Q2 2026 Planet Labs PBC Earnings Call

Speaker #1: Ladies and gentlemen, thank you for joining us, and welcome to the Planet Labs PBC Second Quarter of Fiscal 2026 Earnings Call. After today's prepared remarks, we will host a question-and-answer session.

Operator: Ladies and gentlemen, thank you for joining us and welcome to the Planet Labs PBC second quarter of fiscal 2026 earnings call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please raise your hand. If you have dialed in to today's call, please press star nine to raise your hand and star six to unmute. I will now hand the conference over to Chris Genualdi, VP of Investor Relations. Please go ahead.

Speaker #1: If you would like to ask a question, please raise your hand. If you have dialed in to today's call, please press *9 to raise your hand and *6 to unmute.

Speaker #1: I will now hand the conference over to Chris Genualdi, VP of Investor Relations. Please go ahead.

Speaker #2: Thanks, operator. And hello, everyone. Welcome to Planet's second quarter of fiscal year 2026 earnings call. I'm here at the New York Stock Exchange, joined by Will Marshall and Ashley Johnson, who will provide a recap of our results and discuss our current outlook.

Chris Genualdi: Thanks, operator. Hello, everyone. Welcome to Planet's second quarter of fiscal year 2026 earnings call. I'm here at the New York Stock Exchange, 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. 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 Planet Labs PBC that future plans, estimates, or expectations will be achieved.

Speaker #2: 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 #2: 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.

Speaker #2: The inclusion of such forward-looking information should not be regarded as a representation by Planet that future plans, estimates, or expectations will be achieved. Such forward-looking statements are subject to various risks, uncertainties, and assumptions, as detailed in our SEC filings, which can be found at www.sec.gov.

Chris Genualdi: 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. 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 #2: Our actual results or performance may differ materially from those indicated by such forward-looking statements. 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 #2: 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.

Speaker #2: We believe that these measures provide useful information about operating results and hence the overall understanding of past financial performance and future prospects. They also allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making.

Speaker #2: For more information on the non-GAAP financial measures, please see the reconciliation tables provided in our press release issued earlier this morning, which is available on our website at investors.planet.com.

Chris Genualdi: For more information on the non-GAAP financial measures, please see the reconciliation tables provided in our press release issued earlier this morning, 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. These and other key performance indicators are discussed in more detail in our press release and our earnings update presentation, which are intended to accompany our prepared remarks. At this point, I'd now like to turn the call over to Will Marshall, Planet's CEO, Chairperson, and Co-Founder. Over to you, Will.

Speaker #2: Further, throughout this call, we provide a number of key performance indicators used by management and often referenced by competitors in our industry. These and other key performance indicators are discussed in more detail in our press release and our earnings update presentation, which are intended to accompany our prepared remarks.

Speaker #2: 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.

Speaker #3: Thanks, Chris. And hello, everyone. Thanks for joining us today. It's exciting to be back at the New York Stock Exchange. In the three and a half years since we rang the bell and went public, we've come a long way.

Operator: Thanks, Chris, and hello, everyone. Thanks for joining us today. It's exciting to be back at the New York Stock Exchange. In the three and a half years since we rang the bell and went public, we've come a long way. We've launched nearly 200 satellites on six rockets, including our next-generation Pelican and Tanager satellites. We've shifted our data business towards selling solutions, leveraging AI to enable speed and scale. We've leaned into our strength in agile aerospace to bring to market our new satellite services offering, and we've more than doubled our revenue run rate while driving bottom-line performance to reach adjusted EBITDA and free cash flow profitability milestones. In a world that has changed dramatically with heightened global security challenges and rapid adoption of AI, Planet's capabilities are proving to be more valuable to customers than ever. We're eager to share the latest, so let's dive in.

Speaker #3: We've launched nearly 200 satellites on six rockets, including our next-generation Pelican and Tanata satellites. We've shifted our data business towards selling solutions leveraging AI to enable speed and scale.

Speaker #3: We've leaned into our strength in agile aerospace to bring to market our new satellite services offering, and we've more than doubled our revenue run rate while driving bottom-line performance to reach adjusted EBITDA and free cash flow profitability milestones.

Speaker #3: In a world that has changed dramatically with heightened global security challenges and rapid adoption of AI, Planet's capabilities are proving to be more valuable to customers than ever.

Speaker #3: We're eager to share the latest, so let's dive in. Planet's Q2 financial results reflect the team's excellent execution in two key initiatives: delivering integrated global insights through AI-enabled solutions atop our daily scan and rapidly expanding our satellite services business.

Operator: Planet's Q2 financial results reflect the team's excellent execution in two key initiatives: delivering integrated global insights to AI-enabled solutions atop our daily scan and rapidly expanding our satellite services business. To briefly summarize the financials, we generated $73.4 million in revenue, representing approximately 20% year-over-year growth, marking another quarter of growth reacceleration. Non-GAAP gross margin was 61% in the quarter, up from 58% a year ago, and adjusted EBITDA profit came in at $6.4 million, representing our third sequential quarter of adjusted EBITDA profitability. We also achieved our second consecutive quarter of positive free cash flow, delivering year-to-date cash flow from operating activities of $85.1 million and year-to-date free cash flow of $54.3 million, representing free cash flow margin of approximately 39%.

Speaker #3: To briefly summarize the financials, we generated $73.4 million in revenue, representing approximately 20% year-over-year growth, marking another quarter of growth re-acceleration. Non-GAAP gross margin was 61% in the quarter, up from 58% a year ago.

Speaker #3: An adjusted EBITDA profit came in at $6.4 million, representing our third sequential quarter of adjusted EBITDA profitability. We also achieved our second consecutive quarter of positive free cash flow, delivering year-to-date cash flow from operating activities of $85.1 million and year-to-date free cash flow of $54.3 million, representing a free cash flow margin of approximately 39%.

Speaker #3: Our backlog increased to $736.1 million at the end of the quarter, representing a year-over-year increase of 245%. This provides us with excellent visibility to revenue over the next 12 to 24 months and gives us confidence in our growth acceleration into FY27.

Operator: Our backlog increased to $736.1 million at the end of the quarter, representing a year-over-year increase of 245%, which provides us with excellent visibility to revenue over the next 12 to 24 months and gives us confidence in our growth acceleration into FY27. We are delighted to share that with the strong Q2 performance, we are now expecting to be free cash flow positive this fiscal year, over a year ahead of our prior target and a major milestone for the company. Turning to sales highlights, I'll start with the defense and intelligence sector, where Q2 revenue accelerated to approximately 41% growth year-on-year and up approximately 14% quarter-over-quarter, driven by strong performance with our core data and solutions business, as well as our satellite services contract with JSAP. I'd like to share two wins from the quarter that are incremental to those we announced in our July press conference.

Speaker #3: We are delighted to share that, with the strong Q2 performance, we are now expecting to achieve free cash flow positive this fiscal year, over a year ahead of our prior target and a major milestone for the company.

Speaker #3: Turning to sales highlights, I'll start with the defense and intelligence sector, where Q2 revenue accelerated to approximately 41% growth year on year, up approximately 14% quarter over quarter. This was driven by strong performance in our core data and solutions business, as well as our satellite services contract with JSAP.

Speaker #3: I'd like to share two wins from the quarter that are incremental to those we announced in our July press conference. First, we were awarded an additional seven-figure option by the Defense Innovation Unit, part of the U.S. Department of Defense, under our hybrid space architecture pilot.

Operator: First, we were awarded an additional seven-figure option by the Defense Innovation Unit, part of the U.S. Department of Defense, under our hybrid space architecture pilot. This option expands the capacity of our existing hybrid space architecture pilot, which we announced over the summer. The short-term pilot is focused on delivering vital indications and warnings. This contract demonstrates how customers can leverage Planet's daily scan and extensive data archive to monitor sites of strategic interest for critical changes and threats. Second, the U.S. National Reconnaissance Office expanded its contract with us under the EOCL program to include PlanetScope monitoring and maritime domain awareness in support of national security, counter-narcotics, and disaster response efforts. This award is in addition to the contract option we announced in July, which extended Planet's provision of daily monitoring and high-resolution tasking data and maintained our prior EOCL performance level from June through October 2025.

Speaker #3: This option expands the capacity of our existing hybrid space architecture pilot, which we announced over the summer. The short-term pilot is focused on delivering vital indications and warnings.

Speaker #3: This contract demonstrates how customers can leverage Planet's daily scan and extensive data archive to monitor sites of strategic interest for critical changes and threats.

Speaker #3: Second, the U.S. National Reconnaissance Office expanded its contract with us under the EOCL program to include Planet's scope monitoring and maritime domain awareness in support of national security, counter narcotics, and disaster response efforts.

Speaker #3: This award is in addition to the contract option we announced in July, which extended Planet's provision of daily monitoring and high-resolution tasking data, and maintained our prior EOCL performance level from June through October 2025.

Speaker #3: To recap our July wins for our AI-enabled solutions, we announced pivotal contracts with customers, including NATO and the U.S. Department of Defense, for use cases such as persistent space-based surveillance, enhanced indications and warning, and critical maritime domain awareness functions.

Operator: To recap our July wins for our AI-enabled solutions, we announced pivotal contracts with customers including NATO and the U.S. Department of Defense for use cases such as persistent space-based surveillance, enhanced indications and warning, and critical maritime domain awareness functions. Similarly, our landmark collaboration with the German government for satellite services also includes a multi-year eight-figure ACV renewal for access to PlanetScope data and maritime domain awareness with our partner SIMAX. More broadly, we continue to see robust demand for downstream products that embed our capabilities into customers' operations, enhance situational awareness, and support informed decision-making. Turning to the civil government sector, where the second quarter revenue was down approximately 4% year-over-year, largely due to the expiration of our partnership with Norway, NEXI, and relatively flat quarter-over-quarter, we continue to see significant growth opportunities in this sector, especially for Planet monitoring and enforcement and disaster response applications.

Speaker #3: Similarly, our landmark collaboration with the German government for satellite services also includes a multi-year, eight-figure ACV renewal for access to Planet's scope data and maritime domain awareness with our partner, Simmax.

Speaker #3: More broadly, we continue to see robust demand for downstream products that embed our capabilities into customers' operations, enhance situational awareness, and support informed decision-making.

Speaker #3: Turning to the civil government sector, our second quarter revenue was down approximately 4% year over year, largely due to the expiration of our partnership with Norway, NICFI, and was relatively flat quarter over quarter.

Speaker #3: We continue to see significant growth opportunities in this sector, especially for planet monitoring and enforcement, and disaster response applications. To share a few recent highlights, we signed a seven-figure ACV renewal with the UK Rural Payments Agency.

Operator: To share a few recent highlights, we signed a seven-figure ACV renewal with the UK Rural Payments Agency. The UK government uses Planet's data to support its Environment Land Management program, which involves countrywide monitoring of a wide range of environmental and agricultural features. Earlier this year, we entered a new relationship with the Panamanian Ministry of Environment, kicking off a strategic collaboration to strengthen continuous monitoring of the province of Darien, where illegal mining, deforestation, and unauthorized land use, as well as unpermitted road development, are expanding. Planet's broad area of monitoring solutions support the ministry in detecting illicit activities, generating actual insights that enhance enforcement, governance, and protection of Panama's natural resources. Like our work with the Brazilian Federal Police, this application of our solutions shows how Planet can help serve both security and sustainability challenges, sometimes simultaneously.

Speaker #3: The UK government uses Planet's data to support its environment and land management program, which involves countrywide monitoring of a wide range of environmental and agricultural features.

Speaker #3: Earlier this year, we entered into a new relationship with the Panamanian Ministry of Environment, kicking off our strategic collaboration to strengthen continuous monitoring of the province of Darien, where illegal mining, deforestation, and unauthorized land use, as well as unpermitted road development, are expanding.

Speaker #3: Planet's broad area monitoring solutions support the Ministry in detecting illicit activities, generating actionable insights that enhance enforcement, governance, and protection of Panama's natural resources.

Speaker #3: Like our work with the Brazilian Federal Police, this application of our solutions at Planet can help serve both security and sustainability challenges, sometimes simultaneously.

Speaker #3: Shifting finally to the commercial sector, where revenue grew approximately 6% year over year and approximately 13% quarter over quarter, driven in part by strong execution in the agriculture and energy sectors.

Operator: Shifting finally to the commercial sector, where revenue grew approximately 6% year-over-year and approximately 13% quarter-over-quarter, driven in part by strong execution in the agriculture and energy sector. To share a couple of customer highlights, we announced a new six-figure win with FarmDar, a global agricultural technology company. Through this contract, FarmDar has access to Planet's deep archive of PlanetScope data, including base maps, to inform its crop insights platform, enabling more precise crop detection, field boundary identification, and arable land mapping. We also continue to partner with SwissRe, a leading global reinsurer for innovative drought insurance solutions. To share a recent proof point, SwissRe leveraged PlanetScope and NDVI data to create a new drought insurance policy in Syria that provided early assistance to nearly 120,000 people, resulting in a payout of $7.9 million, demonstrating the power of Planet data in addressing food and essential needs in crisis situations.

Speaker #3: To share a couple of customer highlights, we announced a new six-figure win with FarmDar, a global agricultural technology company. Through this contract, FarmDar has access to Planet's deep archive of Planet's scope data, including base maps, to inform its crop insights platform, enabling more precise crop detection, field boundary identification, and arable land mapping.

Speaker #3: We also continue to partner with Swiss Re, a leading global reinsurer, for innovative drought insurance solutions. To share a recent proof point, Swiss Re leveraged Planet's scope and NDVI data to create a new drought insurance policy in Syria that provided early assistance to nearly 120,000 people, resulting in a payout of $7.9 million. This demonstrates the power of Planet data in addressing food and essential needs in crisis situations.

Speaker #3: Next, onto our growing satellite services offering. In July, we announced a $240 million multi-year satellite services collaboration with Germany. This is our second win in 2025 in satellite services.

Operator: Next, onto our growing satellite services offering. In July, we announced a €240 million multi-year satellite services collaboration with Germany. This is our second win in 2025 in satellite services. The deal includes dedicated capacity on Pelican satellites, leveraging Pelicans, which are already under development. The team has also continued to execute well on our contract with JSAP, which contributed to our revenue upside in the quarter. Overall, we're seeing very strong demand signals for satellite services, driven by the current geopolitical landscape and the desire for sovereign access to space. We're therefore aggressively pursuing strategic opportunities, and I'm pleased to report that our pipeline is maturing very well. Turning now to the exceptional execution by our Space Systems teams. Just two weeks ago, we were very excited to have two of our high-resolution Pelican satellites launch into orbit. We have successfully contacted these satellites, and they're now undergoing commissioning.

Speaker #3: The deal includes dedicated capacity on Pelican satellites, leveraging Pelican's capabilities, which are already under development. The team is also continuing to execute well on our contract with JSAP, which contributed to our revenue upside in the quarter.

Speaker #3: Overall, we're seeing very strong demand signals for satellite services, driven by the current geopolitical landscape and the desire for sovereign access to space. We are therefore aggressively pursuing strategic opportunities, and I'm pleased to report that our pipeline is maturing very well.

Speaker #3: Turning now to the exceptional execution by our space systems teams. Just two weeks ago, we were very excited to have two of our high-resolution Pelican satellites launch into orbit.

Speaker #3: We have successfully contacted these satellites, and they're now undergoing commissioning. More broadly, we're extremely pleased with the progress of our Pelican program. The production line is now fully ramped, and we have four Pelicans in orbit and multiple Pelican launches slated for the next year.

Operator: More broadly, we're extremely pleased with the progress of our Pelican program. The production line is now fully ramped, and we now have four Pelicans in orbit and multiple Pelican launches slated for the next year. In August, we celebrated the one-year anniversary of Tanager-1, our first hyperspectral satellite. To date, our partners at Carbon Mapper have leveraged Tanager's powerful data set to detect methane and CO2 plumes across 3,000 sources. We're incredibly excited about the future of this program and to see what our partners and customers achieve with this powerful data set. Overall, then, we're incredibly pleased with the strong results we delivered in Q2. The business is humming for both our data and solutions and our new satellite services offerings.

Speaker #3: In August, we celebrated the one-year anniversary of Challenger 1, our first hyperspectral satellite. To date, our partners at Carbon Mapper have leveraged Challenger's powerful data set to detect methane and CO2 plumes across 3,000 sources.

Speaker #3: We're incredibly excited about the future of this program and to see what our partners and customers achieve with this powerful data set. Overall then, we're incredibly pleased with the strong results we delivered in Q2.

Speaker #3: The business is humming for both our data and solutions and our new satellite services offerings. We're capitalizing on the ongoing AI revolution, for which we're extremely well positioned. We've made excellent progress in our profitability goals and on building a strong cash flow-generating business for the long term.

Operator: We're capitalizing on the ongoing AI revolution, for which we're extremely well positioned, and we've made excellent progress in our profitability goals and on building a strong cash-flow-generating business for the long term. I'd like to take a moment to commend our entire Planet team on a phenomenal quarter and thank them for their drive and dedication to delivering for our customers. It is your commitment and teamwork that makes this all possible. With that, I'll turn it over to Ashley to discuss our financials. Over to you, Ash.

Speaker #3: I'd like to take a moment to commend our entire Planet team on a phenomenal quarter and thank them for their drive and dedication to delivering for our customers.

Speaker #3: It is your commitment and teamwork that makes this all possible. With that, I'll turn it over to Ashley to discuss our financials. Over to you, Ash.

Speaker #4: Thanks, Will. I'll start by echoing Will's remarks and saying that Q2 was another excellent quarter, with strong execution by our teams around the globe.

Ashley Johnson: Thanks, Will. I'll start by echoing Will's remarks and saying that Q2 was another excellent quarter with strong execution by our teams around the globe. Revenue came in at $73.4 million, representing approximately 20% year-over-year growth. Strength was primarily driven by key wins with defense and intelligence customers, higher than expected usage by some of our government accounts, and steady progress against our new JSAP contract. During the second quarter, revenue from the defense and intelligence sector grew approximately 41% year-over-year. The commercial sector grew approximately 6% year-on-year, and civil government revenue was down approximately 4% year-on-year, impacted primarily by the end of our contract with Norway for their NEXI contract. We're pleased to see the strong uptake of our AI-enabled solutions in the government markets, as well as the health of our customer relationships in the agricultural and energy sectors.

Speaker #4: Revenue came in at $73.4 million, representing approximately 20% year-over-year growth. Strength was primarily driven by key wins with defense and intelligence customers, higher-than-expected usage by some of our government accounts, and steady progress against our new JSAP contract.

Speaker #4: During the second quarter, revenue from the defense and intelligence sector grew approximately 41% year-over-year; the commercial sector grew approximately 6% year-over-year; and civil government revenue was down approximately 4% year-over-year, impacted primarily by the end of our contract with Norway for their NICFI program.

Speaker #4: We're pleased to see the strong uptake of our AI-enabled solutions in the government markets, as well as the health of our customer relationships in the agricultural and energy sectors.

Speaker #4: Switching to our regional revenue breakdown for the second quarter, revenue grew more than 50% year-over-year in Asia-Pacific, more than 30% in EMEA, while North America revenue was roughly flat year-on-year, and Latin American revenue was down slightly.

Ashley Johnson: Switching to our regional revenue breakdown, for the second quarter, revenue grew more than 50% year-over-year in Asia-Pacific, more than 30% in EMEA, while North America revenue was roughly flat year-on-year and Latin American revenue was down slightly. The strength in Asia-Pacific and EMEA was driven by multiple customers in the defense and intelligence sector, while North America reflects the quarter-to-quarter variability in timing of pilot contracts with the U.S. government. As of the end of Q2, our end-of-period customer count was 908 customers, lower on a sequential basis, reflecting our direct sales team's intentional shift to focus on large customer opportunities and leveraging our self-serve platform to provide access to our data for other customers. As a reminder, Planet Insights platform customers are not included in our end-of-period customer count.

Speaker #4: The strength in Asia-Pacific and EMEA was driven by multiple customers in the defense and intelligence sector, while North America reflects the quarter-to-quarter variability and timing of pilot contracts with the U.S. government.

Speaker #4: As of the end of Q2, our end-of-period customer count was 908 customers, lower on a sequential basis, reflecting our direct sales team's intentional shift to focus on large customer opportunities and leveraging our self-serve platform to provide access to our data for other customers.

Speaker #4: As a reminder, Planet Insight platform customers are not included in our end-of-period customer count. We continue to see strong revenue growth, 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.

Ashley Johnson: We continue to see strong revenue growth 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. As we shift to some of our ACV metrics, I want to remind you that the JSAP multi-year 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 98% 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 85% of our end-of-period ACV book of business consists of annual or multi-year contracts. Net dollar retention rate at the end of Q2 was 107%, and net dollar retention rate with win-backs was 108%.

Speaker #4: As we shift to some of our ACV metrics, I want to remind you that the JSAP multi-year 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.

Speaker #4: Recurring ACV was 98% 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.

Speaker #4: Over 85% of our end-of-period ACV book of business consists of annual or multi-year contracts. Net dollar retention rate at the end of Q2 was 107%, and the net dollar retention rate with winbacks was 108%.

Speaker #4: Turning to gross margin, non-GAAP gross margin for the second quarter was 61%, compared to 58% in the second quarter of fiscal year 2025, demonstrating improvement year-over-year.

Ashley Johnson: Turning to gross margin, non-GAAP gross margin for the second quarter was 61% compared to 58% in the second quarter of fiscal year 2025, demonstrating improvement year-over-year. This result is better than expected, primarily driven by the revenue outperformance in the quarter, in particular from our usage-based data subscription customers, which results in very high margin revenue upside. Adjusted EBITDA profit was $6.4 million for Q2, better than expected, primarily driven by revenue outperformance in the quarter and disciplined OpEx spend. This marks our third sequential quarter of adjusted EBITDA profitability. Capital expenditures in Q2, which include our capitalized software development, were approximately $21.5 million. This was toward the upper end of our guidance range, driven largely by the catch-up spending from Q1 that we discussed on our last earnings call, including for launch payments and procurements for our Pelican and Tanager-1 satellites.

Speaker #4: This result is better than expected, primarily driven by the revenue outperformance in the quarter, particularly from our usage-based data subscription customers, which results in very high-margin revenue upside.

Speaker #4: Adjusted EBITDA profit was $6.4 million for Q2, better than expected, primarily driven by revenue outperformance in the quarter and disciplined OPEX spend. This marks our third sequential quarter of adjusted EBITDA profitability.

Speaker #4: Capital expenditures in Q2, which include our capitalized software development, were approximately $21.5 million. This amount was toward the upper end of our guidance range, driven largely by the catch-up spending from Q1 that we discussed on our last earnings call, including launch payments and procurements for our Pelican and Challenger satellites.

Speaker #4: 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 in front of us.

Ashley Johnson: 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 in front of us. Turning to the balance sheet, we ended the quarter with approximately $271.5 million of cash, cash equivalents, and short-term investments, an increase of approximately $45 million sequentially. This marks our second sequential quarter of increasing our cash position. During the first half of the year, we generated approximately $85.1 million in net cash from operating activities and $54.3 million in free cash flow. 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.

Speaker #4: Turning to the balance sheet, we ended the quarter with approximately $271.5 million of cash, cash equivalents, and short-term investments, an increase of approximately $45 million sequentially.

Speaker #4: This marks our second sequential quarter of increasing our cash position. During the first half of the year, we generated approximately $85.1 million in net cash from operating activities and $54.3 million in free cash flow.

Speaker #4: 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.

Speaker #4: At the end of Q2, our remaining performance obligations, or RPOs, were approximately $690 million, up approximately 516% year-over-year, of which approximately 32% applied to the next 12 months and 57% to the next 24 months.

Ashley Johnson: At the end of Q2, our remaining performance obligations, or RPOs, were approximately $690 million, up approximately 516% year-over-year, of which approximately 32% apply to the next 12 months and 57% to the next 24 months. 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 $736 million, up approximately 245% year-over-year. Approximately 35% of our backlog applies to the next 12 months and 59% to the next two years. We believe this backlog provides us with good visibility to sustain our revenue growth rate heading into fiscal 2027. Now let me turn to our guidance for the third quarter and full year for fiscal 2026. In Q3, we're expecting revenue to be between $71 million and $74 million.

Speaker #4: We estimate our backlog, which includes contracts with a termination for convenience clause—a common feature in our U.S. federal contracts and occasionally found in other customer contracts—to be approximately $736 million, up approximately 245% year-over-year.

Speaker #4: Approximately 35% of our backlog applies to the next 12 months, and 59% to the next two years. We believe this backlog provides us with good visibility to sustain our revenue growth rates heading into fiscal 2027.

Speaker #4: Now let me turn to our guidance for the third quarter and full year for fiscal 2026. In Q3, we're expecting revenue to be between $71 million and $74 million. As in previous quarters, when we've seen elevated usage patterns, our guidance assumes that we will see those customers return to historical levels to manage consumption within their annual budgets.

Ashley Johnson: As in previous quarters, when we've seen elevated usage patterns, our guidance assumes that we will see those customers return back to historical levels to manage consumption within their annual budgets. We expect non-GAAP gross margin for the quarter to be between 55% and 57%. Our adjusted EBITDA range for the third quarter is expected to be between $4 million to break even, 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 $18 million to $24 million in Q3. For the full fiscal year 2026, we now expect revenue to be between $281 million and $289 million.

Speaker #4: We expect non-GAAP gross margin for the quarter to be between 55% and 57%. Our adjusted EBITDA range for the third quarter is expected to be between a negative $4 million to break even, 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.

Speaker #4: We are planning for capital expenditures of approximately $18 to $24 million in Q3. For the full fiscal year 2026, we now expect revenue to be between $281 million and $289 million. This increase in range for our outlook reflects our strong performance in Q2 and the improved visibility for the back half of the year, even as we continue to monitor the evolving landscape of U.S. government budgets.

Ashley Johnson: This increase in range for our outlook reflects our strong performance in Q2 and the improved visibility for the back half of the year, even as we continue to monitor the evolving landscape of U.S. government budgets. We expect non-GAAP gross margin for fiscal 2026 to be between 55% to 57%, unchanged from the guidance provided on our prior call. We expect our adjusted EBITDA loss for fiscal 2026 to be in a range from $7 million to break even, again, reflecting the investments we're making in downstream solutions and our space systems capabilities. We are planning for capital expenditures of approximately $65 million to $75 million for the year, reflecting increased investments we're making in our Pelican, Tanager, and SuperDev fleets to put us in a strong position to meet the accelerating market demand.

Speaker #4: We expect non-GAAP gross margin for fiscal 2026 to be between 55% to 57%, unchanged from the guidance provided on our prior call. We expect our adjusted EBITDA loss for fiscal 2026 to be in a range from minus $7 million to break even, again reflecting the investments we're making in downstream solutions and our space systems capabilities.

Speaker #4: We are planning for capital expenditures of approximately $65 to $75 million for the year, reflecting increased investments we are making in our Pelican, Challenger, and SuperDev fleets, to put us in a strong position to meet the accelerating market demand.

Speaker #4: As Will referenced earlier, we also expect to be free cash flow positive on an annual basis this year, over a year earlier than the target we’d previously shared.

Ashley Johnson: As Will referenced earlier, we also expect to be free cash flow positive on an annual basis this year, over a year earlier than the target we'd previously shared. It's worth also taking a moment to highlight that Q2 represented our first rolling 12 months of free cash flow profitability, something our team should be very proud of, given the work they all contributed to get us to this milestone. Before we turn to Q&A, I'd like to let everyone know that we're hosting an Investor Day on Thursday, October 16, 2025, both in New York City and virtually. Please visit our Investor Relations website to learn more. We intend to cover our growth outlook, market opportunity, and much more at the event. We hope you're able to join us. Operator, that concludes our comments, and we can now take questions.

Speaker #4: It's worth also taking a moment to highlight that Q2 represented our first rolling 12 months of free cash flow profitability—something our team should be very proud of, given the work they all contributed to get us to this milestone.

Speaker #4: Before we turn to Q&A, I'd like to let everyone know that we're hosting an Investor Day on Thursday, October 16th, 2025, both in New York City and virtually.

Speaker #4: Please visit our Investor Relations website to learn more. We intend to cover our growth outlook, market opportunity, and much more at the event. We hope you're able to join us.

Speaker #4: Operator, that concludes our comments, and we can now take questions.

Speaker #1: Thank you. We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you'd like to ask a question, please raise your hand now.

Operator: Thank you. We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you'd like to ask a question, please raise your hand now. If you have dialed into today's call, please press star nine to raise your hand and star six to unmute. Please stand by while we compile the Q&A roster. Your first question comes from the line of Colin Michael Canfield with Cantor Fitzgerald. Your line is open. Please go ahead.

Speaker #1: If you have dialed in to today's call, please press *9 to raise your hand and *6 to unmute. Please stand by while we compile the Q&A roster.

Speaker #1: And your first question comes from the line of Call-in Canfield with Cantor Fitzgerald. Your line is open. Please go ahead.

Speaker #5: Hey, thank you for the question. Maybe starting out on growth dynamics, if you can kind of talk us through how much of Germany and JSAP is within the backlog that's posted today, and how to think about kind of the growth mechanics within the DOD.

Colin Michael Canfield: Thank you for the question. Maybe starting out on growth dynamics, if you can kind of talk us through how much of Germany and JSAP is within the backlog that's posted today and how to think about the growth mechanics within the DOD. Just looking at the contract award around naval maritime domain awareness and maybe pointing to trends you see where Planet Labs PBC can deal directly more with combatant command controls. Thanks.

Speaker #5: So just kind of looking at the contract award around Naval Maritime Domain Awareness, and maybe pointing to kind of trends you see where Planet Labs can deal directly more with Combatant Commands.

Speaker #5: Thanks.

Speaker #6: Maybe I can start with the latter. Fine. I just actually came back from DC, and unfortunately, on one of their events, we have a very strong partnership there, and the government sees huge value in that expansion. You know, particularly it leans into our maritime domain awareness and transcript solutions, and that gives you a hint as to the answer to your question, which is they’re leaning more into this broad area of monitoring capabilities, whether that's our GMS solution or our MDA solution.

Will Marshall: Maybe I can start with the latter point. I just had to get back from DC and unfortunately I'm on the list and have a very strong passion for that. I'm getting huge value in that expansion. You know, particularly leans into our maritime domain awareness and planned script solutions and gives you a hint to the answer to your question, which is they're leaning more into this broad area of monitoring capabilities, whether that's our GMS solution or our MDA solution. You saw the win lastly with the US Navy earlier and our work with the Defense Innovation Unit. Overall, we see them leaning into that focus.

Speaker #6: And you saw the wins obviously with the U.S. Navy earlier and our work with the Defense Innovation Unit. So overall, we see them leaning into that further.

Speaker #7: In terms of the amount of the contract expenses put in, our business backlog, the full amounts would be in those numbers. And obviously, recognize there were multiple years.

Ashley Johnson: In terms of the amount of this contract that's included in our view of the backlog, the full amount would be in numbers and obviously recognized over multiple years.

Speaker #1: Got it. And then, as we think about, kind of not to preview investor day targets a little bit, but like multi-year free cash flow dynamics, if you can, kind of give us a high-level, you know, kind of concept of the working capital schedule related to those awards, as well as the other international awards that I think we talked about last call around sizing the pipe as being similarly sized, maybe a little bit smaller than Germany and JSAP.

Colin Michael Canfield: Got it. As we think about, not to preview Investor Day targets a little bit, but like multi-year free cash flow dynamics, if you can kind of give us a high-level, you know, kind of concept of the working capital schedule related to those awards, as well as the other international awards that I think we talked about last call around sizing the pipe as being similarly sized, maybe a little bit smaller than Germany and JSAP. Contemplating the working capital payments from those two customers, as well as the other international opportunities, is there a right way to think about kind of the conceptual free cash flow ladder from here, given those working capital benefits? Thank you.

Speaker #1: So, kind of contemplating the working capital payments from those two customers, as well as the other international opportunities, is there a right way to think about kind of the conceptual free cash flow ladder from here?

Speaker #1: Given those working capital benefits? Thank you.

Speaker #7: Yeah, without getting too specific, I'd say, you know, generally speaking, what we see from these satellite services contracts is that they are positive for us from a working capital perspective.

Ashley Johnson: Yeah, without getting too specific, I'd say, generally speaking, what we see from these satellite services contracts is they are positive for us from a working capital perspective and enabled us to build out the fleet without needing to fund those build-outs from our balance sheet. The specifics will obviously vary quarter to quarter with a decent amount weighed in the early years of the contract and then later milestones.

Speaker #7: And it enables us to build out the fleet without needing to fund those build-outs from our balance sheet. The specifics will obviously vary quarter to quarter, with a decent amount weighted in the early years of the contract and then later milestones as the contract progresses to more of a managed service component.

Speaker #1: Thank you. Your next question comes from the line of Trevor Walsh. With JMP Securities, your line is open. Please go ahead.

Operator: Thank you. Your next question comes from the line of Trevor James Walsh with JMP Securities. Your line is open. Please go ahead.

Speaker #5: Great. Can you guys hear me okay? Terrific.

Trevor James Walsh: Great. Can you guys hear me okay? Terrific. Thanks for taking the questions. Maybe just a quick one for you, Will. You've talked about this in different ways before, but could you maybe just give an update on the pipeline of the services, type of contracts? I'm really trying to understand where you are ring-fenced or guardrailed, if at all, around those. Is it just the ability to get Pelicans out the door to service those contracts? Is it more just finding the right customers that want to do it at a scale that makes it economically viable for you guys? Maybe you can just walk through how you're thinking about not just the size of the pipeline, but what you can actually execute there, if that makes sense.

Speaker #6: Yeah.

Speaker #5: Thanks for taking the questions. Maybe just a quick one for you, Will. You've talked about this in different ways before, but could you maybe just give an update on the pipeline of the services-type contracts?

Speaker #5: And really, I'm trying to kind of understand where you are ring-fenced or guardrailed, if at all, around those. Is it just the ability to get Pelican belt to door to service those contracts?

Speaker #5: Is it more just finding the right customers that want to kind of do it at a scale that kind of makes it economically viable for you guys?

Speaker #5: Just maybe just walk through how you're thinking about not just, you know, the size of the pipeline, but what you can actually, you know, execute there, if that makes sense.

Speaker #6: Yeah. Look, I mean, we're just seeing a lot of strong demand there. I said last time we were working with a number of strategic partners that we've often worked with for many years before.

Will Marshall: Yeah. Look, I mean, we're just seeing a lot of strong demand for that. I said last time, we're working with a number of strategic partners that we've often worked with for many years before. The deal in collaboration with Germany could expand back as well. We've been working with them for many years because of trusted relationships. There are a lot more opportunities we're going after, and across the world as well as the global demand. We're feeling very good and we're leaning into that model and positioning them as a market that's trying to trend very well. We're very pleased with that second deal being done in satellite services later this year.

Speaker #6: The deal in collaboration with Germany couldn't stand, either. We've been working with them for many years to build a trusted relationship. There are a lot more opportunities for it going forward.

Speaker #6: And it's across the world as well. It's a global demand, so we're feeling very good, and we're leaning into that demand. I mentioned in a pair of remarks that the pipeline is ensuring very well.

Speaker #6: So we're very pleased with that second deal being done in satellite services made this year. I just want to touch on how synergistic that is with the core business as well.

Will Marshall: I just want to touch on how synergistic that is with the core business as well because these things enable us to build more satellites, but then you have more capacity and we'll revisit ways to grow the rest of our customer base. It really is win-win for the time investing ourselves in the rest of our customer base.

Speaker #6: Because these things enable us to build more satellites, we have more capacity and more revisit rates for the whole rest of our customer base.

Speaker #6: And so it really is a win-win for the fine customer like ourselves and the rest of our customer base.

Speaker #5: Great. Awesome.

Trevor James Walsh: Great. Awesome. I appreciate the color. Maybe one quick follow-up for you, Ashley. With the good outperformance on the gross margins, and I know you've talked through some of the elements there that helped to contribute to that, how should we think about that heading into, obviously, not so much even the balance of the year, but just heading into next fiscal around, you know, is that still going to have some variability around that gross margin number just based on what you're doing with JSAT and others, or can we expect that now hitting that plus 60% watermark to hold in the next, you know, call it year, year and a half?

Speaker #1: I appreciate the color. And maybe one quick follow-up for you, Ashley. Just with the good outperformance on gross margins—and I know you talked through kind of some of the elements there that helped to contribute to that—but how should we just think about that, kind of heading into obviously not so much even the balance of the year, but just heading into next fiscal around, you know, is that still going to have some variability around that gross margin number just based on kind of what you're doing with JSAP and others? Or can we kind of expect that now kind of hitting that plus 60% watermark to hold in the next, you know, call it year, year and a half?

Speaker #7: Yeah, I'd call it on Q2, as I said, that upside in gross margin was really driven by strong usage dynamics. We see upside in the data subscription revenue.

Ashley Johnson: Yeah, I'd call it on Q2 as I said, that upside in gross margin is really driven by funding dynamics. We see upside in the data subscription revenue. Obviously, that's very high margin business from just at the bottom line. As we look forward on gross margin as you allow, just the mix of revenue will cause margin to be different. Obviously, we feel that we're going to have the ability to expand gross profit and continue to drive overall profitability on the business. The margin number will likely vary as we see, you know, as we progress into the build phase, lower margin in the earlier years and higher margin.

Speaker #7: Obviously, that's a very high-margin business and drops to the bottom line. As we look forward on gross margin, as you called out, does the mix of revenue cause margin to be different?

Speaker #7: Obviously, we feel very good about the ability to expand the gross profit and continue to drive overall profitability for the business. However, the margin number will likely vary as we progress into the build phase of some of these satellite services contracts, which are lower margin in the earlier years and obviously tend to be higher margin in the latter years of the contract.

Speaker #6: And if I can just go back and add one other thing on satellite services, just to sort of go up, I think we've competitively positioned very well to win this market because of our ability for full stack integration and our ability to build out that quickly.

Will Marshall: This is just a sort of quote. I think we're competitively very well positioned to win this market. To give you a tiny sense of that, the partnership we did in collaboration with Germany, we already launched one satellite for them. This was already in the planning, but the fact that we were able to get in their own eyes that fast within a couple of months, this is enough.

Speaker #6: And just to give you a tiny sentence on that, the partnership we did in collaboration with Germany: we already launched one satellite for them.

Speaker #6: This was already in the planning, but the fact that we were able to get them their own eyes that fast, within a couple of months, is unprecedented.

Speaker #6: And no one else can do that. And so it really puts us in a strong position.

Speaker #1: Great. Thanks, both. Appreciate it.

Operator: Great. Thanks, Paul. Appreciate it.

Speaker #7: And thank you.

Ashley Johnson: Thank you.

Speaker #1: Thank you. Your next question comes from the line of Mike Latimore from Northland. Your line is open. Please go ahead.

Operator: Thank you. Your next question comes from the line of Michael James Latimore from Northland. Your line is open. Please go ahead.

Speaker #8: All right. Yeah, great. Congrats on the strong results here. I guess with regard to the usage levels, can you comment a little bit more on that?

Michael James Latimore: All right. Yeah, great. Congrats on the strong results here. Okay, with regard to the usage levels, can you comment a little bit more on that? What do you see as driving that? Are any of your customers discussing early renewals and maybe expansions early or anything like that? Are they paying overage? Just a little bit more color on the usage dynamic. Is it continuing so far in the third quarter to be strong?

Speaker #8: You know, what do you see as driving that? Are any of your customers sort of, I don't know, discussing early renewals and maybe expansions early or anything like that?

Speaker #8: Are they paying over? Just a little bit more color on the usage dynamic, and is it continuing so far in the third quarter to be strong?

Speaker #7: Yeah, thanks for the question, Mike. Generally speaking, when we see an uptick in usage like that, just to be safe, given the dynamics around government budgets, we don't assume that that will continue in subsequent quarters, but instead look at historical pacing and try to adjust accordingly so that our overall assumption would be they stay within their annual budgets.

Ashley Johnson: Yeah, thanks for the question, Mike. Generally speaking, when we see an uptick in usage like that, just to these days, given the dynamics around government budgets, we don't assume that that will continue in the subsequent quarters, but instead look at historical pacing and try to adjust accordingly so that our overall assessment would be they stay within their annual budgets. We have seen some dynamics where customers have sought early renewals. There is always the potential that we could see that usage continue. Again, a lot of it depends on what their availability is to doing an early renewal, getting early access to budget dollars, etc. Like I said in the prepared remarks, to be safe, we look at historical patterns and assume that in our guidance.

Speaker #7: But we have seen some dynamics where our customers have sought early renewals, so there is always the potential that we could see that usage continue.

Speaker #7: But again, a lot of it depends on their availability for doing an early renewal, getting early access to budgets, budget dollars, etc.

Speaker #7: So, like I said in the prepared remarks, to be safe, we look at historical patterns and assume that in our guidance going forward.

Speaker #8: Yeah, that makes sense. And then on the EOCL deal, it sounds like you've expanded your opportunity there. Is there a new timeframe for the renewal beyond October?

Michael James Latimore: Okay. Yeah, makes sense. On the EOCL deal, it sounds like you've expanded your opportunity there. Is there a new timeframe for the renewal beyond October?

Speaker #6: No, I mean, but we continue to be very proud of what we're doing there and seeing that expansion come in. Everyone's leaning into our broad area analytics, like I said before.

Will Marshall: We continue to be very familiar with what we're doing there, and we've seen that since we came in, and everyone's leaning into our board area. Being more in the commercial solution and using services overall, we think that planning as well is interesting for that. We're obviously updating you with more on the EOCL as we go.

Speaker #6: And so we provide great value. As I said, I just came from D.C., and I was meeting a bunch of leaders there. This administration is leaning more into commercial solutions and services overall.

Speaker #6: So, we think that we are well positioned for that. And so, yeah, we'll obviously update you with more on EOCL as we know.

Speaker #1: Thank you. Your next question comes from the line of Ryan Koontz from Needham. Your line is open. Please go ahead.

Operator: Thank you. Your next question comes from the line of Ryan Boyer Koontz from Needham & Company. Your line is open. Please go ahead.

Speaker #8: Great. Thanks. On your satellite services deal, maybe just stepping back a bit, can you reflect on what percentage, or maybe kind of range, of those satellite capacities you have kind of nailed up with these deals?

Ryan Boyer Koontz: Great, thanks. On your satellite services deal, maybe just stepping back a bit, can you reflect on what percentage or maybe kind of range of those satellite capacities you have kind of nailed up with these deals for Japan and Germany? I mean, these dedicated satellites you're building for them, what percentage of these satellite capacity is included in your contracts? Is it 100% capacity?

Speaker #8: For Japan and Germany?

Speaker #6: What do you mean, what percentages? Do you mean of our...?

Will Marshall: Yeah. We mentioned when we did the deal with Japan, and that was a tiny fraction of our capacity. The majority of our capacity, the rest of the world capacity, is still continuing to provide to our other customers. It is a win-win in that. That's often seen in that area. In that case, seen around Asia region. That's where we get sharp, but it's a significant majority. The new partnership in collaboration with Germany, as I was just going to start to explain that, Europe theater, so to speak. I'll just point out, again, it's slightly different from the time period in that we're not, we're leveraging existing built plans and for that rather than new ones. It had a slightly different structure financially. That, again, is a small.

Ryan Boyer Koontz: Yeah, great. Thank you. On maritime domain awareness, any updates there on your kind of solutions approach? It sounds like a really hot area. Are you, you know, what type of partners are you working with? I know you talked a lot about SIMAX in the past. Any updates on your maritime domain awareness solutions from a product perspective?

Will Marshall: Yeah, no, we're very pleased to focus there. I mean, we saw our expansion with the US Navy, and that was the marquee one. We had mentioned previously that that was sole source because they recognized also that no one else could provide. We'll just write the name you see it into none of our other partnerships, including the one with NATO and others. We're very excited by the maritime domain awareness. Yeah, it is our most mature AI-enabled solution, and we have a strong pipeline of others that we're going after. It is also a part of our deal with collaboration with Germany because in addition to the satellite services component of that, there's a bigger annual contract for data and solutions as well as part of that deal. That includes maritime domain awareness as part of one of those solutions.

Will Marshall: Really, this gets our ability to scan large areas and look for unknowns to knowns rather than just the known knowns that the financial security is really focused on to start with. It's getting at their holy grail in a way. It is a unique position because of our daily scans do that.

Contact with data and solutions is part of that deal, and that includes my time domain awareness as part 1 of this. And so really, um, this enhances our ability to scan large areas and look for unknown unknowns, rather than just the known knowns that these functional communities really focused on to start with. It's getting their Holy Grail in a way, and it is unique to the position because a lot of these scans do that.

Operator: Thank you. As a reminder, if you'd like to ask a question, please raise your hand. If you have dialed into today's call, please press star nine to raise your hand and star six to unmute. Your next question comes from the line of Daniel Hibschman with Craig-Hallum. Your line is open. Please go ahead.

Thank you. As a reminder, if you'd like to ask a question, please raise your hand. If you have dialed into today's call, please press *9 to raise your hand and *6 to unmute.

Daniel Hibschman: Hey, yeah, this is Daniel Hibschman on for Jeff Van Rhee. Will, I say congrats on, you know, another really great quarter. I just wanted to start in on maybe if we could double-click on commercial, you know, really strong quarter there, the 16% sequential growth. I think the first year-over-year growth for commercial in about two years. A really great quarter for that line and a little bit of an inflection for it back to growth. Maybe we could just, you know, you said about energy and agriculture driving some strengths there, but maybe if you could expand a little bit on what's happening and what you see kind of going forward for that business.

Your next question comes from the line of Daniel Hibshman with Craig Hallum. Your line is open, please go ahead.

Will Marshall: Yeah, energy and agriculture, but also insurance. I mentioned the SwissRe partnership, which is a good example there. A really creative part of our high ROI. I think overall we're right, but we're starting to see that turnaround. I remember when we're building these solutions for DNI, they are often translatable to other areas. We were just talking about domain awareness. Think about how that could be useful for the maritime sector, right? Not just for navies and coast guards. Our solutions to civil government are also relevant for the commercial sector. Maybe it goes again about our daily scan as well, and just part of the system is that opening up these markets, right? We have that differentiation component of the rest of the earth observation players, and we can serve agriculture, insurance, disaster services. I expect that to be driven even more as AI-enabled solutions in these areas.

Hey, yeah, this is Daniel on for Jeff panry and will ask you congrats on, you know another really great quarter. I just wanted to start in on maybe if we could, uh, double click on Commercial, you know, really strong quarter that 16% sequential growth. And I, I think the first year of your growth for commercial and about 2 years. So, a really great quarter for that line and a little bit of an inflection for it back to growth. Maybe we could just, you know, you said about energy and agriculture, driving some strength there. But maybe, if you could expand a little bit on what's Happening, and what you see kind of going forward for that business,

Yeah, energy and I can talk to you, but also, um, insurance. Uh, I mentioned the Swiss free partnership, which, uh, where you know, a particular example. There really created, I think overall, you're right. But we're starting to see that tournament at night. You know, remember when we're building these solutions for DNA.

They are often translatable to other areas. We were just talking about finding ways to think about how that could be useful for the maritime sector, right? Not just for navies and Coast Guards and our solutions; the civil government is also relevant for the commercial sector, you know. So we have.

Will Marshall: The traditional challenge has been expanding out the actual insights from our imagery, and AI is making that easier and easier. We're starting with our focus on solutions and sensor intelligence, but I believe there'll be translations into the commercial sector, and we're beginning to see that.

I think tremendous value and 1 of the amazing things. Again about our daily scam is that if rather than just asking systems is that it opens up these markets, right? That's, you know, we have that differentiation in terms of the best of the earth observation players and that we can serve Agriculture and insurance Disaster Response so on because they need large area coverage to do that. So um I expect that to be driven even more as AI enables Solutions in these areas, the traditional challenge has been expecting it out the actual insights, from our imagery and AI is making that easier and easier. So, we're starting with our focus on Solutions and intelligence, but I believe they'll be translations into the commercial sector and we're beginning to see that.

Operator: Thank you. Your next question comes from the line of Gregory Pendi from Clear Street Markets. Your line is open. Please go ahead.

Thank you. Your next question comes from the line of Gregory Pendy from Clear Street. Your line is open. Please go ahead.

Gregory Pendi: Hi, can you hear me? Sorry about that. Thanks for taking my question. I just was wondering, can you provide us a possible update on where the Anthropic relationship is and how that's been developing and what we can possibly expect, you know, through the course of the year?

Hi, can you hear me?

Will Marshall: Yeah, I mean, firstly, we're really bullish on AI in general and our data scan, speeding our values, and then usability and scaling up capability. What we're doing with Anthropic, in particular, is helping to fine-tune the cloud model on our data. You know, those models are pretty good out of the box. If you show them satellite imagery, these new multimodal visual language models are really good at describing the image, being able to do basic analysis on those images. That's without fine-tuning, because they haven't seen much satellite data. Our thinking together with collaborations is that if we expose it to far more satellite imagery, it will be much more accurate and scalable at that capability too. Now, our partnership with Anthropic is not the only one. We're also doing a partnership with Google on a few months of collaboration.

Hi. Hi, can you hear me? Sorry about that. Um, thanks for taking my question. Um, just was wondering, uh, can you brought about us? Uh, possible update on where the anthropic uh, relationship is, and how that's been developing, and what we can possibly expect, um, you know, through the course of the year.

Yeah, I mean, trust me. Um, I'm really bullish on the AI in general. And and and and and uh, you know, incredibly important tool for for our data. Scan Speedy, time value, spending usability, scaling up capability. What we're doing with that topic in particular is helping to find tune the cloud model on our data. Um, you know, those, those models are pretty good out of the box if you show them some imagery, these new multimodal, um uh visual language models are really good at uh, describing the image being able to do basic analysis on those images.

Will Marshall: And then with NVIDIA on the chat that they're including on the platform that we launched on both of the platforms that we just launched two weeks ago. There was AI upstairs and AI downstairs we're focused on, and it really is, we're in a unique position and it's a very, very exciting time. I'd go so far to say that really Planet Labs PBC is the only space company that's truly central to AI, and we're the only space and AI company. I think this is a fascinating time, and we're excited about those collaborations that we're doing with other companies and our own internal work.

And that's without fine-tuning. Those smells haven't seen much of our data, so uh, our our thinking together as a collaboration is that as if we expose it to far more stuff like imagery, it'll be much more accurate and scalable at that capability too. Remember our partners, for example, is not the only 1. We also doing have a partnership with Google, um, on a similar sort of collaboration. And then with Nvidia, on the chips that including the Jets and own platforms that we launched on both of the Pelicans that we just not 2 weeks ago. So it it both AI upstairs and, and AI dancers. We're we're focused on. And it's just, it really is, we're in a unique position. And and, and, and it's a very very exciting time. Um,

We say, send AI company. So I think this is a fascinating time. And we're excited about those collaborations that we're doing with other companies and our own internal work.

Operator: That's very helpful. Thanks a lot. Thank you. Your next question comes from the line of Caleb Henry with Quilty Space. Your line is open. Please go ahead.

That's very helpful. Thanks a lot.

Thank you. Your next question comes from the line of Caleb Henry with Quilty Space. Your line is open. Please go ahead.

Michael James Latimore: Sorry, can you hear me? Am I coming through?

Sorry. Can you hear me?

Yep.

Can I come through?

Operator: Okay, thanks. Two questions. The first was just about the Tanager fleet. I was wondering if there's kind of any more planning around how to monetize that going forward, and if you have any more visibility into what that might look like as a future constellation.

Yeah.

Will Marshall: Yeah, absolutely. I'd say, firstly, again, we're kind of at our one-year anniversary milestone, and that informed methane detection work that we do in collaboration with Carbon Mapper are suggesting our 3,000 resources, missions. It's been fantastic to see. There are so many opportunities already with that. One is with Carbon Mapper itself, and the other is California that we've announced earlier this year. We think California leverages this technology to monitor emissions and get ahead of those sort of climate goals that they have. We believe there's a strong commercial and innovation that we are just beginning on to provide those data. It's early days still on that. It's a relatively new market, but we are very pleased with the performance of that instrument.

Okay, thanks. Uh, 2 questions. First was just about the, the Tanner fleet was wondering if there's kind of any more planning around how to monetize that going forward. And uh, if you have any more visibility into what that might look like, as a, a future constellation.

Yeah, absolutely. So firstly, again, we're proud of our 1-year anniversary last time. And um, that important methane detection work that we do in collaboration with Carbon Mapper, detecting now 3,000 sources of their emissions, it's been fantastic to see the results of that instrument. Um, we have 2 solid revenue opportunities already. That 1 is the problematic itself, and the other is California. We've been out earlier this year, and we think California has a powerful proof point about how other government, state, and local entities can.

Language this technology to monitor emissions and get ahead of, uh, those sort of, uh, climate goals that they have. Um, we believe there's a strong commercial and, and dependent intelligence application of this that we only just beginning on, uh, to provide those data. Um, and so it's early days, still on that. It's a relatively new market. But we, uh, we are very pleased with performance, um, of that instrument.

Michael James Latimore: Okay, thanks. My other question is just about backlog. Forgive me if I missed the answer to this one already, but it's grown really fast. I was wondering if you could share anything about the kind of average length or how revenues are distributed from that backlog, if that's more front-loaded or linear over the next couple of years.

Will Marshall: No, we haven't even talked more about that. It's going up 245% year over year. We feel very good about that. Ashley, do you have anything to share on that?

Okay, thanks. And then, my other question is just about backlog. Forgive me if I missed the answer to this one already, but it's grown really fast. I was wondering if you could share anything about the kind of average length of how revenues are distributed from that backlog, if that's more front-loaded or linear over the next couple of years.

Ashley Johnson: Yeah, and I'm just going to put it as well as in our head sheet you can see the breakdown and what % is more length. You know, generally speaking, the large contracts that we've announced this year, both with our partners in Japan as well as the collaboration with Germany, were the drivers of the backlog increase. In addition, we announced in July, as well as additional contracts on the call today that are, you know, seven-figure and higher contracts for some of the solutions that we are bringing to the market. The combination of those factors is really driving backlog increase. Obviously, the largest public services contracts are recognized over multiple years. We do allow a % of 10% to 12% to 24 months, and solutions contracts, when we talk about, you know, seven and eight figures are typically referred to in the ACV metrics.

Yeah, we're happy to talk more about that log, right now? On a sense. It's going up, 245% year-over-year. We feel very good about that. Actually, we do have a, something to share on the yeah. And, and the supervisor, as well, as in our country, you can see the breakdown in in, you know, what percentage is um, expect to be recognized every every 12 months versus the next 24 months. Um but you know, generally speaking that the large contracts that we've announced this year, but with our partner in Japan as well as the collaboration with Germany and work with drivers of that backlog, increase. And in addition, um, we announced in July as well as um, additional contracts on the call.

Day um, that are, you know, seven-figure and higher contracts for some of the solutions that we are bringing to market. And then the combination of those factors that's really driving, um, backlog increases. Obviously, um, the larger solid services contracts are recognized over multiple years, and so we do call out what percentage is in 12 and 24 months, um, and solutions contracts. Um, when we talk about, you know, seven and eight figures, particularly right to AC.

Operator: Thank you. That's all the time we have for questions today. I will now turn the call back to Will Marshall, CEO and Co-Founder, for closing remarks.

Thank you. That's all the time we have for questions today. I will now turn the call back to Will Marshall, CEO and co-founder, for closing remarks.

Will Marshall: Thanks everyone for joining. Overall, I'd say our business is humming. I can give a quick update about the work of our teams together. Both on the core business, it is humming. We saw those deals in NATO and NATO Paytm. The constellation of satellite services business was humming with that second deal. As a result, our financials are humming, and the backlog in particular I'm proud of. This all gives us confidence about probably growth acceleration, not seeing it go.

Oh, thanks everyone for joining. Um My overall I'd say our business is humming um and if you're both of the work by teams together to that both on the core business is coming. Um you saw those deals with NATO and take on um the constellation of satellite services businesses coming with that second video. And as a result, our financials are harming, the cash and the backlog in particular, I'm proud of. Um and this all gives us uh confidence about solid growth acceleration locks in for fy7. So we've been very good. Thanks for paying attention and we're really proud of it. So work with the team to get us set.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.

This concludes today's call. Thank you for attending. You may now disconnect.