Q1 2026 Planet Labs PBC Earnings Call and Business Update

Operator: Good afternoon. Thank you for attending the Planet Labs PBC first quarter of fiscal 2026 earnings call.

Good afternoon. Thank you for attending the planet Labs PBC first quarter of fiscal 2026 earnings call. My name is Cameron and I'll be your moderator for today all lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end.

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

Speaker Change: If you would like to ask a question. Please press star one on your telephone keypad and I would now like to pass the conference over to your host Cui, Oklahoma Perona you May proceed.

Operator: And I would now like to pass the conference over to your host, Cleo Palmer Perroner. You may proceed.

Cleo Palmer Perroner: Thanks, Operator. And hello, everyone.

Speaker Change: Thanks, Operator, and Hello, everyone. This is <unk> from the Investor Relations team at Planet Labs PDC welcome to <unk> first quarter of fiscal year 2026 earnings call I'm joined by will Marshal and Ashley Johnson, who will provide a recap of our results and discuss our current outlook.

Cleo Palmer Perroner: This is Cleo Palmer Perroner from the Investor Relations team at Planet Labs PBC. Welcome to Planets First Quarter, a fiscal year 2026 earnings call.

Cleo Palmer Perroner: I'm joined 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.

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.

Cleo Palmer Perroner: Before we begin, we'd like to remind everyone that we will make forward-looking statements related to future events or our financial outlook. 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 Planets that future plans, estimates, or expectations will be achieved.

Speaker Change: Before we begin we'd like to remind everyone that we will make forward looking statements related to future events or financial outlook. 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 play that that future plans estimates or expectations will be achieved.

Cleo Palmer Perroner: Such forward-looking statements are subject to various risks and uncertainties and assumptions as detailed in our SEC filings, which can be found at www.sec.gov. Our actual results or performance may differ materially from those indicated by such forward-looking statements, and we undertake no responsibility to update such forward-looking statements to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.

Speaker Change: Such forward looking statements are subject to various risks uncertainties and assumptions are detailed in our SEC filings, which can be found at www dot SEC dot Gov. Our actual results or performance may differ materially from those indicated by such forward looking statements and we undertake no responsibility to update such forward looking statements to reflect events or circumstances. After the date on which the statement is made or to refer.

Speaker Change: The occurrence of unanticipated events.

Cleo Palmer Perroner: 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 in its financial and operational decision-making.

Speaker Change: During the call. We will also discuss historic and forward looking non-GAAP financial measures. We use these non-GAAP financial measures for financial and operational decision, making and as a means to evaluate period to period comparison.

Speaker Change: We believe that these measures provide useful information about operating results enhance the overall understanding of past financial performance and future prospects and allow for greater transparency with respect to key metrics used by management in its financial and operational decision, making for more information on the non-GAAP financial measures. Please see the reconciliation table provided in our press release issued earlier this afternoon, which is available on our website at <unk>.

Cleo Palmer Perroner: For more information on the non-GAAP financial measures, please see the reconciliation tables provided in our press release issued earlier this afternoon, which is available on our website at investors.planet.com. Further, throughout this call, we provide a number of key performance indicators used by management and often used by competitors in our industry.

Speaker Change: <unk> Dot planet Dot com further throughout this call we provide a number of key performance indicators used by management and often used by competitors in our industry.

Cleo Palmer Perroner: These and other 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 other performance indicators are discussed in more detail in our press release and our earnings update presentation, which are intended to accompany our prepared remarks.

Will Marshall: At this point, I'd now like to turn the call over to Will Marshall, Planet's CEO, Chairperson, and Co-Founder. Over to you, Will. Thanks, Cleo. And hello, everyone. Thanks for joining us today.

Well Marshalls: At this point I would now like to turn the call over to well Marshalls Planet Z O chairperson and cofounder over to you well.

Well Marshalls: Thanks, Claire and Hello, everyone. Thanks for joining us today.

Will Marshall: We're pleased to have delivered an excellent first quarter in fiscal 2026. To briefly summarize the results, we generated $66.3 million in revenue, representing approximately 10% year over year growth and exceeding our expectations. Non-gap gross margin was 59% up from 55% a year ago, and adjusted EBITDA profit came in at $1.2 million, representing our second sequential quarter of adjusted EBITDA profitability. We also generated $17.3 million of cash flow from operating activities and achieved our first-ever quarter of positive free cash flow at $8 million, a significant milestone for the company and for shareholders.

Well Marshalls: We're pleased to have delivered an excellent first quarter and fiscal 2026 to briefly summarize the results we generated $66 $3 million in revenue, representing approximately 10% year over year growth in <unk>.

Well Marshalls: Exceeding our expectations.

Well Marshalls: non-GAAP gross margin was 59% up from 55% a year ago and adjusted EBITDA profit came in at $1 2 million, representing our second sequential quarter of adjusted EBITDA profitability.

Well Marshalls: We also generated $17 $3 million of cash flow from operating activities and achieved our first ever quarter of positive free cash flow at $8 million, a significant milestone for the company and for shareholders.

Will Marshall: Our backlog grew to over half a billion dollars in the end of the quarter, reinforcing our path to accelerating growth.

Well Marshalls: Our backlog grew to over half a billion dollars in the end of the quarter reinforcing our path to accelerating growth.

Will Marshall: Before we turn to our first quarter wins, I'd like to share a few takeaways from my recent travels visiting our customers and partners around the globe. In D.C., I met with various leaders at the U.S. government, and the government's demand signal for smarter solutions that leverage the latest innovations from technology providers is ringing loud and clear.

Well Marshalls: Before we turn to our first quarter wins I'd like to share a few takeaways from my recent travels visiting our customers and partners around the globe.

Well Marshalls: In D C I met with various leaders at the U S government and the government demand signal for smart solutions that leverage the latest innovation from technology providers is bringing loud and clear.

Will Marshall: Although today's dynamic environment is creating uncertainty, my visit only reinforced our view that the opportunities outweigh the risks for planets. While in Europe, I met with leaders across governments, and it's clear that the changing geopolitical landscape is resulting in heightened need for planet services. This builds on the increased awareness of the significant value of satellites that has grown since the start of the war in Ukraine. Overall, we are seeing unprecedented interest in our solutions. We see Planet as a reliable and trusted partner to our domestic and international customers during such times of global change.

Well Marshalls: Although today's dynamic environment is creating uncertainty my visit only reinforced our view that the opportunities outweigh the risks for planet.

Well Marshalls: While in Europe, I met with leaders across government and its clear that the changing geopolitical landscape is resulting in heightened need for planet services. This.

Well Marshalls: This builds on the increased awareness of the significant value of satellites has grown since the start of the war in Ukraine.

Well Marshalls: Overall, we are seeing unprecedented interest in our solutions, we see planet as a reliable and trusted partner to our domestic and international customers during such times of global change. So as I turned to sales highlights I'll start with the defense and intelligence sector, which was once again the key growth driver for the business this quarter.

Will Marshall: So as I turn to sales highlights, I'll start with the defense and intelligence sector, which was once again the key growth driver for the business this quarter. Revenue from the DNI sector grew over 20% year-over-year during Q1, driven by strong performance with our core data and solutions business, as well as our satellite services contract with JSAP. During the quarter, Planet was awarded an eight-figure ACV expansion contract by a European Defense and Intelligence customer for Planetscope data and our Maritime Domain Awareness solution. This relationship expanded rapidly, progressing from a pilot last year to an eight-figure operational contract.

Well Marshalls: Revenue from the DNI sector grew over 20% year over year during Q1, driven by strong performance with our core data and solutions business as well as our satellite services contract with Jason.

Well Marshalls: During the quarter planet was awarded an eight figure ACB expansion contract by a European defense and intelligence customers with planet script data and our maritime domain awareness solution. This relationship expanded rapidly progressing from a pilot last year to an eight figure operational contract.

Will Marshall: As a reminder, our Maritime solution is a high-frequency, broad-area solution with partner-enabled analytics for vessel identification and classification, enabling customers to monitor large areas of open ocean for mission-critical situation awareness. Similarly, we won a seven-figure ACV expansion to provide MDA to one of our long-term customers, expanding their monitoring capability with Planet from land to sea. More broadly, we continue to see robust demand for downstream products that embed our capabilities into customers operations, enhance situation awareness, and support informed decision making.

Well Marshalls: As a reminder, our maritime solution is a high frequency board area solution with partner enabled analytics for vessel identification and classification and enabling customers to monitor large areas of open ocean from mission critical situation awareness.

Well Marshalls: Similarly, we won a seven figure ACB expansion to provide MDA to one of our longtime customers expanding them monitoring capability with tenet from land to sea.

Well Marshalls: More importantly, we continue to see robust demand for downstream products to embed our capabilities into customers' operations enhance situation awareness and support informed decision making.

Will Marshall: This quarter's wins are two of many proof points supporting the scale of this opportunity.

Well Marshalls: This quarter's wins are two of many proof points supporting the scale of this opportunity.

Will Marshall: Turning to the civil government sector, where first-quarter revenue was down year-over-year, largely due to the expiration of our NICFI contract. We continue to see significant growth opportunity here, and to share a few recent highlights, in March we announced that we've been selected as the primary subcontract for the California Air Resources Board's Satellite Data Purchase Program, SDPP. The $95 million contract was awarded to our partner, CarbonMapper, and is centered on providing the state of California with methane data built upon tanner-to-hyperspectral collections, as well as other data products. This three year plus program marks the first major purchase of Tanager data by a customer outside of the Carbon Matter Consortium itself.

Well Marshalls: Tennessee that civil government sector, where first quarter revenue was down year over year, largely due to the exploration of Nick fee contract.

Well Marshalls: We continue to see significant growth opportunity here and to share a few recent highlights.

Well Marshalls: March we announced that we have been selected as the primary subcontracts for the California Air Resources Board satellite data purchase program SDP.

Well Marshalls: The $95 million contract was awarded to our partner carbon matter and are centered on providing the state of California with methane data built upon tonnage of hyper spectral collection as well as other data products.

Well Marshalls: This three year plus program marks the first major purchase of tonnage of data by a customer outside of the carbon macro consortium itself. It demonstrates the market potential within civil government for large scale automated environmental monitoring.

Will Marshall: It demonstrates the market potential within civil government for large scale automated environmental monitoring.

Will Marshall: This approach can be expanded to other government customers around the world. Last month we announced an expansion of our seven-figure countrywide contract with the German government entity BKG, which now includes insights from Planetary Variables, water monitoring services from Planet's partner EOMAP, and access to Planet's Insights platform. The data will be used to monitor water, forest, agriculture, socioeconomics, and land use, as well as to support the federal monitoring campaigns and environmental assessments. During Q1, we also expanded our business with the Welsh Government to help inform agricultural policy and natural resource management. Using our high-cadence satellite imagery, historical archive, and tasking capabilities, the Welsh Government is deriving data-informed management plans for agricultural efficiency, water and land use change, and emergency response.

Well Marshalls: This approach can be expanded to other government customers around the world.

Well Marshalls: Last month, we announced an expansion of our seven figure countrywide contract with the German government entity BK G, which now includes insights from planetary variables water monitoring services from Hans partner ear map and access the planets insights platform.

Well Marshalls: The data will be used to monitor water for agriculture, socioeconomics and land use as well as the support the federal monitoring campaigns and environmental assessments.

Well Marshalls: During Q1, we also expanded our business with the Welsh government to help inform agricultural policy and natural resource management.

Well Marshalls: Using a high cadence satellite imagery historical archive and tasking capabilities. The Welsh government is deriving data informed management plans for agricultural efficiency water and land use change and emergency response.

Will Marshall: Shifting finally to the commercial sector, where revenue was up slightly year over year, where we continue to see signs of more stable performance despite quarter-to-quarter variability.

Well Marshalls: Shifting finally to the commercial sector, where revenue was up slightly year over year, where we continue to see signs of more stable performance despite quarter to quarter variability to.

Will Marshall: To share a highlight, we recently signed a multi-year expansion with Onyx, an outdoor digital navigation company, to inform their suite of recreation applications with PlanetScope products. With Planet satellite data, the apps enable users to stay informed about conditions in remote areas as they plan outdoor pursuits.

Well Marshalls: Sure I'll highlight we recently signed a multiyear expansion with on X and outdoor digital navigation company to inform their suite of recreation applications with planet scope products with planet satellite data. The apps enable uses the same informed about conditions areas as they plan outdoor pursuits.

Will Marshall: Next, onto our nascent satellite services offerings.

Well Marshalls: Next onto our nascent satellite services offering.

Will Marshall: Firstly, our team is executing well on the JSEC contract. Secondly, as mentioned last time, we're pursuing a handful of highly strategic deals, each significant in scale. And I'm pleased to report that we saw very solid progress with multiple prospects during the quarter.

Well Marshalls: Firstly, our team is executing well on the chase that contract.

Well Marshalls: Secondly, as mentioned last time, we are pursuing a handful of highly strategic deals.

Well Marshalls: Significant in scale and I'm pleased to report that we saw very solid progress with multiple prospects during the quarter.

Will Marshall: These deals are win-wins, providing sovereign satellite services to our customers and accelerating and funding the development of our new fleet. Furthermore, the California FTPP award showcases how a set of satellites initially funded through satellite services can drive incremental data business.

Well Marshalls: These deals are win wins, providing suffering satellite services to our customers and accelerating and funding the development of our new fleets.

Well Marshalls: The more the California, STP Peep award showcases how our set of satellites initially funded through satellite services can drive incremental data business.

Will Marshall: Turn into product updates, starting on the platform side. We recently streamlined our self-service purchasing offering for small customers to make it easier to get started with the Planet Insights platform. This supports Planet's strategy to support small customers efficiently with a flexible and scalable model that grows with their operations.

Well Marshalls: Turning to product updates starting on the platform side.

Well Marshalls: We recently streamlined our self service purchasing offering for small customers to make it easy to get started with the planet insights platform.

Well Marshalls: This supports planet strategies to support small customers efficiently with a flexible and scalable model that grows with that operation.

Will Marshall: For our larger customers, the platform delivers time series solutions and insights that become embedded into their workflows, which is key to expanding our addressable market with customers who haven't traditionally used geospatial data. We also released our new aircraft detection analytic feed, which automates detection of aircraft, including commercial, private and military around the world. By combining advancements in artificial intelligence with planet's high frequency scan of the Earth, we're able to offer this product at a global scale, aiming to help users analyze patterns of life and anomalous geopolitical behavior. This presents a massive and unprecedented capability for analysts, with or without geospatial expertise.

Well Marshalls: For our larger customers the platform delivers the time series solutions and insights that become embedded into their workflows, which is key to expanding our addressable market with customers, who haven't traditionally use geospatial data.

Well Marshalls: We also released a new and cost detection analytic feed which automates detection of aircraft, including commercial private and military around the world.

Well Marshalls: By combining advancements in artificial intelligence with planets high frequency scanner, we're able to offer this product at a global scale aiming to help users analyze patents of life, an anomaly anomalous geopolitical behavior.

Well Marshalls: This presents a massive and unprecedented capability of analysts with or without geospatial expertise.

Will Marshall: On the space system side, Tanger 1, which we launched last year, is servicing a number of early customers across energy, defense, civil government, and agricultural markets. Our space systems team has rapidly progressed the satellite's operational maturity, expanding the satellite's imagery capacity to bring down approximately 300,000 square kilometers per day via hundreds of collections. We're not only extremely pleased with the quality of data and the insights being derived from Tanger 1, but also with early wins showing momentum and indicative of our demand for this new capability in the market.

Well Marshalls: On the space systems side tonnage of one which we launched last year is servicing a number of early customers across energy defense civil government and agricultural markets.

Well Marshalls: <unk> team has rapidly progressed the satellites operational maturity expanding our satellite imaging capacity to bring down approximately 300000 square kilometers per day via hundreds of collections.

Well Marshalls: But not only extremely pleased with the quality of data and insights derived from tonnage one but also with early wins, saying momentum and indicative of demand for this new capability in the market. Meanwhile, Pelican too, which we launched in January is continuing to perform very well we've completed our commissioning process fully validated the payload in optics and began providing.

Will Marshall: Meanwhile, Pelican 2, which we launched in January, is continuing to perform very well. We've completed our commissioning process, fully validated the payload and optics, and begun providing data to select customers. Between our first two Pelican satellites and our Tanager 1 satellite, we now have over two and a half years of on-orbit experience of our small sat platform, the modular spacecraft architecture which is shared between the two fleets. These on-orbit technology demonstrations have provided us with critical learnings as we develop this technology and prepare to launch operational fleets. As a reminder, we plan to have multiple Pelican launches this year.

Well Marshalls: Data to select customers.

Well Marshalls: Between our first two pelican satellites and our tenants are ones that line. We now have over two and a half years of on all the experience of our small sat platform. The modular space got architecture, which is shared between the two fleets.

Well Marshalls: Just on OLED technology demonstrations have provided us with critical learnings as we develop this technology and prepare to launch operational fleets. As a reminder, we plan to have multiple pelican launches. This year. We're also working on additional pelicans for partner J, Sam which are expected to begin launching in calendar 2027.

Will Marshall: We're also working on additional Pelicans for our partner JSAF, which are expected to begin launching in calendar 2027.

Will Marshall: I'd like to take a moment to commend our global sales, product, and space systems organizations on a phenomenal quarter and thank them for their hard work winning and delivering for our customers. Overall, our first quarter performance validates our strategic direction, relentless customer focus, and disciplined execution.

Well Marshalls: I'd like to take a moment to commend our global sales product and space systems organizations on a phenomenal quarter and thanking them for their hard work, winning and delivering for our customers.

Well Marshalls: Overall, our first quarter performance validates, our strategic direction relentless customer focus and disciplined execution.

Will Marshall: Looking ahead, we are going to continue to aggressively execute on our two key initiatives. One, delivering integrated global insights via AI-enabled solutions, and two, rapidly expanding our satellite services offering. Both are seeing strong traction, and our endgame is clear, to establish Planet as the undisputed market leader for monitoring the physical world at a global scale.

Well Marshalls: Looking ahead, we are going to continue to aggressively execute on our two key initiatives one delivering integrated global influenced by AI enabled solutions and to rapidly expanding our satellite services offering both are seeing strong traction.

Well Marshalls: On our end game is clear to establish China as the undisputed market leader for monitoring the physical world at a global scale.

Ashley Johnson: With that, I'll turn it over to Ashley to discuss our financials. Over to you, Ashley. Thanks, Will. As Will highlighted, Q1 was an excellent start to the year with record revenue and our second quarter of delivering adjusted EBITDA profits. Revenue for the first quarter came in at $66.3 million, representing approximately 10% year-over-year growth. This strong quarter was primarily driven by key wins with our defense and intelligence customers, higher than expected usage by some of our government accounts, and steady progress across our new JSAT contract. During the first quarter, our defense and intelligence sector revenue grew over 20% year-on-year.

Well Marshalls: With that I'll turn it over to Ashley to discuss our financials over to ash. Thanks.

Ashley Johnson: Thanks will.

Speaker Change: As well highlighted Q1 was an excellent start to the year with record revenue in our second quarter of delivering adjusted EBITDA profits.

Speaker Change: Revenue for the first quarter came in at $66 $3 million, representing approximately 10% year over year growth.

Speaker Change: The strong quarter was primarily driven by key wins with our defense and intelligence customers higher than expected usage by some of our government accounts and steady progress across our new GSA contract.

Speaker Change: During the first quarter, our defense and intelligence sector revenue grew over 20% year on year. The commercial sector was flat year on year and civil government revenue was down year on year impacted primarily by the end of our contract with Norway. Further next day program the.

Ashley Johnson: The commercial sector was flat year-on-year, and civil government revenue was down year-on-year, impacted primarily by the end of our contract with Norway for their NICFE program. The commercial sector has continued to show signs of stabilization since the trough in Q1 of Fiscal 25. The quarter-on-quarter step-down in revenue within the commercial sector was largely attributable to the previously discussed final adjustments for a couple of our larger agricultural contracts in Q4.

Speaker Change: The commercial sector has continued to show signs of stabilization since the trough in Q1 of fiscal 'twenty five.

Speaker Change: Quarter on quarter step down in revenue within the commercial sector was largely attributable to the previously discussed final adjustments for a couple of our larger agricultural contracts in Q4.

Ashley Johnson: Switching to our regional revenue breakdown, for the first quarter, revenue grew more than 30% year-over-year in both EMEA and Asia Pacific, while North America and Latin American revenue were down year-over-year. North America was impacted primarily by the aforementioned agricultural impact.

Speaker Change: Switching to our regional revenue breakdown for the first quarter revenue grew more than 30% year over year in both EMEA and Asia Pacific, While North America, and Latin American revenue were down year over year.

Speaker Change: North America was impacted primarily by the aforementioned agricultural impacts.

Ashley Johnson: As of the end of Q1, our end-of-period customer count was 919 customers, lower on a sequential basis reflecting our direct sales team's focus on large customers in our core verticals and our shift to serving smaller customers via the Planet Insights Platform. As a reminder, Planet Insights Platform customers are not included in our end-of-period customer count. We saw overall revenue growth in spite of the decline in customer account and thus a solid increase in average revenue per customer as a positive indicator that our sales team's focus on landing and expanding high-value accounts is yielding results.

Speaker Change: As of the end of Q1, our end of period customer count was 919 customers lower on a sequential basis, reflecting our direct sales teams focus on large customers in our core verticals and our shift to serving smaller customers via the planet insights platform.

Speaker Change: As a reminder, planet insights platform customers are not included in our end of period customer count.

Speaker Change: We saw overall revenue growth in spite of the decline in customer count and Thats, a solid increase in average revenue per customer as a positive indicator that our sales teams focused on landing and expanding high value accounts is yielding results.

Ashley Johnson: As we shift to some of our ACV metrics, I want to remind you that the JSAT multiyear satellite services contract is not included in our ACV metrics, although it is included in our RPOs and backlog, which we'll discuss in a moment. Recurring ACV was 97% of our end-of-period ACV book of business, reflecting our continued focus on selling subscription data contracts and solutions, as opposed to one time professional or engineering services. Over 90% of our end-of-period ACV book of business consists of annual or multi-year contracts. Our average contract length continues to be approximately two years weighted on an ACV basis.

Speaker Change: As we shifted some of our ACB metrics I want to remind you that the Jason multiyear satellite services contract is not included in our ACB metrics. Although it is included in our Rps and backlog, which we'll discuss in a moment.

Speaker Change: Recurring ACB was 97% of our end of period ACB book of business, reflecting our continued focus on selling subscription data contracts and solutions as opposed to one time professional engineering services.

Speaker Change: Over 90% of our end of period <unk> book of business consists of annual or multi year contracts.

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

Ashley Johnson: Net dollar retention rate at the end of Q1 was 103%, and net dollar retention rate with windbacks was 104%.

Speaker Change: Net dollar retention rate at the end of Q1 was 103% and net dollar retention rate with win backs was 104%.

Ashley Johnson: Turning to gross margin, non-GAAP gross margin for the first quarter was 59 percent, compared to 55 percent in the first quarter of fiscal 25, demonstrating improvement year over year.

Speaker Change: Turning to gross margin non-GAAP gross margin for the first quarter was 59% compared to 55% in the first quarter of fiscal 'twenty five.

Speaker Change: Demonstrating improvement year over year.

Ashley Johnson: On a sequential basis, we saw an increase in cost of revenue attributable to depreciation from our satellites, costs related to partner solutions, and costs associated with our new satellite services contract with JSAT. Adjusted EBITDA profit was $1.2 million for Q1, better than expected, primarily driven by revenue outperformance in the quarter and disciplined OPEC spend. Capital expenditures in Q1, which include our capitalized software development, were approximately $9.3 million.

Speaker Change: On a sequential basis, we saw an increase in cost of revenue attributable to depreciation from our satellites costs related to partner solutions and costs associated with our new satellite services contract with Jason.

Speaker Change: Adjusted EBITDA profit was $1 2 million for Q1 better than expected, primarily driven by revenue outperformance in the quarter and disciplined opex spend.

Speaker Change: Capital expenditures in Q1, which include our capitalized software development were approximately $9 $3 million. This was lower than expected driven largely by the timing of certain launch payments and procurements for Pelican and <unk> satellites.

Ashley Johnson: This was lower than expected, driven largely by the timing of certain launch payments and procurements for Pelican and Tanager satellites. We expect to see these expenses catch up in Q2, which is reflected in our guidance. As a reminder, we're currently in a growth capex investment cycle as we build out our next generation fleets to capture the market opportunity we see for planet.

Speaker Change: We expect to see these expenses catch up in Q2, which is reflected in our guidance.

Speaker Change: As a reminder, we are currently in a growth capex investment cycle as we build out our next generation fleets to capture the market opportunity we see for planet.

Ashley Johnson: Turning to the balance sheet, we ended the quarter with approximately $226.1 million of cash, cash equivalents and short-term investments, an increase of approximately $4 million sequentially.

Speaker Change: Turning to the balance sheet, we ended the quarter with approximately $226 1 million of cash cash equivalents and short term investments an increase of approximately $4 million sequentially.

Ashley Johnson: During the quarter, we generated approximately $17.3 million in net cash from operating activities and $8 million in free cash flow, which marks our first quarter of positive free cash flow as a public company, a significant milestone for Planet's employees and shareholders. The strong performance in the quarter reinforces our expectation for full-year cash burn to be under half of what it was in fiscal 25. While we expect cash flow to vary quarter-to-quarter, the milestone we reached in Q1 demonstrates excellent progress for the business.

Speaker Change: During the quarter, we generated approximately $17 $3 million in net cash from operating activities and $8 million in free cash flow, which marks our first quarter of positive free cash flow as a public company a significant milestone for <unk> employees and shareholders.

Speaker Change: The strong performance in the quarter reinforces our expectation for full year cash burn to be under half of what it was in fiscal 'twenty five.

Speaker Change: We expect cash flow to vary quarter to quarter. The milestone we reached in Q1 demonstrates excellent progress for the business. Our focus remains on managing the business to enable sustainable cash flow generation through efficient growth across our data solutions and satellite services revenue streams.

Ashley Johnson: Our focus remains on managing the business to enable sustainable cash flow generation through efficient growth across our data, solutions, and satellite services revenue streams. At the end of Q1, our remaining Performance Obligations, or RPOs, were approximately $451.9 million, up 262% year-over-year, of which approximately 45% applied to the next 12 months and 76% to the next 24 months.

Speaker Change: At the end of Q1, our remaining performance obligations or Rps were approximately $451 $9 million up 262% year over year of which approximately 45% applied to the next 12 months and 76% to the next 24 months.

Ashley Johnson: We estimate 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, to be approximately $527 million, up 140% year over year. Approximately 45% of our backlog applies to the next 12 months and 76% to the next 2 years.

Speaker Change: We estimate 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 to be approximately $527 million up 140% year over year.

Speaker Change: Approximately 45% of our backlog applies to the next 12 months and 76% to the next two years.

Ashley Johnson: We believe this backlog provides us with good visibility to meaningful growth rate acceleration into fiscal 27.

Speaker Change: We believe this backlog provides us with good visibility to meaningful growth rate acceleration into fiscal 2007.

Ashley Johnson: Let me turn now to our guidance for the second quarter and full year for fiscal 2026. In Q2, we're expecting revenue to be between $65 and $67 million. Underlying this guidance is an assumption that the strong usage by some of our customers in Q1 returns to normalized levels in Q2.

Speaker Change: Let me turn now to our guidance for the second quarter and full year for fiscal 2026.

Speaker Change: In Q2, we're expecting revenue to be between 65% and $67 million.

Speaker Change: Underlying this guidance is an assumption that the strong usage by some of our customers in Q1 returns to normalized levels in Q2.

Ashley Johnson: We expect non-gap gross margin for the quarter to be between 56 and 57 percent, and we expect our adjusted EBITDA loss for the second quarter to be between minus four and minus two million dollars, 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. We are planning for capital expenditures of approximately $17 million to $22 million in Q2, reflecting the catch-up of capital investments that we expected to see in Q1.

Speaker Change: We expect non-GAAP gross margin for the quarter to be between 56, and 57% and we expect our adjusted EBITDA loss for the second quarter to be between minus four 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.

Speaker Change: Our growth initiatives.

Speaker Change: We are planning for capital expenditures of approximately 17 million to $22 million in Q2, reflecting the catch up of capital investments that we expected to see in Q1.

Ashley Johnson: Our full year expectations for CAPEX have not changed.

Speaker Change: Our full year expectations for Capex have not changed.

Ashley Johnson: For the full fiscal year 2026, we expect revenue to be between $265 and $280 million. We are pulling up the lower end of our guidance range to reflect our improved outlook while recognizing that we remain in an environment with multiple geopolitical and economic uncertainties. We're confident in our ability to execute, and we see multiple potential sources of upside for our revenue.

Speaker Change: For the full fiscal year 2026, we expect revenue to be between 265 and $280 million.

Speaker Change: We are pulling up the lower end of our guidance range to reflect our improved outlook, while recognizing that we remain in an environment with multiple geopolitical and economic uncertainties. We're.

Speaker Change: We're confident in our ability to execute and we see multiple potential sources of upside for our revenue.

Ashley Johnson: We expect non-GAAP gross margin for fiscal 2026 to be between 55 to 57 percent, unchanged from the guidance provided on our prior call.

Speaker Change: We expect non-GAAP gross margin for fiscal 2026 to be between 55% to 57% unchanged from the guidance provided on our prior call.

Ashley Johnson: We expect our adjusted EBITDA loss for fiscal 2026 to be in a range of minus 12 to minus $7 million, reflecting the investments we're making in downstream solutions and our space systems capabilities. We're planning for capital expenditures of approximately $50 to $65 million for the year, unchanged from our prior call.

Speaker Change: We expect our adjusted EBITDA loss for fiscal 2026 to be in a range of minus 12 to minus $7 million, reflecting the investments, we're making in downstream solutions and our space systems capabilities.

Speaker Change: We're planning for capital expenditures of approximately $50 million to $65 million for the year unchanged from our prior call.

Ashley Johnson: To summarize, I'm incredibly proud of the execution and operational focus of our teams across planet. We're making a strategic shift toward downstream solutions, which is being validated with significant customer wins and demand signals. This isn't merely a product enhancement.

Speaker Change: To summarize I'm incredibly proud of the execution and operational focus of our teams across the planet, we're making a strategic shift toward downstream solutions, which is being validated with significant customer wins and demand signals there.

Speaker Change: This isn't merely a product enhancement. This is a strategic maneuver designed to cross the chasm to capture the early majority of customers and establish a market leading position in our key target markets.

Ashley Johnson: This is a strategic maneuver designed across the chasm to capture the early majority of customers and establish a market leading position in our key target market.

Ashley Johnson: Furthermore, our innovative satellite services model, as demonstrated with JSAT, represents a fundamental re-architecting of how we fund and monetize our next generation fleet. This approach isn't just about technology. It's about aligning our offerings with a strong market demand, thereby ensuring we capture the value we create and deliver compelling returns as we scale.

Speaker Change: Furthermore, our innovative satellite services model as demonstrated with Jason that represents a fundamental re architected of how we fund and monetize our next generation fleets.

Speaker Change: This approach isn't just about technology, it's about aligning our offerings with a strong market demand, thereby ensuring we capture the value we create and deliver compelling returns as we scale.

Operator: Operator, that concludes our comments, we can now take questions. We will now begin the question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. If for any reason you would like to remove that question, please press star 2. Again, to ask a question, please press star 1. And as a reminder, if you are using a speakerphone, please remember to pick up your handset before asking a question. And due to the interest of time during this Q&A session, please limit your questions to one question. Again, due to the interest of time during the Q&A session, please limit your questions to one question.

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

Speaker Change: We will now begin the question and answer session. If you would like to ask a question. Please press star one on your telephone keypad. If for any reason you would like to remove that question. Please press star two again to ask a question. Please press star one and as a reminder, if you were using a speaker phone.

Speaker Change: Please remember to pick up your handset before asking a question.

Speaker Change: Due to the interest of time during this Q&A session. Please limit your questions to one question again due to the interest of time during the Q&A session. Please limit your questions to one question.

Operator: And we will pause here briefly as questions are registered.

Speaker Change: And we will pause briefly as questions are registered.

Edison Yu: And the first question is from the line of Edison Yu with Deutsche Bank, you may proceed. Hi, thank you. Thank you for taking our questions.

Speaker Change: And the first question is from the line of Edison <unk> with Deutsche Bank You May proceed.

Speaker Change: Okay.

Speaker Change: Alright. Thank you. Thank you for taking our questions.

Edison Yu: Wanted to ask about AI. And I know it's a pretty kind of loaded term there. But it's been about three months, I think, since you signed that agreement with Anthropic or partnership with Anthropic. And I'm wondering if you could talk about what you've kind of discussed with them so far. And in particular, about maybe the amount of data that you would really need to kind of ingest into LLM and also the diversity of data you would need. Is it enough just to have the Planet Archive or PlanScope? Do you need to include either SAR or other types of data to make it useful?

Speaker Change: I wanted to ask about <unk>.

Speaker Change: And I know.

Speaker Change: It's a pretty kind of.

Speaker Change: A loaded term there, but it's been about three months I think since you signed that great place anthropic or partnership, but that's opex and.

Speaker Change: And I'm wondering if you could talk about what you kind of discussed with them so far and in particular about the maybe the amount of data that you would really need to kind of inject into.

Speaker Change: And also the diversity of data you would need is it enough just to have the planet archive or client scope do you need.

Speaker Change: To include.

Speaker Change: Either.

Speaker Change: Our or other types of okay to make you. So just curious kind of how those discussions are going.

Edison Yu: Just curious how those discussions are going and about the quantity and diversity of data required.

Speaker Change: The quality and diversity of data required thanks, yes.

Will Marshall: Yeah, good questions. Overall, we're very excited by how these sort of developments of foundation models can speed time to value for our customers and expand usability. The specific partnership with Anthropic is primarily focused on fine-tuning their models on our data.

Speaker Change: Yes, good questions.

Speaker Change: Overall.

Speaker Change: We were very excited about how the sort of developments of foundation models can speed time to value for our customers and expand usability.

Speaker Change: The specific partnership with Entropic is primarily focused on fine tuning the models on our data.

Will Marshall: And exactly the point you're making there, the data that those models have had access to thus far is primarily whatever they've scraped from the internet, which is very limited satellite data. So exposing them to more satellite data can, or the instinct is, should help improve accuracy of those models in doing questions on our data.

Speaker Change: Exactly the point, you're making there.

Speaker Change: The data that those models have had access to thus far as primary whatever they escape from the Internet, which is very limited satellite data so exposing them to more satellite data Ken can or the instinct is should help improve accuracy of those models in doing questions on on our data. So we also.

Will Marshall: So we also are partnering with Google and others, and so it's not limited to them, but we think exploration with these sort of companies is good. So it's both in our core products, that is to say, and enabling us to speed time to value and ease usability that enables accessibility for more users and therefore expands our market potential. So it's very exciting on all fronts, and we're continuing to push in both of those ways.

Speaker Change: Partnering with Google and others, and so it's not limited to them, but we think its exploration with the service companies is good.

Speaker Change: Thats separate and in addition to the core of what we're doing with AI on top of.

Speaker Change: Many solutions.

Speaker Change: The contract that.

Speaker Change: We announced with a European government includes NDA solution that involves AI.

Speaker Change: I think things like identifying chips and identifying ship activity like kind of shipments and other things or leveraging AI and so it was both in our core products that is to say and enabling us to speed time to value.

Speaker Change: He's usability nabors accessibility for more used and therefore expand our market potential. So it's very exciting on own funds and we're continuing to push.

Speaker Change: That's right.

Colin Canfield: The next question is from the line of Colin Canfield. The next question is from the line of Colin Canfield with Kentsworth Fitzgerald, you may proceed.

Speaker Change: The next question is from the line of carbon Ken for you.

Speaker Change: Yeah.

Speaker Change: The next question is from the line of Colin Canfield with Cantor Fitzgerald you May proceed.

Colin Canfield: Thank you. Maybe talking to the pre-cash flow building blocks, half of 25 suggests maybe about $30 million of pre-cash flow burden this year. So as we think through the EBITDA guidance and the CAPEX guide, that's just maybe call it $30 to $40 million of working capital benefits.

Colin Canfield: Great. Thank you maybe talking to the free cash flow building blocks.

Speaker Change: So it's 25 suggests maybe about 30 million of free cash flow burn this year. So as we think through the EBIT guidance on the Capex side Thats just maybe.

Speaker Change: At $30 million to $40 million of working capital benefit. So I think it's a two part question. One is how do we think about that working capital unwind over a multi year period and the second part of that question is how do we think about the cash terms of the pipeline of deals that handful of deals that you talked about that are similar to Jason. Thank you.

Colin Canfield: So I think it's a two-pronged question. One is, how do we think about that working capital unwind over a multi-year period? And the second part of that question is, how do we think about the cash terms of the pipeline of deals, that handful of deals that you talked about that are similar to JSON?

Will Marshall: Thank you.

Speaker Change: Yeah.

Will Marshall: Yes, thank you for the question. Obviously, we were very excited to post our first quarter of free cash flow positivity in Q1, and it's a great milestone for the company. And as I think your question is really pointing to, working capital can be lumpy quarter to quarter, especially since we are working with such big contracts, you know, signing eight-figure contracts in addition to, you know, contracts like the JSAT satellite services contract, just means that the timing of those payments will cause quarter to quarter working capital to look different. That, in combination with the fact that some of our CapEx activity, building and launching satellites, satellites can cause that investment capital to vary quarter to quarter.

Speaker Change: Yes. Thank you for the question. Obviously, we were very excited to post our first quarter of free cash flow positivity in Q1, and it's a great milestone for the company.

Speaker Change: And as I think your question is really pointing to working capital and can be lumpy quarter to quarter.

Speaker Change: And especially since we are working with the state contracts.

Speaker Change: Signing eight figure contract.

Speaker Change: In addition to.

Speaker Change: Contracts like the <unk>.

Speaker Change: Hum.

Speaker Change: Satellite services contract just means that the timing of those payments will cause <unk>.

Speaker Change: For the quarter working capital to look different that in combination with the fact that some of our capex activity building and launching satellites and satellites can cause that investment capital to vary quarter to quarter.

Will Marshall: We're very focused on one, you know, operating the business with a path to EBITDA profitability as well as sustainable free cash flow profits. As I mentioned last quarter, we see a path to sustainable free cash flow generation in the next 24 months. And really what we're looking at is all the places where we can invest in growth, but do so in a very both capital efficient way and a way that sets us up to operate a high margin business that's self-sustaining.

Speaker Change: And we're very focused on one.

Speaker Change: Operating the business with.

Speaker Change: With a path to EBITDA profitability as well as sustainable free cash flow profits.

Speaker Change: As I mentioned last quarter, we see a path to sustainable free cash flow generation in the next 24 months and really what we're looking at is all the places where we can invest in growth, but do so in a very capital efficient way in a way that sets us up to to operate a high margin business itself the statement.

Speaker Change: Yeah.

Michael Latimore: The next question is from the line of Michael Latimore with Northland. You may proceed. All right, great. Yeah, congrats on the excellent results here. In terms of just the strong sequential growth in the quarter, can you elaborate a little bit on what drove that? I think you called out some usage, maybe among current customers, just a little more detail would be great. And then, Will, you talked about sort of seeing unprecedented demand. I mean, you know, kind of at this point, can you parse that a little bit? Is it just broad based? Or are there a couple areas that really stand out?

Speaker Change: The next question is from the line of Michael Latimore with Northland You May proceed.

Speaker Change: Alright, great and yes, congrats on the excellent results here.

Speaker Change: In terms of just the strong sequential growth in the quarter can you elaborate a little bit on what drove that I think you called out some usage may be among current customers just Walmart detail would be great and then will.

Speaker Change: Will you talked about sort of seeing unprecedented demand.

Speaker Change: Yes.

Speaker Change: Kind of at this point can you parse out a little bit.

Speaker Change: This broad based or are there a couple of areas that really stand out.

Ashley Johnson: Yeah, I'll take the first part of your question and let Will address the second. In terms of Q1 revenue outperformance, it was really across multiple vectors. So one, just the sales team really having an excellent quarter. I mentioned, you know, or we mentioned in the prepared remarks specifically, an eight-figure contract win, which was really exciting and helped drive some of the revenue upside in the quarter. In addition, you know, obviously, we work very closely with our customers to really drive that engagement with our data, which can drive usage rates up. And so that drove some of the outperformance in the quarter.

Speaker Change: Yeah I'll take the first part of your question.

Speaker Change: Address the second.

Speaker Change: In terms of Q1 revenue outperformance.

Speaker Change: It was really across multiple vectors. So one just the sales team really having an excellent quarter and mentioned.

Speaker Change: Or we mentioned in the prepared remarks, specifically in <unk>.

Speaker Change: Our contract win.

Speaker Change: What's really exciting and and helped drive some of the revenue upside in the quarter. In addition.

Speaker Change: Obviously, we work very closely with our customers to really drive that that engagement with our data, which can drive usage rates up and so that drove some of the outperformance in the quarter and then finally and great progress on the <unk> contract and just hitting getting off to a strong start with hitting milestones. So it was.

Ashley Johnson: And then finally, great progress on the JSAT contract and just, you know, hitting, getting off to a strong start with hitting milestones. So it was really across multiple vectors that drove the outperformance in Q1.

Speaker Change: It was really across multiple vectors that drove the outperformance in Q1.

Will Marshall: And just to the demand point, yeah, we're seeing really strong demand in the core data capabilities, as well as for our nascent satellite services opportunities. And so I think what's happening in there is that the changing political landscape is a heightening need for security. I mean, I mentioned my trip to Europe and, you know, visited a bunch of capitals over there.

Speaker Change: And just to the demand point, yes, we are seeing really strong demand in the core.

Speaker Change: Data capabilities as well as for nice.

Speaker Change: Nathan satellite services.

Speaker Change: Opportunities in so.

Speaker Change: I think what's happening in the changing political landscape.

Speaker Change: Is heightening need for security I mean, I mentioned my trip to Europe.

Speaker Change: <unk> visited a bunch of capital over there.

Will Marshall: And, you know, frankly, I've never seen the urgency that I have felt on that trip from countries for both of those kinds of data and satellite services needs. And I think, you know, that's them realizing they need to strengthen themselves and get their own capabilities. And that's not just applicable to Europe. We're feeling it in Asia as well, for example.

Speaker Change: Frankly, I have never seen the urgency that I have felt on that chip from countries for both of those kinds of data and satellite services.

Speaker Change: And I think that's been realizing they need to San Fran and get their own capabilities.

Speaker Change: And that's not just applicable to Europe were feeling in Asia as well for example, and so yes I think that's all speaks to the point that we were hinting at last time.

Will Marshall: And so, yeah, I think, you know, that all speaks to the point that we were, you know, hinting at last time that there's opportunities and risks to this new changing environment, but the opportunities for planet are pretty strongly outweighing the risks. And in fact, you know, my trips to both D.C. and to Europe reinforced that.

Speaker Change: There's opportunities and risks this new changing environment.

Speaker Change: The opportunities for planning a pretty strongly outweigh the risks and in fact my trips to both DC.

Speaker Change: So Europe reinforce that.

Speaker Change: Okay.

Jeff Van Ree: The next question is from the line of Jeff Van Ree with Craig Hallam. You may proceed. Great. Thanks, Sal and Mike. Congratulations. The real nice quarters.

Speaker Change: The next question is from the line of Jeff Van <unk> with Craig Hallum. You May proceed.

Jeff Van: Great. Thanks, I'll add my congratulations.

Speaker Change: Real nice quarter.

Will Marshall: I guess one question, two parts here, but the European maritime deals, Will, just talk to those deals. I mean, it's great. It sounds like those have really broken open. How repeatable are those? What really broke them open now? What does the pipeline look like there?

Speaker Change: I guess one question two parts here, but the European Maritime deals, we'll just talk to those deals aren't as great. It sounds like those are really broken open how repeatable are those what is what really broke them open now what does the pipeline look like there and then the second part is just from a civil DNI and commercial break down when you look at the pipeline how do you see each of those sectors behaving over the.

Will Marshall: And then the second part is just from a civil DNI and commercial breakdown, when you look at the pipeline, how do you see each of those sectors behaving over the next several quarters in terms of year of year growth? Yeah, I mean, on the maritime domain awareness solution piece, I mean, we have a real solution there. And that is enabling that strong offering is enabling partners to really rely on that government. And, and then that's coupled with the political piece that I just mentioned, which is driving urgency. I mean, it's what it's doing is, it's, I mean, we're seeing a strategic shift in Europe, which needs our kinds of capability, needs more security.

Speaker Change: Next several quarters in terms of.

Speaker Change: Year over year growth.

Speaker Change: Yes.

Speaker Change: The maritime domain awareness solution piece I mean, we have a real solution there and that is enabling.

Speaker Change: That strong offering is enabling us to really rely on that.

Speaker Change: Governments, and then that coupled with the political piece that I, just mentioned, which is driving urgency.

Speaker Change: Doing is.

Speaker Change: I mean, we are seeing a strategic shift in Europe, which needs kinds of needs more security and.

Ashley Johnson: And, you know, people look at the changing way in which these new technologies play into security as they have in Ukraine, drones and satellites and AI, and they realizing that they need them. And they need them swiftly. I've never felt that kind of urgency before. So it does say that, and that that helps drive these things a little bit faster. The MDA in particular, is probably because there are both real maritime needs, but also we've got a real full solution there. And so that I think is what has driven that if people want to look out in open water and find shipping activities, and ensure that they can track them.

Speaker Change: People look at the changing way in which these new technologies play into security as they have in Ukraine drones and satellites in AI and they are realizing that they need them.

Speaker Change: They need them swiftly I've never felt that kind of urgency before so it does say that.

Speaker Change: That helps us drive these things a little bit faster.

Speaker Change: The MDA in particular is probably because there are both real maritime needs, but also we've got a real full solution there and so that I think is was.

Speaker Change: Given that people want to look out in open water and find a shipping activities and ensure that they can charge them.

Ashley Johnson: And I can jump in on the question about pipeline, you know, obviously, as Will highlighted, we continue to see strong demand emerging in the D&I sector. I think we've got both compelling solutions and very unique data. And, you know, the changing political environment is just heightening the need for the solutions and the data that we have.

Speaker Change: And I can jump in on the question about pipeline.

Speaker Change: Obviously as well highlighted we continue to see strong demand emerging in the DNI sector. I think we've got the compelling solutions and very unique data and <unk>.

Speaker Change: The changing political environment is just heightening the need for the solutions in the data that we have.

Ashley Johnson: On the civil side, our team's doing a great job of engaging around some key solutions that we have, running workshops to show them how our data can uniquely enable governments to either enforce and execute new policy commitments that they have. For example, the common agricultural policy over in Europe, or do broader based civil opportunities around things like water quality management, environmental monitoring, new building assessment, et cetera, as Will highlighted with the BKG deal that we announced earlier in the quarter.

Speaker Change: On the civil side, our team is doing a great job of engaging around some key solutions that we have running workshops to show them, how our data can uniquely enable governments to either enforce and.

Speaker Change: Execute new policy commitments that they have for example, the common agricultural policy of or in Europe.

Speaker Change: Or do broader based civil.

Speaker Change: Civil opportunities around things like water quality management, environmental monitoring new building assessment et cetera.

Speaker Change: Well, hi highlighted with the <unk> deal that we announced earlier in the quarter. So.

Ashley Johnson: So a lot of strong opportunities on the government front and on the commercial front, as we talked about last year, we've really been refocusing that team over a few key markets where we see the strongest product market fit. I think that refocusing has really enabled our team to see stronger execution and really understand where our AI based solutions are going to enable us to take those markets over the longer term. So it's been a refocusing, but I think is really starting to yield the results as evidenced by the comments we made around stabilization.

Speaker Change: A lot of strong opportunities on the government front and on the commercial front as we talked about last year was really been refocusing that team over a few key markets, where we see the strongest product market fit I think that refocusing has really enabled our team to.

Speaker Change: See stronger execution.

Speaker Change: And really understand where our AI based solutions are going to enable us to take those markets over the longer term. So it's been a been a refocusing, but I think is really starting to yield results as evidenced by the comments we made around the stabilization.

Trevor Walsh: The next question is from the line of Trevor Walsh with Citizens Financial Group. You may proceed. Great. Hey, Ashley and Will, thanks for taking the questions. Just double-clicking a little bit, Ashley, on that last comment you made around the commercial business.

Trevor Walsh: The next question is from the line of Trevor Walsh with citizens Financial Group you May proceed.

Trevor Walsh: Great Hey, Ashley Thanks for taking the questions.

Speaker Change: Just double clicking a little bit actually on that last comment you made around the commercial business. Just curious just given the April and if there was any disruption maybe around deals.

Ashley Johnson: Just curious, just given the April end, if there was any disruptions maybe around deals just in the last few weeks of the quarter with all the things around tariffs and some of the disruptions there, and then kind of as you look forward in that pipeline, is there anything that kind of signals at all any customer uncertainty around demand? Just kind of wrangling with how that affects their own businesses, if that's coming within those key focus areas that you just kind of called. Yeah, to be honest, that isn't something that's that's necessarily been impacting the conversations that we've been engaged with, at least to my knowledge.

Speaker Change: Just in the last few weeks of the quarter with all the things around tariffs and some of the disruptions there and then kind of as you look forward and that pipeline is there anything.

Speaker Change: That signals at all any customer uncertainty around demand just kind of wrangling with how that affects their own businesses.

Speaker Change: Coming coming within those key focus areas that you just kind of called out.

Speaker Change: Yes to be honest that isn't something that's necessarily been impacting the conversations that we've been engaged with at least to my knowledge.

Speaker Change: Obviously.

Ashley Johnson: Obviously, I think that there's a really interesting opportunity for Planet and the solutions that we've been building around global monitoring to ultimately have applicability to things like supply chain and understanding any types of events like these and how they might impact supply chain.

Speaker Change: I think that there is a.

Speaker Change: And really interesting opportunity for our planet and the solutions that we've been building around global monitoring to ultimately have applicability to things like supply chain and understanding any types of events like these and how they might impact supply chain, so I see that as a longer opportunity.

Ashley Johnson: So I see that as a longer opportunity, a longer term opportunity for us, but nothing specifically jumps out at me from the quarter that would be relevant in that vein.

Speaker Change: Longer term opportunity for us but.

Speaker Change: Nothing specifically jumps out at me from the quarter that would be relevant in that vein.

Speaker Change: Yeah.

Ryan Koontz: The next question is from the line of Ryan Koontz with Needham and Company. You may proceed. Great, thanks.

Speaker Change: The next question is from the line of Ryan <unk> with Needham <unk> Company you May proceed.

Speaker Change: Great. Thanks.

Ryan Koontz: Two part, if I could. Ashley, if you could. qualitatively kind of walk us. takes on gross margin maybe over the past year. forward. I know you've talked about some of the impacts of Jason. second to that, relative to.

Speaker Change: Two part if I could actually if you can just at least qualitatively kind of walk us through some of the puts and takes on gross margin maybe over the past year and as usual.

Speaker Change: Think about that going forward I know you've talked about some of the impacts of J side expenses hitting gross margin and then second to that.

Speaker Change: Relative to your your civil exposure on U S Federal and NASA.

Ashley Johnson: civil exposure on U.S. Federal and NASA. Commentary there. Great.

Speaker Change: Any commentary there relative to efficiency active.

Speaker Change: Activities in Washington.

Speaker Change: Great.

Ashley Johnson: Specifically around gross margin, we've highlighted a couple factors as we, actually, as we came into this year and gave guidance on fiscal 26, even last quarter. Working with partners on solutions enables us to expand the amount of data that we can sell and drive value to customers, but it does have a short-term impact on margins. Similarly, with a contract like JSAT, what's obviously really exciting about it is it enables us to scale the fleet faster. And the way the contract was signed, not only do we build this fleet for JSAT and their customers, but we're actually able to monetize the rest of world capacity, which means that over the long arc of the contract, we see the gross margins of it being similar to the rest of our business.

Speaker Change: Specifically around gross margin.

Speaker Change: We've highlighted a couple of factors as we actually as we came into this year and gave gave guidance on in fiscal 2006, even last quarter.

Speaker Change: The.

Speaker Change: <unk>.

Speaker Change: Working with partners on solutions enables us to expand.

Speaker Change: The amount of data that we can sell and drive value to customers, but it does have a short term impact on margins Similarly with contract like Jay said.

Speaker Change: What's obviously really exciting about it is and it enables us to scale the fleet faster and the way the contract was.

Speaker Change: <unk> signed not only do we build this fleet for Jason and their customers, but we are actually able to monetize the rest of world capacity, which means that over the long arc of the contract we see the gross margins of it being similar to the rest of our business.

Ashley Johnson: So, while there is some short-term impact on gross margins, over the long term, we see our margins stabilizing back towards our long-term targets.

Speaker Change: So while there is some short term impact on gross margins.

Speaker Change: Over the long term, we see our margins stabilizing back towards our long term targets. We will do you want to address the first part of the question around U S. Federal government, Yes, I mean, obviously NASA is facing some uncertainty.

Will Marshall: Will, do you want to address the first part of the question around U.S. civil government? Yeah. And, I mean, obviously, NASA is facing some uncertainty politically right now and from a budget standpoint. During my trip there, I mean, firstly, we have tremendous relationship with NASA. The users get a lot of value, not just within NASA, but it provides value to users across the U.S. government, across universities, across the United States, federally funded university researchers. And those users love what they're getting from our data and incredible productivity from it.

Speaker Change: As.

Speaker Change: Politically right now and from a budget standpoint.

Speaker Change: Thank you very much I mean, firstly, we have tremendous relationship with NASA uses.

Speaker Change: A lot of value not just within NASA, but it provides value to users across the U S coming in of course.

Speaker Change: Universities across the United States federally funded university with processes and.

Speaker Change: And those users love, what they're getting from our data and an incredible productivity from it.

Will Marshall: I think, overall, there's a leaning in this government towards more efficiency, and I think that that actually plays very well into the planet's hands. And, obviously, with NASA, we had conversations specifically on how we could help them with missions if there's a reduced budget, how we can help do those missions at lower cost, as we have demonstrated before with the Talenger mission. So, it's actually something that we lean into. But, yeah, so we're obviously tracking that, and I think there's a lot of opportunities to help the government do that sort of, those sort of missions more efficiently.

Speaker Change: I think.

Speaker Change: Overall, we had.

Speaker Change: There's a leaning in this government towards more efficiency and I think that that actually plays very well into planets and NASA. We had conversations specifically on how we can help them with missions. If there's if there's reduced budget. How we can help do those missions at lower costs as we have demonstrated before with the tonnage.

Speaker Change: Emissions. So if that's really something that we lean into.

Speaker Change: But.

Speaker Change: Yes, so we're obviously tracking that and I think theres a lot of opportunities to help the government to that sort of.

Speaker Change: Those are the emissions from efficiently.

Kristine Liwag: The next question is from the line of Kristine Liwag with Morgan Stanley. You may proceed.

Speaker Change: The next question is from the line of Kristine <unk> with Morgan Stanley You May proceed.

Kristine Liwag: Good afternoon, everyone. Maybe a first quick question. I mean, NASA's fiscal year 26 budget is down almost 25 percent. I mean, I appreciate it's still early days and it looks like a lot of the cuts are on the science side of the business. But how are you thinking about potential risks from these cuts? How exposed are you on your specific programs?

Speaker Change: Hey, good afternoon, everyone.

Speaker Change: Maybe a first quick question I mean massive fiscal 'twenty six budget is down almost 25% I mean I. Appreciate it's still early days and it looks like a lot of the cuts are on the science side of the business, but how are you thinking about potential risks from these cuts how exposed are you on your specific programs and a second follow.

Kristine Liwag: And a second follow up question. You know, you talked about the high usage in one cue from certain customers kind of tapering in two cue. How do we think about this regarding overall demand or is there just a natural seasonality in the use of your products? How do we think about that? Thank you.

Speaker Change: Oh up question.

Speaker Change: Are you you talked about the high usage in <unk> from certain customers kind of tapering in <unk>. How do we think about this regarding overall demand or is there just a natural seasonality in the use of your products. How do we think about that thank you.

Will Marshall: Yeah, again, on NASA, the budget process has yet to be finalized. Of course, we're tracking that. But again, the overall sentiment is that the administration is pushing into lower cost solutions and efficient ways of doing their missions, which is the kind of program that we fit within under our CSDA program, for example, at NASA, fits very much into those kind of priorities.

Speaker Change: Yes again on that.

Speaker Change: The budget process is yet to be finalized of course, we're tracking that.

Speaker Change: But again the overall sentiment is that the administration is pushing into lower cost solutions in efficient ways of doing that emissions, which is the kind of programs that we fit within.

Speaker Change: On the <unk> program for example, what NASA fits very much into those satisfy our fees. So we don't know exactly how that's going to fall out that creates some uncertainty.

Will Marshall: So we don't know exactly how that's going to fall out. That creates some uncertainty. And our guidance takes that into account. But we actually think that the upside is quite significant there as they try to figure out how to do these missions more efficiently under those sort of budget arrangements. So we're having conversations to try and support that.

Speaker Change: Our guidance takes that into account but.

Speaker Change: We actually think that the.

Speaker Change: The upside is quite significant there as they as they try to figure out how to do these machines more efficiently and those sorts of budget arrangements. So we are having conversations to try and support them.

Will Marshall: And then, with respect to usage, yeah, as you point out, there are some aspects of seasonality to usage in certain sectors in agriculture. For example, as we go into the growing season, we do see some uptick in usage. So that can be 1 of the drivers. The other is, as I said, we're really working with customers to engage them and help them get to value more quickly. So that we see those usage patterns actually increase and sustain.

Speaker Change: And then with respect to usage and yes as you point out there are some some aspects of seasonality to usage.

Speaker Change: And certain sectors in agriculture for example, as we go into the growing season, we do see some uptick in usage.

Speaker Change: So that can be one of the drivers. The other is is as I said, we're really working with customers to engage them and help them get to value more quickly.

Speaker Change: So that we see those usage patterns actually increase and sustain.

Will Marshall: Obviously, for some governments, 1 of the challenges will be they have budget for a certain amount in any given year. And so when I'm thinking about Q1 outperformance driven by usage, and then how much do I roll that forward into subsequent quarters? I need to be careful in recognizing that in the past, we've seen them sometimes throttle back usage to make sure that they stay within their budget envelope. So it's less about the value, which we know that they're seeing, and it's obviously reinforced by what we saw in Q1, but that's always going to be counterbalanced with their own budgetary and timing constraints.

Speaker Change: Obviously for some government one of the challenges will be they they have budget for a certain amount in any given year and so when I'm thinking about Q1 outperformance.

Speaker Change: Driven by usage and then how much do I roll that forward into subsequent quarters I need to be careful and recognizing that in the past we've seen them, sometimes throttled back usage to make sure that they stay within their budget envelope. So it's less about.

Speaker Change: The value, which we know that they're seeing and it's obviously reinforced by what we saw in Q1, but that's always going to be counterbalanced with their own vegetarian and timing constraints.

Speaker Change: Yeah.

Speaker Change: Yeah.

Chris Quilty: The next question is from the line of Chris Quilty with Quilty Space. You may proceed. Thanks.

Speaker Change: The next question is from the line of Chris Quilty with Quilty space You May proceed.

Will Marshall: Cleo, I'm going to ask a question that you're not going to answer. So this one doesn't count. But obviously the elephant in the room here are news stories we've seen about possible cuts to the EOCL program. Obviously, you're probably limited in what you can say on that topic, and you've already kind of addressed it, I think, in your prior discussion here, in that you're offering the low-cost commercial solution that the government seems to be pushing for. Is there a insights you can give us on what might be happening in the background with any potential cuts or the outlook for the EOCL program or what the government might have in the pipeline.

Chris Quilty: Thanks Leila.

Speaker Change: I'm going to ask a question that youre not going to answer this one doesn't count, but obviously the elephant in the room here.

Speaker Change: These stories, we've seen about possible cuts to the UCL program.

Speaker Change: Obviously, you're probably limited in what you can say on that topic and you've already kind of addressed it I think in your prior discussion here.

Speaker Change: In that you are offering a low cost commercial solution that the government seems to be pushing for.

Speaker Change: Is there a.

Speaker Change: Insights you can give us on what might be happening in the background with any potential cuts or the outlook for the <unk> program or what the government might have in the pipeline.

Will Marshall: I mean, I think you're getting there with the, it's analogous to what I was just saying about NASA. You know, we obviously track the budget process carefully. And just like with NASA, we have a strong partnership with the NRO and NGA, and we know that the government is leveraging those capabilities and think they're important. And this particular administration is leaning more into that, right? So we've seen Trump administration push out executive orders, looking to leverage commercial services, and Planet fits well into that. There's obviously opportunities and risks associated with the particular programs and so on.

Speaker Change: I. Thank you again.

Speaker Change: As analogous to what I was just thinking about NASA, we obviously track that budget process carefully.

Speaker Change: And just like with NASA, we have a strong partnership with <unk> and <unk>.

Speaker Change: And we know that the government is leveraging those capabilities and think they are important and this particular administration is leaning more into that right. So we've seen kind of administration pushout executive orders looking to leverage commercial services and planet fits well into that.

Speaker Change: There is obviously opportunities and risks associated with the particular programs and so on.

Will Marshall: Obviously, we will discuss those if and when we pull up more details on programs going forward. But overall, again, my trip to DC, we have found that there's more opportunities than risks in this environment in DC.

Speaker Change: Obviously, we will.

Speaker Change: Scott said, if we if and when we put out more details on programs going forward, but overall.

Speaker Change: Again, Mike kept to D. C. We have found that theres more opportunities and risks in this environment in D C.

Jason Gursky: The next question is from the line of...

Speaker Change: The next question is from the line of.

Jason Gursky: Jason Gursky with Citigroup. You may proceed. Yeah, just maybe a quick follow up to that last question.

Jason Gursky: Jason Gursky with Citigroup you.

Speaker Change: You May proceed.

Speaker Change: Yes, just maybe a quick follow up to that last question.

Jason Gursky: Well, maybe you could talk about the pockets of demand that you're seeing in DOD inside, inside Washington. To Chris's point, you know, it looks like the OCL program is maybe at risk here as much as a 30% cut to it, if what we read in some of the industry rags is correct. So, when you say that you're seeing lots of demand inside DOD, is it shifting around inside the agencies for this kind of, you know, for the geospatial data that you're providing is going to shift away from DOD, I mean from NRO and maybe go over to DOD directly, I think, and then maybe just tangential to that.

Speaker Change: Maybe you could talk about the pockets of demand that you're seeing.

Speaker Change: Okay.

Speaker Change: Inside Washington.

Speaker Change: Cause you to Chris's point, you know it.

Speaker Change: It looks like the LCL program, that's maybe at risk here as much as a 30% cut.

Speaker Change: Two it is what we read in some of the industry rags crews.

Speaker Change: Correct.

Speaker Change: So when you say that you are seeing lots of demand inside Doj is it shifting around inside the agencies.

Speaker Change: For this kind of <unk>.

Speaker Change: Uh huh.

Speaker Change: For the geospatial data that you're providing is going to shift away from duty from NRO and maybe go over to.

Speaker Change: Directly.

Speaker Change: And then maybe just tangential to that.

Will Marshall: I think you've got a renewal on the OCL coming up. Can you remind us of what the typical timing is on that? And do you expect that timing to change at all? Thanks. Yeah, yeah. And there is, there is interest in DOD separate. We've shared some of the details about the pilots that we have done with DOD and how they've leveraged, in particular, then not so much buying the pixels as solutions, but it's our MDA solution, we've talked about our collaboration with the US Navy. And there's more opportunities like that. So yes, we're seeing opportunities like that in the DOD.

Speaker Change: Yes, I think you've got to renew on Youll see all coming up can you remind us of what the typical timing is on that and do you expect that to change at all thanks.

Speaker Change: Yes, yes.

Speaker Change: Sure.

Speaker Change: There is there is.

Speaker Change: Interesting.

Speaker Change: But if we've shed some of the details about the pilots that we have done with EOG and how they've leveraged in particular, then not so much buying the pixels solutions.

Speaker Change: Both our NDA solution, we've talked about our collaboration with the U S Navy.

Speaker Change: And there's more opportunities like that so yes, we're seeing opportunities like that in the Vod and then separately there's missions right.

Will Marshall: And then separately, there's missions, right, that they, to the sort of Constellation Services offering. There could be opportunities like that within the US government. I don't want to speculate on any specifics on that yet. It's too early to do that. But that's what I'm talking about is the pull both for our solutions, as well as for our satellite services.

Speaker Change: <unk>.

Speaker Change: Sure.

Speaker Change: Constellation services or offerings that can be opportunities like that within the U S coming I don't speculate on any specifics on that yet it's too early.

Speaker Change: That's what I'm talking about is the pull both of our solutions as well as for us.

Speaker Change: Satellite.

Will Marshall: And, you know, back to EOCR, there's nothing much more I can say right now, because it's all in flux, and hasn't been determined yet. But again, we feel like we have a strong relationship and, and, and, and demand what we are providing. And overall, this government is pushing towards that, you know, executive order, I should say, from the Trump administration pushing more into this. So we'll see where it all comes out and watch this space. And we'll give you more updates when we can. But I believe overall, plan a stance to find more opportunities and risks in DC.

Speaker Change: Services and.

Speaker Change: Back to ECR theres not much more I can say right now because it's still in flux and hasnt been determined yet, but again, we feel like we have a strong relationship and.

Speaker Change: And this.

Speaker Change: Demand, what we are providing.

Speaker Change: This government is pushing towards that.

Speaker Change: Second of all do I should say.

Speaker Change: From the Trump administration pushing more into this so we'll see where it all comes out and watch this space and we will give you more updates when we can but I believe overall planning stance.

Speaker Change: Find more opportunities and risks in D C.

Speaker Change: Yeah.

Speaker Change: Yeah.

Anthony Valentini: The next question is from the line of Anthony Valentini with Goldman Sachs and Co. You may proceed. Hey guys, thanks for taking the question. I just wanted to ask about, I think last quarter you guys had said that you expect the growth next year to be at least double. Is that still the case? And if you guys can just provide an update there, that would be great.

Speaker Change: The next question is from the line of Anthony <unk> with Goldman Sachs <unk> Co. You May proceed.

Speaker Change: Hey, guys. Thanks for taking the question I just wanted to ask about I think last quarter. You guys had said that you expected gross next year to be at least double.

Speaker Change: Is that still the case and if you guys can just provide an update there that would be great.

Speaker Change: She is from China.

Ashley Johnson: I mean, broadly, I would say our targets going forward are unchanged. So you saw the growth in our backlog, which we were very excited to see. And, you know, as Will alluded to, our sales team is performing well. We've brought in new contracts. So all of this gives us, you know, the book of business that we need to see that sustained and accelerated growth. So as far as all the commentary that we said last quarter about how we feel about, you know, this year and next, I'd say our targets are unchanged.

Speaker Change: Sure.

Speaker Change: I would say our targets going forward are unchanged. So.

Speaker Change: You saw growth in our backlog, which we were very excited to see and.

Speaker Change: As <unk> alluded to where our sales team is performing well we've brought in new contracts.

Speaker Change: So all of this gives us.

Speaker Change: The book of business that we need to see that sustained and accelerated growth. So.

Speaker Change: As far as all the commentary that we said last quarter about how we feel about this year and next I would say our targets are unchanged.

Speaker Change: Okay.

Colin Canfield: The next question is from the line of Colin Canfield with Kent or Fitzgerald. You may proceed. Hey, thank you. So just to follow up on the last few questions, one of the things that we have to deal with in government services is kind of confusion around requested budgets versus legislated budgets.

Speaker Change: The next question is from the line of Colin Canfield with Cantor Fitzgerald you May proceed.

Colin Canfield: Hey, Thank you. So just a follow up on the last few questions. One of the things that we have to deal with in government services is kind of confusion around requested budgets versus legislated budget. So maybe if you can walk us through kind of the dynamics of the FY 'twenty five CR and what that means for on contract growth for planet Labs.

Will Marshall: So maybe if you could walk us through kind of the dynamics of an FY25 CR and what that means for on-contract growth for Planet Labs, and then how we should think about the potential of an FY26 CR as it relates to that growth algorithm. Thank you. Yeah, I mean, we've been through these sort of situations before, and it's not uncommon now to get a CR for a meaningful amount of time. So obviously, we track that. CRs, the opportunities and risks, they tend to be stable, because they just continue the budget from the prior year. They don't now big new starts, basically.

Speaker Change: And then how we should think about the potential of an FY 'twenty six CR as it relates to desktop that growth algorithm. Thank you.

Speaker Change: Yes, I mean, we've been through these sort of.

Speaker Change: Situations before and it's not uncommon now to get a CR for a meaningful amount of time. So obviously, we track that.

Speaker Change: Opportunities and risks they tend to be stable because they discontinue the budget from the prior year.

Speaker Change: Now big New starts basically so.

Will Marshall: So there are pluses and minuses about the different options there. But obviously, we're tracking that space, as anyone else in the industry is, and we continue to pursue opportunities as they open up.

Speaker Change: The pluses and minuses about the different.

Speaker Change:

Speaker Change: Options here, but but obviously, we're tracking that space and as anyone else in the industry is and.

Speaker Change: We continue to pursue opportunities as they as they open up.

Ashley Johnson: Anything to add Ashley? No, I mean, I think as you've heard, it's a fluid environment. We're keeping an eye on, you know, things as they unfold. And, you know, as Will said a few times now, we see a lot more opportunity in the direction of looking for more efficient, more effective ways to service the needs of the government.

Anthony: Anything to add Anthony.

Anthony: No I mean, I think as you've heard it's a fluid environment, we're keeping an eye on.

Speaker Change: Things as they unfold.

Speaker Change: You know as well as said a few times now and we see a lot more opportunity in the direction of looking for a more efficient and more effective ways to service the needs of the government.

Speaker Change: Okay.

Will Marshall: That was the last question for the call.

Speaker Change: That was the last question for the call I would now like to pass the conference back for any further remarks.

Will Marshall: I would now like to pass the conference back for any further remarks. Maybe I'll just close by saying it's great to see the strong performance we had in the first quarter of the year. It exceeded expectations and achieved significant financial milestones, including and especially positive free cash flow. And we secured really great wins, so we're feeling good. We're seeing strong demand for our solutions, both the global insights and our satellite services, and we believe we're establishing Planet as the market leader here. I'm very proud of our teams, the dedication, the hard work that enabled us to produce these results, and we look forward to building on this momentum through the year.

Speaker Change: Hey, guys, just close by saying that.

Speaker Change: It's great to see the strong performance, we had in the first quarter of the year.

Speaker Change: That exceeded expectations and achieved significant financial milestones, including and especially positive free cash flow.

Speaker Change: We secured really great wins, so we're feeling good.

Speaker Change: We're seeing strong demand for our solutions both the.

Speaker Change: Global in science.

Speaker Change: Our satellite services.

Speaker Change: And we believe we are establishing tenant as the market leader here.

Speaker Change: I'm very proud of our teams.

Speaker Change: Dedication and hard work that enabled us to produce these results and we look forward to building on this momentum through the year. Thanks. So thanks very much for tuning in and see you next time.

Operator: So thanks very much for tuning in, and see you next time.

Speaker Change: Okay.

That concludes today's call. Thank you for your participation and enjoy the rest of your day.

Speaker Change: That concludes today's call. Thank you for your participation and enjoy the rest of your day.