Q2 2025 Planet Labs PBC Earnings Call

September 5, 2024

Hello everyone. Thank you for attending today's Planet Labs PVC, second quarter of fiscal 2025 earnings call. My name is Sierra and I will be your moderator for today.

Sierra: My name is Sierra, and I will be your moderator for today. All lines we muted during the presentation portion of the call will have an opportunity for questions and answers at the end. If you would like to ask a question, press star one on your telephone keypad.

All lines we made it during the presentation portion of the call, with an opportunity for questions and answers at the end. If you would like to ask a question, press star 1 on your telephone keypad.

Operator: I would now like to pass a conference over to our host, Cleo Palmer Perona, Invest Relations at Planet Labs PDC. Please proceed.

Speaker Change: Oh, now I'd like to pass a conference over to our host, Creole Palmer Perona, and best relations at PlanetWafTDC. Please proceed.

Cleo Palmer: Thanks, operator, and hello everyone. This is Cleo Palmer Perona, Invest Relations at Planet Labs PDC. Welcome to Planet's second quarter of fiscal 2025 earnings call. I'm joined today by Will Marshall and Ashley Johnson, who will provide a recap of our results and discuss our current outlook.

Speaker Change: Thanks, operator and hello everyone. This is Cleo Palmer Proner, Investor Relations at Planet Labs, PDC. Welcome to Planet's second quarter of fiscal 2025's earnings call. I'm joined today by Will Marshall and Ashley Johnson, who will provide a recap of our results and discuss our current outlook.

Cleo Palmer: 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 reference qualified pipeline, which represents potential sales leads that have not yet executed contracts. Any forward-looking statements are based on management's current outlook, plans, estimates, expectations, and projections. The inclusion of such forward looking information should not be regarded as a representation by Planet that future plans, estimates, or expectations will be achieved.

Speaker Change: 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 lifting 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.

Speaker Change: and a 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 achieved.

Cleo Palmer: 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.ethc.gov. Our actual results or performance made 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 an anticipated event.

Speaker Change: Such forward-looking statements are subject to various risks and uncertainties and assumptions as detailed in our SEC filing.

Speaker Change: which can be found at www.sc.gov. Our actual results are performance made different materials.

Speaker Change: 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 an anticipated event. During the call, we will also discuss historic and forward-looking non-gap financial measures. We use the non-gap financial measures for financial and operational decision making and as it means to evaluate period-to-period comparisons.

Cleo Palmer: During the call, we will also discuss historic and forward-looking non-GAAP financial measures. We use these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. We believe that these measures provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management and 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: We believe that these measures provide useful information about operating results and 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 and its financial and operational decision making. For more information on the non-gap financial measures, please see the reconciliation tables provided in our press release issued earlier this afternoon. Further throughout this call, we provided 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.

Cleo Palmer: Further, throughout this call, we provided 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.

Speaker Change: and our earnings update presentation, which are intended to have been a prepared remarks. At this time, I'd now like to turn the call over to Will Marshall, Plan CEO, Chairperson and co-founder, over to you, Will.

Cleo Palmer: At this time, I'd now like to turn the call over to Will Marshall, Plan CEO, chairperson, and co-founder. Over to you, well.

William Marshall: Thanks, Cleo, and hi everyone. Thanks for joining the call today. For the second quarter of fiscal year 2025, we generated a record $61.1 million in revenue, representing 14% year-on-year growth. This was driven by continued strength in the government sector. Non-GAAP growth margin for the quarter was 58%, and adjusted EBITDA loss was $4.4 million. These results were all in line with or better than the guidance provided on our last earnings call. Q2 marked our fifth sequential quarter of improvement in adjusted EBITDA as we persistently marked towards our target of achieving adjusted EBITDA profitability by Q4 of this fiscal year.

Will Marshall: Thanks Clio and hi everyone, thanks for joining the call today. For the second quarter of fiscal year 2025, we generated a record $61.1 million in revenue, representing a 14% year on year growth.

Will Marshall: This was driven by continued strength in the government sector.

Speaker Change: Young Gap, gross margin for the quarter was 58% and adjusted even a loss was $4.4 million.

Speaker Change: These results were all in line with or better than the guidance provided on our last earnings cool.

Speaker Change: Q2 marked our fifth sequential quarter of improvement in adjusted EBITDA as we consistently marked towards our target of achieving adjusted EBITDA profitability by Q4 of this fiscal year.

William Marshall: We also successfully launched our first Canada satellite along with 36 new superdubs last month. All of the satellites have been contacted and are undergoing commissioning.

Sierra: of Fiscal 2025 Earnings Call. My name is Sierra and I will be your moderator for today. All lines we muted during the presentation portion of the call will have an opportunity for questions and answers at the end. If you would like to ask a question, press star one on your telephone keypad.

Speaker Change: We also successfully launched our first Tanner Disadlight, along with 36 new superdubs last month. All of the satellites have been contacted and are undergoing commissioning.

William Marshall: Today, I'll cover a number of topics, including recent organizational changes, sales win, satellite launches, and product updates. These actions were simultaneously aimed at improving our go-to-market towards accelerating growth, as well as reducing costs. We are creating industry-aligned business groups focused on specific sectors to help drive both product and sales strategy.

Speaker Change: Today, I'll cover a number of topics including recent organizational changes, sales, wind, satellite launches and product updates. Ashley will then provide more colour on the business and our financials. So let's dive in.

Cleo Palmer-Perona: I would now like to pass a conference over to our host, Cleo Palmer-Perona, Invest Relations at Planet Lab's PDC. Please proceed. Thanks operator and hello everyone. This is Cleo Palmer-Perona, Investor Relations at Planet Lab's PDC. Welcome to Planet's second quarter of Fiscal 2025 Earnings Call. I'm joined today by Will Marshall and Ashley Johnson, who will provide a recap of our results and discuss our current outlook. 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.

Ashley Johnson: Starting with recent organizational changes, in Q2, we took action to align resources to the market opportunity and prove our operational efficiency.

Ashley Johnson: We consider which areas of our business are operating most efficiently, in which need improvement, as well as the demand trends we're seeing across drug fees and sectors.

Ashley Johnson: These actions were simultaneously aimed at improving our go-to-market towards accelerating growth as well as reducing costs.

Cleo Palmer-Perona: Before we begin, we'd like to remind everyone that we may make forward-lifting 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 production. The inclusion of such forward-looking information should not be regarded as a representation by planet that future plans, estimates, or expectations will be achieved.

Ashley Johnson: We are creating industry-aligned business groups focused on specific sectors to help drive both product and sales strategy.

William Marshall: As part of these changes, we undertook a head count reduction that resulted in parting ways with approximately 17% of our planetirs; approaches that was very difficult, but allowed us to meaningfully improve our cost structure. We expect this new, more efficient operating model will support the sustainable long-term growth and profitability of the business. Ashley will provide additional details on these changes shortly, as she oversees our go-to-market teams in her capacity as president, and works with our go-to-market leaders to architect this new operating model.

Ashley Johnson: As part of these changes, we undertook a hate count reduction that resulted in parting ways with approximately 17% of our planet's. A process that was very difficult, but allowed us to meaningfully improve our cost structure.

Ashley Johnson: We expect this new, more efficient operating model, will support the sustainable long-term growth and profitability of the business.

Cleo Palmer-Perona: 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.ethc.gov. Our actual results are performance made different 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 an anticipated event. During the call, we will also discuss historic and forward-looking non-gap financial measures.

Speaker Change: will provide additional details on these changes shortly. Actually, overseas, I'll go to market teams and her capacity as a person, and what we'll go to market leaders to architect this new operating model.

William Marshall: Let's turn now to some of our customer highlights from Q2. The defense and intelligence sector continues to be a strong industry vertical for Planet, with revenue in the quarter growing more than 30% year over year. I'd like to highlight a few of the sales wins we saw in the quarter, which are indicative of the increasing interest we are seeing from both US and international government customers around the world for Planet's unique data sets and the solutions we're delivering with our partners.

Speaker Change: Let's turn now to some of our customer highlights from Q2.

Speaker Change: The Defence and Intelligence sector continues to be a strong industry vertical for planet.

Speaker Change: With revenue in the course of growing more than 30% year of year, I'd like to highlight a few of the sales wins we saw in the quarter, which are indicative of the increasing interest we are seeing from both US and international government customers around the world for planets, unique data sets and the solutions we're delivering with our partners.

Cleo Palmer-Perona: We use the non-gap financial measures for financial and operational decision making and as a means to evaluate period to period comparisons. We believe that these measures provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management and its financial and operational decision making. For more information on the non-gap financial measures, please see the reconciliation tables provided in our press release issues earlier this afternoon.

William Marshall: During the quarter, we closed a new deal with NATO. Their communications and information agencies, new alliance assistance surveillance from space program or APSS will evaluate using both planets board area monitoring and task solutions to perform detailed tracking and analysis of foreign military activities, monitor infrastructure and fill intelligence gaps. We've powered the partner with NATO in this time of heightened global conflict to reinforce multinational alliances to enhance global security, and we look forward to developing our relationship. While this is an introductory deal, we view it as strategically important. Additionally, we closed the seven-figure deal with an international defense customer, which includes an expansion of high resolution, tasking, and a pilot for planiscope data enhanced with AI capabilities from our partner Symmax for maritime domain awareness.

Speaker Change: During the quarter we closed a new deal with NATO.

Speaker Change: Their communications and information agency is new, a Lions Assistant surveillance from Space Program, or APSS.

Speaker Change: Well, the better we're using both planet board area monitoring and tasking solutions to perform detailed tracking and analysis of foreign military activities, monitor infrastructure and fill intelligence gaps.

Cleo Palmer-Perona: Further throughout this call, we provided 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.

Speaker Change: with proud to partner with NATO in this time of heightened global conflict to reinforce multinational alliances to enhance global security and we look forward to developing our relationship.

Will Marshall: At this time, I'd now like to turn the call over to Will Marshall, plan CEO, Chairperson, and co-founder. Over to you, Will. Thanks, Clio, and hi, everyone. Thanks for joining the call today. For the second quarter of fiscal year 2025, we generated a record $61.1 million in revenue representing 14% year-on-year growth. This was driven by continued strength in the government sector. Non-gap growth margin for the quarter was 58% and adjusted even a loss was $4.4 million.

Speaker Change: While this is an introductory deal, we view it strategically important.

Speaker Change: Additionally, because the seventh figure deal with an international defense customer, which includes an expansion of high resolution tasking and a pilot for planet skip days are enhanced with AI capabilities for our partner Symmax for maritime domain awareness.

William Marshall: Let's discuss on previous courses part of a growing trend we see in using AI on planet daily scan imagery to gather intelligence more efficiently and speed customer time to value. Over all demand in the defense and intelligence sector remains strong, and we believe in our new industry aligned operating model will further support our ability to capitalize on the momentum we're seeing.

Speaker Change: At the Scott's on previous course, this part of a growing trend we see in using AI on planet steady scan imagery to gather intelligence more efficiently and speed customer time to value.

Will Marshall: These results were all in line with or better than the guidance provided on our last earnings call. Q2 marked our fifth sequential quarter of improvement in adjusted EBITDA, as we persistently marched towards our target of achieving adjusted EBITDA profitability by Q4 of this fiscal year. We also successfully launched our first tanner to satellite, along with 36 new Superdives last month. All of the satellites have been contacted and are undergoing commissioning. Today, I'll cover a number of topics, including recent organizational changes, sales, wins, satellite launches, and product updates.

Speaker Change: Over all demand in the defense in the town of the sector remains strong and we believe in a new industry-aligned operating model with further support our ability to capitalize on the momentum we're seeing.

William Marshall: Progress in the civil government sector also continues to be sold with revenue growth of over 20% year on year and Q2. I'll take a moment to highlight a couple of use cases that are highly repeatable for the civil government market. We recently announced that the Kingdom of Bahrain is using Planet SkySet data enhanced with AI solutions from our partner Eto Sky to support smart city management and urban planning initiatives across the country. Bahrain reported that thus far this has led to a significant increase in the effectiveness of building permit validation activities. There's a great example of a use case that could be repeated in other nations and cities around the world.

Speaker Change: Progress in the civil government sector also continues to be solid with revenue growth of over 20% year on year and Q2. I'll take a moment to highlight a couple of use cases that are highly repeatable for the civil government market.

Speaker Change: We recently announced that the Kingdom of Bahrain is using planet sky-set data in hearts with AI solutions from our partner Ethosguy to support smart city management and urban planning initiatives across the country.

Will Marshall: Ashley will then provide more color on the business and our financials, so let's dive in. Starting with recent organizational changes, in Q2, we took action to align resources to the market opportunity and prove our operational efficiency. We consider which areas of our business are operating most efficiently and which need improvement, as well as the demand trends we're seeing across geographies and sectors. These actions were simultaneously aimed at improving our go-to-market towards accelerating growth, as well as reducing costs.

Speaker Change: By Wayne reported that thus far this has led to a significant increase in the effectiveness of building permit validation activities. This is a great example of a use case that could be repeated in other nations of cities around the world.

William Marshall: Last month, a planet on the road, we announced that INRA, Olivia's Land Management Agency, is using the Planet Insights platform with our local partner and geospatial AI service provider, Civis, for land use, titling, and emissions compliance. We also introduced IGAC, the Colombian cartographic entity, which utilizes AI and Planetscape scenes and basements for land use planning and infrastructure monitoring across Colombia.

Speaker Change: Last month at Planet on the road, we now have that in-row, the Olivia's land management agency, is using Planet Insights platform with our local partner and do a speech or AI service provider, service for land use.

Speaker Change: Prytling and Emissions Compliance.

Ashley Johnson: We also introduced IGAC the Columbia and Cartagraphic entity, which utilizes AI and planet-skip scenes and basemands for land use planning and infrastructure monitoring across Columbia. Ashley who attended on the road in Columbia will share her reflections on the event shortly.

Will Marshall: We are creating industry-aligned business groups focused on specific sectors to help drive both product and sales strategy. As part of these changes, we undertook a headcount reduction that resulted in parting ways with approximately 17% of our planetirs, a process that was very difficult, but allowed us to meaningfully improve our cost structure. We expect this new, more efficient operating model will support the sustainable long-term growth and profitability of the business. Ashley will provide additional details on these changes shortly, as she oversees our go-to-market teams in her capacity as president and work with our go-to-market leaders to architect this new operating model.

William Marshall: Ashley, who attended on the road in Colombia, will show her reflections on the event shortly. Finally, we closed a seven-figure expansion with another international government agency for SkyAssad, Higher Resolution Data, which we previously announced in July. Overall, our ability to save government customers' time and resources because our board area management solutions is driving customer adoption globally. Leveraging our platform and solution partners, we believe we can further penetrate the global market opportunity we see for our data in the civil government sector.

Speaker Change: Finally, we close the 7th figure expansion with another international government agency, for Skyersat, Higher Resolution Data, which we previously announced in July.

Speaker Change: Overall, our ability to save government customers' time and resources could have board area management solutions, driving customer adoption globally.

Speaker Change: Leveraging our platform and solution partners, we believe we can further penetrate the global market opportunity we see for our data in the civil government sector.

William Marshall: Shifting to the commercial sector, where we discussed on prior calls, we've seen both macroeconomic heavens generally and challenges in the agriculture sector, specifically. Under our new operating model, we were refining our resource allocations and focusing efforts on building out our insights platform for a lower friction experience for our customers and partners that are building solutions on top of Earth observation data. The platform provides valuable tools to our partners and customers while also reducing our cost service to use customers. We're seeing a lot of green shoots and experimentation in the platform at a small scale, which enables us to tap into the solid growth potential of the board market, but in an automated and scalable way.

Speaker Change: Shifting to the commercial sector where we discussed on prior calls, we've seen both macroeconomic headwinds generally and challenges in agriculture sector, specifically.

Will Marshall: Let's turn now to some of our customer highlights from Q2. The dependent intelligence sector continues to be a strong industry vertical for planet, with revenue in the quarter growing more than 30% year over year. I'd like to highlight a few of the sales wins we saw in the quarter, which are indicative of the increasing interest we are seeing from both US and international government customers around the world for planets unique data sets and the solutions we're delivering with our partners.

Speaker Change: Under a new operating model, we were finding our resource adaptations and focusing efforts on building out our insights platform for a lower friction experience for our customers and partners, their building solutions on top of our observation data.

Speaker Change: The platform provides valuable tools to our partners and customers, while also reducing our cost service these customers.

Will Marshall: During the quarter, we closed a new deal with NATO. Their communications and information agencies, new alliance assistance surveillance from space program or APSS, will evaluate using both planets board area monitoring and task solutions to perform detailed tracking and analysis of foreign military activities, monitor infrastructure and fill intelligence gaps with power to partner with NATO in this time of heightened global conflict to reinforce multinational alliances to enhance global security and we look forward to developing our relationship.

Speaker Change: We're seeing a lot of green shoots and experimentation in the platform and a small scale which enables us to tap into the solid growth potential of the board of market, but in an automated and scalable way.

William Marshall: We expect this structural better position planet to serve the large addressable markets in the commercial sector in particular, which we believe can be a driver of upside over the long term. To share some commercial wins from the quarter, we expanded our contract with longtime customer and agricultural leader, BASF, who have added the planet's field boundary solution to support the ZARVO digital platform. As we discussed in our prior call, we're seeing digital agriculture applications shift towards new business balls with better aligned incentives, and customers like BASF are at the forefront leading this transition. We also recently announced a partner-led renewal and expansion with American Crystal Sugar via Planet Partner Sat Agro, a precision agriculture company.

Speaker Change: We think this structure will better position planet to serve the larger dressable markets in the commercial sector in particular, which we believe can be a drive of upside over the long term.

Speaker Change: The SAS and commercial winds from the quarter.

Speaker Change: We expanded our contract with long-time customer and agricultural leader, beer, sir.

Will Marshall: While this is an introductory deal, we view it as strategically important. Additionally, we closed the seven-figure deal with an international defense customer, which includes an expansion of high resolution tasking and a pilot for planiscope data enhanced with AI capabilities from our partner Symax from maritime to main awareness. Let's discuss on previous courses part of a growing trend we see in using AI on planet daily scan imagery to gather intelligence more efficiently and speed customer time to value.

Speaker Change: who have added a few boundary solutions as for the Zavio digital platform. As we discussed in our prior call, we're seeing digital agriculture applications shift towards new business goals with better aligned incentives and customers like BESF are at the forefront leading this transition.

Speaker Change: We also recently announced a partner led renewal and expansion with American Crystal Sugar via Planet Partner, that angered, a precision and agricultural company.

William Marshall: Under this contract, Sat Agro will use planet data to provide American Crystal Sugar with advanced sugar beet monitoring in the northern United States, including harvest progression, yield prediction, and other insights to enable crop management decisions.

Speaker Change: Under this contract, SAT AGRO will use planet data to provide American crystal sugar with a vans, sugar beat monitoring in the Northern United States, including harvest progression, yield prediction and other insights to enable crop management decisions.

Will Marshall: Overall, demand in the defense of the television sector remains strong and we believe in our new industry alliance operating model will further support our ability to capitalize on the momentum we're seeing. Progress in the civil government sector also continues to be sold with revenue growth of over 20% year on year and Q2.

William Marshall: This brings us to product updates for QT. As many of you saw, we successfully launched our first Tanajas satellite and 36 Superdubs on board a SpaceX launch vehicle on August 16. With three weeks into a few months long commissioning period for this first of its kind, Tanajas hyperspectral satellite, I'm very proud of the progress that we've made as we work towards first light. On Superdubs, our mature fleet that supports the planet's daily scan, and pleased to report that all 36 satellites have been contacted. The first reached first light in a record three days, and they are rapidly going into production mode.

Speaker Change: This brings us to product updates for duty. As many of you saw, we successfully launched our first Tana just satellite and 36 superdoules onboard a SpaceX launch vehicle on August 16th.

Will Marshall: I'll take a moment to highlight a couple of use cases that are highly repeatable for the civil government market. We recently announced that the Kingdom of Bahrain is using planet sky set data enhanced with AI solutions from our partner Eto sky to support smart city management and urban planning initiatives across the country. Bahrain reported that thus far this has led to a significant increase in the effectiveness of building permit validation activities.

Speaker Change: with three weeks into a few months long commissioning periods for this first of its client manager, Hyperspector, or Saddline. I'm very proud of the progress that we've made as we work towards first life.

Speaker Change: On Superdavs, I'm a tour fleet that supports the planet's go daily scan and please to report that all 36 surveys have been contacted.

Speaker Change: The first reached first light in a record three days and they are rapidly going into production mode.

William Marshall: This constellation remains the largest Earth imaging fleet in history, and the basis for a planet's core differentiated data. I want to thank the global team that worked nights and weekends to make this launch and these missions happen.

Will Marshall: This is a great example of a use case that could be repeated in other nations and cities around the world. Last month, a planet on the road, we announced that INRA, Olivia's Land Management Agency, is using Planet Insights platform with our local partner and geospatial AI service provider, Civis, for land use, titling and emissions compliance. We also introduced IGAC, the Colombian Cartographic Entity, which utilizes AI and Planetscape scenes and basements for land use planning and infrastructure monitoring across Colombia.

Speaker Change: This constellation remains the largest earth imaging fleet in history and the basis for a planet's core differentiated data.

Speaker Change: I want to thank the global team that worked nights and weekends to make this launch and these missions happen.

William Marshall: Finally, we are preparing to ship the Pelican 2 satellite in the coming months. As a reminder, the Pelican program has our next generation high resolution fleet, which enables continuity and enhancements over its predecessor Sky Set, including resolution, image quality, spectral bands, and imaging capacity. The Pelican 2 design incorporates in videos latest Jetson GPU module, with this GPU, Planet Labs to enable edge compute, allowing us to run AI on board the satellite. When paired with our next generation communication technology, the program has the potential to decrease time to value by 10X, increasing customer value by significantly shortening the time of delivery of actual insights.

Speaker Change: Finally, we are preparing to ship the Pelican Two satellite in the coming months. As we remind the Pelican Programme as our next generation high resolution fleet, which enables continuity and enhancements over its predecessor sky-sap, including in resolution, image quality, spectral bands and imaging capacity.

Speaker Change: The Pelican 2 design incorporates Nvidia's latest jets and GPU module with this GPU, planet Earth to enable Edge Compute allowing us to run AI on board the satellite.

Will Marshall: Ashley, who attended on the road in Colombia, will show her reflections on the event shortly. Finally, we closed a seven-figure expansion with another international government agency for SkyAssad, Higher Resolution Data, which we previously announced in July. Overall, our ability to save government customers' time and resources because our board area management solutions is driving customer adoption globally. Leveraging our platform and solution partners, we believe we can further penetrate the global market opportunity we see for our data in the civil government sector.

Speaker Change: When paired with our next generation communication technology, the program has the potential to decrease time to value by 10x, increasing the customer value by significantly shortening the time of delivery of actual insights.

William Marshall: Finally, Pelican will also improve resolution, with the Pelican 2 satellite already expected after 40 centimeter class resolution imagery as part of the program that we expect will ultimately deliver 30 centimeter class resolution.

Speaker Change: Finally, Pelican will also improve resolution with the Pelican II satellite already expected to offer up to 40 centimeter class resolution imagery as part of the program that we expect will ultimately deliver 30 centimeter class resolution.

William Marshall: We look forward to sharing updates on Pelican 2 as the launch date approaches.

Will Marshall: Shifting to the commercial sector, where we discussed on prior calls, we've seen both macroeconomic heavens generally and challenges in the agriculture sector specifically. Under our new operating model, we were refining our resource allocations and focusing efforts on building out our insights platform for a lower friction experience for our customers and partners that are building solutions on top of Earth observation data. The platform provides valuable tools to our partners and customers while also reducing our cost service to use customers.

Speaker Change: We look forward to sharing updates on Pelican 2 as the launch date approaches.

William Marshall: In software products, we recently rolled out customer education on how to use our land surface temperature planetary variable to optimize agricultural practices. Land surface temperature can be a powerful tool to predict crop growth rates. Together with crop and regional specific models and planet daily monitoring, customers can use these tools to infer crop growth progress in specific areas. Our platform strategy continues to focus on providing tools that help reduce customer time to value and improve the ease of use.

Speaker Change: In software products, we recently rolled out customer education on how to use our land surface temperature planetary variable to optimize agricultural practices.

Speaker Change: Learn Surface Temperature can be a powerful tool to predict crop growth rates.

Speaker Change: Together with Crop and Regional Specific Model and Planets Daily Monitoring, customers can use these tools to infer Crop growth progress in specific areas. I've found a strategy to continue to focus on providing tools that help reduce customer time to value and improve ease of use.

Will Marshall: We're seeing a lot of green shoots and experimentation in the platform at a small scale, which enables us to tap into the solid growth potential of the board of market, but in an automated and scalable way. We expect this structural better position planet to serve the large addressable markets in the commercial sector in particular, which we believe can be a driver of upside over the long term.

William Marshall: In summary, we're steadily executing on our strategy and implementing a new industry-aligned operating model across planet to better support our customers and growth. The trends we're seeing in the government sector remain strong, fueled by heightened security needs, increased sustainability requirements, and global climate risks. In the commercial sector, we're making the strategic changes needed to better position Planet for the significant market opportunity that we believe we can capture while continuing our progress towards adjusted EBITDA profitability.

Speaker Change: In summary, we're steadily executing on our strategy and implementing a new industry-aligned operating model across planet, to better support our customers and growth. The trends we're seeing in the government sector remains strong, fueled by heightened security needs, increased sustainability requirements, and global climate risks.

Will Marshall: To share some commercial wins from the quarter. We expanded our contract with long-time customer and agricultural leader BASS, who have added parents' field boundary solutions to support the ZARVO digital platform. As we discussed in our prior call, we're seeing digital agriculture applications shift towards new business balls with better aligned incentives and customers like BASS are at the forefront leading this transition. We also recently announced a partner led renewal and expansion with American crystal sugar via planet partner, SAP Agro, a precision agriculture company. Under this contract, SAP Agro will use planet data to provide American crystal sugar with advanced sugar beet monitoring in the northern United States, including harvest progression, yield prediction, and other insights to enable crop management decisions.

Speaker Change: In the commercial sector, we're making the strategic changes needed to better position planet for the significant market opportunity that we believe we can capture or continuing our progress towards adjusted EBITDA profitability.

William Marshall: Finally, I'd like to say thank you to the planet team members around the world for all your commitment and enthusiasm, and continuing impressed by our innovation and leadership of planters in pursuit of our mission.

Ashley Johnson: Finally, I'd like to say thank you to the planet team of us around the world for all your commitment and enthusiasm and continuing and pressed by our innovation and leadership of Tantes in pursuit of our mission. I'll now turn it over to Ashley over to you.

Ashley Johnson: I'll now turn it over to Ashley. Over to you. Thanks, Will. The past quarter has been especially busy at Planet with a number of customer events, new technology launches, and of course realigning our business.

Ashley Johnson: Thanks for watching.

Ashley Johnson: The past quarter's been especially busy at planet with a number of customer events, new technology launches, and of course, re-aligning our business.

Ashley Johnson: I'd like to start off by sharing some of my reflections from our Explore on the Road customer events around the globe. Over the summer, we hosted events in Berlin, Washington DC, and Bogota, where we showcased our planet insights platform to help our partners and customers better understand the capabilities we seek to unlock for them with this new suite of tools. We talked about AI, not as magic, but as a practical accelerant to insights and our platform, not as a substitution for the solutions our partners build, but as an enabler for their solutions that can speed time to value for customers.

Ashley Johnson: I'd like to start off by sharing some of my reflections from our explore on the road customer events around the globe.

Will Marshall: This brings us to product updates for Q2. As many of you saw, we successfully launched our first Tanajas satellite and 36 superdubs on board a SpaceX launch vehicle on August 16th. With three weeks into a few months long commissioning period for this first of its kind, Tanajas hyperspectral satellite, I'm very proud of the progress that we've made as we work towards first light. On superdubs, our mature fleet that supports the planet's daily scan, and pleased to report that all 36 satellites have been contacted, the first reached first light in a record three days, and they are rapidly going into production mode.

Ashley Johnson: Over the summer we hosted events in Berlin, Washington, DC, and Bolata, where we showcase our planet insights platform to help our partners and customers better understand the capabilities we seek to unlock for them with this new suite of tools.

Ashley Johnson: We talked about AI, not as magic, but as a practical accelerant to insights and our platform, not as a substitution for the solutions our partners build, but as an enabler for their solutions that can speed time to value for customers.

Ashley Johnson: In August, I joined customers and partners in Bogota for a series of talks on topics ranging from law enforcement to forest protection to land management and infrastructure monitoring, all ideal use cases for our broader management solutions. It was personally energizing to spend time with customers and partners that are using Planet's data and platform combined with our partners, software, and services to solve some of the world's most pressing challenges. They share that they've collected billions of US dollars from fines, seized goods, and frozen assets since 2020. They also highlighted the path they took to secure the funds and governmental support for the program in the first place, offering other countries a roadmap to follow.

Ashley Johnson: In August, I joined customers and partners in Bogata for a series of talks on topics ranging from law enforcement to forest protection, to land management and infrastructure monitoring, all ideal use cases for our broad area management solutions.

Will Marshall: This constellation remains the largest earth imaging fleet in history, and the basis for a planet's core differentiated data. I want to thank the global team that worked nights and weekends to make this launch and these missions happen. Finally, we are preparing to ship the Pelican 2 satellite in the coming months. As a reminder, Pelican program has a next-generation high resolution fleet, which enables continuity and enhancements over its predecessor Skyser, including resolution, image quality, spectral bands, and imaging capacity.

Ashley Johnson: It was personally energizing to spend time with customers and partners that are using planet state and platform, combined with our partners software and services, to solve some of the world's most pressing challenges.

Ashley Johnson: We heard from representatives from a wide range of partners and customers joining us from all over Latin America.

Ashley Johnson: At the event, the Brazilian federal police and our partner SC Con spoke about their latest ROI figures from the Brussels Mise program, which uses planet data paired with SC Con solutions to stop illegal deforestation.

Will Marshall: The Pelican 2 design incorporates in videos latest Jetson GPU module, with this GPU, Planet Labs to enable Edge Compute, allowing us to run AI on board the satellite. When paired with our next-generation communication technology, the program has the potential to decrease time to value by 10X, increasing customer value by significantly shortening the time of delivery of actual insights. Finally, Pelican will also improve resolution, with the Pelican 2 satellite already expected to offer up to 40 centimeter-class resolution imagery as part of the program that we expect will ultimately deliver 30 centimeter-class resolution. We look forward to sharing updates on Pelican 2 as the launch date approaches.

Speaker Change: They share that they've collected billions of US dollars from fines, seas, goods, and frozen assets since 2020.

Speaker Change: They also highlighted the path they took to secure the funds and governmental support for the program in the first place.

Ashley Johnson: This program has been so impactful that the Brazilian Federal Police announced on stage their ambitions to work with neighboring countries on similar programs for all countries of Amazonia. It's been truly inspiring to hear directly from our customers and partners how they're using Planet's data to solve critical problems and to understand what we can do to deliver greater value to them.

Speaker Change: offering other countries a roadmap to follow.

Speaker Change: This program has been so impactful that the Brazilian federal police announced on stage their ambitions to work with neighboring countries on similar programs for all countries of Amazonia.

Speaker Change: It's been truly inspiring to hear directly from our customers and partners how they're using planet status to solve critical problems and to understand what we can do to deliver greater value to them.

Will Marshall: In software products, we recently rolled out customer education on how to use our land surface temperature planetary variable to optimize agricultural practices. Land surface temperature can be a powerful tool to predict crop growth rates. Together with crop and regional specific models and planet daily monitoring, customers can use these tools to infer crop growth progress in specific areas. Our platform strategy continues to focus on providing tools that help reduce customer time to value and improve the ease of use.

Ashley Johnson: I'll turn now to the financials for the quarter. Revenue for our second quarter in fiscal 2025 came in at a record $61.1 million, which represents approximately 14% year-over-year growth. As Will mentioned, year-over-year revenue growth for the second quarter was led by our government customers, while we've continued to see macroeconomic and agriculture-specific headwinds in the commercial sector.

Speaker Change: I'll turn now to the financials for the quarter.

Speaker Change: Revenue for our second quarter in fiscal 2025, came in at a record $61.1 million, which represents approximately 14% year of year growth.

Speaker Change: As we'll mentioned, your of your revenue growth for the second quarter was led by our government customers. While we've continued to see macroeconomic and agriculture specific headwinds in the commercial sector.

Ashley Johnson: Under the new industry aligned operating model mentioned by Will, we believe we will enable greater team agility that are alignment with our customers and sustainable growth across all sectors that we serve. To that end, we've assigned global go-to-market leads for the defense and intelligence, civil government, and commercial sectors to help drive both product and sales strategy. These business groups and leads will help direct product priorities and shape go-to-market strategy with a singular focus growing the book of business in that market. We expect this new structure will enable us to better serve the needs of our customers with a more efficient model.

Will Marshall: In summary, we're steadily executing on our strategy and implementing a new industry-aligned operating model across planet to better support our customers and growth. The trends we're seeing in the government sector remain strong, fueled by heightened security needs, increased sustainability requirements, and global climate risks. In the commercial sector, we're making the strategic changes needed to better position planet for the significant market opportunity that we believe we can capture while continuing our progress towards adjusted EBITDA profitability. Finally, I'd like to say thank you to the planet team members around the world for all your commitment and enthusiasm and continuing impressed by our innovation and leadership of planters in pursuit of our mission.

Speaker Change: Under the new industry aligned operating model mentioned by Will, we believe we will enable greater team agility that are alignment with our customers and sustainable growth across all sectors that we serve.

Will Marshall: To that end, we've assigned global go-to-market leads for the Defense and Intelligence Civil Government and Commercial Sectors to help drive both product and sales strategy.

Will Marshall: These business groups and leads will help direct product priorities in shape, go to market strategy with a singular focus, growing the book of business in that market. We expect a new structure will enable us to better serve the needs of our customers with a more efficient model.

Ashley Johnson: From a geographic perspective, during the second quarter, EMEA revenue grew over 20% year of year. Asia Pacific grew over 40% year of year, while our team in Latin America drove revenue growth of over 30% year of year. Revenue in North America was up modestly on a year-of-year basis, reflecting solid growth in defense and intelligence, offset by headwinds in the commercial sector. As of the end of Q2, our end of period customer count was 1,012 customers. The sequential change in end of period customer count reflects the increased focus of our direct sales team on larger customers in our core verticals and the focus of our product teams to enable smaller, more transactional customers to purchase through our platform or our marketplace partners.

Ashley Johnson: I'll now turn it over to Ashley over to you. Thanks, Will. The past quarter has been especially busy at planet with a number of customer events, new technology launches, and of course, realigning our business.

Will Marshall: From a geographic perspective, during the second quarter, EMEA revenue grew over 20% year every year. Asia-Pacific grew over 40% year every year. While our team in Latin America drove revenue growth of over 30% year every year.

Ashley Johnson: I'd like to start off by sharing some of my reflections from our explore on the road customer events around the globe. Over the summer, we hosted events in Berlin, Washington, DC, and Bogota, where we showcased our planet insights platform to help our partners and customers better understand the capabilities we seek to unlock for them with this new suite of tools. We talked about AI not as magic, but as a practical accelerant to insights and our platform not as a substitution for the solutions our partners build, but as an enabler for their solutions that can speed time to value for customers.

Will Marshall: Revenue in North America was up modestly on a year of year basis, reflecting solid growth and defense and intelligence, offset by headwinds in the commercial sector.

Will Marshall: As of the end of Q2, our Edivp period customer count was 1,012 customers.

Speaker Change: The sequential change in end up period customer count reflects the increased focus of our direct sales team on larger customers in our core verticals and the focus of our product teams to enable smaller, more transactional customers to purchase through our platform or our marketplace partners.

Ashley Johnson: Recurring ACV or annual contract value was 96% 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 base. Let Dollar Retention Rate at the end of Q2 was 99% and Let Dollar Retention Rate with Windbacks was 100%. Our Let Dollar Retention Rate for the quarter reflects some delays we experienced with bookings for certain large opportunities that we're pursuing with partners, as well as continued headwinds in the commercial sector.

Ashley Johnson: In August, I joined customers and partners in Bogota for a series of talks on topics ranging from law enforcement to forest protection to land management and infrastructure monitoring. All ideal use cases for our broad area management solutions. It was personally energizing to spend time with customers and partners that are using Planet's data and platform combined with our partners software and services to solve some of the world's most pressing challenges. We heard from representatives from a wide range of partners and customers joining us from all over Latin America.

Speaker Change: Recurring ACV or annual contract value was 96% 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 multiplayer contracts.

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

Speaker Change: Net Dollar Retention rate at the end of Q2 was 99%, and Net Dollar Retention rate with windbacks was 100%.

Speaker Change: Our net dollar retention rate for the quarter reflects some delays we experience with bookings for certain large opportunities that we're pursuing with partners, as well as continued headwinds in the commercial sector.

Ashley Johnson: At the event the Brazilian Federal Police and our partner S. C. Conn spoke about their latest ROI figures from the Brussels MIS program, which uses Planet data paired with S. C. Conn solutions to stop illegal deforestation. They shared that they've collected billions of US dollars from fines, seized goods, and frozen assets since 2020. They also highlighted the path they took to secure the funds and governmental support for the program in the first place, offering other countries a roadmap to follow.

Ashley Johnson: As a reminder, at this point in the year, our Let Dollar Retention Rate reflects six months of contract renewals. Our Let Dollar Retention Rate starts each fiscal year at 100%, then builds through the course of the year toward our final full-year result.

Speaker Change: As a reminder, at this point in the year, our net dollar retention rate reflects six months of contract renewals. Our net dollar retention rate starts each fiscal year at 100% then builds through the course of the year toward our final full year result.

Ashley Johnson: Turning to Gris Margin, non-GAAP Gris Margin for the second quarter was 58%, which was better than we had originally expected, in part due to the mix of deals leveraging partner solutions, as well as benefits from the cloud infrastructure investments we've made to optimize cost. AddustityBitaLoss was $4.4 million for Q2, marking another quarter of sequential improvement in AddustityBita. The upside to our prior guidance was driven largely by better than expected Gris Margin's and increased efficiencies in our new industry aligned go-to-market structure.

Speaker Change: Turning to gross margin, non-gap gross margin for the second quarter was 58%, which was better than we originally expected, and part due to the mix of deals leveraging partner solutions, as well as benefits from the cloud infrastructure investments we've made to optimize cost.

Speaker Change: Ajustidivit.loss was $4.4 million for Q2, marking another quarter of sequential improvement in

Speaker Change: The upside to our prior guidance was driven largely by better than expected gross margins and increased efficiencies in our new industry-aligned go-to-market structure.

Ashley Johnson: I'll turn now to the financials for the quarter. Revenue for our second quarter in fiscal 2025 came in at a record $61.1 million, which represents approximately 14% year of year growth. As we'll mentioned, year of year revenue growth for the second quarter was led by our government customers, while we've continued to see macroeconomic and agriculture specific headwinds in the commercial sector.

Ashley Johnson: As well noted, we made reductions to our teams in Q2 in service of becoming more effective and more efficient in our global operations. As a result, we expect to achieve an estimated $35 million of annual operating expense run rate savings. Additionally, we incurred approximately $10.5 million of one-time non-recurring charges related to the restructuring during the quarter. The reductions align with our commitment to reaching AddustityBitaL profitability by the fourth quarter of this fiscal year, and we remain on track to achieve this important milestone. Capital expenditures, including capitalized software development, were $16.6 million for the quarter. With the additional investment in the Pelican Intanager programs anticipated for this year, we expect CapEx to remain at a similar level in Q3 and Q4.

Speaker Change: As we'll noted, we made reductions to our teams in Q2 in service of becoming more effective and more efficient in our global operations.

Speaker Change: As a result, we expect to achieve an estimated $35 million of the annual operating expense run rate savings. Additionally, we incurred approximately $10.5 million of one-time non-recurring charges related to the restructuring during the quarter.

Ashley Johnson: Under the new industry aligned operating model mentioned by Will, we believe we will enable greater team agility that are alignment with our customers and sustainable growth across all sectors that we serve. To that end, we've assigned global go-to-market leads for the defense and intelligence civil government and commercial sectors to help drive both product and sales strategy. These business groups and leads will help direct product priorities and shape go-to-market strategy with a singular focus growing the book of business in that market.

Ashley Johnson: We expect this new structure will enable us to better serve the needs of our customers with a more efficient model. From a geographic perspective, during the second quarter, EMEA revenue grew over 20% year over year. Asia Pacific grew over 40% year over year, while our team in Latin America drove revenue growth of over 30% year over year. Revenue in North America was up modestly on a year of year basis, reflecting solid growth and defense and intelligence offset by headwinds in the commercial sector.

Ashley Johnson: Turning to the balance sheet, we ended the quarter with approximately $249 million of cash-equivalence and short-term investments, which we continue to believe provides us with sufficient capital to invest behind our core growth accelerating initiatives and achieve cash flow break even without needing to raise additional capital, and we still have no debt outstanding. At the end of Q2, our remaining performance obligations, or RPOs, were approximately $112 million, of which approximately 78% applied to the next 12 months and 97% to the next two years. Our backlog, which includes contracts with determination for convenience clause, which is common in our U.S.

Speaker Change: Turning to the balance sheet, we ended the quarter with approximately $249 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.

Speaker Change: And we still have no debt outstanding.

Speaker Change: At the end of Q2, our remaining performance obligations or Rps were approximately a $112 million of which approximately 78% apply to the next 12 months and 97% to the next two years.

Ashley Johnson: As of the end of Q2, our end of period customer count was 1,012 customers. The sequential change in end of period customer count reflects the increased focus of our direct sales team on larger customers in our core verticals and the focus of our product teams to enable smaller, more transactional customers to purchase through our platform or our marketplace partners. Recurring ACV or annual contract value was 96% 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.

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 $214 million of which approximately 65% applied to the next 12 months and 87% to the next two years.

Ashley Johnson: Federal contracts, and occasionally found in other customer contracts, was approximately $214 million, of which approximately 65% applied to the next 12 months and 87% to the next two years. 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.

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

Ashley Johnson: Our average contract length continues to be approximately two years, weighted on an ACV base. Net Dollar Retention Rate at the end of Q2 was 99% and Net Dollar Retention Rate with Windbacks was 100%. Our Net Dollar Retention Rate for the quarter reflects some delays we experienced with bookings for certain large opportunities that we're pursuing with partners, as well as continued headwinds in the commercial sector. As a reminder, at this point in the year, our Net Dollar Retention Rate reflects six months of contract renewals.

Ashley Johnson: Let me now turn to our guidance for the third quarter of fiscal 2025. We're expecting revenue to be between $61 and $64 million, which represents growth of approximately 10 to 16% year over year. We expect non-GAAP growth margin for Q3 to be between 59 and 61%. As a reminder, quarterly growth margin can fluctuate based on the mix of business and the inclusion of partner solutions in our contracts, particularly with government customers. Growth margin guidance also reflects approximately half a million dollars of impact from the higher depreciation expense related to three of our SkySat satellites that we've discussed on our prior calls, which we expect will be completed during the quarter.

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

Speaker Change: We're expecting revenue to be between 61, and $64 million, which represents growth of approximately 10% to 16% year over year.

Speaker Change: We expect non-GAAP gross margin for Q3 to be between 59 and 61%.

Speaker Change: As a reminder, quarterly gross margin can fluctuate based on the mix of business and the inclusion of partner solutions and our contracts, particularly with government customers.

Ashley Johnson: Our Net Dollar Retention Rate starts each fiscal year at 100%, then builds through the course of the year toward our final full-year result. Turning to Gross Margin, non-Gap Gross Margin for the second quarter was 58%, which was better than we had originally expected, in part due to the mix of deals leveraging partner solutions, as well as benefits from the cloud infrastructure investments we've made to optimize cost. AddustitybetaLoss was $4.4 million for Q2, marking another quarter of sequential improvement in Addustitybeta.

Speaker Change: Gross margin guidance also reflects approximately half a million dollars of impact from the higher depreciation expense related to three of our sky sat satellites that we've discussed on our prior calls, which we expect will be completed during the quarter.

Ashley Johnson: We expect our Adjusted EBITDA loss for the third quarter to be between negative $5 million and negative $2 million. We are planning for capital expenditures of approximately $13 million to $16 million in Q3, reflecting our continued investments in our next generation fleets, as well as the ongoing maintenance cat-backs for our planet scope constellation. Looking to the remainder of the year, we continue to see strong demand signals from the government sector, our pipeline of seven and eight-figure opportunities in both the defense and intelligence. And civil government sectors remains healthy, and we're pursuing a range of large opportunities both domestically and abroad, although it remains hard to predict the timing and size of large customer wins.

Speaker Change: We expect our adjusted EBITDA loss for the third quarter to be between negative $5 million and negative $2 million.

Speaker Change: Yeah.

Speaker Change: We are planning for capital expenditures of approximately $13 million to $16 million in Q3, reflecting our continued investments in our next generation fleets as well as the ongoing maintenance capex for our planet scope constellation.

Ashley Johnson: The upside to our prior guidance was driven largely by better than expected Gross Margin's and increased efficiencies in our new industry aligned go-to-market structure. As well noted, we made reductions to our teams in Q2 in service of becoming more effective and more efficient in our global operations. As a result, we expect to achieve an estimated $35 million of annual operating expense run rate savings. Additionally, we incurred approximately $10.5 million of one time non-recurring charges related to the restructuring during the quarter.

Speaker Change: Looking to the remainder of the year, we continue to see strong demand signals from the government sector, our pipeline of seven and eight figure opportunities in both the defense and intelligence and civil government sectors remains healthy and we're pursuing a range of large opportunities both domestically and abroad, although it remains hard to predict the timing and.

Speaker Change: <unk> of large customer wins we.

Ashley Johnson: We were pleased with our Q2 wins, which included NATO and multiple international government customers, proof points of the demand and value of our high cadence, broad area solutions, and representative of opportunities where we see significant room for expansion.

Speaker Change: We were pleased with our Q2 wins, which included NATO and multiple international government customers proof points of the demand and value of our high cadence broad area solutions and representative of opportunities, where we see significant room for expansion.

Ashley Johnson: The reductions align with our commitment to reaching Addustitybeta profitability by the fourth quarter of this fiscal year, and we remain on track to achieve this important milestone. Capital expenditures, including capitalized software development, were $16.6 million for the quarter. With the additional investment in the Pelican Intanager programs anticipated for this year, we expect CapEx to remain at a similar level in Q3 and Q4.

Ashley Johnson: I'd like to close by saying that I'm incredibly proud of the commitment and performance of our planet here globally. As a testament to the commitment of our teams to our customers, our technical support team was once again honored as a CV Award winner in multiple categories for 2024, a prestigious award in sales and customer service. We believe the changes we talked about today will enable us to strengthen even further our commitment to our customers, while also driving greater predictability, consistency, and efficiency to the business over time, which are key priorities that we consider fundamental to accelerating our growth scaleably.

Speaker Change: I'd like to close by saying that I'm incredibly proud of the commitment and performance of our planet tiers globally as a testament to the commitment of our teams to our customers. Our technical support team was once again honored as a C. V Award winner in multiple categories for 2020 for a prestigious award and sales and customer service.

Speaker Change: We believe the changes we talked about today will enable us to strengthen even further our commitment to our customers. While also driving greater predictability consistency and efficiency to the business over time, which are key priorities that we consider fundamental to accelerating our growth scalable.

Ashley Johnson: Turning to the balance sheet, we ended the quarter with approximately $249 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 flowbreak even without needing to raise additional capital, and we still have no debt outstanding. At the end of Q2, our remaining performance obligations, or RPOs, were approximately $112 million, of which approximately 78% applied to the next 12 months, and 97% to the next two years.

Ashley Johnson: And we believe our partner and platform led strategy will enable us to tap into the larger market opportunity that we see for our data across both commercial and government sectors.

Speaker Change: And we believe our partner in platform led strategy will enable us to tap into the larger market opportunity that we see for our data across both commercial and government sectors.

Operator: Operator, that concludes our comments. We can now take questions. Thank you.

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

Speaker Change: Thank you.

Operator: We now begin the Q&A session. If you would like to ask a question, please press star followed by one on your telephone keypad. To remove your question for any reason, press star followed by two. As a reminder, if you are using a speaker phone, please pick up your handset before asking your question. In the interest of time, we ask that you please limit yourself to two questions each.

Speaker Change: You may now begin the Q&A session.

Speaker Change: You'd like to ask a question. Please press star followed by one on your telephone keypad.

Ashley Johnson: Our backlog, which includes contracts with determination for convenience clause, which is common in our U.S, federal contracts, and occasionally found in other customer contracts, was approximately $214 million, of which approximately 65% applied to the next 12 months, and 87% to the next two years. 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.

Speaker Change: To remove your question for any reason press star followed by two.

Speaker Change: As a reminder, if you are using a speakerphone. Please pick up your handset before asking your question and in the interest of time, we ask that you. Please limit yourself to two questions each.

Ryan Coons: Our first question today comes from Ryan Coons with Needham & Company. Your line is now open. Hi, thanks for the question. With regards to some housekeeping first on numbers, I see North America down. in the quarter sequentially as well as RPO down last couple of quarters. Can you actually kind of unpack what's going on there in terms of some of the puts and takes across different seconds? Appreciate that.

Speaker Change: Our first question today comes from Ryan Koontz with Needham <unk> Company. Your line is now open.

Speaker Change: Hi, Thanks for the question.

Speaker Change: With regards to some housekeeping first on numbers.

Ashley Johnson: Let me now turn to our guidance for the third quarter of fiscal 2025. We're expecting revenue to be between $61 and $64 million, which represents growth of approximately 10 to 16% year-of-year. We expect non-gap growth margin for Q3 to be between 59 and 61%. As a reminder, quarterly growth margin can fluctuate based on the mix of business and the inclusion of partner solutions in our contracts, particularly with government customers. Growth margin guidance also reflects approximately half a million dollars of impact from the higher depreciation expense related to three of our SkySat satellites that we've discussed on our prior calls, which we expect will be completed during the quarter.

Speaker Change: With Americas down.

Ryan Koontz: In the quarter sequentially as well as far down in the last couple of quarters can you actually kind of kind of what's going on there in terms of some of the puts and takes across different segments I appreciate that.

Ashley Johnson: Yeah, I think the simplest answer is to remind you that we have a number of larger opportunities, particularly with government entities, many of whom cannot sign more than one year at the time; there's just a baked-in renewal. And so that can create some lumpiness in terms of timing of new business. And then I think that's generally what is driving RPOs and backlogs this quarter. In terms of the geographic growth rates in North America, specifically the performance by commercial, is what's impacting that growth rate. Right, okay, great.

Ryan Koontz: Yeah.

Speaker Change: I think the simplest answer is it is just to remind you that we have a number of larger opportunities, particularly with government entities many of them.

Speaker Change: Cannot set a signed more than one year at a time, that's just the baked in renewal and so that can create some lumpiness.

Speaker Change: In terms of timing of new business, and then I think that that's.

Speaker Change: Generally.

Speaker Change: What is what is driving our pose in backlog this quarter.

Ashley Johnson: We expect our Adjusted EBITDA loss for the third quarter to be between negative $5 million and negative $2 million. We are planning for capital expenditures of approximately $13 million to $16 million in Q3, reflecting our continued investments in our next generation fleets, as well as the ongoing maintenance cat-backs for our planet's goat constellation. Looking to the remainder of the year, we continue to see strong demand signals from the government sector. Our pipeline of seven and eight figure opportunities in both the defense and intelligence and civil government sectors remains healthy, and we're pursuing a range of large opportunities both domestically and abroad, although it remains hard to predict the timing and size of large customer wins.

Speaker Change: In terms of the geographic.

Speaker Change: Growth rates in North America, specifically the U S. The performance by commercial is what's impacting that.

Speaker Change: Growth rate.

Speaker Change: Right Okay great.

Ryan Coons: And in terms of the gross margin there, a nice gross margin improvement in the quarter, really, really strong and nice to see it reflected in the guide as well.

Speaker Change: And.

Speaker Change: In terms of the gross margin there nice gross.

Speaker Change: Margin improvement in the quarter really really strong and nice to see it reflected in the guide as well.

Ashley Johnson: Can you unpack that for us a little bit? And in terms of what some of the drivers there, I recall that some packaging of partner products were weighing that down in past quarters as well as some of the write-offs from the solar storm as well that in the rear view mirror down. It's getting into the rear view mirror that actually continued into Q2, and there's a bit of a tail that into Q3, which I referenced. The gross margins benefited one from the performance of our software engineering teams and the efficiencies that they've been driving in our cloud infrastructure.

Speaker Change: Can you unpack that for us a little bit in terms of what some of the drivers there I recall that.

Speaker Change: Some some packaging a partner.

Speaker Change: Products, we are weighing that down in past quarters as well as some of the.

Speaker Change: Yeah.

Speaker Change: Write offs from the from the solar storms.

Ashley Johnson: We were pleased with our Q2 wins, which included NATO and multiple international government customers. Proof points of the demand and value of our high cadence, broad area solutions, and representative of opportunities where we see significant room for expansion. I'd like to close by saying that I'm incredibly proud of the commitment and performance of our planet here globally. As a testament to the commitment of our teams to our customers, our technical support team was once again honored as a CV award winner in multiple categories for 2024.

Speaker Change: Fair enough.

Speaker Change: It's getting into the rearview mirror that that actually continued into Q2, and there's a bit of a tail that into Q3, which I referenced.

Speaker Change: The gross margins benefited one from the performance of our software engineering teams and the.

Speaker Change: The efficiencies that they've been driving in our cloud infrastructure.

Ashley Johnson: Another driver is mix of business. So, as you referenced, depending on the mix of new business and the quarter that includes partners, we can see cost of goods fluctuate as a result of that. So that is another one of the drivers versus the guidance that we had previously given. And then again in our core business as we continue to sell data deals with our one-to-many model, bringing new customers on a large gross margin to expand. So it's a combination of all of those factors that drove the upside in the quarter.

Speaker Change: Another driver is mix of business, where as you referenced.

Speaker Change: Pending on the mix.

Speaker Change: New business in the quarter that includes partners, we can see cost of goods sold fluctuate as a result of that so that is another one of the drivers versus the guidance that we had previously given.

Ashley Johnson: A prestigious award in sales and customer service. We believe the changes we talked about today will enable us to strengthen even further our commitment to our customers, while also driving greater predictability, consistency, and efficiency to the business ever time, which are key priorities that we consider fundamental to accelerating our growth scalably. And we believe our partner and platform led strategy will enable us to tap into the larger market opportunity that we see for our data across both commercial and government sectors.

Speaker Change: And then again you know in our.

Speaker Change: Our core business as we continue to sell data deals with our one to many model, bringing new customers on allows gross margins to expand so it's a combination of all those factors that drove the upside in the quarter.

Speaker Change: Yeah.

Ryan Coons: Great, thanks so much for talking to us. Great, thank you.

Speaker Change: Great. Thanks, so much.

Speaker Change: Great. Thank you.

Unknown Executive: Operator, that concludes our comments.

Michael Adamor: Our next question comes from Michael Adamor with Northland. A lot of that open. All right, great, thanks.

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

Unknown Executive: We can now take questions. Thank you.

Speaker Change: Your line is now open.

Speaker Change: Yeah.

Unknown Executive: We now begin the Q and A session. If you like to ask a question, please press star followed by one on your telephone keypad. To remove your question for any reason, press star followed by two. As a reminder, if you are using a speaker phone, please pick up your handset before asking your question. And in the interest of time, we ask that you please limit yourself to two questions each.

Michael Latimore: Alright, great. Thanks.

Michael Adamor: Yeah, this is sticking with gross margin. You've guided for that to be in the sort of 59 to 61 percent range, I think, is a third quarter here. Is that a good new kind of baseline to think about that, you know, it should be at least that level going forward? I mean, that's certainly how we're targeting it. Again, the only caution I would give is depending on the mix of business that we sign, we could see pressure. You know, if we were to sign a larger deal that included for which we were prime and includes other partners, but yes, then, you know, as we...

Speaker Change: I guess, just sticking with gross margin.

Speaker Change: You've guided for that to be in the sort of 59% to 61% range I.

Speaker Change: I think in the third quarter here is that is that a good kind of baseline to think about that it.

Speaker Change: It should be at least that level going forward.

Speaker Change: I mean, that's certainly how we're we're targeting it again the only caution I would give is depending on mix of business that we signed we could see pressure.

Ryan Koontz: Our first question today comes from Ryan Coons with Needham Company.

Ryan Koontz: Your line is now open. Hi, thanks for question. With regards to the some housekeeping first on numbers, I see North America down, in the quarter sequentially as well as RPO down in the last couple quarters.

Speaker Change: We were to sign a larger deal that included for which we were prime and includes other partners.

Speaker Change: But yes, and you know as we.

Ashley Johnson: As we move forward, obviously the more business we're bringing on to the platform, that's a very scalable model. So that helps us balance out, you know, other times where we might see, you know, partner costs weighing it down. So that's certainly our ambition is to sustain and improve from here.

Speaker Change: As we move forward, obviously, the more business, we're bringing on to the platform that is a very scalable model. So that helps us balance out other times, where we might see partner costs weighing it down so.

Ashley Johnson: Can you actually kind of kind of unpack what's going on there in terms of some of the puts and takes across different seconds. Appreciate that. Yeah, I think the simplest answer is just to to remind you that we have a number of larger opportunities, particularly with government entities, many of whom cannot sign more than one year at a time. There's just a baked in renewal. And so that can create some lumpiness in terms of timing of new business.

Speaker Change: That's certainly our ambition is to sustain and improve them from here.

Michael Adamor: Great. And then can you just get enough data on the pilots you've been working on? You know, how many did you have in the second quarter?

Speaker Change: Great.

Speaker Change: And then.

Speaker Change: Can you just give an update on the.

Speaker Change: Pilots that you've been working on.

Speaker Change: Amit as you have in the second quarter do you have any in the third quarter.

Ashley Johnson: Do you have any in the third quarter? Just not data; that would be great. Yeah, I'm having to speak to that a little bit. Yeah, so, as you know, we've been doing these pilots with AI on top of our PlanetScope, daily scan, and we've done a couple this year already. We expect to have more data this year.

Speaker Change: Right.

Amit: Yes, I'm happy to speak to that a little bit yeah. So.

Ashley Johnson: And then I think that's that's generally what is what is driving our POs and backlog this quarter in terms of the geographic growth rates in North America, specifically the U.S, the performance by commercial is what's impacting that year. That growth rate. Right. Okay, great.

We've been doing these parts for AI on top of our planet Skype data scan and you've done a couple this year already we expect to have more later this year and.

William Marshall: And, and then we're most importantly building the foundation to build those into operational vehicles, which doesn't happen overnight, but we're definitely making good progress on that.

Speaker Change: And then most importantly building the foundations to build those into operational vehicles, which doesn't happen overnight, but we are definitely making good progress on that.

Michael Adamor: Great. I guess just last on the egg sector. You know, it's been headwinds there. Do you feel like that? Yeah, stabilized on a sequential basis. You know, third or fourth quarter of the strategy. I mean, we certainly are hearing more positivity from our ad partners and customers. So I'm optimistic about that as a market that can certainly get a lot of benefit from planet products and solutions. And we've got a number of, you know, really good customers in that space; some of them were referenced on this call. Yeah, the BSS. And, as I mentioned, we're moving towards the right sort of incentive model, and that that's important.

Speaker Change: Great and then just I guess just last one the AG sector.

Michael Latimore: And in terms of the gross margin there, a nice gross margin improvement, the quarter really, really strong and nice to see it reflected in the guide as well. Can you unpack that for us a little bit in terms of what some of the drivers there, I recall that you have some some packaging of partner products where we're weighing that down in past quarters as well as some of the. Right off from the from the solar storm is a lot of that in the rear room, you know, it's getting into the rear view mirror that that actually continued into Q2 and there's a bit of a tail that into Q3, which I referenced the growth margins benefited one from the performance of our software engineering teams and the the efficiencies that they've been driving in our cloud infrastructure.

Speaker Change: [noise] headwinds there did you see.

Speaker Change: Yes stabilize on a sequential basis.

Speaker Change: Yeah.

Third or fourth part of the search.

Speaker Change: Okay.

Speaker Change: I mean, we certainly are hearing more positivity from our AD partners and customers. So I'm optimistic about that as a as a market that can certainly get a lot of benefit from planets products and solutions.

Speaker Change: And we've got a number of really good customers in that space. Some of them are referenced on this call BSS aveo.

Speaker Change: As I mentioned that we are moving towards the right sort of incentive model.

William Marshall: And, you know, the overall optimism that actually and I share there is that the sector fundamentally can benefit from our data. And, and farmers can improve yields, decrease costs, and therefore increase profitability, and all of that sense remains. And as these customers like BSS leverage the tools in a way that's where we have business alignment, like this beginning to do. I think we begin to see that turnaround.

Speaker Change: That's important.

Speaker Change: Ooh optimism that assay in a nutshell.

Speaker Change: As is the sector fundamentally can benefit from our data and in pharma is going to improve yields decrease costs, and therefore increase profitability and all of that.

Michael Latimore: Another driver is mix of business, so as you referenced, depending on the mix of new business in the quarter that includes partners, we can see cost of goods fluctuate as a result of that, so that is another one of the drivers versus the guidance that we had previously given. And then again, you know, in our core business as we continue to sell data deals with our one to many model, bringing new customers on a lot of gross margins to expand. So, you know, it's a combination of all the factors that drove the upside in the quarter. Great, thanks so much for talking to us. Great, thank you.

Speaker Change: <unk> remains and as these customers like BSF leverage the tools in a way that's where.

Speaker Change: We have business alignment by beginning to to do I think we begin to see that turn around.

Michael Adamor: So we very much believe in the long term in that market still.

Speaker Change: So we very much believe in the long term in that market still.

Speaker Change: Yeah.

Michael Adamor: Great. Thank you.

Speaker Change: Okay, great. Thanks, a lot.

Speaker Change: Thank you.

Christine Louis: Our next question comes from Christine Louis with Morgan Stanley. Your lives now open. Hey, good afternoon, guys. Just wanted to follow up on the NATO contract that you want the NATO app contract. Can you provide a little bit more color around the program structure in the size of that opportunity. I think NATO had said that the overall program could be worth like a combined billion dollars over five years. Like what's addressable to you? Yeah, it's great. Great question.

Speaker Change: Our next question comes from Kristine Lueck with Morgan Stanley. Your line is now open.

Kristine Lueck: Oh, Hey, good afternoon guys.

Kristine Lueck: Just wanted to follow up on the the NATO contract that you won.

Kristine Lueck: The needle apps contract could you provide a little bit more color around the program structure and the size of that opportunity I think NATO had said that the overall program could be worth like a combined $1 billion over five years like what what's addressable to you.

Ashley Johnson: Our next question comes from Michael out of more with North one, a lot of how open. All right, great, thanks. Yeah, this is sticking with gross margin. You've guided for that to be in the sort of 59 to 61% range. I think as a third quarter here, is that a good new kind of baseline to think about that, you know, it should be at least at a level going forward. I mean, that's certainly how we're targeting it again, the only caution I would give is depending on mix of business that we sign, we could see pressure, you know, if we were to sign a larger deal that included for which we were prime and includes other partners.

Speaker Change: Yes, great Great question, Yes, we're very excited about this.

William Marshall: Yeah, we're very excited about this introductory partnership. It's very exciting: what value proposition. I think NATO can gain from our data board assessment of threats and across wide areas of interest that they have. And also a common operating picture between allies with our data being unclassified and shareable. It means they can share this information between different countries. And of course, NATO is an alliance can really benefit from that sort of common operating and understanding. To your point about the size, yeah, I mean, that's right. The governments have committed up to billion dollars to that program over five years.

Kristine Lueck: Introductory partnership.

Speaker Change: It's very exciting what's the value proposition I think NATO can gain from data board assessment of.

Kristine Lueck: Threat.

Kristine Lueck: And.

Across a wide areas of interest that they have and also a common operating picture between allies with data being unclassified and shareable. It means they can share.

Kristine Lueck: As mentioned between different countries and of course makes it isn't the alliance can really benefit from that sort of comment on operating and understanding to you.

Ashley Johnson: But yes, you know, as we, as we move forward, obviously the more business we're bringing on to the platform, that's a very scalable model. So that helps us balance out, you know, other times where we might see, you know, partner costs weighing it down.

Speaker Change: Appointed by the size, yes, that's right.

Speaker Change: <unk> have committed.

Speaker Change: In dollars to that program over five years.

William Marshall: We're at the beginning end of that, so ram. But we think it's a significant opportunity for a planet to support. So we're very excited about it.

Ashley Johnson: So that's certainly our ambition is to sustain and improve from from here. Great.

Speaker Change: At the beginning end of that ramp.

Speaker Change: But we think it is a significant opportunity for China to support so we're very excited about it.

Ashley Johnson: And then can you just get enough data on the pilots you've been working on? You know, how many did you have in the second quarter? Do you have any in the third quarter? Just not data, that would be great. Yeah, I'm happy to speak to that a little bit. Yeah, so as you know, we've been doing these pilots for with AI on top of our planet scope, daily scan and we've done a couple this year already. We expect to have more data this year and and then we're most importantly building the foundations to build those into operational vehicles, which doesn't happen overnight, but we're definitely making good progress on that. Great.

Christine Louis: Great, that's helpful. And then when we, I guess we have with the first satellite now launched, do you peel back the curtain a little bit on manager?

Speaker Change: Great that's helpful and then when.

Speaker Change: When we I guess the first satellite now launched if you Peel back the curtain a little bit on tanager, I mean, what sort of early contributions you're expecting from this first satellite and what's your latest thinking about launching the second one.

William Marshall: I mean, what sort of early contributions are you expecting from this first satellite? And what's your latest thinking about launching the second one? Yeah, great, great. Yeah, I mean, firstly, I mean, the teams have worked incredibly to build and now starting to commission that first satellite. It's really fantastic to see the progress there and hard work. And that satellite, as I mentioned, is an early part of its commissioning to the revenue opportunities. We're very excited about the number of vertical markets that and use cases that that high-perceptual imagery opens up. And I think we've mentioned before that we've already got two customers there, one in the form of carbon method that people that have to fund the program, looking at the environmentally use case of methane data.

Speaker Change: Okay, great great yes.

Speaker Change: I mean, the teams have worked incredibly to build and now starting to commission.

Speaker Change: Satellite, it's really fantastic to see the progress there.

Speaker Change: Hard work.

Speaker Change: And that that satellite as I mentioned is in the early part of its commissioning.

Speaker Change: Revenue opportunities. So we're very excited about.

Will Marshall: I guess just last on the egg sector. You know, it's been had with their, do you feel like that? Yes, stabilized on a sequential basis. You know, third or fourth quarter of the structure. I mean, we certainly are hearing more positivity from our ad partners and customers. So I'm optimistic about that as a as a market that can certainly get a lot of benefit from planet products and solutions. And we've got a number of, you know, really good customers in that space, some of them were referenced on this call.

Speaker Change: The number of vertical markets that that.

Speaker Change: And use cases that that hyper spectral imagery opens.

Speaker Change: Opens up.

Speaker Change: And I think we've mentioned before that we've already got two customers one in the form of carbon method that people that help fund the program.

Speaker Change: Look in environmental use case of methane data and we also have the national reconnaissance office that you guys all data.

William Marshall: And we also have the NRO Natural Reconnaissance Office that you buy as our data. And we have a small contracting vehicle for that that can expand as we get operational data, which is exciting. But also, we have been working with multiple other entities. We've about a dozen oil and gas operators, two large ag companies, and others where mining companies and so on. That we're doing an early product work, developing the use cases such that when we start producing operational data, we can start building those markets. It is a nascent market, but we believe that this is our first foray into it, and it's an exciting opportunity.

Speaker Change: And as we have a small contracting vehicle for that.

Speaker Change: Can expand that as we get operational data, which is exciting but also we have been working with multiple other entities.

Will Marshall: Yeah, the BSS, Savio. And as I mentioned, we're moving towards the right sort of incentive model and that that's important. And you know, the overall optimism that actually and I share there is is that the sector fundamentally can benefit from our data and farmers can improve yields, decrease costs and therefore increase profitability. And all of that sense remains. And as these customers like BSS, leverage the tools in a way that's where we have business alignment, like this beginning to do. I think we begin to see that turn around. So we very much believe in the long term in that market still. Great. Thank you.

Speaker Change: About a dozen oil and gas operators.

Speaker Change: Two large energy companies.

Speaker Change: Others, where mining companies and so on.

Speaker Change: We are doing.

Speaker Change: Early product work developing new use cases.

Speaker Change: Such that when we stopped producing operational data we can start building those markets. It is a nascent market.

Speaker Change: But we believe that this is this is our first foray into it and it's an exciting opportunity.

William Marshall: Great. Thanks.

Speaker Change: Great. Thanks, Thanks, well if I could just squeeze a last quick question is I mean the.

William Marshall: Well, and if I could squeeze the last question in, I mean, the NGA. So $700 million over the next five years to improve AI labeling of space imagery. I guess for something like that, that seems like exactly in your real house.

Speaker Change: Alright.

Christine Lewis: Our next question comes from Christine Lewis with Morgan Stanley your lives now open. Hey, good afternoon guys. Just wanted to follow up on the NATO contract that you want the NATO app contract. Can you provide a little bit more color around the program structure in the size of that opportunity. I think NATO had said that the overall program could be worth like a combined billion dollars over five years. Like what's addressable to you? Yeah, it's great. Great question.

Speaker Change: So $700 million over the next five years.

Speaker Change: Improved AI labeling of space imagery.

Speaker Change: For something like that that seems like exactly in your wheelhouse. So can you talk about how you're positioned for this contract and is this a winner takes all type of pursuit or do you see this.

William Marshall: So can you talk about how your position for this contract is and is this a winner takes all type of pursuit or do you see this carrying multiple vendors. How do you think about timing and, you know, any sort of perspective on the sizable opportunity for you would be really helpful. And I promise it's in my last question. No, no, it's all good. I was just being silly. Yeah, yeah, absolutely. We track that; obviously, we work closely with the NGA. That particular opportunity is more focused on labeling of data, which is not what we do.

Speaker Change: Carrying multiple vendors.

Speaker Change: How do you think about timing and any sort of a perspective on the sizable opportunity for you would be really helpful.

Will Marshall: Yeah, we're very excited about this introductory partnership. It's very exciting what value proposition. I think NATO can gain from our data board assessment of threats and across wide areas of interest that they have. And also a common operating picture between allies with our data being unclassified and shareable. It means they can share this information between different countries. And of course, NATO is an alliance can really benefit from that sort of common operating and understanding.

Speaker Change: And I promise that's my last question yes.

Speaker Change: Okay.

Speaker Change: Okay that was just being silly.

Speaker Change: Yes, yes, absolutely we track that obviously, we work closely with the NGA at that particular opportunity is more focus on labeling of data, which is not what we do we don't do labeling right.

William Marshall: We don't do labeling, right? Generally, the technology is moving away from that kind of method, more towards the sort of automatic. These large language models and foundation models are able to be more zero-shot or one-shot. Learning, which is very different where you don't have to mask scale labeling of data.

Speaker Change: Generally the technology is moving away from that kind of method more towards the sort of automatic lost language models and foundation walls are able to.

Speaker Change: The more zero show a one shot.

Speaker Change: Learning, which is very different.

Will Marshall: To your point about the size, yeah, I mean, that's right. The governments have committed up to billion dollars to that program over five years. We're at the beginning end of that so ram. But we think it's a significant opportunity for a planet to support. So we're very excited about it. Great, that's helpful.

Speaker Change: Don't have the mass scale labeling of data. So I think the better place for us to be able to be contributing and is where we combine these foundation modeled without dataset to do profound things like look over large areas for new trucks, and so on which fits more into other opportunities.

William Marshall: So I think the better place for us to be able to be contributing is where we combine these foundation models with our data set to do profound things like look over large areas for new threats and so on, which fits more into other opportunities. Thank you.

William Marshall: Great. Thanks for the color.

Speaker Change: Great. Thanks for the color.

Will Marshall: And then when we, I guess we have with the first satellite now launched. Do you peel back the curtain a little bit on Tannager? I mean, what sort of early contributions are you expecting from this first satellite? And what's your latest thinking about launching the second one? Yeah, great, great. Yeah, I mean, firstly, I mean, the teams have worked incredibly to build it, and I'll start in commission that first satellite is really fantastic to see the progress there and hard work.

Trevor Walsh: Our next question comes from Trevor Walsh with JMP.

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

Trevor Walsh: Your line is not open. Great. Hi team. Thanks for taking my questions. I actually or will just question around the go-to-market changes, kind of at the top level that you had mentioned. Understand you've got new leadership at kind of at each of the primary vertical areas.

Line is now open.

Trevor Walsh: Great Hi team thanks for taking my questions.

Trevor Walsh: Hi, Ashley Orwell, just a question around the go to market changes kind of at the top level that you had mentioned.

Speaker Change: I understand you've got new leadership at kind of at each of the.

Trevor Walsh: Just curious, kind of maybe just diving in a little deeper what exactly those new leaders will be focusing on that may be different or in addition to kind of how each of those business units were kind of being run before and sort of what the kind of, you know, 60, 60, 90 kind of day plan is for those folks. Yeah, thanks for the question. It's again, it's really more of taking the work that we started last year and actually just moving a bit deeper and more aggressively towards aligning around our customers. So a year ago, we talked about the fact that we were aligning our sales teams to these customer verticals.

Ashley Orwell: Primary vertical areas, just curious kind of maybe just diving a little deeper what exactly those new leaders will be focusing on that may be different or in addition to kind of how each of those business units, where can be run run before and sort of what the what the kind of 30 60 90 day plan is for those folks.

Will Marshall: And that satellite, as I mentioned, is an early part of its commissioning to the revenue opportunities. So we're very excited about the number of vertical markets that that and use cases that that high-perpectual imagery opens up. And I think we've mentioned before that we've already got two customers there, one in the form of carbon methods that people that have to fund the program, looking at the environmentally use case of methane data.

Speaker Change: Yeah. Thanks for the question. It's again, it's really more of taking the work that we started last year and actually just moving a bit deeper and more aggressively towards aligning around our customers. So a year ago, we talked about the fact that we were aligning our sales teams to these customer verticals.

Will Marshall: And we also have the NRO natural reconnaissance office that you buy as our data, and we have a small contracting vehicle for that that is can expand as we get operational data, which is exciting. But also, we have been working with multiple other entities. We've about a dozen oil and gas operators, two large ag companies and others where mining companies and so on, that we're doing an early product work, developing the use cases, such that when we start producing operational data, we can start building those markets. It is a nascent market, but we believe that this is our first foray into it and it's an exciting opportunity. Great, thanks. Thanks, Will.

William Marshall: So that was really kind of focused on our AES and kind of how our balance of investment was on that line. What we've done is said, you know, really we should be looking at a broader our broader commercial organization and alignment, as well as our product teams and how we're thinking about the alignment of those resources behind the demands that are going to serve the broadest array of customers and meet the needs of these customers very directly. So that's really the nature of the organizational model changes in terms of the leadership. So these are all people that that existed in the company and we're strong leaders already in their own right and partnering sales and product to lead these initiatives to really focus on accelerating the growth of the book of business.

Speaker Change: So that was really kind of focus on our aes and kind of how our balance of investment was on that line.

Speaker Change: What we've done has said you know really we should be looking at a brought our broader commercial organization and alignment as well as our product teams and how we're thinking about the alignment of those resources behind the demands that are going to serve the broadest array of customers and meet the needs of these customers very directly.

Speaker Change: So that's really the nature of of the organizational model changes.

Speaker Change: In terms of the leadership. So these are all people that that existed in the company and we're strong leaders already in their own right and partnering sales and product.

Speaker Change: To lead these initiatives to really focus on accelerating the growth of the book of business and so that means really thinking about the renewals of existing accounts the opportunities to expand them and where the most robust pipeline is that we can be targeting both our sales execution and our product development strategy too so.

Will Marshall: And if I could squeeze the last question in, I mean, the NGA, I don't know if I can just spend $700 million over the next five years to improve AI labeling of space imagery. I guess for something like that, that seems exactly in your wheelhouse. So can you talk about how your position for this contract and is this a winner takes all type of pursuit? Or do you see this carrying multiple vendors?

Ashley Johnson: And so that means really thinking about the renewals of existing accounts, the opportunities to expand them and where the most robust pipeline is that we can be targeting both our sales execution and our product development strategies to. So that's the nature of the organizational changes, and with that, you know, quite honestly, we were able to drive a lot of efficiencies and frankly achieve upside on those efficiencies versus what we had expected.

Speaker Change: That's the nature of the organizational changes and with that quite honestly, we were able to drive a lot of efficiencies and frankly achieve upside on those efficiencies versus what we had expected coming.

William Marshall: You know, coming into the quarter. I can only add that I think the teams have got going really quickly, and you know this with a singular focus of growing the book of business for this for their vertical across sales and product, as she was saying. They really got going quite quickly and and and and I think it all, as I said, both lead to better growth and to operational efficiency that we've seen.

Speaker Change: Coming into the quarter, if I can.

Will Marshall: How do you think about timing and, you know, any sort of perspective on the sizable opportunity for you would be really helpful? And I promise it's in my last question. Yeah. No, no, it's all good, I was just being silly. Yeah, yeah, absolutely. We track that, obviously, we work closely with the NGA. That particular opportunity is more focused on labeling of data, which is not what we do. We don't do labeling.

Speaker Change: I think the teams have got going really quickly and.

Speaker Change: With a singular focus of growing the book of business for this vertical across sales and product is actually it was just saying they've really got going quite quickly and I think it will.

Speaker Change: As I said, both lead to better gross and to operational efficiencies that we've seen.

Speaker Change: Yeah.

Will Marshall: Generally, the technology is moving away from that kind of method more towards the sort of automatic, large language models and foundation models are able to be more zero-short or one-shot learning, which is very different where you don't have to mask scale labeling of data. So I think the better place for us to be able to be contributing is where we combine these foundation models with our data set to do profound things like look over large areas for new threats and so on, which fits more into other opportunities. Thank you. Great. Thanks for the color.

Trevor Walsh: Great, thanks both.

Paul: Great. Thanks, Paul.

Speaker Change: One last one for me.

Trevor Walsh: Yeah, just just one one last one for me. So actually just around the guidance for for three Q and kind of beyond. I know you've talked previously about just challenges around especially the government, the larger government contracts, and getting the timing of those. I'm just sure you've talked about the pipeline as well, but then in this quarter you actually, you know, it looks like between the NATO deal and some of the other seven figured contracts that you mentioned, it looks like some of those are actually coming to fruition.

Speaker Change: Just one last one for me.

Speaker Change: So actually just around around the guidance for <unk> and kind of beyond I know you've talked previously about just challenges around especially the government with larger government contracts and getting the timing of those.

Speaker Change: I'm just.

Speaker Change: <unk> talked about the pipeline as well, but then in this quarter you actually it looks like between the NATO deal and some of the other seven figure.

Contracts that you mentioned it looks like some of those are actually coming to fruition. So as you think about the guidance is it now kind of is it the Rev. Rec around just getting those completed contracts operational and Thats whats kind of the lack of visibility on that front is kind of gumming up the works a little bit to kind of give a little bit broader kind of full year guide I was just curious.

Ashley Johnson: So, as you think about the guidance, is it now kind of a is it the red brick around just getting those completed contracts operational and that's what's kind of, you know, the lack of visibility on that front is kind of coming up the works a little bit to kind of give a little bit broader. The water kind of for your guys just curious kind of where the where the kind of the challenges remain as far as kind of the house. Over top one. Yeah, it's actually, you know, consistent with what I spoke about even at the beginning of the year in terms of, you know, having a lot of different ways that we can kind of get to the number and the balance of those opportunities.

Trevor Walsh: Our next question comes from Trevor Walsh with JMP.

Trevor Walsh: Your line is not open. Great. Hi, team. Thanks for taking my questions. I actually or will just question around the go-to-market changes kind of at the top level that you had mentioned. Understand you've got new leadership at kind of at each of the primary vertical areas.

Speaker Change: Kind of where the where the kind of.

Speaker Change: The challenges remain as far as kind of the outlook on the top line.

Speaker Change: Yes, it's actually consistent with what I spoke about even at the beginning of the year in terms of.

Will Marshall: Just curious kind of maybe just diving in a little deeper what exactly those community leaders will be focusing on that may be different or in addition to kind of how each of those business units were kind of being run run before and sort of what the what the kind of you know 60, 60, 90 kind of day plan is for those folks. Yeah, thanks for the question. It's again, it's it's really more of taking the work that we started last year and actually just moving a bit deeper and more growing.

Speaker Change: Having.

Speaker Change #100: A lot of different ways that we can kind of get to the number in the balance of those opportunities.

Ashley Johnson: Then drive different outcomes in terms of specifically what you reference, so revenue recognition, but also the mix of partners and therefore the impact on gross margin, and obviously that flows through. The rest of the piano. So we are obviously progressing for the year and getting a better sense for how these deals are coming together and what we need to do to close them, but until we are in a position where, you know, we know exactly what the mix of business is going to be driving revenue in the quarter. It just makes it challenging to give that clear guidance.

Speaker Change #100: And then drive different outcomes in terms of specifically what you referenced so revenue recognition, but also the mix of partners and therefore, the impact on on gross margin and obviously that flows through the rest of the P&L.

Speaker Change #100: So we are obviously progressing through the year and getting a better sense for how these deals are coming together and what we need to do to close them, but until we are in a position where we know exactly what the mix of business is going to be driving revenue in the quarter. It just makes it challenging.

Will Marshall: So that's more aggressively towards aligning around our customers. So a year ago we talked about the fact that we were aligning our sales teams to these customer verticals. So that was really kind of focused on our AEs and kind of how our balance of investment was on that line. What we've done is said, you know, really we should be looking at a broader commercial organization and alignment as well as our product teams and how we're thinking about the alignment of those resources behind the demands that are going to serve the broadest array of customers and meet the needs of these customers very directly.

Speaker Change #100: To give that full year guidance, but as you noted we had a number of really great wins in the quarter. We continue to have really strong pipeline for Q3.

Ashley Johnson: But, as you noted, we had a number of really great wins in the quarter. However, we continue to have really strong pipeline for Q3. So, you know, we remain very optimistic, especially with these new business leaders and being able to re-accelerate the growth.

Speaker Change #100: So we remain very optimistic, especially with these new business leaders and.

Speaker Change #100: Being able to reaccelerate the growth but at this.

Ashley Johnson: But at this point, you know, kind of taking it a quarter at a time until we've got, you know, a bit more predictability and ability to call with confidence the full year number all the way through the panel.

Speaker Change #100: Point, you know kind of taking it a quarter at a time and until we've got you know.

Will Marshall: So that's really the nature of the organizational model changes in terms of the leadership. So these are all people that that existed in the company and we're strong leaders already in their own right. Partnering sales and product to lead these initiatives to really focus on accelerating the growth of the book of business. And so that means really thinking about the renewals of existing accounts, the opportunities to expand them and where the most robust pipeline is that we can be targeting both our sales execution and our product development strategies too.

Speaker Change #100: A bit more predictability.

Speaker Change #100: And ability to call with confidence that the full year number all the way through the P&L.

Speaker Change #100: Yeah.

Trevor Walsh: Great. Appreciate the question.

Speaker Change #101: Great I appreciate that.

Jason Gorski: Thanks. Next question comes from Jason Gorski with City. You might as well open. Yeah, good afternoon. He will talk a little bit more about the pilots that you were doing for the US government, the DNI customers there. I know you gave some comments in response to a question earlier, but I think some more detail might be helpful. How do those pilots go? What did you learn? What did your customers learn?

Speaker Change #102: Question. Thanks.

Speaker Change #102: Yep.

Speaker Change #102: Our next question comes from Jason Gursky with Citi. Your.

Speaker Change #103: Your line is now open.

Jason Gursky: Yes. Good afternoon. He will could you talk a little bit more about the pilots would you were doing for the U S government.

Will Marshall: So that's the nature of the organizational changes and with that, you know, quite honestly we were able to drive a lot of efficiencies and frankly achieve upside on those efficiencies versus what we had expected, you know, coming into the quarter. If I can only add that I think the teams have got going really quickly and you know this with a singular focus of growing the book of business for this for their vertical across sales and product as she was just saying. They really got going quite quickly and and and and I think it all as I said, both lead to better growth and to operational efficiency that we've seen.

Jason Gursky: DNI.

Speaker Change #105: Customers there I know you.

Speaker Change #105: Give some some comments in response to a question earlier, but I think some more detail might be.

Speaker Change #105: Helpful. How does those pilots go what did you learn what your customers learn.

William Marshall: And, you know, how does this become a larger opportunity for you, and when might that happen? Yeah, having to speak a little bit more obviously, I would give you a little bit of color on this. Firstly, the pilots earlier this year were already successful, and we expect more to come, as I mentioned. I think one way to think about what they're getting value out of is actually an example we gave in our slides with the New York Times article that came out where investigative journalists. Often we come to talk to the specific use cases with the U.D.

Speaker Change #105: And how does this become.

Speaker Change #106: A larger opportunity for you and when might that happen.

Speaker Change #107: Yes, happy to speak a little bit more obviously I heard you gave you gave a little bit of color on this.

Speaker Change #106: Yeah.

Speaker Change #108: Firstly the pilots earlier this year 40 successful.

Speaker Change #106: And we expect.

Speaker Change #106: More to come as I mentioned.

Ashley Johnson: Great. Thanks both. Yeah, just just one one last one for me. So actually just around around the guidance for for three Q and kind of beyond. I know you've talked previously about just challenges around especially the government, the larger government contracts and getting the timing of those. I'm just you've talked about the pipeline as well, but then in this quarter, you actually, you know, it looks like between the NATO deal and some of the other seven figured contracts that you mentioned, it looks like some of those are actually coming to fruition.

Speaker Change #106: I think one way to think about what they're getting <unk> essentially as an example, we gave in our lives.

Ashley Johnson: So as you think about the guidance, is it now kind of a, is it the rev wreck around just getting those completed contracts operational and that's what kind of, you know, the lack of visibility on visibility on that front is kind of coming up the works a little bit to kind of give a little bit broader kind of for your guys, just curious kind of where the where the kind of the challenges remain as far as kind of the house, on the top one. Yeah, it's actually, you know, consistent with what I spoke about even at the beginning of the year in terms of, you know, having a lot of different ways that that we can kind of get to the number and the balance of those opportunities.

Speaker Change #106: With the New York Times article that came out right.

Speaker Change #109: Our investment agenda, you can often be consequent to the specific use cases with the D. A.

William Marshall: and Defense Intelligence customers. But actually, what the New York Times did with the investigative journalists is somewhat analogous. They are looking at China and found these new settlement villages that China has put sometimes in disputed territory between China and India, China and Japan, and other countries and exposed a new threat that the world didn't know about. That is exactly using AI on top of our board area scan to find new threats, and that's what these pilots are doing. The potential is a peripheral vision to help find unknown unknowns for the intelligence community, and that's a big thing.

Speaker Change #109: And intelligence defense and intelligence customers right, but actually what the New York Times did with the investigator John This is somewhat analogous.

Speaker Change #109: Looking at China and found that these new settlements vintages that China has put sometimes in dispute territory between China, and India, China and the tie in another country and exposed a new threat. The world didn't know about right. So that is exactly using AI on top of our board area scan to find these.

Speaker Change #109: Threats and that's what these pilots are doing.

Speaker Change #109: The potential is the peripheral vision to help find unknown unknowns to the intelligence community.

And that's a big thing that's why we have very strong demand signal, but also new programs and budgets as Youre aware, Jason take time to establish and that's what we're working on with them.

William Marshall: That's why we have a very strong demand signal, but also new programs and budgets, as you're where Jason takes time to establish, and that's what we're working on. Let's come with them.

Speaker Change #109: Yeah.

Jason Gorski: Okay, so this is, you know, multiple quarter, multiple year kind of process to bring this to a meaningful contract volume, just trying to get a little bit better understanding.

Speaker Change #110: Okay. So this is.

Ashley Johnson: Then drive different outcomes in terms of specifically what you reference so revenue recognition, but also the mix of partners and therefore the impact on on gross margin and obviously that flows through. The rest of the P&L. So we are obviously progressing for the year and getting a better sense for how these deals are coming together and what we need to do to close them, but until we are in a position where, you know, we know exactly what the mix of business is going to be driving revenue in the quarter.

Speaker Change #110: Multiple quarter multiple year.

Speaker Change #111: Kind of.

Jason Gursky: Process to bring this to a meaningful contract value I'm, just trying to get a little bit better understanding and then.

Ashley Johnson: And then, Ashley, I think it'd be helpful if you don't mind maybe providing some insight on what revenue level you think the company needs to achieve in order to get to cashflow breakeven. Thanks. Yeah, I mean, I would say it is a multiple quarter effort. At that sort of time frame, we can expect to see, Ram, Ashley on the, yeah, I mean my, my color on cashflow breakeven will be consistent with what I've said in, in prior quarters.

Speaker Change #112: Actually I think it would be helpful. If you don't mind, maybe providing some insight on what revenue level you think.

Speaker Change #112: The company needs to achieve in order to get to cash flow breakeven.

Speaker Change #113: Yes, I mean, I would say it is a multiple quarter effort. That's the sort of timeframe are we can expect to see them actually on the.

Ashley Johnson: It just makes it challenging to give that clear guidance. But as you noted, we had a number of really great wins in the quarter. We continue to have really strong pipeline for Q3. So, you know, we remain very optimistic, especially with these new business leaders and being able to re-accelerate the growth.

Ashley Johnson: But at this point, you know, kind of taking it a quarter at a time and until we've got, you know, a bit more predictability and ability to call with confidence the full year number all the way through the P&L.

Speaker Change #114: Yes, I mean, my my color on cash flow breakeven will be consistent with what I've said in prior quarters. So yeah. Obviously first order priority is making sure that we're maintaining our cost structure is such that regardless of the top line.

Unknown Executive: Great. Appreciate the question.

Ashley Johnson: So, you know, obviously first order priority is, you know, making sure that we're maintaining across structures such that, regardless of the top line, we're always in a position of maintaining a healthy balance sheet. So as we think about, you know, moving first to the objective of EBITDAW profitability and then bringing down cash firm by expanding EBITDAW profitability to offset capex, and then managing capex either by, you know, kind of being in more of a maintenance capex mode as opposed to right now we're in an investing capex mode to ensure that we're preserving cash and not putting ourselves in a situation where we need to raise outside capital.

Speaker Change #114: We're always in a position of maintaining a healthy balance sheet. So as we think about moving first to the the objective of EBITDA profitability, and then bringing down cash burn by expanding EBITDA profitability to offset Capex and then managing capex.

Will Marshall: Thanks. Next question comes from Jason Gorski with city. Your line is not open. Yeah, good afternoon. He will talk a little bit more about the pilots that you were doing for the US government, the DNI customers there. I know you gave some some comments in response to a question earlier. But I think some more detail might be helpful. How are those pilots go? What did you learn? What's your customers learn? And, you know, how does this become a larger opportunity for you and when might that happen?

Either by you know kind of being in more of a maintenance capex mode as opposed to right now were in an investing capex mode to ensure that we're preserving cash and not putting ourselves in a situation, where we need to raise outside capital.

Ashley Johnson: So, you know, it's a combination of, you know, continuing to drive operation efficiencies, focusing on revenue acceleration and pacing our capex investment so that, you know, we're existing with big cash that we've got on our balance sheet today.

Speaker Change #114: So it's a combination of continuing to drive operational efficiencies focusing on revenue acceleration and pacing our capex investments.

Speaker Change #114: So that you know where where existing with the cash that we've got on our balance sheet today.

Will Marshall: Yeah, having to speak a little bit more obviously, I would give you a little bit of color on this. Firstly, the pilots earlier this year were already successful and we expect more to come, as I mentioned. I think one way to think about what they're getting value out is actually an example we gave in our slides with the New York Times article that came out where investigative journalists. Often we come to talk to the specific use cases with the U.D, and defense intelligence customers.

Jason Gorski: Any follow-up questions, Jason? Oh, no, sorry. I had, thank you for the two, and thought you were limiting it there. So all of that. Thank you.

Speaker Change #114: Any follow up questions Jason.

Jason Gursky: Oh no sorry, thank you for the two and thought you were limiting their so all set thank you.

Jason Gorski: Great. Thanks, Jason.

Jason Gursky: Great. Thanks, Jason.

Daniel: Our next question today, because from Jeff Bonnery with Craig Howell. Your line is not open. Hey, this is Daniel on for Jeff. Thanks for taking the questions. Oh, and I wanted to ask on the riff and how to model that. So the 10% riff last year, you know, just because of other expenses coming in overall, op-x stayed pretty flat. You know, this year obviously a bigger riff with a 17% or the 35 million. Just any thoughts on how much other expense will be coming in offsetting that? We're just sort of on a net basis. How to think about what we should be modeling, taking out.

Speaker Change #115: Our next question today comes from Jeff Van <unk> with Craig Hallum Your line.

Speaker Change #115: It is now open.

Speaker Change #115: Hey, this is Daniel on for Jeff Thanks for taking the question.

Daniel: Wanted to ask one on <unk> and how to model that so the 10% risk.

Will Marshall: But actually what the New York Times did with the investigative journalists is somewhat analogous. They are looking at China and found these new settlement villages that China's put sometimes in disputed territory between China and India, China and Japan and other countries and exposed a new threat that the world didn't know about. So that is exactly using AI on top of our board area scan to find new threats and that's what these pilots are doing.

Speaker Change #118: Last year, just because of other expenses coming in overall Opex stayed pretty flat. This year, obviously, a bigger risk with a 17% or the $35 million just any thoughts on how much other expense will be coming in offsetting that just sort of on a net basis how to think about.

Speaker Change #119: What would you be modeling taking out.

Ashley Johnson: Yeah, really good question, Daniel. So, you know, we're seeing most of the savings in salary and payroll, as I outlined. And we'll see the majority of that, you know, most of that in Q3, and obviously Q4 is when that should be pretty clean. This will be partially offset by less contra R&D expenses as the tarot program is coming to completion. So the that funded R&D offset will decrease pretty substantially. But there's also some seasonality in some other expenses, in particular sales and marketing and G&A. You know, depending on the timing of new bookings and certain key renewals, that can impact the timing of commission expense.

Speaker Change #119: Yes, really good question Daniel so.

Will Marshall: The potential is a peripheral vision to help find unknown unknowns for the intelligence community and that's a big thing. That's why we have very strong demand signal. But also new programs and budgets is your where Jason take time to establish and that's what we're working on with them.

Speaker Change #120: We're seeing most of the savings in salary and payroll as I as I outlined.

Speaker Change #120: And we will see the majority of that.

Speaker Change #120: Most of that in Q3, and obviously Q4 is one that should be pretty clean.

Speaker Change #120: This will be partially offset by less contra R&D expenses as the tanker program is coming to completion.

Speaker Change #120: That funded R&D.

Ashley Johnson: Okay, so this is, you know, multiple quarter, multiple year kind of process to bring this to a meaningful contract volume, just trying to get a little bit better understanding. And then, Ashley, I think it'd be helpful if you don't mind maybe providing some insight on what revenue level you think the company needs to achieve in order to get to cash flow breakeven. Thanks. Yeah, I mean, I would say it is a multiple quarter effort at that sort of time frame.

Speaker Change #120: Set will.

Speaker Change #120: Will decrease pretty substantially.

Speaker Change #121: But there's also some seasonality and some other expenses in particular sales and marketing and G&A you know as you know depending on timing of new bookings and certain key renewals that can impact the timing of commission expense.

Ashley Johnson: We can expect to see them actually on the, yeah. Yeah, I mean, my, my color on cash flow breakeven will be consistent with what I've said in, in prior quarters. So, you know, obviously first order priority is you know, making sure that we're maintaining across structures such that, regardless of the top line, we're always in a position of maintaining a healthy balance sheet. So, as we think about, you know, moving first to the, the objective of EBITDAW profitability and then bringing down cash firm by expanding EBITDAW profitability to offset CAPEX and then managing CAPEX either by, you know, kind of being in more of a maintenance CAPEX mode as opposed to right now we're in an investing CAPEX mode to ensure that we're preserving cash and not putting ourselves in a situation where we need to raise outside capital.

Ashley Johnson: And then, you know, audit timing can impact the recognition of those fees. The other factor just to keep in mind is the mix of partner revenues. I mentioned that you drove upside course in the quarter where we sell less partner expenses in the quarter relative to other business that was closed and revenue recognized. And as that flexes quarter to quarter, that can cause some changes. But, you know, the savings were realized across largely sales and marketing in R&D, with a little bit in Cogs and G&A as well. Okay, and then just to maybe, as you talk about partners, just pick on the partner scene, gross margins great to see him coming in 57%. I think the expectation was around 52%.

Speaker Change #121: And then audit timing can impact the recognition of those fees.

Speaker Change #121: Factor just to keep in mind is the mix of partner revenue.

Speaker Change #121: I mentioned and that drove upside for us in the quarter, where we saw less partner expenses in the quarter relative to other businesses that was closed and revenue recognized.

Speaker Change #121: And is that flex is quarter to quarter that can cause some changes, but the savings were.

Speaker Change #121: Realized.

Speaker Change #121: Across largely sales and marketing and R&D with a little bit and in Cogs and SG&A as well.

Speaker Change #122: Okay, and then just maybe as you talked about partners just take on the partner team.

Speaker Change #123: Gross margins, great to see them coming in at 57% I think.

Speaker Change #124: The expectation was around 52% just I take it on the driver of that if that partner revenue that that would be sort of a several million dollar revenue delta between what was expected from partners from what came in so that didn't come in and just what was some of the strength. This quarter that you saw that fill that.

Ashley Johnson: That's I take it on the driver of that, if that's the partner revenue, that that would be sort of a several million dollar revenue delta between what was expected from partners and what came in. So that didn't come in; just what were some of the strengths this quarter that you saw that killed that. Again, it just depends on whether we sign as the prime and so therefore, you know, we're taking gross revenue and recognizing the partner expense or whether we're coming in as not prime and delivering just a pure data deal. Well, sometimes it's, you know, some of the core business that we just have direct relationships with expanding.

Yeah.

Speaker Change #125: Again, it just depends on whether we sign as the prime and so therefore.

Ashley Johnson: So, you know, it's a combination of, you know, continuing to drive operation efficiencies, focusing on revenue acceleration and pacing our CAPEX investment so that, you know, we're, we're existing with big cash that we've got on our balance sheet today.

Speaker Change #125: We're taking gross revenue and recognizing the partner expense or whether where.

Speaker Change #126: We're coming in as a.

Speaker Change #126: Not not prime and then delivering disappear data deal sometimes it.

Speaker Change #127: Some of the core business that we just have direct relationships with expanding so again the mix of business and our pipeline is quite varied.

Ashley Johnson: So again, the mix of business in our pipeline is quite varied. And then the nature of how we close that business can also change, you know, mid, mid deal, depending on what makes sense for the end customer and for our partners. So that's why it's a little bit hard to predict. And so we try to, you know, make sure as we're providing guidance that we're doing so with an eye to, you know, what those range of outcomes can be.

Speaker Change #127: And then the nature of how we close that business can also change.

Unknown Executive: Any follow-up questions, Jason? Oh, no, sorry. I had, thank you for the two and thought you were limiting it there. So, offset, thank you.

Speaker Change #127: Mid mid deal depending on what makes sense for the end customer and for our partners. So that's why it's a little bit hard to predict them.

Speaker Change #127: And so we try to make sure as we're providing guidance that we're doing so with an eye to what those range of outcomes can be.

Unknown Executive: Great.

Speaker Change #127: Okay.

William Marshall: And then last for me just one question for you will on pelican, just any thoughts on, you know, it sounds like some pretty significant changes being made to pelican to, you know, that program still, you know, early stages and undergoing R&D. Any thoughts on how we should, you know, pay, pay our anticipation is for that in terms of just becoming commercially, you know, viable. So it's a sort of more of a 25 or a 26 thing, just what sort of the timetable for that program to mature. Great. Now, great question. I mean, look at Pelican 2, which is excited to be shipping to the launch pad here in a couple months is, yeah.

Speaker Change #128: And then last for me just just one question for you will on Pelican, just any thoughts on it sounds like some pretty significant changes being made to pelican to that program.

Daniel: Thanks Jason. Our next question today because from Jeff Bonnery with Craig Howell. Your line is not open. Hey, this is Daniel on for Jeff. Thanks for taking the questions. Oh, and I wanted to ask on the on the riff and how to model that. So, the 10% riff last year, you know, just because of other expenses coming in, overall, OptX stayed pretty flat. You know, this year, obviously, a bigger riff with a 17% or the 35 million. Just any thoughts on how much other expense will be coming in off setting that? We're just sort of on a net basis how to think about what we should be modeling taking out.

Will Marshall: Early stages undergoing R&D any thoughts on how we should.

Will Marshall: Hey, Pedro our anticipations for that in terms of.

Pedro: This becoming commercially viable is this sort of more of a 'twenty five 'twenty six thing just what's sort of the timetable for that program to mature.

Will Marshall: Alright, great Great question.

Ashley Johnson: Yeah, really good question, Daniel. So, you know, we're seeing most of the savings in salary and payroll as I outlined. And we'll see the the majority of that, you know, most of that in Q3 and obviously Q4 is when that should be pretty clean. This will be partially offset by less contra-R&D expenses as the tarot program is coming to completion. So that funded R&D offset will decrease pretty substantially. But there's also some seedinality in some other expenses in particular sales and marketing and G&A, you know, depending on timing of new bookings and certain key renewals that can impact the timing of commission expense.

Richard: Pelican too Richard excited to be shipping to launch pad here in a couple of months is yes.

William Marshall: It is first an R&D satellite, but we do hope to convert that to an operational satellite that would be able to start the, the, the, the, you are producing real data for customers. So, and, and then, you know, going on from beyond that, we have a rapid deployment of future pelicans that enable us to then carry on the sky sat work, but then make all these improvements that I've mentioned, the better resolution is being one of them. But also the improved capacity for satellite, the improved agility, and then, most of all, this faster time to get the data down, all of which we think can improve customer value.

Speaker Change #131: It is fast and R&D online, but we do hope to convert that to an operational soft lines that would be able to.

Speaker Change #131: The.

Speaker Change #131: Producing real data for customers so.

Speaker Change #131: And then.

Speaker Change #131: Carrying on from beyond that we have a rapid deployment.

Speaker Change #131: Future Pelican.

Speaker Change #131: That enabled us to then carry on this guys that work, but then make all these improvements I've mentioned, the better resolution being one of them, but also the improved capacity per satellite.

Speaker Change #131: Improved agility and then most of all this faster time to get the data down older, which we think can improve customer value.

Ashley Johnson: And then, you know, audit timing can impact the recognition of those fees. The other factor just to keep in mind is the mix of partner revenues, as I mentioned, that drove upside course in the quarter where we sell less partner expenses in the quarter relative to other business that was closed and revenue recognized. And as that flexes quarter to quarter, that can cause some changes. But, you know, the savings were realized across largely sales and marketing in R&D with a little bit in Cogs and G&A as well.

William Marshall: Thanks for that. Well, thanks. Thank you.

Speaker Change #132: Thanks for that little thanks, guys.

Noah Poponak: All right. Our next question comes from Noah Papa Neck with Goldman Sachs.

Speaker Change #131: Thank you.

Noah <unk>: Our next question comes from Noah <unk> with Goldman Sachs. Your line is now open.

Anthony Valentino: Your line is not open. Hey guys, we got Anthony Valentino for Noah. Thanks for taking my question. Thank you. I'm curious if you guys do any work on the Economic Indicator Monitoring Program with the NGA that was awarded a few years ago? So we are applying with various work with the NGA in the area that is EIM is the previous one. Luna is the next vehicle that will go into that direction of using analytics on top of satellite data. And then there's a whole suite of opportunities, and we're applying for the ones that are best fit for our differentiation. And, by the way, both some direct and some subcontractor.

Noah <unk>: Okay.

Anthony <unk>: Hey, guys, you've got to Anthony <unk> on for <unk>. Thanks for taking my question.

Noah <unk>: Yeah.

Speaker Change #135: Hi, Anthony.

I'm I'm curious if you guys do any work on the economic indicator monitoring program with the NGA that was awarded a few years ago.

Ashley Johnson: Okay, and then just maybe as you talk about partners, just pick on the partner scene, gross margins great to see him coming in 57%, I think the expectation was around 52%. I take it on the driver of that, if that's the partner revenue, that that would be sort of a several million dollar revenue delta between what was expected from partners and what came in. So that didn't come in just, what was some of the strength this quarter that you saw that filled that?

Speaker Change #135: And so we.

Speaker Change #135:

Speaker Change #136: We are applying.

Speaker Change #136: <unk> worked with the NGA and the area.

Speaker Change #137: I am.

Speaker Change #137: Previous one Luna is the next vehicle that will go into that direction of using analytics on top of our satellite data and that is.

Speaker Change #137: The whole suite of opportunities and we are applying for the ones the best fit for our differentiation.

Ashley Johnson: Again, it just depends on whether we sign as the prime and so therefore, you know, we're taking gross revenue and recognizing the partner expense or whether we're coming in as not prime and delivering just a pure data deal. Sometimes it's, you know, some of the core business that we just have direct relationships with expanding. So again, the mix of business in our pipeline is quite varied and then the nature of how we close that business can also change mid deal, depending on what makes sense for the end customer and for our partners.

Speaker Change #137: The way, both some direct and some subcontractor.

William Marshall: There's a lot of opportunities there, especially for a planet scope with AI on top, but I think Luna is now the new piece of place where which took over from EIM. Okay, yeah, and I guess I'm curious if Tannager, the capabilities there, if Luna, that program that's going to be replacing EIM, if that opens up capabilities for you guys and for the customer that makes your bid more competitive. Well, 100% it opens up capabilities. I mean, in fact, you know, when going back a bit, when we first launched the Superduv satellites, the reason we moved to a spectral band is and then called that fleet.

Speaker Change #137: A lot of opportunities, especially for planet scope with AI on top.

Speaker Change #137: I think Luna is that now the new place, where which took over from <unk>.

Speaker Change #138: Okay, Yeah, and I guess I'm curious if tanager the.

Ashley Johnson: So that's why it's a little bit hard to predict and so we try to, you know, make sure as we're providing guidance that we're doing so with an eye to, you know, what those range of outcomes can be.

Speaker Change #138: The capabilities there if Luna that program.

That's going to be replacing.

Speaker Change #139: If that opens up capabilities for you guys and for the customer that makes your bid more competitive.

Speaker Change #139: Well, 100% it opens up.

Speaker Change #141: Entities I mean in fact.

Speaker Change #142: Stepping back a bit when we first launched the stupid sidelines. The reason we moved to a spectrum band is and then code that fleet. The first machine learning. Firstly is that as you have more spectrum bands has different ways of pulling out what's going on on the ground. Even if you cant see individual RGB imagery.

William Marshall: The first machine learning first fleet is that as you have more spectral bands, there's different ways of pulling out what's going on on the ground even if you can't see it in the visual RGB imagery. High respect is that plus bus, you know, with 400 spectral bands, but I would also say it's early days and I think Luna is more focused on the more classical, let's say, few band or multispectral as we call it imagery, than high respect imagery. But in the longer term or medium longer term, I certainly think it's a machine learning field day, actually that data set.

Will Marshall: And then last for me, just one question for you will, on pelican, just any thoughts on, you know, it sounds like some pretty significant changes being made to pelican to, you know, that program still, you know, early stages and undergoing R&D. Any thoughts on how we should, you know, pay, pay our anticipation is for that in terms of just becoming commercially, you know, viable. Is this sort of more of a 25 or a 26 thing, just what sort of the time table for that program to mature?

Speaker Change #142: <unk> spectrum is that plus bus with 400 spectrum band.

Speaker Change #143: I would also say it's early days.

Speaker Change #144: Luna is more focused on the more classical let's say few band multi spectrum as we call it.

Speaker Change #144: Imagery than high dispersion of inventory, but in the longer term immediate medium longer time, I certainly think it's a it's a machine learning field day actually.

Will Marshall: Great. Great question. I mean, pelican too, which would expand to be shipping to launch pad here in a couple of months is, yeah. It is first an R&D satellite, but we do hope to convert that to an operational satellite that would be able to start the, the, the, the, the, you are producing real data for customers. So, and, and then, you know, going on from beyond that, we have a rapid deployment of, of future pelicans that, that enable us to then carry on the sky sat work, but then make all these improvements that I've mentioned, the better resolution is being one of them, but also the improved capacity for satellite, the improved agility. And then, most of all, this faster time to get the data down, all of which we think can improve customer value. Thanks for that, Will. Thanks, guys.

Speaker Change #144: Dataset.

William Marshall: Okay, great.

William Marshall: Thank you so much, Will.

Speaker Change #145: Okay, great. Thank you so much I appreciate it.

William Marshall: I appreciate it.

Speaker Change #145: Yeah.

Kayla Tannager: Our next question comes from Kayla Tannager: what's quality space? Your life is not open. All right. Thanks for taking questions. One just about growth internationally. I think it was mentioned earlier that growth is going faster in Latin America and each specific kind of outside North America. Can you talk to me any about the reasons for that, you know, why you're seeing that growth, and does that look mainly like pilots, or are you seeing kind of longer contractual commitments? There's many things going on. I mean, we've got a number of large deals in defense and intelligence around the world.

Kols Henry: Our next question comes from Kols, Henry with coffee space. Your line is now open.

Kols Henry: Yeah.

Hi, Thanks for taking the question wanted to ask about growth internationally I think it was mentioned earlier.

It's going faster in Latin America, and a specific kind of outside North America can.

Speaker Change #147: Can you talk any about the <unk>.

Reasons for that why you are seeing that growth and does that look mainly like pilots or are you seeing kind of the longer contractual commitments.

So there's many things going on I mean, we've got a number of large deals.

Speaker Change #147: In defense and intelligence around the around the World, We mentioned the new International Defense intelligence expansion.

William Marshall: We mentioned the new international defense intelligence expansion. Civil government work, you know, and I mentioned a number in my prepared remarks. We had Bahrain in doing that, that, that urban monitoring in rare from Bolivia, IGC from Columbia. And I can mention a few more. I mean, we've got a government of New South Wales and has been doing some new work with us that is establishing new use cases, long line of urban housing and protecting wildlife. We're doing some work with Kazakhstan resource of civil government, doing some work in disaster response. There's a lot of different use cases emerging in civil government around the world.

Speaker Change #147: Civil government work.

Speaker Change #147: I mentioned that number in my prepared remarks.

Speaker Change #147: Bahrain.

Speaker Change #148: The oven monitoring in our firm.

Anthony Valentino: Thank you. Our next question comes from Noah Papineck with Goldman Sachs. Your line is now open.

Speaker Change #149: Olivia J C from Colombia, and I can mention a few more I mean, we've got government of New South Wales.

Will Marshall: Hey, guys, we got Anthony Valentino for, for Noah. Thanks for taking my question. Thank you, Anthony. I'm curious if you guys do any work on the Economic Indicator Monitoring Program with the NGA that was awarded a few years ago. So we are applying with various work with the NGA in the area that is EIM is the previous one. Luna is the next vehicle that will go into that direction of using analytics on top of satellite data.

Speaker Change #150: He has been doing some new work with us.

Speaker Change #150: Establishing new use cases, along the lineup of in housing and protecting wildlife.

Speaker Change #151: What was Kazakhstan.

Speaker Change #151: With some specific government.

Speaker Change #151: Doing some work in disaster response, Theres a lot of different.

Speaker Change #151: Use cases emerging in civil government around the world.

Will Marshall: And then there's a whole suite of opportunities and we're applying for the ones that are best fit for our differentiation and by the way, both some direct and some subcontractor. There's a lot of opportunities there, especially for a planet scope with AI on top, but I think Luna is the now the new piece of place where it took over from EIM. Okay, yeah, and I guess I'm curious if Tannager, the capabilities there, if Luna, that program that's going to be replacing EIM, if that opens up capabilities for you guys and for the customer that makes your bid more competitive.

Ashley Johnson: And they're quite pioneering; often more, you know, they're pushing the boundaries. And then some of that is really repeatable in other governments as well. So the opportunity there in the civil government space is also really huge and pulling us. Yeah, if I could just add on, just from, as I mentioned, my experience down in Columbia, the product market fit is incredibly strong and in a lot of these regions that are, quite frankly, much more focused on sustainability initiatives. And then we might might be in here in North America in terms of wanting to be able to account for, you know, natural capital in places like South America, Latin America, Africa, etc.

Speaker Change #151: And then quite pioneering offer more.

Speaker Change #151: They're pushing the boundaries and then some of that is really repeatable and other governments as well so the opportunity there in the civil government space is also really huge and pulling us yes.

Speaker Change #152: Yes, if I could just add on just from as I mentioned my experience down in Colombia.

Speaker Change #152: The product market fit is incredibly strong and in a lot of these regions that are quite frankly, much more focused on sustainability initiatives than we might.

Speaker Change #153: Might be in here in North America.

Speaker Change #153: In terms of wanting to be able to account for natural capital in places like South America, Latin America Africa et cetera, some of the sustainability initiatives that you see European governments implementing wanting to both enforced implement incentives and enforced penalties.

Kayla Tannager: Some of the sustainability initiatives that you see European governments implementing, wanting to both enforce, implement incentives, and enforce penalties. These are a direct fit with our broader management solutions, the need to be able to cover these broad areas, identify anomalies, identify changes and put programs in place that are supported by, you know, the solutions that we have. So I do think that that is one of the drivers of the success we're seeing in our international market. Okay, thanks.

Speaker Change #154: <unk> are a direct fit with our broad area management solutions and the need to be able to cover these broad areas identify anomalies identified changes and put programs in place that are supported by the solutions that we had so I do think that that is one of the drivers of the success, we're seeing in our international markets.

Will Marshall: Well, 100% it opens up capabilities. I mean, in fact, you know, when going back a bit, when we first launched the Superduff satellites, the reason we moved to a spectral band is and then called that fleet. The first machine learning first fleet is that as you have more spectral bands, there's different ways of pulling out what's going on on the ground, even if you can't see it in the visual RGB imagery.

Speaker Change #153: Okay.

Speaker Change #155: Okay. Thanks, I think maybe one clarification on that is just looking at the plan at backlog and it looks like it's down a little bit I was wondering if thats because of the influx of kind of new players from around the world that are Trialing the service before.

Ashley Johnson: I think maybe one clarification on that is just looking at the planet backlog, and it looks like it's down a little bit. I was wondering if that's because of the beginning flux of kind of new players from around the world that are like trialing the service before going on to longer term programs. Is there a connection between those two or now? Not really. You know, when I look under the covers at backlog, it's a combination of timing of renewals, some larger multi-year contracts that are just burning their way down to not up for renewal yet.

Will Marshall: The high-respectral is that plus plus, you know, with 400 spectral bands, but I would also say it's early days, and I think Luna is more focused on the more classical, let's say, few band or multispectral as we call it imagery than high-respectral imagery, but in the longer term or medium or longer term, I certainly think it's a machine learning field day, actually, that data set. Okay, great. Thank you so much, Will.

Speaker Change #156: Going on to longer term programs is there a connection between those two or no.

Speaker Change #156: No not really.

Speaker Change #158: When I look under the covers at backlog, it's a combination of timing of renewals. Some larger multi year contracts that are just burning their way down and not up for renewal yet.

Will Marshall: I appreciate it.

Ashley Johnson: It is it is truly a mix of things that that factor into that. If you look at, you know, backlog on a next 12 month basis, you know, it's relative with flat quarter to quarter. So it's not indicative of anything, you know, competitive or otherwise, that that's where it's certainly worth calling out.

It is truly a mix of things that that factor into that if you look at backlog on a next 12 month basis, it's relatively flat quarter to quarter.

Kayla Taylor: Our next question comes from Kayla Taylor, who is cruelty-space.

Speaker Change #158: So it's not indicative of anything you know competitive or otherwise that.

Will Marshall: Your life is not open. All right. Thanks for taking questions. One just about growth internationally. I think it was mentioned earlier that growth is going faster in Latin America and each specific kind of outside North America. Can you talk to me any about the reasons for that? You know why you're seeing that growth and does that look mainly like pilots, or are you seeing kind of longer contractual commitments? There's many things going on.

Speaker Change #158: That's where it certainly worth calling out.

Speaker Change #158: Okay.

William Marshall: Okay, and then if I can do just one more on pelican has planted settled on the size for the pelican fleet. I want to say the NFC filing it was 30 or 32 satellites, but I realize it's not always; that's usually an upper limit. So is that the target of you settled on a different number? That's what you understand exactly right. I mean, we did the filings up to 32 satellites. The great thing of having this in house is the ability to throttle that to demand. First and foremost, it's getting to the sky set replenishment as that fleet comes to the end of its life.

Speaker Change #159: Okay, and then if I can do just one more on Pelican.

Speaker Change #160: Has planted settled on size for the Pelican fleet I want to say then that SEC filing it was 30% or 32 satellites, but I realize that it's not always it's usually an upper limit. So is that is that the target or have you settled on a different number.

Will Marshall: I mean, we've got a number of large deals in defense intelligence around the around the world. We mentioned the new international defense intelligence expansion. Civil government work, you know, and I mentioned a number in my prepare remarks. We had Bahrain in doing that, that urban monitoring, in-ra from Bolivia, IGAC from Columbia. And I can mention a few more. I mean, we've got a government of New South Wales and has been doing some new work with us establishing new use cases, long line of urban housing and protecting wildlife.

And that's what that is.

Speaker Change #161: You understand it exactly right.

Speaker Change #161: The filings to up to 32 satellites.

Speaker Change #162: The great thing of having this in house is is the ability to fulfill that demand first and foremost is getting to the sky that replenishment as that fleet comes to the end of its life.

William Marshall: And the second thing is adding all these new capabilities that I listed earlier. And the third thing is expanding to more frequency and coverage that would be enabled by satellites beyond that. So that's how we think about it.

Speaker Change #162: And the second thing is adding all these new capabilities.

Speaker Change #162: Lifted earlier and the third thing is expanding to more frequency and coverage.

Speaker Change #162: <unk> bye.

Speaker Change #162: Satellites beyond that so that's how we think about it.

William Marshall: And the other exciting aspect of that, if I can just throw it in there, is, you know, we constantly iterate our technology in space. And so, you know, as I mentioned, we find the Nvidia processor on this pelican to next mission and they was a edge compute. And, you know, that shows the ability of us to take the latest capability and put it into a space. That can that will continue through the mission even just the 36 super dust that we launched. We included tech demo that's looking at next generation sensors for that medium res fleet.

Speaker Change #163: And the other exciting aspect of vastly if I can just throw it in there is we.

Will Marshall: We're doing some work with Kazakhstan, resource of civil government, doing some work in disaster response. There's a lot of different use cases emerging in civil government around the world. And they're quite pioneering often more, you know, they're pushing the boundaries. And then some of that is really repeatable in other governments as well. So the opportunity there in the civil government space is also really huge and pulling us. Yeah, if I could just add on just from, as I mentioned my experience down in Columbia, the product market fit is incredibly strong in a lot of these regions that are quite frankly much more focused on sustainability initiatives.

Speaker Change #163: Our technology and space and so.

Speaker Change #163: As I mentioned refined the Nvidia.

Speaker Change #163: <unk> on this this pelican two next mission enables AI and.

Speaker Change #163: And its compute and.

Speaker Change #163: That shows the ability of us to take the latest capability and put it into a into a space that can that will continue through the admission even just the 36 <unk> that we launched we included demo looking at next generation sensors for that medium risk fleet. So we constantly iterating to get better and better data.

William Marshall: So, you know, we constantly iterate to get better and better data. Okay.

Speaker Change #163:

Will Marshall: And then we might be in here in North America in terms of wanting to be able to account for, you know, natural capital in places like South America, Latin America, Africa, etc. Some of the sustainability initiatives that you see European governments implementing wanting to both enforce implement incentives and enforce penalties. These are a direct fit with our broad area management solutions that need to be able to cover these broad areas, identify anomalies, identify changes, and put programs in place that are supported by, you know, the solutions that we have.

Speaker Change #163: Yeah.

Speaker Change #163: Okay. Thank you.

Operator: Thank you all for your questions.

Speaker Change #163: Thanks, Bill. Thank you all for your questions.

Operator: That will conclude the Q&A session.

Speaker Change #163: That will conclude the Q&A session. So I will pass the conference over to Bill Marshall CEO for closing remarks.

William Marshall: So I will pass the conference over to Will Marshall, CEO, for closing remarks. Well, just to close up, we are really pleased with the progress in Q2. If I could just summarize, firstly, we saw the strong growth with government customers, with an exciting new customer during the quarter. Secondly, we were structured the business towards our industry-aligned operating model, which we expected better support growth. Thirdly, we delivered solid financials, including the strong expansion in gross margin, and the strong progress in EBITDA. I've been much towards our adjusted EBITDA profitability goal for Q4. And finally, we're excited about the launch, of course, of 36, 7, 2,000, and our first tenage of spacecraft marking our foray into the hyperspectral market.

Bill Marshall: Well just to close up and we're really pleased with the progress in Q2, if I could just summarize.

Bill Marshall: Especially we saw the strong growth with government customers with some exciting new.

Speaker Change #165: Customers during the quarter.

Speaker Change #165: Secondly, we restructured the business towards our industry aligned operating model, which we.

Will Marshall: So I do think that that is one of the drivers of the success we're seeing in our international market. Davidson. Okay, thanks. I think maybe one clarification on that is just looking at the kind of backlog and it looks like it's down a little bit. I was wondering if that's because of the beginning flux of kind of new players from around the world that are like trialing the service before, you know, going on to longer term programs.

Speaker Change #165: We expect to better support growth.

Speaker Change #165: Finally, we delivered solid financials, including the strong expansion in gross margin the strong progress in EBITDA as we March towards adjusted EBITDA profitability go for Q4.

Will Marshall: Is there a connection between those two or are you referring now? Not really. You know, when I look under the covers at backlog, it's a combination of timing of renewals, some larger multi-year contracts that are just burning their way down, so not up for a renewal yet. It is truly a mix of things that factor into that. If you look at, you know, backlog on a next 12 month basis, you know, it's relatively flat quarter to quarter, so it's not indicative of anything, you know, competitive or otherwise, that's certainly worth calling out.

Speaker Change #165: And finally, we're excited about the launch of course of 36, <unk> and our first tonnage of space growth marking a.

Speaker Change #165: Full way into the highest spectral market.

William Marshall: We see a fair bit of growth potential in the near term via large government deals and in the medium term via the commercial sector with our planning and platform and our partner ecosystem. So overall, we're excited by the progress we're making and executing against our plan against these growth catalysts.

Speaker Change #165: We see a fair bit of growth potential in the near term fire launch government deals and in the medium term.

Speaker Change #166: The commercial sector with a ton of insights platform and our partner ecosystem. So over were exciting.

Speaker Change #166: By the progress, we're making and executing against that plan.

Speaker Change #166: Against these growth catalysts. So thanks, everyone for tuning in.

William Marshall: So thanks all for tuning in.

Operator: That will conclude today's comment fall. Thank you all for your participation.

Speaker Change #167: That will conclude today's conference call. Thank you all for your participation you may now disconnect your lines.

Operator: May now disconnect your line.

Will Marshall: Okay, and then if I can do just one more on Pelican, has planet settled on the size for the Pelican fleet. I want to say in the Nazi sea filing, it was 30 or 32 satellites, but I realize it's not always, that's usually an upper limit, so is that the target area of you settled on a different number? That's what you understand exactly right. I mean, we did the filings up to 32 satellites.

Will Marshall: The great thing of having this in-house is the ability to throttle that to demand. First and foremost, it's getting to the sky, that replenishment as that fleet comes to the end of its life. And the second thing is adding all these new capabilities that I enlisted earlier and the third thing is expanding to more frequency and coverage that would be enabled by satellites beyond that. So that's how we think about it.

Will Marshall: And the other exciting aspect of that fleet, if I can just throw it in there, is we constantly iterate our technology in space. And so, you know, as I mentioned, we're flying the Nvidia processor on this Pelican 2 next mission and they were AI edge compute. And, you know, that shows the ability of us to take the latest capability and put it into a space. That will continue through the mission, even just the 36 super dust that we launched. We included a tech demo that's looking at next-generation sensors for that medium-res fleet. So, you know, we constantly iterate in to get better and better data.

Unknown Executive: Okay, thank you. Thank you. Thank you all for your questions.

Will Marshall: That will conclude the Q&A session, so I will pass the conference over to Will Marshall, CEO for closing remarks. Well, just to close up, we're really pleased with the progress in Q2. If I could just summarize, firstly, we saw the strong growth with government customers, with some exciting new customers during the quarter. Secondly, we re-structured the business towards our industry aligned operating model, which we expected better support growth. Thirdly, we delivered solid financials, including the strong expansion in gross margin, the strong progress in EBITDA. Every much towards our adjusted EBITDA profitability go for Q4.

Will Marshall: And finally, we're excited about the launch, of course, of 36, 7, 7, 7, 7, 7, 7, and our first energy spacecraft marking our four-way into the hyperspectral market. We see a fair bit of growth potential in the near-term via large government deals, and in the medium-term via the commercial sector with our planning and platform and our partner ecosystem. So overall, we're excited by the progress we're making and executing against our plan against these growth catalysts. So thanks all for tuning in.

Unknown Executive: That will conclude today's comment fall. Thank you all for your participation.

Unknown Executive: May now disconnect your line.

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