.

Speaker Change: Scan, which is unlocking new central bank.

Speaker Change: <unk> put out some new products that we're working on an old AI, we're very excited about collaboration with other different last night.

Christine LaWalk: Great. Thank you very much.

Speaker Change: Nothing to announce today.

Speaker Change: Got it.

Speaker Change: Yeah.

Jason Gursky: Our next question today comes from Jason Gursky. Please proceed.

Speaker Change: Great. Thank you very much.

Speaker Change: Thank you.

Speaker Change: Okay.

Jason Gursky: Hey, good afternoon, everybody. [inaudible] Well, I wanted to start on teenagers. I'm not sure if I heard your exact answer there as it relates to revenue generation from teenagers.

Speaker Change: Our next question today comes from Jason Gursky. Please.

Speaker Change: Please proceed.

Speaker Change: Okay.

Speaker Change: Hey, good afternoon everybody.

Speaker Change #100: Well I wanted to start a teenager I'm not sure if I.

Speaker Change #100: Uh huh.

Speaker Change #100: Exactly.

Speaker Change #100:

Speaker Change #102: Your answer.

Speaker Change #103: As it relates to revenue generation on teenager. So can you confirm that you get teenagers are up and running and that on a quarter on quarter basis.

Speaker Change #103: We're going to be generating higher levels of revenue.

Speaker Change #104: Try to better understand exactly what passenger is going to add revenue.

William Spencer Marshall: I mean, foundationally, it's providing a deep data stream that can drive a lot of different use cases, as you mentioned, defense intelligence, cyber security monitoring, missions, and so on. It is a nascent market, as I mentioned. We do have an early access program so that that enables those customers to get up and running when we're producing operational data. So that system has the potential to be operational from the first satellite, so that's exciting. But we're in a nascent market there, so we're obviously going to be building that over time. The way we're doing that is by...

Jason Gursky: [inaudible]

Speaker Change #105: Foundation is providing.

Speaker Change #105: <unk>.

Speaker Change #106: I would drive a lot of different use cases as you mentioned.

So that's the main thing you mentioned you saw them.

Speaker Change #106: It is a nascent market.

Speaker Change #106: As I mentioned earlier, we do have.

Early access program.

Speaker Change #106: That enables those customers.

Speaker Change #106: Choosing operational data.

Speaker Change #106: That asset.

Speaker Change #106: That is essential to the operation.

Speaker Change #106: That line for that exciting, but we.

Speaker Change #107: Yes, Nathan market.

Speaker Change #107: We obviously can be building at a time.

Speaker Change #108: What are you doing that.

Speaker Change #109: <unk> is doing.

Speaker Change #109: How do you anticipate you're going to get those folks but also.

Speaker Change #110: As mentioned.

Speaker Change #110: You mentioned last time, we had a $20 million comes back with common naphtha.

Speaker Change #110: By some of the data to get going on on the emission side of things.

Speaker Change #110: You know that.

Speaker Change #110: Okay.

Speaker Change #110: Therefore, it can be incremental revenue.

Speaker Change #110: And we.

Speaker Change #110: This is an exciting area long Congress.

Speaker Change #111: Yes, just a reminder that that contract is for Adam.

Speaker Change #111: Outer period, so obviously, it's contingent on one.

Speaker Change #112: Yes certain milestones.

Speaker Change #113: <unk> generated by the satellite so we don't expect to see revenue from that contract.

Speaker Change #113: And the next couple of quarters, but we'll keep you posted.

Operator: Okay, so I'm ready to proceed.

Speaker Change #114: If we get to them.

Speaker Change #114: Letting them that way.

Speaker Change #114: Yeah.

Jason Gursky: Yeah, that is helpful. Yeah, I appreciate that. And then on the DoD side of things, and the three pilots that you've been working on have been completed.

Speaker Change #115: Okay, sorry Christine.

Speaker Change #115: Sure.

Speaker Change #115: Yes. It is yes I appreciate that.

Speaker Change #115: And then on the <unk> side of things and the three.

William Spencer Marshall: Is there a possibility here that what we could be adding to the revenue would be something at the scale of your annual EOCL contract? It could just kind help us better understand what you think you've got here on the horizon, potentially.

Speaker Change #115: Pilots that you've been.

Speaker Change #115: Working on too.

Speaker Change #115: Pleated.

Speaker Change #115: Yeah.

Speaker Change #116: Is there a possibility here that what we could be.

Speaker Change #116: Adding to the revenue would be something.

Speaker Change #117: The scale of your annual iOS seal contract can you just kind of help us better understand.

William Spencer Marshall: Yeah, I mean, so...

What you think you've got here on the horizon essentially.

William Spencer Marshall: We're very excited about those pilots because they're generating real capabilities already for the Defense Department. In this case, we've seen interest around the Defense Department and internationally. They're producing capabilities that they don't have, but peripheral vision enabling them to monitor large areas of threats, and that's the combination of our daily scans of AI.

Speaker Change #117: Yes.

Speaker Change #118: We're very excited about those pilots because they generally seem to be okay, but he.

These are an equal.

Speaker Change #119: Okay. So on the synergies.

Yes around the defense Department and ask me.

Speaker Change #119: <unk>.

Speaker Change #120: Hey, Jason.

Speaker Change #120: Our peripheral vision.

William Spencer Marshall: I do think it's scale at operations. So yeah, we believe there's big opportunities there. And yeah, these pilots we believe will build, we would expect to do more pilots and then eventually build into operational contracts there. But yes, we believe they are scalable opportunities, and just note that they are all dependent on this PlanetScope data scan. So we, again, believe we're in a pretty unique position to go after that, and the United States

Speaker Change #120: And monitor advanced areas.

Speaker Change #120: And that's the combination of all.

Speaker Change #121: Yes I.

Speaker Change #121: I do think scale and operations.

Speaker Change #121: Yes, we believe that the opportunities there.

Yes, the pilots, we believe will build.

Speaker Change #121: We expect to do more pilots and then keep building operation.

Speaker Change #121: Yes, we believe scale opportunities.

Speaker Change #121: Just noticed this day are all dependent on the final scope. They scan we again delivered a pretty unique position as you go onto that.

Ashley Whitfield Fieglein Johnson: And just to remind you, it's incredible the pilots that we're seeing. They can scale across multiple dimensions, so the scope of the pilot, how much area we're monitoring, the amount of services that we're providing on top of it, and then also time, because we've been doing time-bound pilots. But to speculate exactly how they will scale and get the budgets lined up to support those operational opportunities is where we don't have the visibility at this time.

Speaker Change #122: And I guess just your own.

Speaker Change #121: Yes.

Speaker Change #123: Thanks credible a pilot with everything that can scale across multiple.

Speaker Change #123: As I mentioned.

Speaker Change #123: The scope of the pilot how much carry them on my right.

Ashley Whitfield Fieglein Johnson: And so, you know, we're very excited about the early results from the pilots, but speculating as to whether this could be as big as an ESEL-type award would not be prudent for us to do at this time.

Speaker Change #123: Services and providing on top of it and then all the time, because we've been doing Honda pilot.

Speaker Change #123: Secondly, as exactly how big it will scale and get into budget signed up to.

Speaker Change #123: To support this operational opportunity.

Speaker Change #123: And where we don't have the visibility at this time and so on.

Speaker Change #123: We're very excited about the early results from the pilots.

Speaker Change #123: Then speculating as to whether this could be if the U S.

Jason Gursky: But you did use the word large here. So maybe you can just, you know, baseline things for us out here in the investment community when you use the word large opportunity. Is that a five-figure deal, a six-figure deal, seven, eight, nine, how many dollars are in your vocabulary? Yeah. I don't know what any of these guys are going to do.

Speaker Change #124: That is very impressive.

Speaker Change #124: Yeah.

Speaker Change #125: Uh-huh, but you didn't use the word large here.

Speaker Change #126: So maybe you can just.

Speaker Change #126: Baseline things for us out here in the investment community. When you use the word large opportunity is that a.

Speaker Change #126: Figure deals six figure deals 789.

William Spencer Marshall: That's only seven figures if it were pilots, right? Then we can leave it at that.

Speaker Change #126: Our rush here in your vocabulary.

Speaker Change #126: Okay.

Speaker Change #127: Already seven figure deal.

Speaker Change #126: Pilot.

Jason Gursky: Great. Will, can you give us an update on Pelican and where we go from here, based on the recent tech demo that you did?

Speaker Change #126: And you can leave behind that.

Speaker Change #128: Okay great.

Speaker Change #129: Well can you give us an update on <unk> and where we go to from here based.

William Spencer Marshall: Yeah, so we're pleased with how that tech demo continues to perform, you know, testing all the technological aspects of that. And so far, it's very good. And as I mentioned in my previous remarks, it's feeding into our ability to do the Canada mission, so they use the same bus, so there's learning that's gone into that. And as I mentioned last time, we are building towards operational satellites that we expected in 12 months when I mentioned that last time, so it's still holding to that sort of timeframe. We're pleased with the progress of that program.

Speaker Change #129: Based on recent tech demolition.

Speaker Change #129: Yeah.

Speaker Change #130: Thanks, Larry.

Speaker Change #131: We had a tech demo it continues to perform.

Speaker Change #131: Testing technology.

Speaker Change #131: That takes.

Speaker Change #132: Very good and as I mentioned.

Speaker Change #132: Now seating.

Speaker Change #132: There's a ton of emissions.

Speaker Change #132: So there's nothing to comment to that.

Speaker Change #132: <unk>.

Speaker Change #132: And as I mentioned.

Speaker Change #132: We are building was operational satellites.

Speaker Change #132: You would expect within 12 months of when I mentioned that last time.

Speaker Change #132: So that sort of timeframe.

Jason Gursky: Okay, so we're going to have some more launches in the next 12 months.

Speaker Change #132: Basically the progress of that program.

Speaker Change #132: Okay.

Speaker Change #132: Yeah.

Speaker Change #132: Yeah.

Speaker Change #132: Okay. So we're going to have some more launches coming in the next 12 months.

Jason Gursky: Okay, great. And then what about?

Speaker Change #132: Think about it.

William Spencer Marshall: And then what about international demand in the D&I area? Are there any opportunities for you all in Five Eyes, Japan, the Middle East? Are there any of our allied nations that, you know, might want something similar to any OCL kind of construct?

Speaker Change #132: Yes.

Speaker Change #133: Okay, Great and then what about international demand in the DNI area.

Speaker Change #134: Are there any opportunities for you all.

Speaker Change #134: And the middle East dessert.

Speaker Change #135: Of our Allied nations.

Speaker Change #136: Might want something similar Jamie LCL.

William Spencer Marshall: Yeah, I mean, there are absolutely opportunities with governments around the world, and we have to be pursuing them. We have existing relationships with many U.S. allies around the world. We've talked about several of them before, a longstanding relationship with Japan, for example, Germany, for example, and others. So yes, there's a lot of opportunities for expansion there.

Speaker Change #136: Construct.

Speaker Change #136: Yes.

Speaker Change #137: Let's see.

Speaker Change #137: Opportunities.

Speaker Change #137: Kevin.

Speaker Change #137: And we're actively exploring.

Speaker Change #137: Many of that is around the world.

Speaker Change #137: A couple of them before.

I was kind of a nice partnership with Japan for example.

William Spencer Marshall: They are absolutely looking at both what is happening in Ukraine, seeing the value of satellite data there, and being keen-eyed on that. And they're also looking to the U.S. as leaders in this domain and following it. And in some senses, they're in an even more eager position because... The U.S. has more capacity of its own, those countries have less, and so ours enables them to get there without the degree of billions that the U.S. government is spending, and we get a lot of those capabilities at lower costs. So there is a strong demand for technology in several other countries, and in recent times, I've been actively working with the sales team on maturing those projects.

Speaker Change #137: For example, and others.

Speaker Change #137: So, yes, and there is a lot of expansion opportunity there.

They are absolutely looking at both.

Speaker Change #138: What is happening in <unk>.

Speaker Change #138: I mean, the value of satellite that you hit that.

Speaker Change #138: <unk> and <unk>.

Speaker Change #138: What we said coming into the U S.

Speaker Change #138: In this dimension and following them.

Speaker Change #138: And in some senses.

Speaker Change #138: Even more eager positioned.

Speaker Change #138: In the U S has more capacity.

Speaker Change #138: Those countries have less I'm sorry.

Speaker Change #139: Got it.

Speaker Change #139: Enable them to get there without degree.

Speaker Change #139: Degree of built in.

Speaker Change #139: U S government spending that I get a lot of it.

Speaker Change #139: So there is a strong demand right now in my opinion, but several other countries.

Speaker Change #139: In recent times on actively working with her.

Speaker Change #139: <unk>.

Jason Gursky: And then two last quick ones for me, the European regulations around, you know, deforestation and some of the basic products coming into the EU and the supply chain meeting to demonstrate that they're not leading to deforestation. And I know there's an acronym associated with this regulation, but I can't remember off the top of my head.

I'm showing no responses.

Yeah.

Speaker Change #140: Okay great.

Speaker Change #141: And then two last quick ones for me the European regulations around.

Speaker Change #141: Deforestation.

Speaker Change #141: Some of the patient.

Speaker Change #141: Products coming into the EU.

Speaker Change #141: The supply chain and to demonstrate that they're not leading to the horse nation I know, there's an acronym associated with yesterday, which I can't remember.

Speaker Change #141: But.

William Spencer Marshall: But can you just give us a little bit of an update on the company's involvement in helping those that are importing those goods into the EU demonstrate that their products aren't leading to deforestation? Has that been any kind of catalyst at all for demand for Planet?

Speaker Change #142: Can you just give us a little yeah. Thank you can you give us a little bit of an update on.

Speaker Change #142: The company is involved in.

Speaker Change #142: Helping.

Speaker Change #142:

Speaker Change #142: Those that are importing those.

Speaker Change #142: Those goods into the EU demonstrating that their products are leading to deepwater station that's been any kind of catalyst at all for demand.

Jason Gursky: We are seeing interest there, and we've been approached by several governments, for example, that have been affected by this, where there are companies outside the EU that have a lot of commodity producers for the EU and are, frankly, scrambling to try to put together systems so their industries aren't adversely affected by this and help provide their industries with centralized systems. So yes, we do see this happening. Is it big? Not yet, but we believe this is really driving the market long-term.

Speaker Change #142: Per plan.

Speaker Change #142: Yeah.

Speaker Change #142: We are seeing interest.

Speaker Change #142: First by several government for example.

Speaker Change #142: Affected by this.

Speaker Change #142: Outside of the EU.

Commodity producers for the EU.

Speaker Change #142: Frankly scrambling to try to put together systems as the industry.

Speaker Change #143: Thank you.

Speaker Change #142: Yes.

Speaker Change #142: And how to define the industry assistance and it wasn't a civil government.

Speaker Change #142: Have discussions with them.

Speaker Change #142: The company's earnings.

Speaker Change #142: Just more broadly nothing weird.

Speaker Change #142: Yes.

Speaker Change #142: This quarter was an initiative with Salesforce.

Speaker Change #144: And Nathan metrics. This is meant to be a solution.

Speaker Change #144: Buffy monitoring, which is also coming up as a percent.

Speaker Change #144: With deforestation peso despite adversity there was in country.

More broadly and that's it.

Companies.

Speaker Change #144: On track nature based targets as well that carbon one.

Speaker Change #144: We do see that happening.

Speaker Change #144: Is it based not yet, but we believe it is.

Ashley Whitfield Fieglein Johnson: Last one for me. Actually, I can't let a quarter go by without asking you about cash flow breakeven. And when do we get there?

Speaker Change #144: Really driving demand long term.

Speaker Change #145: Mhm last one for me actually I cant, let a quarter go by without asking you about cash flow breakeven and when do we get there.

Jason Gursky: Um, of course. As I said on the call, we are continuing to make progress on getting to our target this year of EBITDA profitability, which is the first step to cash flow profitability. And obviously, we're a business with growth margins that can support continued scale and expansion so that we can get to cash flow profitability ahead of any duration. Thank you, Jason. We do have other people in the queue. Thank you, everybody.

Speaker Change #145: Great.

Speaker Change #146: As I said on the call.

Speaker Change #146: Continuing to make progress on getting to target this year.

Speaker Change #146: EBITDA.

Speaker Change #146: And profitability, which is the first step to cash flow profitability and obviously <unk>.

Speaker Change #146: Business with like.

Speaker Change #146: Gross margins that can support it.

Speaker Change #147: Can you scale.

Speaker Change #147: Sachin.

Speaker Change #147: Okay.

Speaker Change #147: Cash flow profitability.

Speaker Change #147: Yeah.

Thanks, Jason.

Ryan Boyer Koontz: Our next question today comes from Ryan Koontz with Needham & Company. Please proceed.

Speaker Change #147: Thanks, everybody.

Okay.

Speaker Change #148: Our next question today comes from Ryan Koontz with Needham <unk> company.

Ryan Boyer Koontz: Thanks for the question. And nice to hear the great progress on the government side and understand there's Strategic Reset sound like going on the commercial side, and I know you've talked in the past about some of your efforts there on the commercial side are going to be with partners, and we've heard some partner announcements in the past. And would you give us an update there and any kind of milestones that we should look out for as far as first deals or first, you know, sizable, important strategic deals that we might look for from some of your commercial partners, either in ag or otherwise? Thanks.

Please proceed.

Speaker Change #149: Hi, Thanks for the question.

Speaker Change #150: Next year, the great progress in the government side and understand there is some.

Speaker Change #151: The strategic reset sound like going on the commercial side I know you've talked in the past about some of your efforts there on commercial it can be with partners and we've heard sort of partner announcements in the past and wonder if you can give us an update there and any kind of milestones that we should look out for what we should look for with your partners as far as you know firstly.

Deals are first sizable important strategic deals that we might look for from some of your commercial partners either in AG or otherwise thanks.

Ashley Whitfield Fieglein Johnson: I think it's fair to say that a lot of our business, commercial and otherwise, involves partners. It's really about leading to a partner-first model to enable us to scale that side of the business. And as we talked about in the prepared remarks, a big part of that is enabling partners to be able to self-serve and build solutions on top of our data. And our strategy is focused on enabling all of that through our platform.

Speaker Change #152: I think it's fair to say that a lot of our business.

Speaker Change #152: Commercial and otherwise.

Speaker Change #152: Right.

But really about leading to a partner first model hit.

Speaker Change #152: To name a few.

Yeah on that type of business and as we talked about on the prepared remarks, a big part of that is enabling partners to be able to stop there.

Speaker Change #152: And building solutions on top of that.

Speaker Change #152: And on top of our data and.

Ashley Whitfield Fieglein Johnson: So, making it easier for partners to work with our data, test our data, so giving them a sandbox environment, giving them more of a self-serve experience working with our data to test their solutions, and then enabling them to more easily scale on top of the platform. This also, one, reduces their total cost of ownership of working with Planet because they don't have to then download and extract the data and try to predict where their end customers are ultimately going to need the data, but rather, they can access the data and work inside of Planet's environment.

Speaker Change #152: Our strategy is focused on enabling all of that through our platform.

Speaker Change #152: Making it easier for partners to <unk>.

Speaker Change #153: Work with our datasets are data for giving them, the sandbox environment and getting them more of a self service experience.

Speaker Change #153: And working with our debt until two testing solutions, and then enabling them to more easily scale on top of the platform, which also.

Speaker Change #153: <unk> reduces their total cost of ownership I'm working with <unk>, because they don't have to then download and extract the data and try to predict where their end customers are ultimately going to need data, but rather they can access the data and work inside of Atlanta environment.

Ashley Whitfield Fieglein Johnson: The benefit to us is that it also gives us visibility into the end customer through that movement. So we can see, as the partners engaging and expanding the business, not only the revenue benefits but the type of usage data that will enable us to provide feedback into our own product development lifecycle. So I'd say partners have always been a very important part of our strategy. And as we've talked about before, we think that this is a really important way for us to scale the business profitably.

Speaker Change #153: To us is that it also gives us the visibility to the end customer for that question. So we can see handset partners engaging and expanding the business not only the rental revenue benefits, but the type of usage data that will enable us to provide feedback into our own product development lifecycle. So.

Speaker Change #153: I would say partners has always been a very important part of our strategy.

Ashley Whitfield Fieglein Johnson: And the investments that we're making around the platform are really about enabling that to scale and serve the needs that we're hearing from our partners that will make their lives easier and make it easier for them to build their own solutions on top of that data.

Speaker Change #153: We talked about before.

Speaker Change #153: And really.

Speaker Change #153: Really importantly, impressed and scale the business profitably and the investments that we're making around the platform are really about enabling that can scale and serve the needs that we're hearing from our partners that will make their lives easier and make it easier for them to build transmission.

Ashley Whitfield Fieglein Johnson: And yes, we did have some milestones this last quarter, including the launch of the Planet Insights platform and our first on-the-road event in Berlin, where we were talking to our partner ecosystem. We had thousands of people come to our launch event for the platform. We had hundreds of our partners join that first regional planet on the road, and we're doing another one next week in Washington, D.C., the North American market. We really believe in those partners, and the ecosystem approach is how we're doing it, enabling them in simple ways with pricing and packaging that's appropriate for them on our platform. And it was very much the thesis of our acquisition that synergized to do that, and I think it enables us to do the expansion into those commercial markets in a low-touch way.

Speaker Change #153: Yes.

Speaker Change #153: Yes.

Speaker Change #153: We did have some milestones this last quarter.

Speaker Change #154: Including the launch of the <unk>.

Speaker Change #154: Platform.

Speaker Change #154: On the lower end.

Speaker Change #154: And whenever youre talking to alpine ecosystem.

Speaker Change #154: Thousands of people come to launch the platform with hundreds of our partners joining us.

Speaker Change #154: So.

Speaker Change #154: Finally on the road and.

Speaker Change #154: Virginia. Another one next week in Washington D C. The North America market.

Speaker Change #154: But even those partners.

Speaker Change #154: Assistant approach is how are we doing in enabling that simple ways with pricing and packaging is appropriate for them on our platform.

Speaker Change #154: The basis of it.

Speaker Change #155: This isn't an synergize.

Speaker Change #155: And I think it enables us to do the expansion into those commercial market and the low touch way.

Ryan Boyer Koontz: That's really great. And on that new platform you're announcing here, like, you know, where are we on that kind of roadmap of having a product that the sectors and or, you know, customer verticals you're chasing after that you feel that platform is fully featured enough to be widely adopted? Do you feel like we're there with this first version? Or is this a roadmap where, "Oh, go ahead. Yeah."

Speaker Change #156: That's really great.

Speaker Change #157: That new platform you're announcing here.

Speaker Change #158: Where are we in that kind of a roadmap of having a product that the sectors or customer verticals, you're chasing after that you feel that platform is.

Speaker Change #159: Fully featured enough to be widely adopted do you feel like we're there with this first version one or is this a roadmap where.

William Spencer Marshall: Yeah, I mean, it's never there. There's always more things to be added, but it is there in the sense that it's already operational, customers are using it, and it has core capabilities. I think it's less measured in how many vertical markets can we succeed with on that platform because that's more or less to the solution department in that case for the platform. But it is about the foundation tools that enable all of those to work, and that's what this is about.

Go ahead.

Speaker Change #159: Yes.

Speaker Change #160: Uh huh.

Speaker Change #161: We have more things that you're adding is there in the sense that it's already operational.

Speaker Change #161: Customers are using it then it has core capabilities I think.

Speaker Change #161: Measured in how many vertical markets can you can see on that platform, because that's more or less.

William Spencer Marshall: I mean, in some cases, it's really just pulling off the boring bits so that they can focus on their solutions in that particular vertical market. And we have already seen central hub users, they have thousands of users on their platform, start to now get access to Planet's data on it after that launch, and we've seen Planet customers start using accounts on central hub so that they can get the tools to apply to the data they already have access to. So in both ways, we've seen it be a success, and it's already affecting pipelines.

Speaker Change #161: So there is some department in that case for the platform, but it is more about the foundation to enable all of that as well.

Speaker Change #161: This is about one in some cases really pulling off the borrowing base.

Speaker Change #161: Can focus on the solutions in that particular vertical market.

Speaker Change #161: And.

Speaker Change #162: We have three already.

Speaker Change #162: Central hub uses that have thousands of users on that platform starting to now get access to finance data on it through that after that launch and we see managed customers.

Speaker Change #162: Not using account from central hub.

Speaker Change #162: <unk> got the tools to apply for the patients they already have access to so in both ways.

Ryan Boyer Koontz: Got it, super. And just a quick clarification on your UK announcement. Again, is this for a platform partner that will be a channel for you? Or is this a contract win for this customer to share your data with their customers? I'm a little confused as to the structure of the deal.

Speaker Change #162: Our success and it's already influencing pipelines.

Speaker Change #163: Got it Super and.

Speaker Change #164: Just a quick clarification on your.

Speaker Change #165: Your UK announcements is this for again is this for a platform partner that it will be a channel for you or is this a contract win.

Ashley Whitfield Fieglein Johnson: Yes, that partnership is helping the UK government to build that platform for government internal users, from my understanding.

Speaker Change #166: Or is this customer to share your data with their customers I'm, a little confused as to the structure of the deal.

Speaker Change #167: Yes that partners that is helping the U K government to build that platform for the government and some of it uses my understanding.

Ryan Boyer Koontz: Got it. All right. That's all I have. Thanks so much. Our next question today comes from Jeff Van Reen with Craig Hallam. Please proceed.

Speaker Change #168: Got it alright, that's all I have thanks, so much.

Jeff Van Reen: Our next question today comes from Jess Vannery with Craig Howland. Please proceed. Great, thanks. Just a couple of cleanups for me. Ashley, on

Ryan Boyer Koontz: Thanks Ryan.

Speaker Change #170: Our next question today comes from Jeff Van <unk> with Craig Hallum. Please.

Speaker Change #171: Please proceed.

Speaker Change #172: Great. Thanks, just a couple of cleanups for me actually on the <unk>.

Speaker Change #173: Gross margin.

Speaker Change #174: Obviously considerably better than you expected given you guided most of the way through the quarter what change I wasn't clear how that came in so much better.

Ashley Whitfield Fieglein Johnson: A couple of factors, so as I said, one was seeing more savings from some of the initiatives that are part of the program, the development team has been working on in cloud infrastructure than we anticipated. I'd say that was one of the biggest drivers, a significant growth margin versus our expectations. And then, as I mentioned before, it's also just a mix of revenue, so in terms of what that means in terms of partner fees.

Couple of factors, though as I said, one one was seeing.

Speaker Change #174: Seeing more savings from some of the initiatives that are part.

Speaker Change #174: Development team has been working on in cloud infrastructure than we anticipated.

Speaker Change #175: Hey, guys.

Ashley Whitfield Fieglein Johnson: I think we came in roughly close to what we had said on that slide, about 3% from partner page. I think that we've given ourselves a little bit of stuff in there, just not being 100% sure of what's next.

The biggest driver of that.

Speaker Change #175: Gross margin.

Alright.

Speaker Change #175: And then as I mentioned before and I'll say just mix of of revenue. So.

Speaker Change #175: In terms of what that meant.

Speaker Change #175: We came in roughly close to what we said on that size of about 3%.

Speaker Change #175: Some partners.

Speaker Change #175: And we have given ourselves a little bit of buffer there just lucky.

Speaker Change #175: Sure.

Speaker Change #175: With me on the floor.

Speaker Change #176: Mhm, Okay and.

Speaker Change #177: And if I could.

Speaker Change #178: Would you say that the challenges in AG are more macro related or go to market friction related.

William Spencer Marshall: Yeah, I think as Will talked about, a lot of it is, you know, the focus of that market has been around these digitalized platforms and using them almost as a log leader. And as, you know, the macro has had an impact on the margins of our customers, they've had to look at things like these types of initiatives and pull back and really rethink how they want to deliver these types of solutions to their end customers in a more. And we already have some partnerships in that line, in front of the line, but it's not got to the scale that we were at, even in these digital ag platform pieces. But eventually, it will drive decision making, which enables all the things we talked about, which is efficiency for that trillion-dollar sector.

Speaker Change #178: Okay metric for sure.

Speaker Change #179: Yes, I think as <unk>.

Speaker Change #179: Talk about a lot of it is the focus of that market been around these centralized platform, they're using it almost as a lost leader.

Speaker Change #179: And as you know.

Speaker Change #179: The macro has had impact on the margin.

Speaker Change #179: Our customers they've had to look at things like these types of initiatives and pull back.

Speaker Change #179: It really rethink how they want to do I think this kind of testing solutions to their end customers anymore.

Speaker Change #179: More lines way and in many ways that has done is they were already on this now, forcing them to reset under it.

Speaker Change #179: We have already some.

Speaker Change #179: And.

Speaker Change #179: <unk>.

In terms of the line.

Welcome to the scale that we were active on <unk>.

<unk>.

Speaker Change #179: Digital AG platform.

Speaker Change #179: Eventually it will drive decision.

Speaker Change #179: Enables all the things, we talked about which is efficiency for that.

Jeff Van Reen: Okay, great. I'll leave it there. Thank you.

Speaker Change #179: Turning to our sector.

Speaker Change #180: Okay, Great I'll leave it there. Thank you so I guess, that's the way it is their sports and <unk>.

Xin Yu: Our next question today comes from Edison Yu with Deutsche Bank. Please proceed.

Speaker Change #180: Okay.

Speaker Change #181: Our next question today comes from Edison Chu with Deutsche Bank.

Xin Yu: Hey, thank you for taking our questions. One, to come back to AI. I know it's a big buzzword right now, and everyone's talking about all the valuations, as I'm sure you've noticed have been popping up for it. How do we think about the end game for you guys of where you wanna get to? Is it the queryable earth demo you showed before?

Speaker Change #182: Please proceed.

Edison Chu: Hey, Thank you for taking our questions wanted to come back to AI.

Speaker Change #182: Yes.

Speaker Change #184: Big Buzz word right now.

Speaker Change #185: Everyone's talking about it all the valuations as I'm sure you heard us have been have been pumping on it how do we think about the the end game for you guys, where you want to get to is it.

William Spencer Marshall: And if that is the ultimate goal, what are we missing or what do we need to happen to get there? Is it faster, cheaper computing? Is it better algorithms?

Speaker Change #186: <unk> Earth demo you showed before and if that is the ultimate go what are we missing or what do we need to happen to get there is it more a faster cheaper compute is it better aldose, what's what's the what are we kind of need to do to get to that end state.

Xin Yu: What do we kind of need to do to get to that end state?

William Spencer Marshall: That's a great question. Well, I... Again, AI is already powering a lot of our relationships, like the Brazil case and many others that are using that. It's powering a lot of our planetary variables. The carbon forest one is another one coming up that we're already seeing good adoption on that's powered by AI. And then there's these future capabilities where it's more to do with leveraging the foundations of large language models. Those are where we're having these pilots, which is pretty narrowly focused at the minute on D&I, but it's building up capabilities with horizontal applicability, so those large language models enable one fundamentally to search through our data stack and over a large area and time, which is a completely novel capability, but we need to work on accuracy, quickly with tight collaboration with the government initial users so that we get to a point where it's really driving significant value for them.

Speaker Change #187: That's great.

Speaker Change #186: Yeah.

Speaker Change #186: Again.

Speaker Change #188: I think a lot of our relationships.

Speaker Change #186: Okay.

Speaker Change #186: Using that as timing of other variables.

The first one is another one coming out of it.

We're already seeing good adoption on the powered by hang on and then as these future capabilities, where it's more to do with leveraging the foundation.

Speaker Change #186: <unk> language.

Speaker Change #186:

Speaker Change #189: Is that where we haven't been pilots.

Speaker Change #189: Which is pretty narrowly focused at the minute on Eni, but it is building up capabilities with horizontal applicability.

Speaker Change #189: Okay.

Speaker Change #189: So there's a lot of language.

Speaker Change #189: And nasal one fundamentally.

Speaker Change #189: Through our basis stack.

Speaker Change #189: And the last area on time.

Speaker Change #189: In our visibility.

Speaker Change #189: We need to work on accuracy and other things of course.

Speaker Change #189: And the test.

Clearly with collaboration with the government initially use instead that he gets to a point, where it's really driving significant value for them.

Speaker Change #189: Focus.

Speaker Change #189: Okay.

Speaker Change #189: And then we are also working to enable our partners.

Speaker Change #189: AI models on top of our platform so that we can.

Speaker Change #189: And that tends to cost there will be other markets. So think of it as a narrower asset.

Speaker Change #189: Focus on gas.

Speaker Change #189: Got one client and then our board.

Speaker Change #189: Platform tool capability.

Speaker Change #189: Great.

William Spencer Marshall: So that's the focus there, and then we are also working to enable our partners to be able to build their own AI models on top of our platform so that we can let 1,000 flowers bloom in that sense across all the other markets. So think of it as a narrow effort focused on government clients and then as a platform tool capability. As for Queer of Love, I mean, I think that's the end game in that that's the generic system that enabled all of this. But our path to get there is quite long.

Speaker Change #189: That's the end game in that basket of generic system and then it was eliminated.

Xin Yu: I appreciate the color and one on the financials. I know you're not giving full-year guidance. But just directionally, should we think about the second half growth trajectory, at the very least, increasing? Or is there any, I realize this could be a wide range of outcomes, but just any kind of directional color on the second half?

Speaker Change #190: Our path to get there as Brian has mentioned.

Speaker Change #190: Okay.

Ashley Whitfield Fieglein Johnson: [inaudible]

Speaker Change #191: Understood I appreciate the color.

Speaker Change #191: And one of the financials.

Speaker Change #192: I know, you're not giving full year guidance.

Speaker Change #192: Just directionally should we think about the second half growth trajectory at the very least increasing or is there any.

Speaker Change #192: I realize this could be a wide range of outcomes, but just any kind of directional color on the on the second half.

Ashley Whitfield Fieglein Johnson: Yeah, I mean, as we're thinking about growth for the remainder of the year, each market that we're in has different dynamics. So, on the DNI side, obviously, blocking in the UCL renewal was fantastic to have that stability and visibility, and obviously, they're an important customer also because of the other opportunities that we're pursuing and operating within the U.S. government. And a lot of these opportunities translate into international opportunities as well.

Speaker Change #192: Gross.

Speaker Change #192: Yeah.

Speaker Change #193: We're thinking about growth the remainder of the year you know each market has different dynamics. So I mean on the D&S side, obviously pricing and renewal.

Speaker Change #193: Fantastic to have that stability and visibility.

Speaker Change #193: And obviously, they're an important customer and also because of the other opportunities that we're pursuing.

Speaker Change #193: Operating within the U S government.

Speaker Change #193: And a lot of these opportunities translate into international opportunities as well.

Ashley Whitfield Fieglein Johnson: So, I'm very optimistic about the opportunities within DNI and the continued strength and growth we've seen there. Civil government can fluctuate quarter to quarter just depending on, I know, consumption patterns, budget availability, those types of factors, but it's been great to see steady, solid growth in the civil government space, and Sentinel Hub really enables us to service that market and some of the rural payment agencies and other opportunities that Synergize already had underway when we acquired them.

Speaker Change #194: Were optimistic about the opportunities with Andy and I and the continued strength and growth we've seen there and several government can fluctuate quarter to quarter just depending on.

Speaker Change #194: Pattern budget availability.

Speaker Change #194: Hi.

Speaker Change #194: Factors, but.

Speaker Change #194: It's been great to see.

Speaker Change #194: Steady solid growth then.

Speaker Change #194: People are government based on the testimony really enables us to.

Speaker Change #194: Service that market.

Speaker Change #194: And some of that erosion in agencies and are there other opportunities that sits in a day.

Ashley Whitfield Fieglein Johnson: And I think the big question is really around the commercial segment. So, we do expect to see continued headwinds, but the ability to stabilize that through some of the initiatives that we're making in shifting to a more platform-led, product-led model and leveraging the partner community will hopefully help us offset that. So, you know, we're, from my own side, I'm trying to manage expenses and make sure that we hit that EBITDA profitability goal in Q4.

Speaker Change #194: We've already had on your land when we acquired them.

Speaker Change #194: And I think that's the big question is really around the commercial segment, we do expect to see continued headwinds.

Speaker Change #194: One is you stabilize that for some of the initiatives that we're making in shifting.

Two of our more platform electronic led model and leveraging the partner community.

Ashley Whitfield Fieglein Johnson: Our assumption is that revenue growth is not going to accelerate beyond the range that we've provided for Q2, which really points to, you know, kind of a first half, second half pacing like you've seen in other years for their helpful colors.

Speaker Change #195: Normally I'm, playing with those offset that so yeah, we're from Miami, right and trying to manage expenses and make sure they see fit.

Speaker Change #195: EBITDA profitability fall into Q4, our assumption is that revenue growth is online chat in summary beyond the range that we provided for Q2.

Speaker Change #195: What's really point sales you know kind of a first half second half.

Xin Yu: That's great. I appreciate it. Thank you.

Speaker Change #195: And I hope.

Speaker Change #196: That's helpful color.

Michael James Latimore: Thanks, everyone. Our next question comes from Michael Latimore with Norflin. Please proceed.

Speaker Change #195: Okay.

That's great appreciate it thank you.

Speaker Change #195: Okay.

Speaker Change #195: Okay.

Michael James Latimore: Gregory, just on EOCL, can you clarify? The amount you're getting on this renewal, is the next 12 months from EOCL similar to the prior 12 months?

Speaker Change #207: Our next question comes from Michael Latimore with Northland.

Speaker Change #195: Proceed.

Speaker Change #195: Okay.

Speaker Change #197: Great Great and just on <unk> can you clarify.

Speaker Change #198: The amount you youre getting on this renewal.

Ashley Whitfield Fieglein Johnson: Yes, so basically, just to remind you, the way the contract was structured was for the first five years, there was a committed amount, a base amount of about $19 million, so that's per year over the first five years. And then there was an incremental award of about $25.5 million per year that was committed for the first two years. And so that's the portion that was up for renewal. And we did secure that for renewal, so the next 12 months should look secured at the same amount as the prior 12 months.

Speaker Change #199: Next 12 months from UCL similar to prior 12 months.

Speaker Change #199: Yes.

Speaker Change #200: Basically just to remind you the way the contract was structured was for the first five years.

Speaker Change #200: There was a committed about face amount of about $19 million per year over the first put the first five years and then there was an incremental of war of about $25 5 million per year that was committed for the first two years and so thats the portion that was that fairly well.

Speaker Change #200: And then to secure that flow right.

Speaker Change #200: The next 12 months.

Michael James Latimore: Thanks. And on the AI pilots, it sounds like they were successful; you concluded them. Is the next step looking for more pilots with the same customer, or is it, you know, potential commercialization of the use case? Yeah, we are expecting more pilots with the same customer as well as other pilots with other customers in the U.S. government and international interest as well. Eventually, our plan is, of course, to convert them to large operational contract vehicles like we have spoken about, and there are really large opportunities to go after across the board there.

Speaker Change #200: Securities.

Speaker Change #200: The prior 12 months.

Speaker Change #201: Okay. Thanks.

Speaker Change #201: And on the.

Speaker Change #202: The AI pilots.

Speaker Change #203: It sounds like there were successful you concluded a.

Included them as the next step.

Speaker Change #204: Looking for more pilots with the same customer or is it.

Speaker Change #204: Potential commercialization as well.

Speaker Change #204: Yes.

Speaker Change #205: Alright, yes, we are expecting more pilots with the same customer as well.

Speaker Change #205: Pilots with outlet.

Kevin: Customers in the U S. Kevin.

Kevin: And international interest as well.

Kevin: Eventually our plan of course.

Kevin: Okay.

Kevin: Contract vehicles like we have spoken about and it's really not on Opex.

Michael James Latimore: And it's our job to execute on them, so this is why, you know, as Ashley was just saying the previous question, with operational planning, like the growth rate that we presently have, and certainly we're not satisfied with that, and getting these big deals in, where we're really mine, especially, attention is to try and mature those opportunities.

William Spencer Marshall: [inaudible]

Kevin: Opportunities to go after across the board.

Kevin: And it allows us to execute on this is why not to use it.

Kevin: Sandy.

Speaker Change #208: Question <unk>.

<unk> timing.

Speaker Change #208: That growth rate.

Speaker Change #208: Certainly, we're not satisfied with that and getting these big deals.

Speaker Change #208: Where we're at.

Speaker Change #208: We mined.

Speaker Change #208: In mind, especially attention is.

Speaker Change #208: Climate two of those those opportunity.

Speaker Change #208: Yeah.

Speaker Change #209: Got it great and then.

Speaker Change #210: Pilots, how long does a seven figure pilot typically last.

Speaker Change #211: I'm not sure that we can typically but these have been short term pilots with any single quarter.

Speaker Change #211: But depending on the size of the pilot a seven figure highlight.

Speaker Change #211: Over a longer period of time, it really depends on the scope and what exactly were piloting an agency in any.

Speaker Change #211: Exactly what's great is as you know securing operational budgets, that's a procedure that takes time.

Speaker Change #211: What's been exciting frankly, the pace at which we've been able to find funding for these pilots, which really points to the fact that there is a real need for that type of capability that we're offering.

Michael James Latimore: Thank you. Congratulations. Yeah.

Speaker Change #211: Okay.

Speaker Change #211: Yeah.

Speaker Change #212: Okay, great. Thank you.

Speaker Change #212: Yeah.

Mike: Great. Thanks, Mike.

Mike: Okay.

Mike: Thank you all for your questions.

Speaker Change #214: That is all the time, we have for Q&A today, So I will pass the conference over to Walmartian for closing remarks.

William Spencer Marshall: Yeah, I'll just close by saying that we feel very strong about the position for the year ahead.

Walmartian: Yes ill just close by saying that we feel very strong about.

Walmartian: Our position for the year ahead.

Walmartian: Obviously, you saw significant growth in the government sector in particular.

Speaker Change #216: Very pleased with the platform launch and the fact that that has.

Speaker Change #216: Enable low cost approach to getting towards.

Speaker Change #216: Our commercial business.

Speaker Change #216: Now with <unk>.

Speaker Change #216: On operational efficiency and big deals in front of us in closing I'm very proud of the team and where we come in the last quarter.

Operator: That will conclude today's conference call. Thank you all for your participation. You may now disconnect your line.

And see you next time.

Speaker Change #217: That will conclude today's conference call.

Thank you all for your participation you may now disconnect your line.