Planet Labs PBC

Good afternoon and thank you for attending today's Planet Labs PBC first quarter of fiscal 2023 earnings call. My name is Jason and I'll be the moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you'd like to ask a question, please press star 1 on your telephone keypad. I would now like to pass the conference over to our host, Chris Ginaldi, Vice President of Investor Relations. Hello.

And welcome to Planit's first quarter of fiscal year 2023 earnings call. 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 a representation by Planit 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. On today's call, we will also be discussing our backlog of contracted revenue. Although our backlog reflects business that our management considers to be firm, please note it is also a forward-looking metric, and any termination, amendment, or cancellation of contracts or awards may occur, which could result in a reduction in our backlog. Before you jump in, I'd like to encourage everyone to reference the slides we have posted on our investor relations website, which are intended to accompany our prepared remarks. 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 hello, everyone. I'm excited to share with you our results for the first quarter of fiscal 2023, including some additional detail on recent announcements, our outlook for the business, and some perspective on the growing demand for our data. Starting with a quick summary of our Q1 results. These were strong across the board. We achieved $40.1 million in revenue, which represents a 26% year-over-year growth and continued acceleration of our top line. We expanded the first quarter non-gap gross margins to 45%, up from 41% a year ago, a significant uptick, continuing our progression towards SaaS-like margins. We also added a diverse group of customers to the business and ended the quarter with 826 unique customers, In short, I'm incredibly proud of the superb execution of our teams during the quarter. And as you'll hear from Ashley shortly, we expect this momentum to continue throughout the fiscal year 2023. As we shared on our prior call, we're seeing significant demand for our data across government and commercial markets, which we believe has accelerated in part due to recent global events as well as broad secular trends. Palant's data subscription business addresses many critical challenges faced by companies and countries around the globe, as climate change and geopolitical security remain on center stage. Rising concerns around global food security touch two of our top vertical markets, agriculture and defense and intelligence. And in general, sustainability and security are increasingly intertwined, driving demand in other key markets, including civil government, energy and finance. Planet's data is enabling better decision-making and outcomes for customers in crucial areas, whether increasing profitability in commercial segments or meeting critical security and policy objectives in government. During Q1, we saw a record number of new deals that were both generated in and closed within the quarter, a positive signal for growing market awareness and the general urgency around the demand for our solutions. Turning to recent announcements, I'm sure many of you have heard last month that Planet has been awarded a contract for the Electro-Optical Commercial Air, or EOCL, opportunity by the National Reconnaissance Office, NRO. The EOCL award is Planet's largest contract to date, and we're thrilled to be awarded a firm fixed price contract of $145.9 million in the initial period of up to five years, of which $89 million is for the first two years. This initial award significantly increases our revenue visibility by almost doubling the backlog of contracted revenue as we had on April 30th. Through EOCL, Planet will supply Planet scope monitoring, SkySat tasking, and archive access to the U.S. government. The procurement vehicle is structured to give the NRO flexibility, for instance, to purchase additional products or packages throughout the lifetime of the contract, to exercise options, and execute change orders that can expand the scope of our partnerships. as well as to extend the contract for up to 10 years. EOCL is the largest commercial satellite data procurement in history, an industry-defining vehicle for unclassified and shareable commercial satellite imagery. It represents the US federal government's significant investment in and commitment to the commercial remote sensing sector. We at Planet have long held the conviction that unclassified commercial satellite imagery not only equips the government with differentiated and innovative intelligence capabilities, but also increases transparency that advances global security, as well as trust between governments and citizens. EUCL is this conviction realized. We're proud to have been selected by the NRO and are focused on delivering excellent services to the government for this contract and beyond. Let me turn now to our work in Ukraine. As we mentioned last quarter, we are supporting critical efforts in three key areas to provide imagery to governments, aid and relief organizations, as well as data analysts and the media. We continued that important work in Q1 and it has remained a high priority for our team. To share some examples of how our products are being used, let me focus on one area of humanitarian operations. We are working with and supplying data to nearly 30 NGOs and intergovernmental bodies who are supporting a number of humanitarian operations in Ukraine. These include civilian evacuation and planned demining operations, conducting building damage assessments, tracking alleged human rights abuses, and trying to mitigate and measure impacts to food supplies. Part of this work also includes collaborations within the private sector as new AI and machine learning platforms that sit on top of our satellite data and generate insights in new ways. Similarly, we're also seeing a number of government and commercial customers expanding their work in new geography or applications, particularly in measuring impact on global supply chain and food security by surveying other regions' crop yields to predict commodity pricing or to explore insurance and financial security for farmers. This leads me to some of our recent announcements in the commercial sectors we serve, and we are particularly pleased with the growth and momentum we saw in the agricultural market in Q1. As an example, We recently expanded our contract with Bayer, a leading international agriculture company, to develop digital solutions to support sustainable agriculture and drive supply chain efficiency. They're using planets fusion data, as well as high-resolution SkySat data, which can help to better understand historical and in-season performance and empower their data scientists to generate valuable insights that have the potential to support production globally. Sustainability continues to be an area of focus across commercial sectors. As many of you have seen, we announced in Q1 that we've entered into an agreement with Moody's to explore and address the growing demand for assessing and monitoring ESG risks. Our partnership will explore how our high cadence geospatial data can be leveraged to further refine Moody's existing offerings spanning ESG, know your customer, supply chain and commercial real estate through real time insights. As you've heard from us before, we think our data can help to improve the quality and consistency of ESG measurement and reporting, ultimately leading to better accountability and management of Earth's natural resources. On the civil government side, during Q1 we signed a 12-month contract with the Natural Resources Canada, the department of the Canadian government responsible for energy, minerals and metals, forests and other natural resources, as well as Earth sciences, mapping and remote sensing. They plan to use PLANET's data to support their emergency geomatics services, and other programs to provide critical, near real-time information to Public Safety Canada and emergency responders during ice breakup and flood events. So as you can tell, we continue to serve a wide range of customers and use cases across the government and commercial sectors. We believe the broad diversity of our customer base and our commitment to building solutions aligned with our one-to-many business model differentiates us from the competition. Turning to product updates. Just ahead of the GeoINT conference in April, we released details about Pelican, our upcoming next-generation high-resolution satellite fleet. Pelican is expected to meet the evolving needs of customers who want real-time information about global events as they unfold, from floods and wildfires to political conflicts and threats to human rights. As we shared, Pelican satellites are designed to deliver up to 30-centimeter resolution imagery, reduced latency, and rapid revisit. 12 times per day globally and up to 30 opportunities in mid-latitudes, an unprecedented revisit rate. As with all satellites designed at Planet, we are targeting a payback period of one year or less for the Pelicans, a reflection of our cost-efficient agile aerospace capabilities. In summary, Q1 was a terrific quarter in which we demonstrated strong execution, evidenced by our results across the board. We continue to see growing demand for our unique solutions in multiple end markets driven by recent global events and broader secular trends. We expect this momentum to continue going forward. With that, I'd now like to turn over to Ashley, after which we'll have some time for Q&A.