Planet Labs PBC

Hello, everyone. Thank you for attending today's Planet Labs PBC third quarter of fiscal 2024 earnings call. My name is Sierra, and I'll be your moderator 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, press star 1 on your telephone keypad. I would now like to pass the conference over to our host, Chris Genualdi, VP of Investor Relations with Planet Labs PBC. Please proceed.

Thanks, operator. And hello, everyone. Welcome to Planet's third quarter of 2024 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. We also 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. 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 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 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. Before we 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. Finally, for each of the customer contracts referenced during this call, please note that the revenue figures we cite will generally be recognized over the term of the contract, which can last multiple years. Further, the terms of these contracts can vary, and we may not realize all expected revenue. 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. Thanks for joining the call today. For the third quarter of fiscal year 2024, we generated a record $55.4 million in revenue representing 11% year-on-year growth. Non-gap gross margins was 51.5%, which is above the midpoint of our expected range. Our adjusted EBITDA loss for the quarter was $12 million, $1 million better than our guidance range, driven by cost discipline and reflecting our commitment to reaching adjusted EBITDA profitability by Q4 of next year. Growth in the third quarter was driven by strength in the civil government and defense and intelligence markets, both of which saw revenue increase more than 20% year-over-year, partially offset by continued macro headwinds in the commercial sector. We've continued to add large seven and eight figure government opportunities across civil government and defensive intelligence markets to our qualified sales pipeline. And while they take longer to close, large government contracts can provide a reliable foundation of long term revenue streams with significant potential for expansion. As our business mix shifts towards government opportunities, our average sales cycles overall have naturally extended. This is just the nature of government procurement processes. In response, we have recently refocused our go-to-market strategy around those large opportunities and made additional improvements to support sales execution. Let's quickly revisit the go-to-market improvements that we're implementing, which align with what we outlined in our prior earnings call and investor day. These include, one, focusing our sales force on our largest opportunities in our core markets. Two, shifting smaller commercial opportunities in other market segments to our partner network and low touch channels, including our newly acquired central hub platform. And three, streamlining and simplifying our sales processes. These go to market improvements are aimed at supporting faster sales cycles, customer adoption and expansions over time. Expanding further on our growth plan, in the near time we see opportunities with several US government entities as one of our primary near-term growth drivers. It's worth noting that in our view, our relationship with the US government has never been stronger, and we believe we're well positioned to significantly expand our work with this important customer in this next fiscal year. In addition, we are encouraged by the diverse global pipeline of opportunities that we've been cultivating, particularly with civil government customers, We've seen solid year-over-year growth in the civil government vertical throughout this year. These opportunities span all of our datasets and include additional services from our planetary variables, including our new carbon solutions and incremental capabilities provided by our acquisition of Synergize. Finally, in spite of the current macroeconomic headwinds, we continue to see the market opportunity in the commercial sector as a significant growth driver over the longer term. our strategy for the commercial sector is focused around partner-led opportunities and efficient low-touch sales motions. We see partners as a highly effective way of shortening sales cycles and speeding customer time to value with solutions and services tailored to a specific geographic market or commercial use case. And as mentioned, our Sentinel Hub platform enables smaller customers to purchase data from planets through a low-touch channel. Taking a step back, Our go-to-market strategy is built around our core value proposition, enabling broad area management at a global scale not possible before. The ability to understand change taking place in broad areas of our planet is what differentiates us and fuels adoption of our solutions. As we walk through our recent customer highlights, you'll hear how this is a common thread between customers across industries. Let's turn now to some recent customer highlights, starting with the civil government sector. During the quarter, we closed a seven-figure ACV contract with IGAC, the Cartographic Agency of Colombia. The agency is a new customer and is using PlanetScope and SkySat data for a range of applications, including geographic studies, professional training, as well as improved land use planning and risk management across Colombia. We expanded our contract with Australian-based partner NGIS, who uses PlanetData to provide critical geospatial services to Australian civil governments, supporting resource management and natural disaster response from wildfires and floods. Turning to the defence and intelligence market, during the quarter we saw a seven-figure ACV expansion with an Asian Ministry of Defence customer for our high-resolution SkySat tasking capabilities. It was great to see the customer's data consumption grow as we had expected. In Latin America, we've added a government intelligence agency as a new customer. They're using our PlanetScope and SkySat data for board area monitoring. We also closed a new contract with SI Analytics, a South Korean-based AI company who are using our solutions to do anomaly detection in North Korea. SI Analytics originally started as a planet partner, is now a customer as well. SI Analytics uses PlanetScope to run analytics for defense intelligence customers. More broadly, we're seeing growing interest from defense and intelligence customers globally for the capabilities unlocked when combining our deep data archive with artificial intelligence. We think of this combination as an incredibly powerful tool to scan, search and monitor. We enable them to rapidly find new threats, monitor them on an ongoing basis, and act as a powerful time machine for forensics of what happened in the past, all over large geographic areas of land or sea. Turning to agricultural solutions, we recently renewed and expanded our seven-figure contract with BASF Digital Farming, the European-based multinational chemical producer. They're using PlanetScope and our planetary variable solutions for board area management to deliver targeted and timely agronomic advice for their customers. We also signed a new contract with the USDA's Foreign Agricultural Service, FAS links U.S. agriculture to the world to enhance export opportunities and global food security. They plan to use our broad area management solutions to support the production of crop-type maps and area estimates overseas. Also in the commercial vertical, we recently announced the addition of OnX Maps as a new customer. They're using Planet's base maps to provide outdoor enthusiasts with up-to-date imagery of outdoor recreation landscapes. This is a great example of how Planets data is making its way into the hands of consumers. OnX was recognized by Time magazine for having one of the best inventions of 2023. Their recent imagery product, which leverages Planets data, won the outdoors category. Turning to product updates, where we've had three key launches. Firstly, on November 11th, we successfully launched 36 super doves and our first Pelican tech demo into orbit on board a SpaceX Falcon 9 rocket. We established contact with all of the satellites within just a few hours of the launch. I'm pleased to report that the on-orbit testing we're conducting with the Pelican tech demo is going well, providing valuable insights and learnings about this new spacecraft design. This marks our 33rd successful launch and our 569th satellite successfully launched and deployed. I'd like to note that while we often take these accomplishments for granted, what our team does here is nothing short of remarkable. Planet's ability to rapidly build satellites affordably and at scale is truly exceptional. I'd like to thank all of the team at Planet for their hard work and dedication in making this latest launch a success. Secondly, as already mentioned, we launched Planet Data and Services on the Sentinel Hub platform with transparent pricing and packaging, enabling low-touch or self-service sales for small deals and giving partners what they need to more flexibly and rapidly build solutions on top of our data. Finally, last month, we launched our new Forest Carbon product. Our 10-year data archive of global forest carbon is accurate, affordable and scalable, helping to solve long-standing challenges associated with measuring forest carbon stocks. We've launched this forest carbon solution with open and affordable pricing to support faster customer adoption and early market capture. We're pleased with the early demand building for this new product, and we were very excited to win our first customer, B0 Carbon. B0 is a carbon ratings agency, and they have adopted this groundbreaking solution to help their clients make more informed carbon credit investments. We're seeing strong interest from the carbon project developers, carbon marketplaces, standard settings bodies, and others across the carbon value chain. In summary, during Q3 we saw solid growth in our civil government and defence and intelligence markets. We focused on efficiency in our go-to-market execution, as outlined in our investor day. We also had a great product quarter, launching 37 satellites, bringing our new forest carbon product to market and enabling low-touch access to planet data via Sentinel Hub. The pace of innovation and development at Planet is truly incredible. And we're doing all this while maintaining disciplined spending to support our path to adjusted EBITDA profitability. Overall, our conviction in a significant opportunity for our solutions remains firm. The ability to understand change taking place in broad areas of our planet is what differentiates us and fuels adoption of our solutions. We continue to see the market for our solutions as enormous, driven by the tailwinds of security, sustainability and digitalization worldwide. I'll now turn to Ashley for review of our financials and our outlook. Over to you, Ashley.