Planet Labs PBC

Good evening. My name is Selena, and I will be your conference operator today. I would like to welcome everyone to the Planet Labs PBC quarterly earnings call. At this time, I'd like to turn the call over to Chris Janewaldi, Vice President of Investor Relations for Planet Labs PBC. Please go ahead, Chris.

Hello, and welcome to Planet's fiscal fourth quarter and full year 2022 earnings calls. Before we begin today's call, we'd like to remind everyone that we may 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 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 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. For more information on the non-GAAP financial measures, please see the reconciliation tables provided in our press release issued earlier this afternoon. 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. At this time, I'd now like to turn the call over to Will Marshall, Planet's CEO, chairperson, and co-founder. Over to you, Will.

Thanks Chris, and thank you everyone for joining our call today. I'm excited to talk to you about Planit's results, outlook, and to give you insights into the business generally. Let me start by going directly into a quick summary of our results, which are strong across the board. For the fourth quarter, we continue to accelerate revenue growth, and as you'll hear momentarily, we expect this growth inflection to continue into fiscal 23. In the full year, fiscal 22, we achieved a record $131.2 million in revenue, coming in just above our projected range. We expanded non-GAAP gross margins to 38%, up from 24% last year. We also increased our customer count to 770 unique customers by the end of the period. I'm incredibly proud of these results and of the execution and dedication of our team demonstrated in the last year. I'm excited about how this positions us in this burgeoning market and our overall strength as we move into the next fiscal year. As this is only our second official earnings call, I wanted to step back and reiterate some critical points that we shared at our analyst day last autumn, all of which I believe are fundamental to understanding our business. Firstly, Planet is a data subscription business based on a unique fleet of 200 Earth imaging satellites, whose data and business model are new to the market. This data business is a one-to-many business, enabling us to rapidly scale to many users, driving both high growth and high margins, as just mentioned, as we saw last year. Secondly, our data is valuable to many vertical markets, from agriculture to mapping, from civil government to defense and intelligence. And so we address a large and diversified market opportunity and will give some examples shortly. And thirdly, we have a significant lead in the market due to our unique daily Earth scanning system, and we expect the compounding effects of our historical data and iterative development process will enable us to continue to gain share and extend our lead. Broadly, our constellation and its supporting infrastructure are already built and proven. Remember that while Planet is new to the public markets, we spent the last decade establishing the core infrastructure of our business. And now we are well capitalized. And so we are now working on reaping the commercial rewards of the data we produce and investing in high ROI activities to meet our growth objectives. With the proprietary data we collect and the services we deliver on top, we enable our customers to make smarter, more informed, and faster decisions on fundamental aspects of their business, including allocating resources, making impactful investments, measuring sustainability goals, or improving strategic planning. Recent events have only underscored the increasing need for PLANET's data, none more so than the situation in Ukraine. We are horrified by what is happening and deeply concerned by the worsening humanitarian crisis, and PLANET has been helping in multiple capacities. First, we have been proud to help our government partners track the build-up around Ukraine and subsequent operations within. In addition, we have been supporting relief and humanitarian organizations in support of their work with refugees and emergency supplies. And finally, when appropriate, we have been providing imagery to news media to illuminate events for all to see. That has moved quickly to meet the needs arising from the situation in the region. We have delivered weekly base maps of the entire Ukraine, partnering to provide analytics of changes on the ground, and making rapid improvements in our systems, some of which, for example, have driven substantive increase in our tasking capacity over the region in just a few short weeks. Our significant revisit rate and our improved capacity have been of critical value to the users in this time of need. Our fast response to the crisis has driven several new important customer engagements and partnerships, and with some of the shortest sales cycles we've ever seen. It's been very hard work for our teams, but they are motivated because the circumstances demonstrated how incredibly important their contributions are. This is what we're here for and why we are proud of the work we do. Stepping back from recent events, we have mentioned previously that Planet Solutions are foundational enablers to the largest economic shifts of our age. the digital transformation and sustainability transformation, both of which are top priorities across government and companies globally. And they provide significant tailwinds for our growth. We are critical to the pressing challenges the world faces today, enabling a sustainable planet and fostering peace and security. I'd like to take a moment to share a few recent and specific examples. We've mentioned before that our business is roughly weighted equally between commercial and government, and even within the government portion, roughly equally between civil government and defense and intelligence government use cases. Let me touch on all three of these. On the civil government side, we already have great partners, and we continue to see significant expansion of our NASA partnership. They are doing incredible work with their data. I recently saw a plot of their usage, and it is truly global. And they help with a variety of scientific studies, including in climate change, biodiversity last and changing ecosystems. And these work often develop use cases that then enable us to drive commercial applications. Another great example I would like to share is our partnership with the country of Wales. This contract has grown from a five-figure deal in fiscal 21 to a seven-figure deal last year and expanded once again this past quarter. The Welsh government uses PlanetScope, SkySat, and Fusion Solutions to address a variety of use cases, including natural resource management, mapping, and policy implementation and measurement. This partnership exemplifies the broad use cases that are addressable with our data by civil governments. On the defense and intelligence side, as mentioned, we have several important customers and partner engagements underway. We are seeing opportunities for upside from this vertical as our revisit rate, and capacity optimizations have enabled us to expand our market share. On the commercial side of our business, we continue to see an increase in customer usage driven by our solutions. For example, in agriculture, with the recent acquisition of Bandersat, we are able to measure and forecast crop yields using geospatial data on soil moisture, land surface temperature, and vegetative water content. With these new indicators, we estimate that we can increase the yield forecasting for crops such as corn, wheat, soybeans, coffee, cocoa, and others by as much as 84% to 94%. Bandersat has also enabled us to expand into a new vertical market, namely insurance. To give one example here, Swiss Re, which joined Leith with its local insurance partners, is using Planet's data to ensure farmers against droughts, in parts of Europe and Central Asia. Continuing the thrust of engagements in new vertical markets, let me turn to a market with great potential for finance. We recently signed a deal with Synmax, a data science solution provider for both energy and maritime intelligence markets. This dual-use contract will be used to forecast trends in the oil and gas market, as well as tracking so-called dark vessels carrying out illegal activity at sea. These are just a few of the ways we are leveraging our incredible data set to meet the demands of our customers around the world in both existing and new markets. With that, let me tell you about some of the recent product developments. On January the 13th, we successfully launched 44 SuperDove satellites onboard SpaceX's Falcon 9 rocket, increasing the number of our next generation satellites in orbit that provide enhanced sensor capabilities. Bolstered by these sensor improvements and our investments in software, on March 1st of this year, we announced the general availability of our next generation of PlanetScope monitoring, offering high-quality, analysis-ready data to all existing PlanetScope customers across eight spectral bands, doubling that of the prior generation of satellites. These additional spectral bands enable greater capabilities in water quality monitoring, land cloud classification, crop classification, and more. This is technology needed to address the food, resource, and environmental challenges faced globally. We expect the improvements that we've been making to our PlanetScape monitoring platform to drive shorter sales cycles and new customers and increase net retention rates. Furthermore, we continue to see growing market demand for our high-resolution imagery, up to 50 centimeters per pixel, generated by the SkySat constellation which is able to image the same place anywhere on Earth up to 10 times per day. Given our increased customer generally and our recent competitive wins in particular, we remain excited about this segment of the market and are making progress against the development of our next generation of high-resolution satellites to capture this growth. We call this fleet Pelican, which is designed to deliver substantively greater capabilities at yet significantly lower cost than the current SkySat fleet. We'll have more announcements about this in the coming weeks around the GeoINT conference. To round out the discussion on our products, I want to say how pleased I am with our recent investments in our software teams, resulting in dramatic improvements in performance and usability of our customer-facing tools, as well as optimization of image quality and delivery. As just one example, We have doubled the number of orders being fulfilled by our in the past year through operational and tasking improvements. And these improvements have had real impact to our customers. Our fourth course of customer surveys showed 180% improvement in our overall Net Promoter Score, NPS, and a 100% increase in responders. We have historically scored well for our large customer accounts and last year achieved a best-in-class score of over 80 for our million-dollar-plus customers. But with our recent investments in customer success and technology enablement, we've also driven improvements with our smaller accounts, those less than 50K, increasing on average 17 points each quarter last year. It's great validation that these investments that we're making are driving real value to our customers. Overall, on a year-on-year basis, our sales and marketing headcount and software engineering headcount both increased over 40% last year. As shared previously, these are two areas that we expect to continue to invest in going forward. They are important to the success of building a highly effective, easy-to-use software solution, working in new markets, and in educating customers and prospects on the value that Planet delivers. In other words, these investments are fundamental to our growth rate acceleration. We also expanded our space systems team by over 25% as we developed our next generation platforms for high resolution and hyperspectral imaging satellites, both critical for the understanding of changes across our planet and meeting the market demand that we are seeing. We wouldn't be here without the incredible talent that has built this company over the last decade. We are thrilled with the talent that we continue to attract to Planet as we invest across the organization. While it has been a challenging market for employers, we believe that Planet's commitment to the mission, our significant technology and market leadership, as well as the strength of our global organization, make Planet a unique place for bright minds to contribute their skills. Looking forward to fiscal year 2023, we are anticipating continued revenue growth acceleration due to market demand and our execution. Indeed, as you will hear from Ashley shortly, we expect our revenue growth rate to accelerate to approximately double or triple last year's growth rate, a dramatic uptick. To meet this demand, we are making significant investments in sales and marketing, software and space systems. To continue to capture a share in new vertical markets, we are investing behind our Vandaflap acquisition and other areas of software development. And just to give you a sense, we anticipate growing our headcount in the software organization by over 50% this coming year. In addition, given the criticality of our high-resolution data in our core vertical markets, we are investing behind our next-generation fleet of Pelicans. As always, we take a disciplined approach to investing in future growth initiatives such as Pelican, and our agility enables us to scale our investment commensurate with the market demand. And as we scale, our strategy is more and more about optimizing our existing infrastructure, all of which investments are very high ROI. Before I hand it over to Ashley, I'd like to emphasize that I am very confident in our market opportunity and plan's position to meet this global moment. Across the world, companies and countries are seeking to uphold their sustainability commitments. Countries seek to understand the activities within and around their borders, and global supply chains need to better understand the changes occurring in all parts of the world. This is why we're forecasting such dramatic acceleration in revenue growth. I'm proud of the work we're doing, confident in our team, and excited for the years ahead. With that, I'll now turn it over to Ashley, after which we'll have some time for Q&A.