Q4 2025 Planet Labs PBC Earnings Call
Good afternoon. Thank you for attending today's planet Labs P. B C fiscal fourth quarter and full year 2025 earnings call. My name is Daimler and I'll be your moderator for today all lines will be muted in the presentation portion of the call look opportunity for questions and answers at the end.
Speaker Change: And now I'd like to turn the conference over to our host Cleo Palmer Perona from the Investor Relations team feel you May proceed.
Speaker Change: Thanks, Operator, and Hello, everyone. This is clay, Oklahoma front or from the Investor Relations team at Planet Labs P. B C. Welcome to plaintiffs fiscal fourth quarter and full year 2025 earnings call.
Speaker Change: I'm joined by will Marshal 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 before we begin we'd like to remind everyone that we will make forward looking statements related to future events or financial outlook. We also may reference qualified pipeline, which represents.
Speaker Change: 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 played out the future plans estimates or expectations will be achieved such forward looking statements are subject to various risks and uncertainties and assumptions as detailed in our SEC filings.
Speaker Change: Flings, which can be found at www dot SEC Doc on our actual results or performance may differ materially from those indicated by such forward looking statements and we undertake no responsibility to update such forward looking statements to reflect events or circumstances. After the date on which the statement is made or to reflect the occurrence of unanticipated events. During the call. We will also discuss historic and forward looking non-GAAP financial measures.
Speaker Change: 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 in its financial and operational decision making for more.
Speaker Change: Information on the non-GAAP financial measures. Please see the reconciliation tables in our press release issued earlier this afternoon, which is available on our website at investors that planet Dotcom further throughout this call. We provide a number of key performance indicators used by management and often use by competitors in our industry.
Speaker Change: These and other key performance indicators are discussed in more detail in our press release and our earnings update presentation, which are intended to accompany our prepared remarks.
Well Marshall: At this point I'd now like to turn the call over to well Marshall played at C O chairperson and cofounder over to you well.
Speaker Change: Thanks, Claire and Hello, everyone and thanks for joining us today.
Well Marshall: Last year was an exciting and transitional year for pilot and I'm incredibly proud of everything our teams have achieved.
Speaker Change: We shifted our go to market structure to be.
Well Marshall: It could be focused approach towards selling solutions.
Well Marshall: Took a major step up in the satellite services market and closed a $230 million contract with a marquee customer.
Well Marshall: We launched 74 satellites into orbit, including off the second Pelican I'm first tonnage spacecraft.
Well Marshall: We launched the planet insights platform and delivered a new global forest carbon monitoring product.
Well Marshall: Drove meaningful improvements in our financials throughout the year, including reaching our target adjusted EBITDA positive in Q4.
Well Marshall: First time in the company's history.
Well Marshall: All of this sets planet on a sound footing going into this year.
To briefly summarize the full year results, we generated a record $244 $4 million in revenue, representing an 11% year over year growth.
Well Marshall: non-GAAP gross margin for the year was a record 60% up from 54% a year ago and full year adjusted EBITDA loss came in at $10 $6 million.
Well Marshall: Q4 was a record quarter for revenue gross margin and operating margin and as I already mentioned, we achieved our goal of delivering our first adjusted EBITDA profitable quarter, a target we set two years ago, an amazing milestone on our journey to positive cash flow.
Well Marshall: Backlog increased in the quarter to almost half a billion dollars up over 100% year over year, and approximately 115% quarter over quarter.
Well Marshall: We believe this puts us in a strong position with a clear path to at least double our revenue growth rate in FY 'twenty seven compared with FY 'twenty six.
Well Marshall: I'd like to spend a little time on our landmark $230 million commercial agreement, we signed with our longtime partner in Japan JCR.
Well Marshall: Last year, we made the strategic decision to take a significant step forward in our satellite services market in response to a strong demand signal selling to customers, who want preferred access to data in a particular region.
Well Marshall: These partnerships can be very synergistic to our core business.
Well Marshall: Jason partnership announced last month is our first deal in support of the strategic direction.
Well Marshall: Under this agreement and it will build launch and operate a constellation of 10 high resolution Pelican sidelines for Jason.
Well Marshall: Janet will commercially sell the rest of the world's capacity of the sidelines across the vast majority of the earth surface, representing a significant upside opportunity.
Well Marshall: We couldn't be more pleased to have Jason as a cornerstone partner as we embark on this new chapter.
Speaker Change: This deal is structured to create a win win win for Jay set. This aims to secure priority access to critical intelligence in our area of interest with a rapid turnaround from program start to operational capabilities for.
Speaker Change: For planet, we intend to drive scale in our business and monetize some of the most strategic assets and IP.
Speaker Change: All other current and future planet customers, we plan to bring more pelican capacity online foster substantially increasing global capacity and revisit rates. We see this as a major step forward for planet in the satellite services market. The satellite services market is in the tens of billions of dollars globally today, and we believe we can address the meeting.
Speaker Change: Portions of this offering.
Speaker Change: Bigger picture the World is in a state of significant transition across geopolitics and technology countries are moving with new clarity and speed to ensure that they have access to the technology and information needed to protect the interests we.
Speaker Change: We are stepping up to meet this need around the globe for countries, who are rushing to maintain or expand the southern access to space and the powerful information gathering and decision making it enables.
Speaker Change: We have always been and will continue to be a leading provider of geospatial data and solutions our core business.
Speaker Change: Move to increase efforts into the satellite services expands our portfolio, where we are accelerating our business by leveraging one of our greatest assets, our proven ability to build an offering cutting edge fleets of remote sensing satellites quickly and cost effectively.
Speaker Change: We're actively pursuing a handful of similar such opportunities with other trusted strategic partners across the defense and intelligence civil government and commercial markets and across all three of our satellite fleets. We aim to be the go to scaled space partner for these customers turning to sales highlights starting with the defense and intelligence sector.
Speaker Change: Revenue from the DNI sector grew more than 20% for the full fiscal year 2025, we are proud to share that we've been awarded a contract to build a prototype for the defense innovation unit the D O D.
Speaker Change: <unk> focused on bringing innovation to the D. O D. We continue to engage in shorter term projects with a D. O D. As we work towards becoming part of operational D. O D. Workflows and we are very excited that the IU has ordered this prototype from US. The order was won by planet as a prime contractor with a partner subcontractor and as valleys in the low seven figures.
Speaker Change: During the quarter, we were pleased to be selected as one of the clients for the National Geospatial Intelligence agency as Luna B commercial data IQ contract under this contract will compete against other prime vendors for pizza delivery orders, the total value of which can be up to $200 million over five years.
Speaker Change: But it was also awarded a seven figure ACB renewal and expansion by the Doj The order Leverages, our maritime domain awareness solution and was one with a partner.
Speaker Change: It's planet data and partner enabled AI capabilities.
Speaker Change: Looking forward, we expect continued strong growth in the defense and intelligence sector and an increasingly complex geopolitical environment plant solutions can enhance situational awareness for customers by providing greater transparency of a patent.
Speaker Change: Emerging challenges and can provide more confidence and well informed responses.
Speaker Change: We see opportunity with the U S government as it skews efficiency and effectiveness across both civil and defense and intelligence agencies.
Speaker Change: And internationally as countries require increased access to information in an uncertain world.
Speaker Change: We are seeing strong and growing opportunities in maritime domain awareness, where we offer open water monitoring and analytics to support situational awareness that piracy smuggling and other serious maritime safety and security risks.
Speaker Change: Additionally, we're investing in the development of our global monitoring service or Gms a solution that leverages recent.
Industry advances in artificial intelligence and a broad area of data.
Speaker Change: To enable customers to scan and tie of countries or regions for important changes in France.
Speaker Change: Relatedly, we were pleased to welcome former general Jade Raymond to planets Board of directors.
Speaker Change: Joe Raymond was the first chief of the U S space Force and a member of the joint Chiefs of staff his years of experience leading space operations at the highest levels of our government are invaluable as we continue to work closely with our critical government customers. Both here in the U S and abroad.
Speaker Change: Turning to the civil government sector, where full year revenue grew approximately 15% year over year.
Speaker Change: While we've seen some seasonality due to large customer usage patents in FY 'twenty five overall the civil sector was strong this last year and we continue to see healthy demand for this market.
Speaker Change: Here are a few examples.
Speaker Change: We were pleased to announce a multiyear contract with the European Space Agency Isa in January.
Speaker Change: Through this contract planet continues to serve the couponing is contributing missions, providing commercial satellite data alongside he says Sentinel satellite data to the <unk> services.
Speaker Change: We also signed a new contract in the quarter with the Hellenic Space Center to leverage planet script data to spoke Greece's.
Speaker Change: Development of future downstream services for their national satellite data program.
Speaker Change: As they look to grow their own satellite capabilities. The Greek government will employees on its data to complement an informed by data sources.
Speaker Change: Shifting finally to the commercial sector, which we previously discussed had faced headwinds, particularly in the agriculture sector, but where we've seen revenue stabilized in recent quarters.
Speaker Change: To share a few recent wins last month, we announced an expansion with a long term customer buyer through a multiyear enterprise license agreement.
Speaker Change: This agreement increases buyers access to planet satellite imagery and analytics expanding into commercial operations and enabling enhanced decision, making across its global agriculture operations.
By our Leverages, a wide range of planets data products, allowing them to make faster data driven agronomic decisions and improving efficiency across its operations.
We also signed a multi year expansion with syngenta during the quarter through the expansion. They will gain increased access to planet scope monitoring and Sky high resolution data as well as the kind of insights platform.
Speaker Change: With these products Syngenta can enable farmers to remotely monitor crop health detect pest infestations and identify disease outbreaks with pinpoint accuracy.
Speaker Change: More broadly our strategy in the commercial sector remains focused on delivering solutions enabled by the planet insights platform for market segments within agriculture, natural resources energy and insurance verticals.
Speaker Change: Turning to the product that pace. During Q4, we successfully launched our Pelican two satellite Pelican two is performing well in space and provides us valuable insights and confidence as we continue to build our next generation high resolution fleet at pace.
Speaker Change: We're very proud to share today are first line images from Pelikan <unk>.
Speaker Change: Featured in our Q4 earnings presentation.
Speaker Change: We have multiple pelican launches scheduled for this year as we scale towards a fully operational high resolution fleet.
Speaker Change: We also wanted to provide an update to our tonnages flatline passenger one launched last summer and has since been producing powerful hyper spectral data.
Speaker Change: We have already begun selling that data to a handful of selected customers under a limited availability program.
Speaker Change: The team has already delivered a five fold and improvement in the challenger one task in capacity since launch.
Speaker Change: Our partner carbon Mappa has published over a thousand methane and C. O two plume detections based on insights gleaned from the data.
Speaker Change: We are actively preparing to offer commercial data to the broader market, particularly to the energy and civil government verticals within the next few months.
Speaker Change: On the platform side in Q4, we released a physics based resolutions sharpening technique that meaningfully improves the usability of our daily scan visual product.
Speaker Change: We also advanced our low touch enablement and the planet insights platform to expand and automate access to smaller customers.
Speaker Change: First fully automated low touch package on tropical Forest Observatory data formally provided by the Nicky program was made available for purchase by self serve users a few weeks ago a significant milestone.
Speaker Change: In addition, we continue to leverage advances in AI, both for our solutions, such as maritime domain awareness and a global monitoring service as well as through partnerships such as with AI leaders.
Speaker Change: A few weeks ago, we announced that we're collaborating with anthropic to explore opportunities where satellite data and foundation models can be combined to deliver powerful new capabilities to users across government and business.
Speaker Change: In particular and topic is fine tuning as Claude model on satellite data with the goal of enhancing model accuracy. We believe AI can enhance the extraction of value from satellite data accelerated delivery of insights and expand access to a wider range of users. This collaboration with Entropic is mutually beneficial AI helps unlocked.
Speaker Change: Value of satellite data. Meanwhile, satellite data helps AI models tackled real world problems.
Speaker Change: As mentioned before we believe planet is uniquely situated for AI, given our unique daily scan and deep archive of over 3000 images on average for every location in the Atlanta.
Speaker Change: The pace of innovation and AI is extraordinary and if we describe planet strategic shift in FY 'twenty five as a big step up in the satellite services market.
Speaker Change: This year, our strategic focus will be a big step up in AI and its potential to accelerate the development of solutions and increase accessibility to our powerful data.
Speaker Change: With that I'll turn it over to Ashley to discuss our financials over to ash.
Ashley Johnson: Thanks, well it was indeed, a very productive year, representing an important transition for planet across a number of friends.
Ashley Johnson: Let's shift gears now to go through the financial results in more detail.
Ashley Johnson: Revenue for the fourth quarter came in at a record $61 $6 million, representing approximately 5% year over year growth.
Ashley Johnson: Full year revenue came in at a record 244 $4 million, representing approximately 11% ERP aircrafts.
Ashley Johnson: As will mentioned, we introduced a new go to market structure last year aligned to our customers' end markets and we began to see a shift from selling data to selling solutions targeted at specific market segments. We.
Ashley Johnson: We expect this shift to continue into the year ahead led by our defense and intelligence business that applying to our civil government and commercial business as well.
Ashley Johnson: We see this shift towards selling targeted solutions as a core part of our strategy to reaccelerate growth, while enhancing the predictability of our business going forward.
Ashley Johnson: During fiscal year 2025, our defense and intelligence sector revenue grew more than 20% year on year Civil government revenue grew approximately 15% year on year and the commercial sector was down more than 10% year on year, but has shown signs of stabilization and improvement since the trough in Q1.
Ashley Johnson: With the discrete commercial headwinds showing signs of abating, we look forward to a return to normalized growth in future periods.
Ashley Johnson: For the full fiscal year EMEA revenue grew more than 15% year over year Latin America revenue grew approximately 30%.
Ashley Johnson: Asia Pacific grew nearly 15%, while North America revenue grew approximately 5% year over year.
Ashley Johnson: Looking ahead, we see significant growth potential across all regions in EMEA National Security solutions, particularly maritime domain awareness or MDA and global monitoring service Gms.
Ashley Johnson: <unk> strong interest driven by the current complex geopolitical environment. We also anticipate restaurant area monitoring systems or a M S.
Ashley Johnson: Supporting the European common agricultural policy.
Ashley Johnson: In Latin America, the civil government sector remains a key growth driver as we continue to build on the incredible proof point from our work with the Brazilian federal police and identifying illegal deforestation in the Amazon.
Ashley Johnson: In North America, and Asia Pacific, We similarly, see National Security solutions, MDA Ngls generating considerable interest.
Ashley Johnson: Furthermore, as new Pelican High resolution data comes online, we expect the enhanced product and capacity to fuel growth across all regions. We continue to pursue commercial sector opportunities in agriculture, natural resources energy and utilities, and finance and insurance globally, although it in a much more targeted and cost.
Ashley Johnson: Wei.
Ashley Johnson: Finally global demand for our satellite services exemplified by our work with Jay side is strong and as will said we are actively pursuing select opportunities with other trusted partners both in the U S and around the globe.
Ashley Johnson: As of the end of fiscal 'twenty five our end of period customer count was 976 customers lower on a sequential basis, reflecting our direct sales teams focus on large customers in our core verticals.
Ashley Johnson: Over the last year, we've worked to enable smaller more transactional customers to purchase through our platform our marketplace partners.
Ashley Johnson: Average new customer ACB sizes increase sequentially throughout this year, while the majority of the turned accounts in the quarter were less than $50000 in annual contract value.
Ashley Johnson: We see this is an indication that our intentional focus on larger accounts is working.
Ashley Johnson: As a reminder, customers who transact solely through our platform, which are typically smaller in nature are not reflected in this customer count.
Ashley Johnson: Recurring ACB was 97%.
Ashley Johnson: End of period ACD book of business, reflecting our continued focus on selling subscription data contracts and solutions as opposed to one time professional engineering services.
Ashley Johnson: Over 89% of our end of period ACB book of business consists of annual or multiyear contracts are.
Ashley Johnson: Our average contract length continues to be approximately two years weighted on an ACB basis for the sake of clarity the Jason multiyear satellite services contract is not included in our ACD metrics. Although it is included in our Rps and backlog, which we will discuss in a moment.
Ashley Johnson: Net dollar retention rate at the end of fiscal 'twenty, five was 106% and net dollar retention rate with win backs was 107%.
Ashley Johnson: As we shift towards selling high value solutions targeted at embedding our data and core operational functions, especially within our top accounts, we expect <unk> to improve toward best in class levels over the next several years.
Ashley Johnson: Turning to gross margin non-GAAP gross margin for the fourth quarter was a record 65% compared to 58% in the fourth quarter of fiscal 'twenty four.
Ashley Johnson: non-GAAP gross margin for the full year was 60% compared to 54% in FY 'twenty four.
Ashley Johnson: In fiscal 'twenty five we saw benefits from cloud infrastructure improvements offset by partner expenses and satellite depreciation.
Ashley Johnson: Adjusted EBITDA was a positive $2 $4 million for Q4, marking our first quarter of adjusted EBITDA profitability in the company's history and a major milestone on our journey to generating positive cash flow.
Ashley Johnson: For the full fiscal year adjusted EBITDA loss was approximately $10 $6 million compared to a $55 3 million dollar loss in fiscal year 2024.
Ashley Johnson: We are proud of the financial and operational focus we've seen from our teams since setting this target two years ago.
Ashley Johnson: As we make some strategic investments this year, particularly in space systems to capture the opportunity in satellite services, we will do so with a stronger foundation of operating efficiency and focus on bottom line performance.
Ashley Johnson: Capital expenditures in Q4, including capitalized software development were approximately $12 $8 million. This was slightly higher than expected driven largely by the timing of certain procurements for our Canada, Pelican and separate of satellites and for a ground station infrastructure.
Ashley Johnson: Full year capital expenditures were approximately $49 $6 million or approximately 20% of revenue reflective of the investments we are making in our next generation fleets.
Ashley Johnson: Although we have been in a period of higher capital investment our step in satellite services market represents a major expansion in our market opportunity that not only has the potential to become a major accelerant to growth, but even more so to long term free cash flow.
Ashley Johnson: Turning to the balance sheet, we ended the quarter with approximately $222 million of cash cash equivalents and short term investments.
Ashley Johnson: We significantly reduced our cash burn in fiscal year, 2025, and expect to further reduce it in fiscal 'twenty six.
Ashley Johnson: We remain confident that we have sufficient capital to invest behind our core growth accelerating initiatives and achieved cash flow profitability without needing to raise additional capital and we still have no debt outstanding.
Speaker Change: On that note I'd like to Echo Wilson Twos. He has them for a recently signed commercial agreements with Jason.
Speaker Change: Under the agreement, we expect to recognize $230 million of revenue over approximately the next seven years with cash payments weighted upfront to the earlier years to facilitate working capital for the program.
Speaker Change: As such we expect the deal to be meaningfully accretive to cash flow, including in fiscal 'twenty six.
Speaker Change: Revenue for the build of the Pelicans will be recognized over time as work progresses. The cost for those pelicans will flow through cost of goods sold as opposed to Capex and services revenue for the contract will be recognized as they are rendered.
Speaker Change: Note that the accounting for long term contracts involves judgment and estimating costs and profit for each performance obligation and are subject to change.
Speaker Change: As we highlighted when we first announced the new win we believe there is significant upside potential we can realize through selling the constellation substantial global capacity to planet customers and the government and commercial sectors and other regions.
Speaker Change: At the end of fiscal 'twenty, five we estimate that our remaining performance obligations or Rps were approximately $407 $5 million up 179% quarter over quarter of which approximately 37% apply to the next 12 months and 70% to the next two years.
Speaker Change: Our backlog, which includes contracts with a termination for convenience clause, which is common in our U S federal contracts and occasionally found in other customer contracts, we estimate to be approximately $498 $5 million up 115% quarter over quarter.
Speaker Change: Approximately 38% of our backlog applies to the next 12 months and 69% to the next two years.
Speaker Change: This increase in backlog provides a solid foundation for meaningful growth rate acceleration into FY 'twenty seven.
Speaker Change: It's important to note that even without the landmark contract with Jason that we saw strong growth in our Rps and backlog in Q4.
Speaker Change: Let me now layout our guidance for the first quarter of fiscal 2026.
Speaker Change: We're expecting revenue to be between 61 and $63 million, we expect non-GAAP gross margin for the quarter to be between 58% and 60% impacted by the same factors that I described for fiscal year 2025.
Speaker Change: We expect our adjusted EBITDA loss for the first quarter to be between minus three and minus $2 million reflective of the variability of our expenses quarter to quarter and our tight focus on cost controls and efficiencies, even as we invest in strategic growth initiatives spin.
Speaker Change: Specifically, we are investing behind space systems capabilities, and bring a new broad area solutions to market, both of which increased our expectations for R&D expenses in Q1 and a year ahead.
Speaker Change: We're planning for capital expenditures of approximately 11 million to $16 million in Q1 or approximately 20% of revenue, reflecting our continued investments in our next generation fleets and the ongoing maintenance capex for our planet scope constellation.
Speaker Change: For the full fiscal year 2026, we're expecting revenue to be between 260 and $280 million. While this range attempts to take into account potential risks related to timing of new business and customer usage patterns as well as timing of revenue recognition for a new satellite services.
Speaker Change: Tracked it may not reflect unforeseen volatility, resulting from the current geopolitical and economic uncertainties. We're mindful that this is a rapidly evolving global environment.
Speaker Change: With that said, we're confident in our plan for the year ahead, and see multiple potential sources of upside opportunity, including growing with our government customers, bringing new AI enabled solutions to market and our pelican antennas or data coming online.
Speaker Change: We expect non-GAAP gross margin for fiscal 2026 to be between 55% to 57%, reflecting assumptions around growth in partner revenue streams increased depreciation related to satellite and costs related to the new contract with Jason.
Speaker Change: Excluding these impacts we would have expected non-GAAP gross margin to be in line with or slightly better than fiscal 2025.
Speaker Change: Our long term target for non-GAAP gross margin continues to be 70% to 80%.
Speaker Change: We see the new contract with chase that are supporting our path to achieving our long term target given the incremental pelican capacity that we expect to be able to monetize outside of our partners area of interest.
Speaker Change: Over the course of the operational phase of the contract we expect the gross margin to be in line with or accretive to the rest of the business.
Speaker Change: We expect our adjusted EBITDA loss for fiscal 2026 to be similar to fiscal 2025 with an expected range of minus 13 to minus $7 million, reflecting the aforementioned investments, we're making in the business.
Speaker Change: We're planning for capital expenditures of approximately $50 million to $65 million for the year, reflecting the investments we're making in our next generation fleets targeted to fulfill customer demand for cutting edge high resolution and hypersexual data with.
Speaker Change: We view this as the peak of the growth Capex investment cycle for the build out of the Pelican Antanas your fleets and expect Capex as a percentage of revenue to trend towards our long term target in fiscal 2027.
Speaker Change: Finally, we expect to reduce our cash burn by approximately 50% in fiscal 2026 and believe we have line of sight to crossover to positive cash flow in the next 24 months leveraging our strong balance sheet without needing to access the financial markets to fund our investments in growth.
Speaker Change: Looking ahead, the J sat win and the significant increase in backlog gives us confidence in our path to meaningful revenue growth rate acceleration in fiscal year 2027.
Speaker Change: There's a incremental growth beyond that could be driven by acceleration from the new AI enabled solutions, we're bringing to market from pelican antennas or data coming online and from any additional satellite services deals we close all of which we are actively pursuing.
Speaker Change: To underscore our confidence in the opportunity I'd like to highlight our plan to build and launch nearly 100 satellites here in the United States over the next two years, an incredible feat in our industry and indicative of the demand we see from the market.
Speaker Change: We're doing this with a non dilutive capital efficient model through innovative structures with partners such as J sat in carbon Mapper, a testament to the strength of those relationships the ingenuity of our teams and our commitment to creating shareholder value.
Well Marshall: As always well and I are thankful for the global planet team. None of this would be possible without your dedication resilience and innovation operator that concludes our comments, we can now take questions.
We will now begin our question and answer session. At this time, if you'd like to ask a question. It is star followed by one or your telephone keypad. If for any reason you would like to remove that question. It is star followed by two again to ask a question. It is star one as a reminder, if you're using a speaker phone.
Well Marshall: Please remember to pick up your hits it before I ask a question or questions are limited to just one.
Colin Canfield: Our first question comes from Colin Canfield with accompany cancer Fitzgerald.
Well Marshall: Caller your line is now open.
Speaker Change: Good question.
Speaker Change: Focusing on the free cash flow dynamics, if you could maybe just kind of flush out the bridge.
Speaker Change: Including what's moving in and out of Capex that gross margin as.
Speaker Change: As well as some other working capital assumptions youre, making in 2006.
Speaker Change: And then given that the company made some commentary on 2007 as you can kind of just flesh out a little bit what the cadence looks like getting to free cash flow positive.
Colin Canfield: Yeah. Thanks Colin.
Colin Canfield: So as we talked about we are in a peak capex investment cycle. This year and so that's reflected in the guidance that we gave for capex for the full year.
Colin Canfield: And it's also reflected in my commentary about expecting our cash burn to be roughly half this year versus versus last year and as I mentioned that the <unk> contract is structured in such a way that we the cash payments are relatively front.
Colin Canfield: Front end loaded which enables us to fund working capital for the program and so it's a balance of you know our traditional business and obviously with high gross margins and <unk>.
Colin Canfield: <unk>, a strong collection experience with them with our customer base.
Colin Canfield: Managing our expenses across the board very carefully.
Colin Canfield: Then at the same time investing in both the <unk> program and the and the building and launching of the Pelican intolerant or fleets. So.
Colin Canfield: And as I mentioned this year, we're expecting our cash burn to be roughly half and based on our current view of the business, we could see getting to cash flow profitability over the next 24 months.
Colin Canfield: Okay.
Colin Canfield: Okay.
Colin Canfield: So your question question taken from.
Edison: Absolutely. Our next question comes from Edison, you with the company Deutsche Bank Edison. Your line is now open.
Speaker Change: Hey, good afternoon. Thank you for taking our questions wanted to ask on the ideal misanthropic.
Speaker Change: In terms of the discussions you have with them how are you thinking about the <unk> mint.
Speaker Change: Monetization.
Speaker Change: Of these whether it's used to the model or whether it's just selling data to them are you sort of thinking about that.
Speaker Change: The way to actually make it.
Speaker Change: A lot of money on us.
Speaker Change: Good question first of all very excited about that.
Speaker Change: Partnership is really really cool and there's others that we're doing in a similar vein.
Speaker Change: Really exciting time as I said on the.
Speaker Change: Let's have a masters is extraordinary the developments in AI and we feel right in the middle of it literally as well because we have a few blocks away. So I'll make a few blocks away from open AI.
Speaker Change: Walks away from the jet Google Gemini team here in San Francisco, and so you sort of feel it.
Speaker Change: And our data set as I mentioned in the remarks is it just sort of sitting credible a unique dataset to train. These models on these companies trying to deal with real world problems, They need real world data very well deal with disaster response or security.
Speaker Change: With.
Speaker Change: And he said it.
Speaker Change: Synthetic data and save condensate is really very primed for that.
Speaker Change: That's the monetization.
Speaker Change: Look I think our near term focus there is on these solutions that we're building with AI.
Speaker Change: The maritime domain awareness like looking over large ocean territory for ships and then identification of and so on that sort of thing we havent real business to go after we've already got meaningful revenue that we're growing that.
Speaker Change: With focus and Theres other Gms asset as you mentioned.
Speaker Change: And then after the foundation efforts of the kind that we're doing with Entropic, it's a little bit more experimental but the.
Speaker Change: In principle benefit there is really great because it can speed time to value we've been very impressed.
Speaker Change: With how these foundation models out of the box can do analysis on satellite data.
Speaker Change: Can code against our API can do things that speed, our ability of our existing customers to get from zero to something that has a value analysis meaningful questions as well as opening up a new set of potential clients that could get.
Speaker Change: Who don't have geospatial expertise, though and so this is an accelerant overall.
Speaker Change: Early days on the foundation stuff, but the.
Speaker Change: What we're doing on MDA and everything is really near term value.
Speaker Change: They are driving and growing our business.
Speaker Change: Okay.
Speaker Change: Our next question comes from Michael J, let them more with company Northland Michael Your line is now open.
Michael J: Alright, great. Thanks Ashley.
Speaker Change: Actually at the end of your remarks, there you talked about.
Michael J: Yes.
Michael J: Pelican cancer, New satellite service wins.
Michael J: Revenue opportunity in 2007.
Michael J: Would that would those be incremental to the doubling of the growth rate are those included in that doubling of the growth rate.
Michael J: Okay.
Michael J: Yeah, Great Great question, and so and the remarks about the ability to double the growth rate based on the backlog that we have and that is literally pointing to the you know the contracts that we that we have in and secured in our our views as to what are our ability to renew that business.
Michael J: And then also execute against the business. That's there that are multiyear in nature upside to that growth rate is some of the areas that we talked about that we're investing in and says well just said AI. We believe is an incredible accelerant to delivering value to our customers and to enabling.
Michael J: These solutions that we are building out with partners.
Michael J: In addition, if we sign.
Michael J: Sign any additional contracts on the satellite services front that would be upside to that that acceleration in growth rate and then finally mm, bringing the pelican Antanas yours online gives us an opportunity to increase the AD the data that we're selling with our existing customers as well as bring.
Michael J: New customers and so those are all upside to the current visibility that we have to grow the growth rate of our business.
Michael J: Right.
Michael J: Okay.
Speaker Change: Great and then just to be clear when you say positive cash flow are you talking free cash flow or cash flow from operations.
Speaker Change: And that's really about it.
Speaker Change: That's about free cash flow.
Speaker Change: Okay.
Speaker Change: Before another way of saying it cash flow.
Speaker Change: Sorry, the other way of saying as cash flow from operations and Capex minus capex.
Speaker Change: Sorry, I interrupted you.
Jason Gursky: No problem. Our next question comes from Jason Gursky with the company Citigroup, Jason Your line is now open.
Jason Gursky: Great. Thank you.
Jason Gursky: If you don't mind, just a couple of quick clarification questions and then.
Jason Gursky: One more meeting one on the clarification on the doubling of the growth rate.
Jason Gursky: Is it that is that at the midpoint of the range in 2026, new double off of the midpoint or.
Jason Gursky: Could we grow off the can we double off the top end of your range.
Jason Gursky: Clarification, one quick clarification question and then the other clarification one.
Jason Gursky: On the increased expenses that you expect here in 'twenty six is that kind of like a onetime in nature kind of thing and that rolls down in 2017 or do we need to see revenue growth for margin expansion.
Jason Gursky: The meat of the question. Your question is just the monetization of the non <unk> areas of the world.
Jason Gursky: Just kind of curious will you be going out and looking to try to find people that are going to take down dedicated access over a region of the world or is this all going into the library and you're trying to monetize the library I'm just kind of curious how you're thinking about the monetization outside of that part of the world.
Speaker Change: Great why don't I take the first two and let will talk about our strategy around satellite services. So in terms of the doubling of the growth rate why don't we just start with looking at the midpoint.
Speaker Change: Our guidance is a good place to start for how we're thinking about FY 'twenty seven but obviously you can you can look at the increase in backlog and what applies to the next 12 months and obviously.
Speaker Change: It's great to have such a strong.
Speaker Change: Book of business, even for the 12 months. After they went ahead of US it's great visibility for us on the expenses side as I mentioned and we are both investing in the space systems side, and so making sure that we have the capacity for all of the programs that we're that we're running for.
Speaker Change: For the core business so that includes.
Speaker Change: Core data business, the Pelican and <unk> as well as our secret athletes.
In addition to.
Speaker Change: The staffing required to execute against us with great new contract that we have with <unk>. So that's one side of the investments and so those.
Speaker Change: Obviously, our team is that that will need because we will be continuing to grow our operations and on the space systems side, and then investments in NII in the software engineering team, So and again I don't view these as onetime in nature, but rather really investing in R&D, which enables us to innovate and really stay.
Speaker Change: Ahead of the market.
Speaker Change: Well do you want to take the question on monetization outside of <unk>.
Speaker Change: Yes, I mean, the great thing about this partnership is not only to.
Speaker Change: Pay for satellites that fund of your lines is pelican season, as I mentioned.
Speaker Change: It's a win win win for us than other customers because of the increased capacity.
Speaker Change: On that latter point, we get to monetize the rest of the world, which is most of that capacity.
Speaker Change: They have dedicated access out of the area of interest, which is in and around and basically and so if the rest of the world.
Speaker Change: We get that capacity in commercially can leverage that and of course, that's all upside too.
Speaker Change: And great margin potential for that partnership.
Speaker Change: And I don't know if you.
Speaker Change: Your question is leaning in this direction, but.
Speaker Change: As I mentioned, there were a handful of other opportunities that we're going after.
Speaker Change: Were longtime.
Speaker Change: Long term partnerships like we have and the strategic.
Speaker Change: And synergistic with the core business.
Speaker Change: And.
Speaker Change: Very excited about the market potential here, obviously, we feel they are in a very strong position had because planet has such a long history of doing observation satellites, we launched more observations on that than anyone else.
Speaker Change: When when countries think about that demand for dedicated access really first of all a pool and so it's very exciting opportunity.
Speaker Change: Okay.
Speaker Change: Our next question comes from Ryan Koontz, with the company Needham and company Ryan Your line is now open.
Speaker Change: Yeah.
Speaker Change: Great. Thank you and sorry about the background noise, if there are some but.
Speaker Change: Regards to the revenue guide.
Ashley Johnson: Ashley how much does that contemplate.
Speaker Change: No.
Speaker Change: The current chaotic situation.
Speaker Change: Washington, obviously, a separate dynamic situation, but it seems that.
Speaker Change: There are already impacts.
Speaker Change: I assume you were contemplating some impact in that revenue guidance.
Speaker Change: The state of things there.
Speaker Change: Peter on the civil, especially on the civil side I'm guessing.
Color you can share there.
Speaker Change: And look I think we've attempted to take an appropriately conservative approach to our guidance, so reflecting potential risks related to macro pressures timing of new business. So that would include.
Speaker Change: The way that the uncertainty in the current environment might cause business new business to be delayed also factoring in customer usage patterns that we've seen you know have variability in the past and then we have a brand new satellite services contract, which is a new revenue recognition methodology for us and so we are.
Speaker Change: You know being appropriately conservative about how we see that revenue pacing and over the course of the year.
Speaker Change: So while it's not possible to reflect every potential outcome related to the current geopolitical and economic environment.
Speaker Change: We believe actually that that solution such as ours are core to government efficiency and that in many ways. The current environment can be opportunity for companies like planet that bring in much more efficient means of getting these kinds of insights and data.
Speaker Change: And you know what.
Speaker Change: We see this both domestically and internationally is driving a lot of opportunity for us I don't know if you'd add anything.
Actually I mean, there are real opportunities in this.
Speaker Change: Actually saying, they're pushing towards efficiency.
Speaker Change: Planet, not just hypothetically able to do that we've done that before we've done that Vanessa we've done that with <unk>, we've done that in the intelligence community and so we are actually seeing opportunities like that arise.
Speaker Change: We are actively working with those agencies on that.
Speaker Change: And we feel that kind of good position and as you mentioned also internationally. This is creating a reaction.
Speaker Change: Actually countries need and are demanding.
Speaker Change: This is a capability sooner.
Speaker Change: And we've seen a lot of.
Speaker Change: Interest in that.
Speaker Change: Including in our suffering sidelines and unique unique position to service that we've also seen increased budgets and incredibly increased urgency for that in those countries as well so.
Speaker Change: I think kind of lean into some of that just changing geopolitical dynamics pretty successfully of course, there's risk, but I would say the opportunity is definitely outweigh them.
Speaker Change: Yeah.
Jeff Zhang: Our next question comes from Jeff Zhang re with a company credit column, Jeff. Your line is now open.
Jeff Zhang: Great. Thanks, Thanks for taking my questions guys a couple from me maybe.
Jeff Zhang: Maybe first just will on ancillary services just to be clear. This is this is sticking to existing configuration footprint capabilities. So this is does pelicans et cetera.
Jeff Zhang: Being sold on essentially a different delivery model sort of phrased differently. This isn't space services with a vision to customization.
Speaker Change: Yes, so we are really focused.
Jeff Zhang: As I said.
Jeff Zhang: Like we've got interest in all three types of us online Pelican, tonnages, and Dove and <unk> III in all three of our vertical markets commercial civil government and defense in southern is the biggest area isn't developed intelligence the Pelican.
Jeff Zhang: It really does span all of those so yes. It is focused on the existing technology roadmap and.
Jeff Zhang: And that's how we can make it very synergistic here.
Jeff Zhang: Where this plays ahead that capital expenditure building up those fleets faster and.
Jeff Zhang: And of course, there's plenty of upside potential as we were just talking about the change that.
Jeff Zhang: Hey, Jeff.
Jeff Zhang: Talk a little bit.
Moderator: Our next question comes from Trevor Walsh with a company citizens Financial group Trevor Your line is now open.
Moderator: Great. Thanks for taking my questions, maybe just to kind of piggy back a little bit off your comments will actually obviously chime in but around this space services opportunity and you had some what I think you had mentioned 10 satellites associated with <unk>.
Speaker Change: So I think by my math at least 'twenty, two kind of authorized pelicans.
Speaker Change: Does that footprint of 10 kind of is that a good proxy for kind of what other kind of constantly many cancellations, let's call them for other types of deals that would that would kind of need to look like that and then I guess the secondary question with that is how easy or could you kind of boost that 32 kind of regulatory kind of a prudent number.
Speaker Change: The opportunity kind of demand kind of comes in and how easy or how much how could you how quickly could you move on that kind of aspect of things. Thanks, Yeah, I think you've got the math roughly right and yes as you know.
Speaker Change: So I think we've got a proof of life. After 32 of those the deals themselves could vary and numbers of course.
Speaker Change: But yes.
Speaker Change: Yes, I mean, we're seeing interesting around that instead of a scale from other countries as well. So we'll see where that comes out at these are big strategic partnerships. This is a it really is these are complex transactions, but again plan is in a relatively unique position to supply them being vertically market vertically.
Speaker Change: Integrated and.
Speaker Change: Having multiple observations outlets than anyone else. So we really are.
Speaker Change: And a lot of cases, having these long term relationships, where they can trust our data and capabilities.
Speaker Change: I hope that gives a flavour.
Okay.
Speaker Change: Our next question comes from Josh Sullivan with the company the benchmark company.
Speaker Change: Josh Your line is now open.
Josh Sullivan: Hey, good evening.
Josh Sullivan: Just as far as the focus on larger.
Josh Sullivan: Just the focus on larger customers, while directing some of the smaller customers third parties once the pig through the snake there they would be when do we see the customer counts stabilize.
Josh Sullivan: That's a good question.
Josh Sullivan: I think as you know the customer account excludes anybody that is solely transacting through the platform because those tend to be to be smaller.
Josh Sullivan: But obviously, we're developing a really strong pipeline of interest to the new solutions that we've been bringing to market. So.
Josh Sullivan: The focus on making sure that we have the right solutions for the right customers should.
Result in stronger net dollar retention rate, which I've said is a really core focus for us and also increase the average customer size, which is.
Josh Sullivan: Obviously, a really important metric for us as well so.
Josh Sullivan: You know as as I mentioned on the prepared remarks.
Josh Sullivan: The drop in customer counts actually is in line with the strategy that we've had of really focusing our direct sales on those larger customers and we've seen that play out in the increase in average ACB over the course of the year.
Josh Sullivan: And if I could just add I mean, I think that.
Josh Sullivan: And such platform. The purpose of that is to help serve those smaller customers and due to cost efficiently. You said most of our sales resources can be focused on those big accounts, where we see the biggest potential still.
Josh Sullivan: It is also because we believe in that long tail.
Josh Sullivan: Eventually as the tools get better as we are seeing.
Josh Sullivan: Finally insights platform and some of the AI solutions.
Josh Sullivan: This is enabling more people to get value out of it that's a huge potential still here with geospatial data and particularly for planet, where you don't have to toss satellites over the time, because we've got the data scan for many users that means the data is already there and they can get value out of it sitting that so.
Josh Sullivan: That's our strategy.
Josh Sullivan: Yeah.
Anthony: The next question comes from Anthony <unk> with the company Goldman Sachs and Cool Anthony Your line is now open.
Anthony: Hey, guys. Thanks for taking my question.
Anthony: I'm just curious so you've done a great job explaining the new strategy of going after a larger new customers and I think you had mentioned in your prepared remarks that you guys are looking to March our way back to industry.
Anthony: Industry, leading net dollar retention ratios.
Could you maybe just talk a little bit about the strategy like how youre actually going to achieve that and then am I thinking of it correctly that big.
Anthony: Because you guys are going after larger customers that are new customers.
Anthony: It's almost like a.
Anthony: Like that's the offset of the lever on the <unk> that it's going to be lower because of that.
Anthony: Just if you could kind of talk through that that would be helpful. Thanks.
Anthony: Yeah absolutely.
Anthony: As I mentioned, a core part of our strategy is in building. These solutions that enable us to accelerate the time to value for our customers and to be embedded operationally with those customers.
Anthony: And we believe that by doing so we have seen in and we will continue to see strong retention rates and expansion rates with those customers. So.
Anthony: In order to organizing our operations. According to vertical markets, it's really about getting more of the company directly connected to our customer needs.
Anthony: That every aspect of our product development is really solving a core operational challenge that our customers are facing that our data can uniquely address.
Anthony: And enabling our sales team to really prioritize those opportunities, where we have the strongest product market fit and growing with those customers. So it's.
Anthony: It's been a core part of the changes that we've made operationally over the last 12 months.
Anthony: As well as the investments that we've been making on the solution side and with our partners.
Anthony: And to really take the time to value accelerate which is a key part of then having best in class retention rates.
Anthony: You'd add anything.
Anthony: Great.
Anthony: Yes.
Speaker Change: Our next question comes from Greg <unk> with company Clear Street markets break your line is now open.
Speaker Change: Hey, Thanks for taking my question just wanted to tell on commercial you mentioned stabilization that you are seeing them earlier in your comments can you just elaborate a little bit on that.
Speaker Change: Yeah, So I specifically in the agricultural sector.
Speaker Change: We're starting this year from a kind of a much stronger place and we've highlighted a few key customer wins and renewals.
Speaker Change: We're actually seeing our large AG customers ramped up nicely in their usage going into this growing season.
Speaker Change: And a lot of it was some transitions that we made working closely with those customers last year to understand where their business was growing parts of their business, where they were reducing their investments are more on the on the marketing side and leaning into those areas, where they are really investing which is in and proving out.
Speaker Change: Operational efficiencies and being part of and reducing the amount of input Tonight and increasingly outputs and Theres a lot of places, where we can drive really tangible ROI to our customers.
Speaker Change: And making sure that that is the nature of the way we're working with those customers. We also see opportunity across the commercial sector with energy and insurance.
Speaker Change: NRG, obviously with bringing tanager online as well as in the insurance space. We have continued to expand with some of our marquee customers on that front, so and again, it's been a rough year just with all the changes going on in the AG sector, but a lot of really positive signs of that in the last few quarters.
Speaker Change: That's helpful. Thanks, a lot.
Speaker Change: Thank you.
Our next question comes from Ken Henry with a company called C space.
Speaker Change: Your line is now open.
Speaker Change: Okay.
Speaker Change: Hi, Thanks for taking my questions. Just had two questions first is sort of on the sort of existing changes in U S. Government on the spire call there was a conversation about.
Speaker Change: Seeing a lot more funding headed towards kind of commercial weather and then kind of anticipating a pretty dramatic change in uptake on their side I am wondering on the.
Speaker Change: Electro optical side or any of the sensor types that planet offers if you if management is kind of anticipating any.
Speaker Change: Similar meaningful changes from the new administration in terms of kind of how they make use of commercial satellite imagery.
Speaker Change: 100%, yes, so we are.
Speaker Change: We expect them and their focus is on efficiency and leveraging commercial capabilities and we fit right into that.
Speaker Change: Again, that's the cost civil government defense and intelligence agencies, we are in active discussions with that and how we can help them on that priority.
Speaker Change: It's something that we have done before.
Speaker Change: This is a case in point alternative partnership came out of the collaboration with NASA and is enabling them to do those missions at lower cost.
Speaker Change: <unk>.
Speaker Change: The contract with <unk> is enabling them to get access to satellite imagery much lower cost than doing their own way, but he is the kind of programs I think the government is going to double down on and accelerate in this environment and again as I mentioned earlier, we are seeing significant budgetary increases in other.
Speaker Change: Countries like Japan and Europe.
Speaker Change: As a policy tool reaction as well and that is something that we want to lean into too we're a global company.
Speaker Change: Okay. Thanks, and then just one clarification on the <unk> contract, what's the rough timeline for when you started launching the satellites is that something where you wanted to get a minimum number of dedicated planet satellites up first and then you shipped J said they'd be interest burst or kind of when do you start.
Speaker Change: Rolling out the <unk> portion of the Pelican fleet.
Speaker Change: Yes. So we are focused first on our own satellites that are most critical to the continuity of our skies that fleet.
Speaker Change: And of course enhancements and otherwise need to Sky describe Pelican and then next is the date that ones, which will be.
Speaker Change: Many of the next 24 months.
Speaker Change: Yeah.
Speaker Change: Okay. Thank you.
Speaker Change: Okay.
Speaker Change: Our next question comes from Colin Canfield with a company cancer Fitzgerald Colin Your line is now open.
Speaker Change: Hey, thanks for the follow up.
Speaker Change: Maybe you can just talk a little.
Speaker Change: About the contract opportunities that will talked about handful of opportunities. It sounds like a pretty similar obviously you have a little bit of a split across.
Speaker Change: The types of satellites that might be procured, but if you could maybe talk through kind of what the total size of that bid pipeline. So I can how that splits out relative to the services pipeline.
Speaker Change: I am going to pipeline.
Speaker Change: The number for you right. This second and is already that is in our entry into this but what I will say is that we're seeing strong demand there.
Speaker Change: From different countries and and.
Speaker Change: Many countries took note of the partnership we did with Japan. So is there any further accelerated subsequent to our announcement of that.
Speaker Change: There's a lot of interest, but we're being very strategic about which ones we focus on when.
Speaker Change: Because these are big complex transactions as I said in and so we're focused on ones that most synergistic they're going to drive drive.
Speaker Change: On a product.
Speaker Change: Pipeline and aligned with our long term financials as well so.
Speaker Change: That's the.
Speaker Change: That's the way I think about it.
Speaker Change: Obviously continue to share more as we can in the coming quarters.
Speaker Change: I would now like to turn the conference over to the CEO and co founder will Marshall will you May proceed with closing remarks.
Speaker Change: But look overall I am very proud of what we've achieved here in the last year that <unk> been hearing about today and I feel China is in a great position overall, especially based on the <unk> partnership that we mentioned and strong.
Speaker Change: Backlog.
Speaker Change: A big focus this year is really on growth acceleration using from these new datasets from these AI powered solutions and.
Speaker Change: A handful of other partnerships and satellite services.
Speaker Change: And.
Speaker Change: Finally, I'll just note about the AI transition.
Speaker Change: Think of that as a strategic focus for the year a bit like.
Speaker Change: More fulsome into the satellite services sector was a big strategic decision last year. This year is going to be focused on AI across the board and we believe that can accelerate our opportunity. So thanks for joining us today.
Speaker Change: And a real big thanks to all of our teams that enable everything that we've been discussing and so look forward to giving you update next time. Thanks.
Speaker Change: That will conclude today's conference call. Thank you for your participation and enjoy the rest of it.