Planet Labs PBC 2027 Q2 Earnings Call

Thanks, operator, and hello, everyone. 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 would like to remind everyone that we will 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 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 anticipated 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. 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 today, which is available on our website at investors.planet.com. Further, throughout this call, we will 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 would now like to turn the call over to Will Marshall, Planet's CEO, Chairperson, and Co-Founder.

Over to you, Will. Thanks, Cleo, and welcome everyone joining us today.

Planet had another outstanding quarter, delivering a record $116 million in revenue, representing approximately 58% year-over-year growth. Non-GAAP gross margin was 59% for the quarter, better than expected, demonstrating the ongoing scalability of our business model. For the fourth sequential quarter, we achieved and in fact well exceeded Rule of 40, which is our revenue growth rate plus adjusted EBITDA margin. Our revenue growth rate was driven by strong execution across our satellite services deals, as well as continued momentum in our data and solutions business. We completed commissioning and handed over the first sovereign Earth observation satellite for the Swedish Armed Forces and successfully launched our next-generation Pelican tech demo. This week, we shipped our second Tanager and 18 SuperDove satellites for launch.

Both at home and abroad, Planet's data, AI-enabled solutions, and sovereign satellite capabilities are proving critical to the challenges and opportunities governments and companies across all industries face every day, from disaster response to resource management to national security. Defense and intelligence was once again an area of strength for us with over 90% revenue growth year on year. I want to highlight two recent wins in this sector for our data and solutions business, both of which landed in August and therefore are not included in our financial metrics for the quarter. We were awarded a new $8 million contract with the National Geospatial-Intelligence Agency, NGA, to deploy Planet's Global Monitoring Service, GMS, in support of national defense priorities, with options to expand and extend this work. Planet was the only vendor considered, as our solutions are truly unique.

We've created a deep archive of thousands of images for every point on Earth's land mass, enabling a peripheral vision, which with AI-powered pattern recognition on top, provides customers with the strategic indication and warning capability to proactively recognize patterns and identify emerging threats. This program grew out of a successful pilot with the Defense Innovation Unit in support of INDOPACOM, and we're incredibly proud to see GMS graduate to an operational program. We were also awarded a seven-figure one-year agreement with a European defense and intelligence customer to supply high-resolution global mosaics and support operational planning. Turning to satellite services, our team's execution against our backlog for our satellite services customers contributed to the strength in our defense and intelligence results.

As we discussed last quarter, in May, we launched our first satellite for the Swedish Armed Forces just four months after the satellite services contract with them was signed. The space systems team's rapid commissioning of that satellite enabled us to officially hand over to the customer, which contributed to the Q2 revenue outperformance. In August, the German government announced that we were awarded a tender for dedicated capacity satellite services. The tender award includes options and has a maximum possible value of €25 million over five years. Overall, our satellite services pipeline progress has been extraordinary. In particular, we're very pleased with the maturation of this pipeline. Today, we have over $4 billion of identified opportunities for satellite services, over 25% of which is qualified as near-term pipeline.

Planet is extremely differentiated here due to the strength of our operational history, as we've launched more Earth-imaging satellites than any other company in the globe, and due to our speed of delivery. For our two most recent satellite services partnerships, we've delivered a first satellite in orbit within 2 and 4 months of the contract award, respectively, compared to many years for the space industry historically. We are also increasingly finding that our customers and prospects want both AI-enabled solutions and satellite services. This bundling creates synergies and is even more differentiated. Governments are articulating an urgent imperative to secure sovereign access to space, understand threats in and around their region, modernize their defense capabilities, prepare their infrastructure for natural disasters and other catastrophic events, and maintain their strategic edge.

More broadly, across the civil government sector, second quarter revenue grew over 5% year-over-year, and we continue to see encouraging momentum both in the U.S. and abroad. To share some recent highlights, during the quarter, Planet signed a new contract with the Rwanda Space Agency to provide national high-resolution data and analytics for government ministries, departments, and agencies, as well as public universities. The satellite imagery data will be used in policy and decision support on agriculture, urban management, spatial planning, disaster response, amongst other applications. This deal marks Planet's first national program of its kind in Africa. Also in the quarter, Planet signed a renewal with the New Mexico State Land Office. Since 2019, this long-standing partnership has evolved into a sophisticated multi-product strategy that enables that land office to monitor, protect, and manage over 9 million acres of public trust land.

Shifting to the commercial sector, revenue grew over 15% year-on-year, reflecting the continued focus from our teams on landing and expanding in larger opportunities and leveraging AI-enabled solutions. To highlight a few interesting use cases in the sector, last month, we signed a six-figure expanded renewal with a hyperscaler AI developer for global monitoring of data centers and semiconductor manufacturing facility construction. Planet's Pelican high-resolution data is used to track construction milestones for those facilities, which are strong indicators of supply chain health and computing capacity. Planet partnered with FarmQA to develop and commercialize AI-powered agronomic intelligence tools for enterprise agriculture.

The first application of the collaboration is already in the field: an AI-driven sugar beet yield estimation model currently being piloted with multiple sugar beet cooperatives during the 2026 growing season. Finally, Planet partnered with Bragger Technologies to integrate Planet's high-frequency satellite data into their spatial intelligence platform, enabling automated change detection and near real-time analytics for natural resource management and civil government applications. Stepping back, AI is enabling us to move up the market into a higher value, higher growth segment. We believe we currently have under 5% market share of today's overall Earth observation market, which excludes satellite services. With the innovations we are making across solutions, real-time insights, and next-generation monitoring, we believe we are poised to rapidly expand our market share.

Perhaps more importantly, we believe that AI is expanding the potential market for these capabilities by enabling users without geospatial expertise to leverage this critical data into their daily operations and expand to further applications and segments. Planet is uniquely positioned to capture this expansion as our daily scan mission is core to those expanded applications and most ready and relevant for AI utilization. Turning to technology and operational updates. In July, we successfully launched our next-generation Pelican tech demo, which included several technology advancements across payload, on-orbit compute, and satellite-to-satellite communications. This satellite forwards our path towards delivering 30-centimeter class resolution imagery. As a reminder, this satellite is a tech demo and is not expected to serve customers. Just this week, we shipped our second Tanager hyperspectral satellite to the launch site, along with 18 SuperDoves. They are slated for launch this fall aboard SpaceX's Transporter-18 mission.