Earnings call transcript Q1 2024

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Operator

Good afternoon. Thank you for attending today's Planet Labs PBC First Quarter of Fiscal 2024 Earnings Call. My name is Anna, and I will be your 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. [Operator Instructions]

to Vice conference President like host to now Genualdi, Chris of would pass over the our I Investor Relations.

ahead. go may You

Chris Genualdi

Thanks, Welcome XXXX everyone. operator, first and of quarter to earnings Planet's call. hello,

may outlook. today's call, future to that related Before we make our we'd statements financial begin forward-looking or remind like everyone we events to

The found estimates regarded on not expectations statements contracts. by as risks Any projections. as which a forward-looking We Planet also represents at representation to be of our which subject expectations be executed that and pipeline, inclusion outlook, forward-looking potential sales estimates, www.sec.gov. future Such are information in yet plans, be based and management's forward-looking assumptions reference filings, detailed qualified leads current or achieved. uncertainties, various plans, will SEC are that should have such statements and not can

performance Our events to on such we statement or statements reflect and by actual materially forward-looking is events. of which results the to indicated responsibility such or from the unanticipated those made date forward-looking circumstances update after statements no may undertake the differ occurrence to or reflect

used and decision useful means financial in believe also the information use management and making. non-GAAP prospects, transparency financial for allow During about operational financial key by future and operating measures and results, and provide measures these making greater metrics that enhance respect the past overall to understanding a its operational performance of decision measures. for will non-GAAP with as financial to evaluate these period-to-period financial We We call, discuss we comparisons.

press reconciliation this see tables non-GAAP the on release financial more For please measures, afternoon. the provided earlier our issued in information

by indicators we often performance indicators discussed this management performance in by These detail key in and provide key competitors are press of our release. a number call, industry. our and more in throughout other used Further, used

are intended I'd on jump remarks. prepared Investor to everyone which like to posted accompany have to our the Relations slides we we website, our encourage in, Before reference

revenue for and site several this contracts generally of contracts contracts recognized the of the be terms years. referenced we many figures be last each by that which can Planet term the terminated note vary, our or maturity. Further, of will these during of can contract, the prior can Finally, these customer the to call, customers please over their

each we result, a realize As not total such for the expected revenue may contract.

time, Co-founder. to this and Will. turn to call Marshall, you, Over like I'd now the over Will CEO, Planet's to At Chairperson,

Will Marshall

everyone. joining call hello, and Chris, for the Thanks today. Thanks,

quarter guidance. the scales. XX% million first line We the year-over-year margins XX% a expansion drive margin and with business percentage point ability in year model Our one-to-many revenue XX% for increase, expanded up to showing in financial in $XX.X were results from data significant revenue, generated as prior growth, XX representing our solid. Non-GAAP an gross to

quarter first unique the across XXX markets. ended with over customers We spanning commercial government and

QX recent in inform our were faced I'll in our guidance April line our with results a for year we address While which May, headwinds and the this in moment. and expectations some

some to is opportunity. all In market dataset. new want are we products see That say, the our quarter challenges. saw pipeline solutions. in our security And that QX, for enabling customers the most continue our address in saw advancements generation our with We Before sustained for we unlocking history. confidence strong possibilities pressing sustainability demand that, our the do I saw to underscore rapid in AI their and to to largest company's of we

expected. anticipated. We together, we sales with of as of this deal primary update guidance than to including we our larger some factors these changes as our is taking well as well combination observed In cycles, impact full-year than enter and driver expected. closing reflect with extended government sales Let budget than year more the believe data is for me we as year the subscription beginning the recent of coming the opportunities a bookings address uncertainty, longer procurement year. cycle later in came hesitation of from model (ph) that weeks, our bookings significant have bookings Because [lighter] now revenue on The lighter in smaller customers recent quarters. as values they forecast a heightened business in

fiscal our this expense trends lower assumed year. to believe continue, may profitability the path rate, are go guidance adjusting at of growth these customer To our we our behavior revenue presuming plan. because remainder on revising maintain we for are this Furthermore, the we

going expansion estimate these headcount rate back the our more to next have will QX annual reduce plan million in EBITDA this year. current than be profitable savings our objective supports than expenses year. into We adjustment standing We our more believe expense later our year. of fiscal But [indiscernible] to by changes adjusted $XX plans, which generated we next significantly importantly, run no

prioritizing we're looking additional path for revenue our our our as customers that core profitability. at focusing investments and business In highest We're on resources to optimize our expenses. opportunities, to scaling our well as support spend, ways ROI back and

margins market we growth, We levers needing that on breakeven to fortunate achieve our to strong this, to continue opportunity, to that and capture sufficient flow us like are and drive we sheet without this. do to the have through raise business further enable the emphasize balance cash believe to have capital. operational in I'd higher gross capital

over long earlier, I strong. the for remains business the conviction our term As stated in our opportunity

signals on expand other Let the that and us of recent give confidence. deals some me

It than year. prior Firstly we a quarterly the in the more pipeline on of qualified average mentioned, of as demand, record generated double QX. amount opportunities of was

first eight-figure foundation of pipeline the We've for customer pipeline color, me new XXXX future qualified quarter. FY during we seen added mention that growth opportunities five For anything this potential to these some Generating like lays never opportunities. for let the the year-on-year. large additional scale

to to bookings and that us revenue. up it's Now convert into pipeline

to data to and AI in AI language is tailwinds. On potential further have existing partner shared Secondly, generative to back the when on last our high machine a users our Chinese point, how our its the AI archive Scope earth balloon models, altitude analytics on through our catalyst to our in archive advances for large to Planet that time scalably search particular, AI, synthetics a going time track data the the Synthetaic we data call, like in value combined with six recent allowing models the and ran almost function unlock origin back years.

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strategy and we close I'm sales acquire would intention this key still work observation variable track At our of as Planet to Sinergise announced to acquisition of Explore and team's that conference, that announced have programs, our the part planetary I we earth building our support quarter. a pleased such position the that to that the to business Meanwhile, new opportunities delivered power Planet. in they already earlier. on view us mentioned add as and it's to of for we QX, policy on multiple bring agricultural this common mainstream the on regulatory to to We Sinergise EU's say

To generation longer expected delivered company's solid had than QX lighter and with summarize, and some expected than history. in our sales pipeline Bookings anticipated. we smaller at landing we results the quarter than taking in strongest others values came

on We spending a we and our our maintaining see ROI. opportunities result, are the we prioritizing responding where are highest adjusting for And profitability customers year. next by our investments plans, as objective

of opportunity significant the business scale in the strong. for our conviction remains Our

Ashley. to And with it that, over I'll turn

Ashley Fieglein Johnson

joining thanks, you, everyone, Thank and us today. Will, for

the came fiscal first million, year-over-year represents growth. $XX.X of revenue at which As quarter April Will for in ending our XX XXXX XX% mentioned,

of our our As of Value end multiyear of Annual of Over contracts. Contract business. book consisted XX% or business QX, of book ACV XX% of recurring annual was the of or

Our average weighted years an be continues contract length ACV on approximately two to basis.

retention of months. at in net book reflective each the the business point important was dollar rate, rate retention and at with relative that dollar this year It's net dollar retention Winbacks we of XX%, beginning was is XX%. three understand rate our year, to to of only Net measure which the

at starts investor our net and you fiscal retention rate then our year prior of the detailed full-year our of final the If quarterly our in rate builds course years look as XXX% through at each retention results. year towards dollar net two dollar earnings presentation,

renewing relative government is The for QX NDRR in slight certain the primarily decrease of beginning in to the to contracts. year due delays

are in we year, retention business the shared the full past. an we dollar have approximate targets the with XXX% rate, For that targeting net for the consistent

to the prior margins approach, of expanded model. gross by subscription XX% margin, expansion our agile one-to-many the the first of year. driven is revenue, our gross aerospace the compared This non-GAAP XX-point to for we margin our XXXX Turning gross fiscal quarter XX% data in to of growth business of efficiency and

practices we in the As goods and sold, the cost marrying of a of depreciation of businesses. our traded reminder, amortization CapEx publicly include SaaS

of than of timing $XX.X was to software the This revenue. for loss anticipated approximately is for quarter. due capitalized EBITDA expenditures, Adjusted million the million were Capital lower development $X.X including quarter we or materials. the XX% receiving

sheet, cash believe equivalents, without balance initiatives quarter to with growth-accelerating cash, the which investments, continue us short-term to of ended Turning raise $XXX invest the and needing behind we capital additional we provides million capital. to our to with sufficient

also have We to continue no outstanding. debt

the of XX approximately end were RPOs XX% apply performance obligations two to next and next to $XXX the QX, the our approximately or which, of years. At XX% million, remaining months

contracts excludes in as include for can convenience contracts. that which contracts RPOs we've our renewal. multi-year our As clause other quarter-to-quarter reported associated on shared our for common in as termination as calls, prior EOCL federal RPOs please come Also, keep fluctuate up contract, the is well the that with mind, value a

were past lighter-than-expected our While earlier solid, the couple the for full months that the results to have mentioned our led Will in outlook year. bookings update of us QX

or the recognition. are of that two not consumption in We significant size, that figures expected assumptions of business two the contracts expected QX deal new were or in cycles QX with XXXX, note and are we that data average revenue our observed. for recently because expansion months the year lowering we've associated modeling in and seven drive fiscal I'll what smaller signed eight longer sizes until revenue to this and and consistent incremental sales but last timing

data timing, the revenue similar forecast a these for we is as their factors, all consumption of made are So QX see we the allowance. as of year. to with our adjustments within around to challenge the remainder QX we forward address saw stay look challenge position renewal our annual appropriately believe the the to forecast customers our and response slowing We we us of have in for in to of headwinds contract up QX some contracts are updated and some that

have in forecast already Sinergise. of revenue of With year the changes approximately the committed from for that's of we before additional the new renewals, acquisition is the QX, XX% revenue factoring or business, our end made and as of

spend we're and our how our outlook. light of outlined revenue already Will adjusting prioritizing in plans our expense updated

We expect over to by these current rate adjustments to we But expect operating expense at path targeted planned million $XX run reduce our support to generate year. savings our in more year-end profitability. the importantly, to it

of XXXX. by than or I'd of profitability XXXX end fourth calendar quarter to like EBITDA commitment later adjusted our to fiscal no objective the the underscore achieving year

As levers business. OpEx side on our spend our align the to to CapEx have we've multiple growth both said rates, before, we of and

We expect in these market. the we can while maintain continuing our lead competitive to make adjustments

is quarter expect million impacted million, a Turning which $X.X second the midpoint. at elevated rate year-over-year was of million $XX revenue upside by guidance for delivered fiscal approximately Please to the fiscal driven the represents usage of quarter the growth year-over-year we which approximately we number XXXX, that in by of note, that second the revenue adversely of XXXX, growth to XX% consumption our with of customers. of $XX

envelope, rates heightened some especially as within mentioned challenging customers year usage create have adjusted I down comparison, The rates their previously. a their year-over-year to as usage stay annual last budget

large last impacted QX, addition, earnings rate in year-over-year In which our conclusion referenced contract call. of by the we a growth the comparison legacy on is

an in than satellite months. activity earlier other initially decline of that estimated, LEO expect our and have increase to two for year, this experienced recent the earth's year XX% reflects caused and mid-next which satellites, we of which by in We to accelerated solar sequential the margin SkySat we operators lower expect of QX atmosphere in The later XX%. depreciation unusual non-GAAP margin gross re-enter and gross was

that Our are earth provides approach to with fleet. operations, serve continue our concerned customers have ability redundancy observation us not to with and existing significant to with SkySat capacity onboard new the we customers to such to our

quarter million negative Our and expected adjusted $XX for be $XX second to the is loss between negative EBITDA million.

We of to million. for are $XX planning expenditures capital $XX million approximately

on and fiscal closure to in which $X ending or $XXX revenue of between revenue expect year-over-year, full to the be XX, an we million January million of the million XX% includes we Sinergise acquisition approximately growth XXXX, based XX% assumed For year expect mid-QX. from $XXX

Our be guidance, of is and of both lower prior million the XX% non-GAAP expense. than approximately gross between guidance because $X is the XX%, margin which lower to expected revenue additional and depreciation

loss EBITDA to $XX be expected is million. negative million between Adjusted negative and $XX

expect be how progressing to $XX SkySat million end this advance of XX% ready to to We fleet. for program schedule Overall, program, look with our on which tech Pelican first is XX% driven approximately for we're approximately the in of year or on of launch forward of year. CapEx be by life shared prior has $XX this currently in demo later revenue, pleased our the investments been and as is our to CapEx our to million call, primarily scheduled

I'd we emissions to scale beginning the program we continue and share before and our of to highlight reporting impact. outline includes turn mission are disclosure. data more our ways we sustainability and you journey with meant making we're operations grow excited equitable our sustainable groundwork marks are carbon world. second to our to like of while is This report. SASB reporting progress highlighting of to all our first for we as and a toward of that our our some Planet just year Finally, and That progress lay the inaugural ESG and Q&A, It the have ESG proud to published company

our planet.com/esg. find report at our website ESG You on can

can now questions. Operator, take that We our comments. concludes

Operator

Needham Company. from [Operator of with first the and Instructions] line question Ryan The is Koontz

may proceed. You

Ryan Koontz

of soft first in fiscal for to it of soft weakness change for your Thanks of the for extrapolate of a that's year, the source I'm the trying outlook correlate North some it balance kind that America was Commercial and little looked year? mix QX in the fair quite of to question. quarter. in was the kind with of a Is in the like the downtick rest

Will Marshall

a of -- and and economic sales I side it challenges are legacy environment some the in the budget customers. say, I'd commercial increased the is But as Well, mean timing we're is it's There longer lot the government scrutiny definitely of well. some it seeing cycles and contract. on clearly

So, anything, it's add not that, you would just Ashley?

Ashley Fieglein Johnson

that's right. think I No,

talking a remember, referenced If comparisons, to we contract. QX that year-over-year you're North important larger contract about the America in completed was it's one that and

certainly of be that's So, one to the factors. going

Ryan Koontz

Got on volume margin the quite SkySat the in an there decline gross it. about outlook? didn't there beyond said I change everything gross you that's Helpful. depreciation the outlook, was catch accelerated there just on margin something impacting or And

Ashley Fieglein Johnson

right. exactly is That yeah. Yeah,

So, there life. estimating are two shorter satellites where a we're now useful

is impact recent on roughly the million that's So, $X and to development. a COGS year relatively this

about So, impact very it year. of just But hitting QX. of the at next most is end tail the QX through started QX

Will Marshall

that I has if is does And the amount sun little may And more that top the bit of context just that atmosphere activity. earth is add the on going up What's of really of adding drag. of here. what heats a abnormal

So, LEO satellite these challenge facing operators this satellites. basically, this the end-of-life are and accelerated of two all

Ryan Koontz

pass That's the queue, thanks. question I'll really helpful.

Ashley Fieglein Johnson

Thank Great. you.

Operator

Mr. Thank you, Koontz.

Walsh question from Trevor is Next JMP. with

proceed. may You

Trevor Walsh

off defend comments kind a you a sun from depending that necessarily have or bit that you your the last potentially activity on Appreciate it. question. might for smaller to that in kind less maybe affect Thanks just and if do so my Will, -- not competitors earnest way? fleet kind on -- just of paying they them that since that more to be taking abnormal little Great. backfill they of able to affecting of in have will, more questions. Would see

Will Marshall

Well, Yeah. absolutely.

about is redundancy does the I agile design swiftly. scan. launch have thing and on We, just us demand with significant Dove, helps as the flexibly all we both that's things these can that and more important build the approach I fleet. our is our fleet thing just much build need other the we enabled the also the SkySat, Dove of to obviously, daily our factors on more mind fleet the we most fleet, mean, in Yeah. we mean aerospace most and and core and -- in-house, bear but redundancy system more, the the in when flex the So, to that the high-resolution because this, to

Trevor Walsh

then terrific. a sense around follow-up get the just their bit jump-off just contracts? piece Do that Is need curtailing back maybe a -- for really you or trailing macro are maybe you the consumption rates consumption And Great, or either the as customers to with the function for talent Ashley. a would there match little and also of budgetary just happening concerns what's of kind that just to really or makes their as of just contract larger Difficulty] kind given had based regardless of in more sense? or it on, needs they're just Does are, to their the the get rightsizing [Technical they've of not attributable to kind macro understand uncertainty ahead of year wanting the of them skees just kind and rightsizing is of a now their far as what just or consumption

Ashley Fieglein Johnson

we strong I XXX% we renewal NDRR. renewables as sense. still said, forward on north year. strong It good to to as rate say, make does a And look a -- news to sight the we of this think line as of the is see continue front, I'd targeting we're actually,

slow the number and made that of QX, pace in out at is, caution getting access QX, renewal they necessarily I'm last to renewing a at we size would they it what it's starting set use contracts we when consumption. dates, seeing are now or and uptick we're would that just in saw not because as early just that it's early software mentioned we we'd had seeing we're frankly the allowance their year, amounts. pace, that get the at their rolled increase at easier budget The I is the up QX a improvements frankly renewal contract issue attributed customers didn't pretty customers of renew time date. actually of whether contracts that the a can't ahead it's of those smaller continued because down we significant as we're know to data that to seeing So, we

seeing little compares So, what the particular. that's we're of in of bit some that's QX a impacting

Trevor Walsh

taking Great. the Thanks for questions.

Ashley Fieglein Johnson

Great. Thank you.

Operator

you, is with The Thank next Mr. Gursky the Walsh from of Jason line Citigroup. question

You may proceed.

Jason Gursky

are Can as bit everybody. outside Where along the you'd you you of renewals. on little more with on like United here with what's States, States? going behavior, either afternoon, fast markets suggested not moving a in things be provide new seeing Just government more contracts bit United color going good are that government on Hey, or on deals would on just the that the as you what's helpful. little color a the

Will Marshall

Yeah, happy to do that.

expected. the we cycles yeah, So, longer new we have way than of on deals there. Does of we've not they These your bit by distinction where before. some the data small know larger does complex I you're and answer are taken geographic little we've seen focus, added it and these softness sort side elongation is procurement don't the think on This question? divide -- piece side and so a seen say the deals any but of up? processes, piece, the on had both commercial on would government commercial the points seen government aware I but the particular that any government in I

Jason Gursky

Yeah.

I think so.

you're inside it's not States everywhere. it outside the So, United or seeing concentrated either

Will Marshall

No, light shed to on tiny more that. a bit no. And just

pick eight-figure was deals QX planned. the to later mentioned and up we the it's but that -- signed in really like up is year of now remarks than expected in one that slipped, had revenue we and had later ticks the increase Just our

this So is just --so it's basically. timing

Ashley Fieglein Johnson

getting of right paper on the It's the US the is of land process a on where getting given just specific procurements these or just an economic something Yeah. expected to into whether the unclear the governments else taking not awarded around are seeing at vessels but time of couple We of getting to going government whether kind Got slipped impacting bureaucracy also a deal the some kind ticking more of ink where QX. quarter saw environment the line. up that a early the goal deals. little business, longer, this there's scrutiny just the the was of over point end in

the at days. it. deals factor Right we're trying making that now of looking to early it revenue it's that assumptions, be we're that assumption our to So, we into and but kind understand slower, are so going

Will Marshall

Yes.

question? second The

Jason Gursky

Look, lot sales kind lot past the all in headcounts the I CSM, you -- that how headcount past. I all yeah, seen you've I know as headcount added know in not I'm you've accuracy has of is in do. So a you've and accurate have headcount given CSM, curious been out -- added of just as of whether forecasting in growth a been the activity robust the this it kind of

of market manage Just to onboarding trying people, or some is process to as to a growing potentially you business. to trying whether to right bringing get if need be a this and you're the that in an are visibility of all all understanding pains is seeing new result out figure appropriately you the truly able a lot the get this of

Ashley Fieglein Johnson

as International sales on conference kickoff. Munich phenomenal, which We a that's our had think to pipeline. We question. really all really Conference that Davos, had Will going of Security fair a in of QX, and was referenced we lot led I mean to I activity we Explore had phenomenal had at strong our

best our our think and averages. company significantly a above historical I ever as

into of question of the and think have is, new processing, for And we on. to all people some now is a so in closed. be to lot that your getting going is team the of a activity to great deals were is of that onboarding So, pointing we that a the factoring lot of this some delays lot I was

is, thing out a or points make rest it's we're data forecasting, factoring just new point, whether the QX general, Two, macroeconomic in in the sure remain having the signals very But confident point our one, we to team's how we factoring into of in we're I market, it. so just environment from important the thinking to year. we make we're great pipeline. to think, want sure that in, coming ability about your on we that to to want some the close of your people saw

So, this of don't into that quarters. run in situation kind we future

Jason Gursky

you. Okay, great. Thank

Operator

Thank you, Mr. Gursky.

Latimore is with question from next Northland. Mike Our

may proceed. You

Mike Latimore

Yes, thanks much. very

Can OpEx board? to sales this the And year? the changes in thought is then detail guess you Just I there you're a midst just headcount this that, the growth the more little of give across planning on on year. what

Will Marshall

Well, maybe do talk of sort can prioritizing remarks. a former are in can we that. areas as to mentioned the little we to actually and bit I our to high-ROI Overall, business

products, moving go-to-market is business of the means long smaller a and of streamlining deals bit to side, really our that tail the partners focusing markets, what terms a higher high to our On acquisition. in some of hence areas vertical the geographies, it's ROI and that ROI Sinergise platform

conference is clear what AI. a ROI, other near-term if less product number the we of more Planet be Explore latter on that the key which focusing of are off there on announced we'll side, and have about we a situation. the made talked there, on there products I bit that saw on refocusing variables, given -- focusing know about the we former further Pelican, On there, in areas, side, beds the some and we And you plenty smaller don't but really the of spoke

you do take want the Ashley second? to

Ashley Fieglein Johnson

Yes. Great.

have and again, of positive I think will the So, market is, what's demand. in I the important signal terms a

And having sure in there and where where so and the the as continue have areas need we invest pipeline street the it. on feet referenced, teams obviously those have the will to close Will we we places to are make go to

a we to those But making still those that feeling sure sure is behind just we lot we the focused also would efficient products these make of and investments, months how XX arrows. from appropriate are behind very that similarly want and we've to that's lot part this profitability. of last make putting And market is where we're investing path over the and of done to a being the that the make and on is being sure focus pull we're now time

Mike Latimore

Got on pipeline. the it. And just then

or thing you and referenced the deals. commonalities and how during new the eight-figure commercial those that the any quarter? very like deals seven-figure Sounds versus then five, does pipeline government was in expansions sort Are quarter terms of in of strong the or logos among there

Will Marshall

week? What was the last

Ashley Fieglein Johnson

Seven-figured. [indiscernible]

Will Marshall

Most our I into and really pipeline quite scrutinize never last put generation plan. quarter Well, firstly, this seen like qualified to isn't five noticed been but and civil eight-figure that like we has have space, we've and have just deals anything healthy Yes. intelligence. is only we've of defense -- government deals that. mix there again a to and mean And is those government

regulations on it's is So, are we AI call catalyst. seeing we're hinted also out it's an little driving a and big sustainability then the this quite deals as there's accelerant a the which and variety really what and on prepared remarks of applications bit -- drive a

of some that seeing the and this strong eight-figure heard you've So, these and we're I deals spoke seven about. pretty momentum of wins

which generation, we're off-the-charts mixed a growth the rate. when a about -- talking revenue little signal So, bit why yeah, reducing it's but the is of pipeline

Mike Latimore

Yes.

thanks. Okay,

Ashley Fieglein Johnson

Okay. you. Thank

Operator

you, Thank Mr. Latimore.

from next Craig-Hallum. Jeff question Van Our is Rhee with

You may proceed.

Jeff Van Rhee

when precision I for the walk questions. evolved, manifest environment the it just more saw. usage to little taking really sales Couple, my guess when a itself Great. through this first sales. you on just and and particularly me Thanks just and how what weakness started

Ashley Fieglein Johnson

say, general, for expect a we closing loading quarter expected We I'd of convert. had commit the backend we we lot Yes. pipeline to that have a on always coming in. deals, in

in quarter we wins the pushed reached As other weeks really a that Will the had line on early close over like final the right and we weeks came in early still we as it of had things May. into final goal May, in couple we were QX, deal eight-figure of track a the referenced, nice felt

Will in our be signal up usage But revenue get working the to committed the anticipated. went eight-figure when than from is on their paper, year, revenue actually deal much budget which later they until got multiyear actually we've that to report going So, remained we uptick we we the later this got the one because the constraints as ink the still there relatively award on of part customer, -- the I referenced strong. mentioned, where of were where the to what start dollar amount perspective, recognition

some factors of about to and as the the some the we trend nature. sizes the And deal average of things of accelerating those and out the so, just coming saw averages first numbers closing as those were the quarter read to cycles talked ran really metric us we that then the we've that at quarter, looked from sales we caused out quarter, that are is have were improving of historically, going And whereas we and this opposite direction. numbers

make blip, a trend. that's And can we treat as that the that so, we could assumptions where

company to assume to that very are factors to a and continue. this to we strong we did profitability that, to have commitment We ensure these getting that have going

we that our expenses So, for rightsize that circumstance.

close seeing to positive what's But know of really close, have from want sales when activity so our make and sure the going a We that generally on signals business, that but to we accordingly. still the team. there's we're of market lot we conservative going speaking, about lot with great we to the as can expenses we we take size that assumptions think more a

Will Marshall

in this the only very add data just recent that a of data is thing sense. is that really that just I'd to only and mind Maybe in keep point one

understanding just markets the and convert we to to got are and here, close soon time. paying we over it saying, as -- was attention I as So it us demand we've it. pipeline the to more and new here, up But it's creating but are

Jeff Van Rhee

last sounds usage, not meaningful in you're in with D&I you of being any saying was prior didn't commercial really booked it it like calling Okay. see kind the and new you're to business And quarter, read varying then it those respect sounds pipeline, back question, trends just all like my it ways? on out to whether as any to Civil you, differences

Ashley Fieglein Johnson

No.

back me. least I it heard think said something different you to on I've read or at I how a different

look average them trend historically sales saw whereas sizes down were we've on saw deal the we and quarter, back seen We when So, one we up. that cycles...

Jeff Van Rhee

Sorry.

Board, you of Civil the terms business of I'm taking going guess definitely didn't Civil taking and down obviously, forward. just, Yeah, I didn't the weakness, phrase sorry, it I Are well. I I D&I outlook no. was the new didn't commercial commercial D&I in -- usage and it and question those phrase well. everything you're across down in equally was Ashley, each the specifically

Ashley Fieglein Johnson

Got it. Yes.

say good. the with generally the contracts of renewal. of is I of across last I'd they Okay, quarter government over a been in and engaging the lot said, customers frankly -- don't the on the until lined some there's where the of Board, have they were accelerated quarters, around just pace budget that few the and that those that we've renewal in Yeah. example larger usage where particular, for up like

I we're that are those so don't to are some that things -- specific And in. the sector. And factoring it's of one think factoring any

caution of governments historically the headwinds, of we've government actually was is seen a new commercial getting us spite anticipate usage versus timing surprise new challenges such revenue is working on they've been think and already this high side, that whereas rate, relatively it's phenomenon. I a the on being the in that any lot because the we Again, just to don't getting I renewals, of strong against for saw impact the macro budget the cycles a of with renewal us.

Will Marshall

is this point. data Yes. And again, one

really and So, need wait analyzing. it's to not a We understand trend see and yet. still it,

Jeff Van Rhee

Yes.

right. it. got all it, Got Okay,

Okay, thank you.

Ashley Fieglein Johnson

Great, thanks.

Operator

Van Thank Rhee. you, Mr.

of is Christine line [indiscernible] from Our Stanley. Morgan the next with question

proceed. may You

Unidentified Participant

Maybe qualified that that's in near-term doubling guys. bridging different of customer and smaller afternoon, the mentioned, conversion pipeline. mean the bridge versus driving longer-term quarter you good Hey, I profiles revenue similar a you tailwinds? that how slower the the the headwind a bookings versus or

Will Marshall

Yes. bookings, your in the in slowness quarter, pipeline and point, a recent incredibly especially, just weeks. to We mean, in have saw we some there strong I general mixed did here. is signal generation

there only had pipeline the is and the think I So, mix -- so don't and past a sales elongating revenue between we're the and I and the distinction just on. bookings.

QX did spend there. this. satisfied bookings a generating lot it's on So, And that rest on revenue. job to think that the again, I result the in we true don't not spend It's with obviously mentioned We pipeline. into pipeline our much But Ashley that. there's our year energies now converting of of the and distinction spend

Ashley Fieglein Johnson

customers insurance interest spend think pipeline, across saw Yes. actually strong referenced. And mixed agriculture all to the like from really commercial some your and sectors we strong and question about sectors. sectors, I We signals

really these about you're talking when budget do having market-making a of as Some a scrutiny of budget, something space, activity the a think make budget on that replacing new. is you're commercial In the actually heightened not in for another you're I so there. and activity, is you're there good there customer, to energy call. just going necessarily lot that's

to And and see makes we of pipeline activity on Will this is environment. especially longer that news in side cycle, what demand front referenced a government so for pointing as there, But going good that obviously is, from of lot security sales the but side, things right a the strong on that business of piece D&I the business. lot are side on so on going of regulatory also the more our a the activity for now tailwinds many sustainability the on

Unidentified Participant

then or acquiring is you. be is insights complementary really that your than or similar spend resulting could category And capabilities in of completely where that meaning up same, Can the amount smaller dollar category smaller the be competitors cutting they is Thank bookings. this on a product you you with share it that the any you customer's Great. your for following spend contracts for if anticipated. budget the of

Will Marshall

anything actually on I to us we're piece. deals drives of is it's any mean, unique, especially more a is because again, the not solution add. our macroeconomic issues it the I'll the lose these to Manga competitors competitive budget-related deals these deals lot completely much comment competition which anything government of basically and-or data not just seeing complexity than to

Ashley Fieglein Johnson

the would of, broader rather the downsizing quite it's demand consumption. their I Yeah. they terms for described there is the what not pacing amounts from you because actually opposite say but necessarily data it's not that in

deals. So that the dollars they for in can larger the budget get

data. number that get where can't get budget of top Off the the contract the used to had our to available the customer examples. my head, I they of and has of think going So, with started a

up But to how to in figure later consumption that our allocated get funds fact it dollars back. larger are think larger, to budget of they way have line a While time. actually that takes more year trying out sometimes they indicative in versus the I scaling lineup the budget that's

Unidentified Participant

working more have guys how work? squeeze mentioned could I If you you with you would that you. different sharing how AI in do one thank future, partners in, a few and Great, think I that that you're economics the about mean in

Ashley Fieglein Johnson

you make protect the going going how to but you keep that that sure data the to have if mean, you're the got processing you're profitable you power, do portion your I data and they've have?

Will Marshall

question, a I great mean. It's

is out about AI extract and incredible, what's to just going tools the value our on power being of and in to AI data for so search the combination now. these we're field Planet able of excited the of new the happening Firstly, here the mean, right that's ability enhances with and everyone. I up what's speeds

in And of we've use about assessment specific kinds mentioned few building damage question of applications AI like defense for areas. useful. in balloons seen wide and case a it. your But data times without like a a doing out number is of disaster is response something and areas just to civil I'd searching intelligence SPY point variety or

You data. train it have to on

So, a of models. stock firstly, trove AI for a massive It's treasure data. has these

on top because that daily all this images our is of data. all archive that companies to can and scan, the applications and scan. interest these have And is this in satellite secondly, new unique that governments daily and we which AI -- ongoing this on driving and what's continue scan up can opening monitor things., how daily XXXX is of

is And that Planet. that to proprietary completely unique and that's

it that in a nearly really coming us and is without to where valuable they lot the not very us powerful know AI position So, of datasets one AI it these to an us of a puts companies because top unusual are with terms say. powerful dataset that licensing so a like once because far pretty but sort to they are do I'd recognition, and position of of in favorable have they the that combined these been

Unidentified Participant

Great. Thank you very much.

Will Marshall

[indiscernible]

Chris Genualdi

[indiscernible]

Unidentified Participant

Yes, thanks.

Operator

Thank you.

with next Bank. is question Edison from Yu Our Deutsche

You may proceed.

Edison Yu

Thanks for taking the questions.

offset of up, go Can maintain kind how growth? follow that to going plan the wanted you just mentioned think you you're just you that the lower target. EBITDA over First to I

Ashley Fieglein Johnson

Yes.

that that the the they're highest and mentioned, plans sure we've at As been the making plans focused back growth and obviously areas. I growth headcount on this year and ROI expense looking we scaling for had

as of number are seeing referenced where multiple we've signals. strong times there demand So, areas we're

one, don't sure we from that want efficiency investments. where to to and internally our behind that, making that make selective we're very on to operations away can we're focused but very we incremental we're investments being of So, as back strategic make and sure any

$XX north be. assessments than So, back exit on already of rate had expense million expected less by we our that run year to doing these we've the scaled such growth is

Edison Yu

that kind I a wanted it, into growing? mentioned know give can the and started but you And fast brings to of I just any opportunity if about an you quickly maybe forward. how insight low Sinergise. of customers trajectory Obviously, use covers a pretty that's wondering lot growth that it's we normally Understood. ask

Will Marshall

on our that We about see add-on doing they're by clients, the and great every front valuable to to partnerships name I like on monitoring also want which top don't of a especially those track segment, and Regulation, how I of that but some Europe end automate it well. has been we're been -- our the our that. the of countries customer a of the have in talking sense, relationships. is data on one tools sustainability Sustainable lot that Demands very as sustainable pieces helps driven use and almost automated AG helps that they the number mentioned, as long It Agriculture, report practices easy of sit of those costly mean all on people has deals to in a tail small small data, big of the a

great. that, very in track happy. close to Also we about still overall, other happy it's I'm And feel we're I'd that with on and comment acquisitions. So, that. also pretty QX two the just with QX,

we it's so feel right the move. confident, And

Edison Yu

Thank you. Okay.

Operator

Mr. you, Thank Yu.

with the from is of Mesniaeff line question WestPark. next Greg Our

proceed. may You

Greg Mesniaeff

Yes. to OpEx announced. to my rightsizing you you've taking wanted I for question. the that Thank circle back

to the you do Focusing on could some granularity areas you be give more If see impacted? of us SG&A in line just what specifically on most likely more kind that.

Ashley Fieglein Johnson

Yeah.

area our ROI deploy have for of as us an larger much looking automation touch having more Will focusing we're much can higher effective obviously a go-to-market at referenced, and The been fronts. where customers multiple model is activities. and customers smaller as how more we on I think we're lighter

of support address thinking of our relying internally on supporting leveraging about as that in side people our well and as the that us customers automation business. base the we're to we're as enables amount our of putting against partner that really and platform the tail longer reduce really So, model to partners

So, that's about really motion. thinking our go-to-market we're focusing of an example how

Greg Mesniaeff

for for margin that. my you to your Thank And follow-up remaining is year. revised gross the guidance

from You mentioned end offsets there the from more the wondering a focused and to associated that's two is impact if any analytics favorable I the that goods for to the mix, more some AI. satellites. million on that to relating tailwinds headwind software of of was presumably heavily with sold life to headwind close $X product

Ashley Fieglein Johnson

already products the As mid-'XXs you our may direct in high our it is. model is that such remember, our data subscription margins on core are quite as

and then which costs the hosting to of relate So, are depreciation predictable our our satellites. primary the expenses

So, there's -- as we...

Greg Mesniaeff

No, there no. is

So, much the saying this not profile I you're already, tailwind what what there is saying is you're given seeing. is a there margin you're of -- guess left high

Ashley Fieglein Johnson

direct as margin perspective, I guess margins revenue a a are what the gross from because so I'd is, tailwind for say us high.

margin. share our that that more has customers as a tailwind revenue So, and, high we increase wallet is selling of with also gross analytics very because by

Greg Mesniaeff

you. Thank

Operator

Mr. Mesniaef. you, Thank

line with last from will be The question Josh of Benchmark Sullivan Company. the Our

proceed. may You

Josh Sullivan

space capital Good seeing are currently you Planet be just to consolidator? we that where given We're think are markets you thus guys appetite do afternoon. a see AI sales an cycles and cycle that macros consolidation have

Will Marshall

in very we're that a about side and our have think hard then yeah, satellite in already business, be of the back about we've think there think extremely as lock-in and business Well, them, more Aerospace focused data when that of sort the on for high we we value the and kind just stack space in they consolidation. about to disciplined do this stepping data more always a is that of a strength I'd talked consolidator displace general, could, we as the I but and and business they they about return thinking think move. But and on the about in rare, that going up when and situation they position say I of high general in API so, us to fact come data natural time. we'll and investment have mean businesses and and And tend natural ourselves powerful more be we to yeah, as on

Josh Sullivan

-- then one on depreciation two And solar satellites. intensity maybe just just accelerated impact the Why have the this wouldn't question we the at broader console reduce risk? probability that of what's see, decreased additional and solar on point a activity Canadian to as the a

Will Marshall

of high No. understand... hasn't It elevated. it's changed, and think We're asking, still I the fleet? still -- the effects you

Josh Sullivan

Yes.

dynamic? activity a the still by the high, that other in this council Just if is activity still understanding the -- solar the satellites we there risk impacted might is

Will Marshall

Well, no.

into Now, the account we've made. this difference taken now is

the also redundancy a this of is So, And fleet. that that. remember but is of it in -- to improvements is fleet make of that situation yeah, are to an reasons our our forecast survive highly in sort And able and lot that operational we redundant. continue can but then, situation we one unusual have we we

So, worried about customers. continue we're being to to to provide not able our

we good yeah, to so, to continue our ability this. about feel And

Josh Sullivan

Okay, Will. thank you,

Ashley Fieglein Johnson

Okay.

Operator

the have time for Sullivan. the Mr. we session. you, That Thank question-and-answer is all

back remarks. I call So, over Marshall, any Co-Founder now Will and will further to the turn for CEO

Will Marshall

and maintain weeks said Just solid pipeline spending expected recent the our lighter profitability we've to seen they is come our responding result, high by overall, changing around bit the quarter pretty scale our a remains -- the as so results to catalyst we and and had history. and than delivered I'd But the in customers guideline, high in thanks that around the joining in we in summarize, activities. strongest backed in as for and of now generation And our digital our QX security by further high, a investments of and plans tailwinds piece we've key the we're company's AI, call. and ROI last that sustainability opportunity conviction transformation a say prioritizing

Operator

That call. participation, your now you lines. today's your Thank concludes may you disconnect for

Planet Labs PBC (PL) 8 Jun 232024 Q1 Earnings call transcript