Planet Labs PBC Q3 2025 Earnings Call Transcript

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Provided by Quartr
December 9, 2024

Key Takeaways

  • Planet generated a record $61.3 M in revenue (+11% YoY) in Q3 and achieved a 64% non-GAAP gross margin, marking six consecutive quarters of adjusted EBITDA improvement as it nears profitability.
  • The company secured multiple large government contracts—including an eight-figure expansion with an international defense customer and a third DoD pilot—driving a ~25% YoY increase in Defense & Intelligence revenue and bolstering its backlog.
  • Under NASA’s new CSTA vehicle, Planet won a $20 M order—landing later than expected—resulting in a ~$2.3 M Q3 revenue headwind but expanding NASA footprint by seven figures.
  • New product launches include the analytics-ready PlanetScope ARPS time-series feed, a 3 m AI-powered forest carbon monitoring service, and initial commercial availability plans for the Tanager hyperspectral and Pelican high-resolution satellites.
  • Commercial sector performance is improving with rising average deal sizes, wider AI-enabled solution adoption, and the largest-ever ACV bookings quarter, signalling potential growth acceleration.
AI Generated. May Contain Errors.
Earnings Conference Call
Planet Labs PBC Q3 2025
00:00 / 00:00

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Operator

Hello, everyone. Thank you for attending today's Planet Labs PBC third quarter of fiscal 2025 earnings call. My name is Sierra, 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. I would now like to pass the conference over to our host, Chris Genualdi, Vice President of Investor Relations. Please proceed.

Chris Genualdi
Chris Genualdi
VP of Investor Relations at Planet Labs PBC

Thanks, Operator. And hello, everyone. This is Chris Genualdi, Vice President of Investor Relations at Planet Labs PBC. Welcome to Planet's third quarter of fiscal 2025 earnings call. I am 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 may make forward-looking statements related to future events or our financial outlook. We also may reference qualified pipeline, which represents potential sales leads that have not yet executed contracts. Any forward-looking statements are based on management's current outlook, plans, estimates, expectations, and projections.

Chris Genualdi
Chris Genualdi
VP of Investor Relations at Planet Labs PBC

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 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.

Chris Genualdi
Chris Genualdi
VP of Investor Relations at Planet Labs PBC

We believe that these measures provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making. For more information on the non-GAAP financial measures, please see the reconciliation tables provided in our press release issued earlier this afternoon, 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.

Will Marshall
Will Marshall
CEO, Chairperson, and Co-founder at Planet Labs PBC

Thanks, Chris, and hello, everyone. Thanks for joining us today. During the third quarter, we made significant progress across our go-to-market, technology, and financial objectives. We secured multiple large contracts with government customers globally, advanced our next-generation data sets towards commercialization, and enhanced the Planet Insights Platform with new capabilities. We also meaningfully improved the fundamentals of the business. To quickly summarize our financial achievements, for the third quarter of fiscal 2025, we generated a record $61.3 million in revenue, representing 11% year-on-year growth. Non-GAAP gross margin for the quarter increased to a record 64%, up from 52% a year ago and 58% last quarter. Adjusted EBITDA loss for Q3 narrowed to approximately $242,000, marking our sixth sequential quarter of improvement in adjusted EBITDA as we substantively narrow in on our target to achieving adjusted EBITDA profitability next quarter. Ashley will provide more detail on the financials shortly.

Will Marshall
Will Marshall
CEO, Chairperson, and Co-founder at Planet Labs PBC

Turning to sales highlights, let's start with the defense and intelligence sector. During Q3, we saw a substantial increase in new and expansion bookings with D&I customers, primarily driven by wins in the international market, which have contributed to the increase in our backlog and strengthened our foundation for growth going forward. Revenue from the D&I sector grew approximately 25% on a year-over-year basis, and we continue to see the emerging trend of defense customers adopting partner and AI-enabled solutions powered by our data to enhance their ability to identify known and unknown threats over broad areas. For example, during the quarter, Planet won an eight-figure expansion with an international defense customer to provide a full range of Planet products, including PlanetScope, SkySat, maritime domain awareness, and other analytics. We expect this contract to ramp into the next year. Planet also was selected for another seven-figure pilot with the U.S.

Will Marshall
Will Marshall
CEO, Chairperson, and Co-founder at Planet Labs PBC

Department of Defense. This is our third such pilot program with the U.S. DOD this year. Under this three-month project, Planet will provide satellite imagery in key areas of interest with analytics-powered insights developed with a Planet partner. We continue to work towards converting these pilots into operational contracts. The opportunity to sell global and regional monitoring services to existing and new government customers is significant in our view. Additionally, we have the opportunity to sell upcoming new data sets like Tanager hyperspectral or Pelican high resolution to government customers as those come available. We'll share more on Tanager and Pelican in a moment. Turning to the civil government sector, where revenue grew approximately 10% year-over-year in Q3, we're pleased to announce that we've received our first order under the new NASA Commercial SmallSat Data Acquisition contract vehicle, CSDA, for approximately $20 million, covering one year of performance.

Will Marshall
Will Marshall
CEO, Chairperson, and Co-founder at Planet Labs PBC

As a reminder, NASA announced in early September that Planet was selected for the CSDA, the framework under which NASA can place orders through November 2028. While the first order came in later than we anticipated, landing on November 25th, with a renewal delay impacting revenue in Q3 by approximately $2.3 million, we were pleased to see that it came in as a seven-figure ACV expansion on our prior contract. Planet is very proud of the work our data have enabled through the CSDA program, which serves thousands of researchers at NASA and labs across the U.S. working on a wide range of Earth system sciences and applications.

Will Marshall
Will Marshall
CEO, Chairperson, and Co-founder at Planet Labs PBC

In a similar program across the Atlantic, we also recently signed a multi-year contract with the German space agency, DLR, to provide data access and development support for the agency's Earth observation data platform, integrating Planet data into the system and offering advanced services. These are two examples of government-wide agreements which provide broad access to our vast Earth observation archive to empower education research users in furthering science research and identifying and validating new use cases. These broad agreements enable substantial user bases at research institutions and government agencies to access large data sets, often covering entire countries or regions. There are often seven- or eight-figure deals, and we believe there are over 100 countries that could benefit from such offerings.

Will Marshall
Will Marshall
CEO, Chairperson, and Co-founder at Planet Labs PBC

Shifting to the commercial sector, we're cautiously optimistic that the improving business environment, combined with the changes we've made in our go-to-market, will position this sector to return to growth. We were pleased to observe in the quarter that average deal sizes for new and expansion contracts continue to trend upwards, indicative of our sales team's focus on higher value accounts with strong ROI use cases. Here, we are also seeing a growing trend for customers adopting AI-enabled solutions powered by Planet's differentiated data sets. We see these solutions as facilitating analysis across significantly broader areas and speeding up time to value for our customers. To share some examples, we recently signed an expansion with Abelio, a French technology company offering smart farming solutions. They're leveraging Planet Insights Platform and our PlanetScope data to enhance their digital agriculture solutions.

Will Marshall
Will Marshall
CEO, Chairperson, and Co-founder at Planet Labs PBC

Their solutions apply algorithms and AI models on top of Planet data to generate insights for precision farming and help save farmers between 5% and 10% in nitrogen application on average. They'll have access to our agriculture data across France, nearly three times the amount of data that they had previously integrated into their solutions last year. We also recently won an expansion with Global Fishing Watch, an international non-profit dedicated to advancing ocean governance. This six-figure deal represents a 650% expansion and enables 20 times the ocean coverage, allowing Global Fishing Watch to fully leverage PlanetScope data and machine learning to map vessel activity across millions of square kilometers of the ocean to better detect small vessels engaged in illegal fishing activities. Finally, we recently announced a partnership with Laconic to deliver AI-powered forest carbon insights aimed at enabling informed carbon credit trading.

Will Marshall
Will Marshall
CEO, Chairperson, and Co-founder at Planet Labs PBC

Under the seven-figure deal, Laconic will gain access to Planet's new forest carbon monitoring products we released last quarter. Leveraging these data feeds, Laconic plans to offer their customers accurate trends and verifications to instill trusted trading confidence and empower informed carbon credit decision-making. Overall, we're proud to share that Q3 represented our largest ever quarter of ACV bookings. We remain focused on driving growth acceleration while also building greater predictability into our book of business. This quarter's bookings expansion gives us confidence in our team's ability to do this, and Ashley will speak more to this shortly. Now to some recent product updates. During Q3, we released our analytics-ready PlanetScope ARP product for time series analysis and machine learning models on our core daily scan. This product harnesses our proprietary algorithm to create harmonized and spatially consistent stacks of images of the same location over time.

Will Marshall
Will Marshall
CEO, Chairperson, and Co-founder at Planet Labs PBC

The result is a more precise data set that's readily available for manipulation, analysis, and visualization, all delivered in the Planet Insights Platform. It's available today to our customers. In Q3, we also released our AI-powered Forest Carbon Monitoring product at the UN Climate Week in New York. It's the world's first global-scale forest structure monitoring system at a three-meter resolution, an unprecedented data set that can be used to underpin voluntary carbon markets, regulatory compliance, and deforestation mitigation. Turning to updates on our next-generation satellite fleets. As many of you saw, in September, we shared the first light images from Tanager-1 hyperspectral satellite. Tanager-1 has since begun helping Carbon Mapper monitor hundreds of emission sites globally under our commercial partnership. Just last month, Carbon Mapper published over 300 methane and CO2 plume detections at COP29 in Azerbaijan.

Will Marshall
Will Marshall
CEO, Chairperson, and Co-founder at Planet Labs PBC

In an incredible early win for the program, one emissions leak in Texas was voluntarily fixed by the commercial operator. This provides a small sense of the power of this data. It can lead to accountability and benefits for companies enhancing their efficiency while also providing significant benefits for the environment. Tanager-1 continues to go through its final commissioning and calibration, after which we plan to make the data commercially available to other customers across government and commercial markets. We're pleased with the near-term traction we're seeing in our pipeline for hyperspectral data, particularly in the energy and government sectors. I'd also like to highlight how the Tanager program represents a powerful blueprint for accelerating our technology roadmap by leveraging our space systems, capabilities, and IP with a partner.

Will Marshall
Will Marshall
CEO, Chairperson, and Co-founder at Planet Labs PBC

Now that the first satellite is in orbit and delivering data, we can begin to unlock the growth potential of the Tanager program while also accelerating our partner Carbon Mapper's mission. Overall, we see such opportunities as highly strategic, enabling us to scale our business more rapidly and strengthen our financial position. We expect to pursue similar opportunities going forward. Moving to our Pelican fleet, we're pleased to share today we shipped the Pelican-2 satellite to Vandenberg Space Force Base in preparation for launch, which is currently scheduled for January. As a reminder, the Pelican program is our next-generation high-resolution satellite, which enables continuity and enhancements over our current SkySat fleet, including in image quality, spectral bands, imaging capacity, and latency. The Pelican-2 design incorporates NVIDIA's latest Jetson GPU module, enabling edge compute, the power to run powerful AI on the satellite, and speed time to insights.

Will Marshall
Will Marshall
CEO, Chairperson, and Co-founder at Planet Labs PBC

It also incorporates satellite-to-satellite links, previously discussed, speeding time to value. In summary, we won multiple large contracts with government customers that we believe positions us to re-accelerate growth as those contracts ramp and expand. On the product front, we've made improvements to our core daily scan data. We're capturing a powerful new data set with our first Tanager satellite, which we expect to commercialize in a month ahead, and we plan to launch our next Pelican satellite shortly. Finally, the adoption of AI-enabled solutions amongst both government and commercial customers is growing. We're focused on leveraging our platform and partners to nurture this adoption, increase customer value, expand the addressable market, and ultimately build greater predictability and growth into the business. With that, I'll turn over to Ashley to talk through more details around our financials. Over to you, Ashley.

Ashley Johnson
Ashley Johnson
President and CFO at Planet Labs PBC

Thanks, Will.

Ashley Johnson
Ashley Johnson
President and CFO at Planet Labs PBC

As a quick reminder, it was less than six months ago that we completed a restructuring and introduced a new industry-aligned operating model to the business. In spite of the significant amount of change that this introduced to our teams, during this last quarter, our go-to-market teams delivered our best quarter of ACV bookings, including renewals, expansions, and new business, and I'm impressed with the team's performance. We also saw a meaningful step up in average deal sizes across all three sectors. These early proof points give us confidence that the new operating model is facilitating the foundational changes needed to re-accelerate our growth. While deal timing continues to be hard to predict, particularly given the large-scale nature of our business, the underlying fundamentals of the business continue to improve, and our competitive position is strengthening.

Ashley Johnson
Ashley Johnson
President and CFO at Planet Labs PBC

We've made significant strides towards profitability this quarter, showing substantial margin expansion and reducing our cash burn. So let's turn to the results. Revenue for the third quarter came in at a record $61.3 million, representing approximately 11% year-over-year growth. From a geographic perspective, during the third quarter, EMEA revenue grew approximately 15% year-over-year, Asia-Pacific grew over 25% year-over-year, Latin America grew over 30% year-over-year, and revenue in North America was flat on a year-over-year basis, impacted primarily by the delay in renewing and expanding our contract with NASA. As of the end of Q3, our end-of-period customer count was 1,015 customers. As we've shared before, this metric reflects our direct sales team's focus on large customers in our core verticals and our initiative to enable smaller, more transactional customers to purchase through our platform or our marketplace partners.

Ashley Johnson
Ashley Johnson
President and CFO at Planet Labs PBC

Customers who transact solely through our platform are not reflected in this number. Recurring ACV, or annual contract value, was 97% of our end-of-period ACV book of business, and over 90% of our end-of-period ACV book of business consists of annual or multi-year contracts. Our average contract length continues to be approximately two years weighted on an ACV basis. Net dollar retention rate at the end of Q3 was 104%, and net dollar retention rate with Winbacks was 105%. The delayed NASA task order impacted our net dollar retention rate by approximately 8.5 percentage points. As a reminder, at this point in the year, our net dollar retention rate reflects nine months of contract renewals. Our net dollar retention rate starts each fiscal year at 100% and then builds through the course of the year toward our final full-year result.

Ashley Johnson
Ashley Johnson
President and CFO at Planet Labs PBC

Turning to gross margin, Non-GAAP gross margin for the third quarter was a record 64%, up over 1,200 basis points year-over-year and over 600 basis points sequentially. This was better than we had expected coming into the quarter, largely driven by optimizations in our cloud infrastructure. We expect to continue to benefit from these optimizations going forward, although at a more moderate pace of improvement. Adjusted EBITDA loss was approximately $242,000 for Q3, marking another quarter of sequential improvement in adjusted EBITDA and putting us in a strong position to end the year with achieving EBITDA profitability in Q4. Capital expenditures, including capitalized software development, were $8.9 million for the quarter, lower than we anticipated due to the timing of certain procurements. Turning to the balance sheet, we ended the quarter with approximately $242 million of cash, cash equivalents, and short-term investments.

Ashley Johnson
Ashley Johnson
President and CFO at Planet Labs PBC

We continue to believe that our balance sheet provides us with sufficient capital to invest behind our core growth accelerating initiatives and achieve cash flow break-even without needing to raise additional capital, and we still have no debt outstanding. At the end of Q3, our remaining performance obligations, or RPOs, were approximately $146 million, up 30% quarter over quarter, of which approximately 82% applied to the next 12 months and 98% to the next two years. Our backlog, which includes contracts with a termination for convenience clause, which is common in our U.S. federal contracts and occasionally found in other customer contracts, was approximately $232 million, of which approximately 70% applied to the next 12 months and 91% to the next two years. To be clear, RPOs and backlog at the quarter end do not include the $20 million NASA order received on November 25th.

Ashley Johnson
Ashley Johnson
President and CFO at Planet Labs PBC

As a reminder, RPOs and backlog can fluctuate quarter to quarter as revenue is recognized against customer contracts and multi-year contracts come up for renewal. Let me turn now to our guidance for the fourth quarter of fiscal 2025. We are expecting revenue to be between $61 and $63 million, comparable to Q3 levels as we work to ramp large customers and our new operating model begins to take effect. In the commercial sector specifically, we expect the tail of the digital agriculture application headwinds that we've discussed on prior calls to roll off in Q4 as we've transitioned many of these accounts to more internal-use operational contracts. We have seen this focus on higher-value use cases, such as precision agriculture and informed scouting, enable us to establish stickier and larger contracts with agriculture customers over time.

Ashley Johnson
Ashley Johnson
President and CFO at Planet Labs PBC

Similar to Q3, we expect non-GAAP gross margin for Q4 to be between 63%-65%. We expect our adjusted EBITDA profit for the fourth quarter to be between $0-$2 million, consistent with the profitability target we set nearly two years ago. We're planning for capital expenditures of approximately $8-$11 million in Q4, reflecting our continued investments in our next-generation fleets and the ongoing maintenance CapEx for our PlanetScope constellation. To close, I'd like to underscore the objectives of the changes we made earlier this year, centering our business around our customers with an industry-aligned operating model. By making our customers the core of everything we do, we ensure that we deliver the right solutions to unlock the economic value of our powerful data sets.

Ashley Johnson
Ashley Johnson
President and CFO at Planet Labs PBC

We furthermore ensure that we're developing the right next generation of data sets that can increase that value for our customers. The opportunity for the Earth observation industry over the next decade is significant. A report published earlier this year by the World Economic Forum in collaboration with Deloitte estimated that by 2030, Earth observation data and insights could provide over $700 billion of economic value to global gross domestic product annually, made possible by rapid advancements in satellites and sensors, computing power, and greater accessibility to insights driven by analytics and AI. We see Planet as being an important driver for this global economic opportunity.

Ashley Johnson
Ashley Johnson
President and CFO at Planet Labs PBC

With relentless focus on delivering customer value across all of our teams, we not only increase our own share of the Earth observation value chain, but we also increase the positive economic impact that we make through our customers while improving the growth and predictability of our business. This is our core focus as we move through the final quarter of fiscal 2025 and look forward to fiscal 2026. Operator, that concludes our comments. We can now take questions. Thank you.

Operator

We will now begin the Q&A session. If you would like to ask a question, please press star followed by one on your telephone keypad. If you would like to remove that question, press star followed by two.

Operator

In the interest of time, we ask that you please limit yourself to one question and a follow-up, and if you are using a speakerphone, please pick up your handset before asking your question. To begin, we have an online question from an analyst. The question is, "Can you please discuss how AI spend is flowing through the Planet's pipeline? Which sectors are you seeing the most traction in?"

Will Marshall
Will Marshall
CEO, Chairperson, and Co-founder at Planet Labs PBC

Yeah, thank you. So clearly, AI is helping to drive our pipeline, and you saw it in the big deals that we discussed in our prepared remarks. Just to pick on the first two as an example, the expansion of the large D&I customer that uses some MDA, maritime domain awareness tools that uses AI, and that is driving use of our PlanetScope imagery across those ocean territories.

Will Marshall
Will Marshall
CEO, Chairperson, and Co-founder at Planet Labs PBC

And the second deal, of course, is our third pilot with the DOD, and that is also central to that is AI driving, again, PlanetScope in this case over land territory. So we see that. And so to the sectors, it is definitely more focused on the government, but we are seeing it across the board. I mean, the Laconic example I also mentioned, commercial deal leverages our Forest Carbon Planetary Variable, which also leverages AI. So I think it is all over the board. It is definitely driving our pipeline, and it is an accelerant to our business because it speeds up time to value, and it opens up new markets. Next question.

Operator

Our next question comes from Michael Latimore with Northland. Your line is now open.

Michael Latimore
Michael Latimore
Managing Director and Senior Research Analyst at Northland Capital Markets

Great. Thanks. Yeah, congrats on the strong bookings quarter here. I guess in terms of the pilot you just highlighted there, third pilot, great to see.

Michael Latimore
Michael Latimore
Managing Director and Senior Research Analyst at Northland Capital Markets

What are the kind of key catalysts or events that need to occur here to kind of get that to commercialization? And is that something that is a couple of quarters, a couple of years away?

Will Marshall
Will Marshall
CEO, Chairperson, and Co-founder at Planet Labs PBC

Yeah, great question. I mean, look, we're really excited that the DoD is leaning in with this third pilot this year. I mean, it's quite a new capability coming here because what it's enabling is the government to look at large areas to find new threats. That new system, based on the fact that we have this daily scan with AI finding tools, is a very new capability. So what we're doing with these pilots is the government is iterating what they need, and we're reacting to that and changing it. There's opportunities for more pilots, extensions to these current ones, and we do believe we can grow into operational contracts over time.

Michael Latimore
Michael Latimore
Managing Director and Senior Research Analyst at Northland Capital Markets

Got it. Got it. And one basic kind of financial question. It looks like sales and marketing took a step down sequentially quite a fair amount. Is that kind of a good new run rate, or was there a one-time item in there?

Ashley Johnson
Ashley Johnson
President and CFO at Planet Labs PBC

To my knowledge, I don't think there's any one-time item driving that. That's really about the restructuring that we did in the middle of the year. And as I mentioned before, a lot of that was really looking at our cost of acquisition and making acquiring customers more efficient.

Ashley Johnson
Ashley Johnson
President and CFO at Planet Labs PBC

Got it. Got it. Okay. Great. Thanks a lot.

Will Marshall
Will Marshall
CEO, Chairperson, and Co-founder at Planet Labs PBC

No problem.

Chris Genualdi
Chris Genualdi
VP of Investor Relations at Planet Labs PBC

Our next question comes from Trevor Walsh with JMP. Your line is now open.

Trevor Walsh
Trevor Walsh
Director of Equity Research and Senior Research Analyst at JMP Securities

Great. Thanks, team. Appreciate you taking my questions. We'll maybe just start with you.

Trevor Walsh
Trevor Walsh
Director of Equity Research and Senior Research Analyst at JMP Securities

Just at a high level, lots of kind of interest and buzz, I guess, broadly around the space domain kind of from early November to now, just given the incoming administration. Just would be curious to hear your thoughts just broadly on that and also just what you're hearing from customers in terms of how they think things might either change positively, negatively, neutral for coming kind of heading into next year.

Will Marshall
Will Marshall
CEO, Chairperson, and Co-founder at Planet Labs PBC

Yeah, certainly. It's something we've been thinking a fair bit about, obviously. Overall, let's just step back and say that the priorities that we serve for the government, which tends to be national security, disaster response, these sort of things, are pretty nonpartisan as they go. But as we regard to this incoming administration, we do see them pretty focused on efficiency generally and commercial capabilities in particular.

Will Marshall
Will Marshall
CEO, Chairperson, and Co-founder at Planet Labs PBC

And we think that applies very well to space, and Planet is very well positioned to support that. In fact, I was just in DC last week, and conversations with multiple agencies there who are already reflecting on these incoming administration's priorities are focused on exactly that. How can they do things more efficiently, especially with the commercial sector? So I think Planet is very well positioned for that.

Trevor Walsh
Trevor Walsh
Director of Equity Research and Senior Research Analyst at JMP Securities

Great. Terrific. Thanks. And maybe just one quick follow-up. Ashley, around the new customer numbers, understand that you're not adding as much just based on that commercial kind of shift in the go-to-market and whatnot. How should we even really be concentrating on that metric?

Trevor Walsh
Trevor Walsh
Director of Equity Research and Senior Research Analyst at JMP Securities

Just generally, I know you're going to report on it, but it just seems like it's maybe not the best way to kind of be looking at the business in terms of a net new, or maybe that is still kind of relevant. I'm just trying to kind of get an understanding of, as you bring a large company like Laconic, for example, just how that kind of gets what the onboarding is for that customer in terms of from a RevRec perspective and just, again, just kind of wrapping all those things kind of in my head around just from that perspective.

Ashley Johnson
Ashley Johnson
President and CFO at Planet Labs PBC

Yeah. It's a good question. I do think that it's a useful metric just because it really spotlights how differentiated Planet is from kind of the traditional Earth observation industry. We have such a broad and diversified customer base.

Ashley Johnson
Ashley Johnson
President and CFO at Planet Labs PBC

The focus of the sales team really is around those opportunities where we can land and expand the customer. To ensure that we are operating efficiently, that's really where we're focused our direct sales. As you recall, we have also been making investments in the platform, including an acquisition of a really strong platform in Sentinel Hub, which enables us to continue to work with a broader community that might be more transactional in nature, just much more efficiently. As I said, some of these customers are unlikely to be counted in the overall customer count because they just transact directly and not through our sales team. That's where that change in focus is impacting the pace of growth of that number, but I still think it's an important metric and one that will continue to track over time.

Ashley Johnson
Ashley Johnson
President and CFO at Planet Labs PBC

In terms of onboarding new customers, it really depends on the complexity of the business. So some of our more complex government sales can take longer to onboard. There are going to be multiple parties that are involved in getting that account up and running. I don't know specifically as it relates to Laconic whether that's more straightforward of turning the customer on and getting them working with the data, or there's a ramp time associated with that. And the ramping of revenue typically relates to which product specifically was sold. So if it's a pure data subscription, that's going to be more ratable. If it's one of our usage contracts related to tasking, that can see some variability based on those onboarding characteristics. So it's a little bit of some and some. That helps.

Will Marshall
Will Marshall
CEO, Chairperson, and Co-founder at Planet Labs PBC

Yep.

Trevor Walsh
Trevor Walsh
Director of Equity Research and Senior Research Analyst at JMP Securities

That's great. Thanks so much. Thank you.

Operator

Our next question comes from Ryan Koontz with Needham & Company. Your line is now open.

Ryan Koontz
Ryan Koontz
Managing Director and Senior Research Analyst at Needham & Company

Great. Thanks for the question. Ashley, on the guide, it sounds like the NASA renewal came in a little late, and there might have been a couple of other deal slips. But relative to your expectations, say, 90 days ago, was there a sizable impact from a couple of deal slips that impacted the fourth quarter guide? Or can you walk us through that a little bit? Numbers?

Ashley Johnson
Ashley Johnson
President and CFO at Planet Labs PBC

Yeah. Obviously, you hit on one, which was simply the timing of that NASA renewal definitely coming in later due to the procurement process. Obviously, very glad to have that in and to see an expansion with that customer. So I'd say in terms of the guide, it's timing.

Ashley Johnson
Ashley Johnson
President and CFO at Planet Labs PBC

As I mentioned, NASA, it's timing as it relates to some of these large bookings that we got in Q3 and the time it will take to onboard either that expansion or new customer. And so expectations about the ramp time for that revenue. And some of it is really usage variability quarter to quarter, quarter to quarter. So that's a primary impact on the revenue guide for the year or for the back half of the year.

Ryan Koontz
Ryan Koontz
Managing Director and Senior Research Analyst at Needham & Company

That makes sense. And what's the typical time to onboard some of the larger customers? Is it two, three quarters type of thing, or how should we think about that?

Ashley Johnson
Ashley Johnson
President and CFO at Planet Labs PBC

No, I think it should be faster than that. As I mentioned in the last question, it really does depend on the complexity of the customer and the specific product they've purchased.

Ashley Johnson
Ashley Johnson
President and CFO at Planet Labs PBC

So if they've purchased a data subscription, once we've provisioned them, we can start recognizing that more rapidly. But if it's a usage-based contract related to downloads or tasking, then it really is about getting the users up and running, and sometimes that's globally, and getting them to start using the task orders more regularly. So that is it really depends on the contract.

Ryan Koontz
Ryan Koontz
Managing Director and Senior Research Analyst at Needham & Company

Got it. And if I could squeeze one more in for Will. Around the competitive landscape for tasking and your data analytics, obviously, with PlanetScope, it's kind of a one of a kind there. But your follow-through ability to upsell analytics and upsell tasking, what's that competitive environment like these days relative to some of your peers, bigger and smaller?

Will Marshall
Will Marshall
CEO, Chairperson, and Co-founder at Planet Labs PBC

Great question. Yeah. I mean, obviously, the daily scan is pretty much unique, and that's what's driving.

Will Marshall
Will Marshall
CEO, Chairperson, and Co-founder at Planet Labs PBC

I mean, it's the most applicable dataset for AI because it is a continuous dataset, the same sun angles every day. You always know that it's on everywhere. And so actually, having this data stack of over 2,500 images for every point in the land of the Earth is the sort of dataset that everyone's training on, less the tasking system. The tasking system is where there's other players, of course, that have tasking systems, but we are competitive for multiple reasons. We've got a lot of capacity, the fastest revisit rates on our SkySat system. And there's the complementarity between the two where you find changes in the PlanetScope data that you then want to take a look at, which is a sort of system we call a tip and cue that no one else can do because no one else does the scan.

Will Marshall
Will Marshall
CEO, Chairperson, and Co-founder at Planet Labs PBC

Now, just talking as we go forward, obviously, one of the exciting things with Pelican is that not only are we improving the resolution on that, we're improving the capacity for satellite on that, but with the twin new capabilities that we put on this next Pelican that literally just got to the launch site today, it has satellite-to-satellite communications to get tasks up and images taken faster, and it also has this latest NVIDIA chip that enables us to, I think it's the fastest processor in space, and it basically enables us to do AI on the edge. That means you can do things like, say, look over, take a picture of an area of water, detect ships automatically, and just send down the pixels around that ship, all to say that that speeds up time from hours to minutes, and that's critical for a number of important applications.

Will Marshall
Will Marshall
CEO, Chairperson, and Co-founder at Planet Labs PBC

So look, we're differentiated today. We continue to invest to make it better and better, and the complementary nature between our datasets is always a boon.

Ryan Koontz
Ryan Koontz
Managing Director and Senior Research Analyst at Needham & Company

Great. Thanks, Will. Thanks, Ashley.

Ashley Johnson
Ashley Johnson
President and CFO at Planet Labs PBC

Thank you.

Operator

Thank you all for your questions. As a reminder, it is star one to ask a question and star two to remove. Our next question today comes from Jeff Van Rhee with Craig-Hallum Capital Group. Your line is now open.

Jeff Van Rhee
Partner and Senior Research Analyst at Craig‑Hallum Capital Group LLC

Great. Thanks, Ashley. Will, congrats. Got a lot to smile about here. A couple of questions for me. On the top line outlooks for 2026, I know you're not giving a guide, but you've got obviously quite a bit better visibility. You've got a bunch of signings. I get that the timing of go-lives is going to be unpredictable.

Jeff Van Rhee
Partner and Senior Research Analyst at Craig‑Hallum Capital Group LLC

But if you look out to Q4, so a year from now, next year, is there a floor growth rate at which you'd be comfortable saying, "Hey, based on the visibility we have, we certainly should be able to grow at least X at this point"?

Ashley Johnson
Ashley Johnson
President and CFO at Planet Labs PBC

Yes. It's a good question. Obviously, we're not giving guidance that it's by 2026 at this time, but as Will mentioned, really pleased at the way the teams are executing and seeing such a strong bookings quarter that does start to give us visibility into next year of that committed revenue base.

Ashley Johnson
Ashley Johnson
President and CFO at Planet Labs PBC

As we continue to invest in some of these core growth initiatives, specifically leveraging AI as a strategic vector for both expanding with existing customers and opening new markets, that gives us a lot of confidence in our ability to re-accelerate the business, knowing that these things take time to really drive these go-to-market transitions and operating models and everything else. I feel really good about the outlook. I think we can start to see revenue accelerate. I'd be just cautious about how quickly we start to see that acceleration, cautiously optimistic that it can be the early part of next year and feeling particularly optimistic that the back half of next year should really see strong acceleration. Hope that helps.

Jeff Van Rhee
Partner and Senior Research Analyst at Craig‑Hallum Capital Group LLC

Yeah. Yeah. Yeah. I appreciate the effort.

Jeff Van Rhee
Partner and Senior Research Analyst at Craig‑Hallum Capital Group LLC

And then on CapEx, I know in September, I think you had commented you expected a $13-$16 million run rate for foreseeable future, if I have it right. I think you did $8.9 million this quarter. You're guiding to $8-$11 million. I think you commented to timing this quarter. Is that the same next quarter, or is there a new thought process in terms of expected CapEx?

Ashley Johnson
Ashley Johnson
President and CFO at Planet Labs PBC

Yeah. It is timing. As I said, we're always balancing the desire to get the fleet of Pelicans and Tanagers up and running faster and just balancing that with cash burn and maintaining a strong balance sheet. So just looking at the timing of upcoming launches, we feel like that the lower guide for the back half of the year around CapEx is more in line with what we're likely to see.

Ashley Johnson
Ashley Johnson
President and CFO at Planet Labs PBC

But definitely don't have any specific concerns around the supply chain. And a lot of this is just coming down to the ability of our teams to be very agile in how they operate and scale up as we see opportunity to grow the fleet.

Jeff Van Rhee
Partner and Senior Research Analyst at Craig‑Hallum Capital Group LLC

Great. Last one then maybe for me on Pelican. Obviously, congrats. It looks like that's going to be up soon, hopefully January. I think you commented. How should we think about time to revenue there? Just any sense of how booked up, so to speak, that unit is, how quickly you can reach high utilization, just path to revenue for that capability?

Will Marshall
Will Marshall
CEO, Chairperson, and Co-founder at Planet Labs PBC

Well, let me just comment on the top level. Of course, we already have an existing book of business in that line, the SkySat book of business.

Will Marshall
Will Marshall
CEO, Chairperson, and Co-founder at Planet Labs PBC

So those Pelicans will be taking on, and then with their new capabilities that I just mentioned in my previous answer of better resolution, more capacity for satellite, and faster delivery, just overall, we believe there's greater customer value, so we will drive that value up. So yeah, that's where we see it going, and we'll be ramping that this next year.

Jeff Van Rhee
Partner and Senior Research Analyst at Craig‑Hallum Capital Group LLC

Got it. Thank you.

Operator

Our next question comes from Caleb Henry with Quilty Space. Your line is now open.

Caleb Henry
Director of Research and Senior Research Analyst at Quilty Space

Hi. Thank you. Just one question for me on the SkySats and the Pelicans. It looks like all of the Pelican or excuse me, all of the SkySat satellites that were in the inclined orbit have since been deorbited. I was curious if you had any kind of lessons learned from those. I think it was six or seven satellites. And then how that influences the Pelican fleet.

Caleb Henry
Director of Research and Senior Research Analyst at Quilty Space

Will those all be in SSO orbits, or will you kind of mix them up with inclined?

Will Marshall
Will Marshall
CEO, Chairperson, and Co-founder at Planet Labs PBC

Yeah. Good question. That's right. I mean, firstly, what we learned was that having inclined planes was really helpful for our cadence, and we will be doing that same sort of architecture with the Pelican system that is a combination of sun-synchronous satellites and inclined plane satellites. Yeah. I mean, the rapid revisit I mean, the good thing is that what we've seen is as those dropped off, we have been able to constantly increase the capacity per satellite on our SkySat such that we more than kept up with the total capacity. But what the inclined plane does is give us more revisit rates. So as we rebuild into the inclined planes later with Pelican, we'll pick that back up again as well. Does that make sense?

Caleb Henry
Director of Research and Senior Research Analyst at Quilty Space

Okay.

Caleb Henry
Director of Research and Senior Research Analyst at Quilty Space

Can you kind of clarify? Yeah. I think I got most of it. When you mentioned having kind of kept up pace, can you clarify what exactly that means?

Will Marshall
Will Marshall
CEO, Chairperson, and Co-founder at Planet Labs PBC

Oh, just in terms of total capacity, so number of collects we can collect overall in the system. So I mean, I think last year we mentioned that year alone, we more than doubled the capacity of our SkySats per satellite. So yes, there have been a few SkySats that we lost because of atmospheric drag and the solar radiation that we've been talking about, solar maximum. But overall capacity of the entire fleet has actually gone up.

Caleb Henry
Director of Research and Senior Research Analyst at Quilty Space

Okay. So in that case, the satellites that are gone, that doesn't put any pressure or accelerated pressure on kind of refreshing the fleet with Pelican?

Will Marshall
Will Marshall
CEO, Chairperson, and Co-founder at Planet Labs PBC

Well, I mean, we wanted to do that.

Will Marshall
Will Marshall
CEO, Chairperson, and Co-founder at Planet Labs PBC

And so we've got our own motivation to do that because we want to improve the system anyway. But yeah, of course, continuing the SkySat is part of that mission. But what's more important is the upgrades that I was talking about earlier that give us even more capability per satellite and more market value and demand.

Caleb Henry
Director of Research and Senior Research Analyst at Quilty Space

Understood. Okay. That's all my questions. Thank you.

Will Marshall
Will Marshall
CEO, Chairperson, and Co-founder at Planet Labs PBC

All right.

Operator

Thank you all for your questions. No longer questions in queue. So I'll pass the conference back to Will Marshall for any closing remarks.

Will Marshall
Will Marshall
CEO, Chairperson, and Co-founder at Planet Labs PBC

Well, thanks everyone for joining. I think in summary, firstly, we're really pleased with our significant improvements in the fundamentals of the business, especially as we fast approach our adjusted EBITDA profitability in this quarter now. Secondly, we secured multiple large government contracts in Q3, which we expect to ramp into the year.

Will Marshall
Will Marshall
CEO, Chairperson, and Co-founder at Planet Labs PBC

It was our strongest ever ACV bookings quarter. And so that lays the groundwork for our growth ahead. Thirdly, we're seeing further acceleration because of AI that's driving a new adoption of our datasets, as well as exciting new datasets coming online with Pelican and Tanager. So overall, we feel good about our ability to accelerate growth coming into next year. And I'd just like to end by thanking our teams across the world for the huge dedication to getting us to where we are today. Thanks a lot.

Operator

That will conclude today's conference, Will. Thank you all for your participation. You may now disconnect your line.

Executives
    • Chris Genualdi
      Chris Genualdi
      VP of Investor Relations
    • Will Marshall
      Will Marshall
      CEO, Chairperson, and Co-founder
    • Ashley Johnson
      Ashley Johnson
      President and CFO
Analysts
    • Caleb Henry
      Director of Research and Senior Research Analyst at Quilty Space
    • Ryan Koontz
      Managing Director and Senior Research Analyst at Needham & Company
    • Trevor Walsh
      Director of Equity Research and Senior Research Analyst at JMP Securities
    • Michael Latimore
      Managing Director and Senior Research Analyst at Northland Capital Markets
    • Jeff Van Rhee
      Partner and Senior Research Analyst at Craig‑Hallum Capital Group LLC
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