Planet Labs PBC

Q2 2027 Earnings Call — September 3, 2026

our first question comes from the line of Edison Yu with Deutsche Bank. Your line is open. Please go ahead. Great. Thank you for taking our questions. First of all, I want to ask about AI and maybe try to tie in some of the broader dynamics going on. There's obviously been a lot of attention paid to the fact that the gap between frontier and open source open weight models is compressed a lot. Does this have any sort of impact on your efforts? And if so, is that actually a positive tailwind for you? I hadn't thought very much about it in that way, but look, what we're taking is the best models across the field to apply on top of our data. It does help us, of course, the proliferation of that, more models, more availability. And what we're trying to be is model agnostic on a lot of our applications. You heard about our AI app and that progressing to the open beta phase. And in that particular app, we allow people to choose their own models back end. So if you have a preference for Gemini over and topic or what have you, you can choose. It's a good point about smaller models. Obviously, I think that we're going to turn to a situation where.

The system will choose the model that's most appropriate for the question at some point. I'm sure that's where the big companies are going to go as well. But yeah, I mean, in a sense, the commoditization of those models only accentuates the extra value that we have of our data. And I often say to people, Thank you very much for joining us. Daily Scan with all of the archive really fits in well. So I think it just with the point you're making and it accentuates the value of extra data sets like ours. Understood. And then, yeah, yeah, totally, totally. Separate question as a follow up. You cited the pipeline and I believe $4 billion and I think over 25% or a billion I guess is near term. Can you provide a little bit more context on how that number has been relative to the past and also kind of the size of the deals maybe in the pipeline relative to Germany? Yeah, it's really great. Yeah, well, we're very pleased with the German deal. That pipeline that you're talking about is referring to Constellation Services. So yeah, we've got about $4 billion in of deals identified in our pipeline there, about 1 billion of which we have designated as near term pipeline.

And yeah, so we've seen both smaller deals when civil governments come in like this German civil, but it's really exciting that there are civil governments now taking interest in dedicated capacity options in particular of our constellation services options. and I'm pleased to say we're also seeing even bigger deals at the big end of this spectrum. And some of that's contributing to the sheer scale of near-term opportunity pipeline there. So, yeah, I mean, I've never seen it as big as it is now. So it's maturing in all the ways, but especially the maturation of the big deals is really impressive right now. So we're pleased on all fronts with Constellation Services.

Thank you.

Your next question comes from the line of John Godden with Citi. Your line is open. Please go ahead. Hey, guys. Thanks for taking my question. You know, a number of companies out there are planning to launch different types of large LEO constellations, and the launch players who generally describe the market for their services is very tight. You mentioned a recent partnership in Germany as an example of just diversifying access to launch. I was hoping you could offer a bit of a temperature check on the market for launch services as you see it. And do you have any concerns about getting access at reasonable prices? Yeah, I mean, there is definitely a lot of demand, especially for the rideshare missions with SpaceX right now. And that is driving some challenges for some of the players, especially the smaller players. You have to remember, of course, in the big arc, prices have been coming down. When we first started out at Planet, the launch prices were about 20K a kilogram. Now they're significantly less than that.

Thank you very much. and so we're very experienced in putting our payloads up when we need and we're very flexible and speedy so you know all those providers really like working with us because of how experienced we are in doing that so we always turn up with the payloads on time integrate them quickly and so on and so they love working with us so we've got Good plans. Of course, diversification is really great when new players and we like investing in contracts with new players because it helps encourage They want to show they've got real opportunities to their investors to get going, and that's great. And it's synergistic with our satellite services with countries. I mean, in the case of that one with ESA Aerospace in Germany, yeah, that's really great because, of course, Germany would love to see satellites built in Germany and launched on German rockets. So it just plays into that game. So we're an even stronger industrial player for that country in that example. And there's others around the world like that. That's great.

And if I could just follow up with broadening up that question a bit to the supply chain at large, kind of same idea, a lot of activity, a lot of growth in expected satellite launches. Is there anything deeper in the supply chain that's showing up as kind of a problem, a concern, access to some sort of raw material or technology that's tightening up lead times? Anything like that, a temperature check would be great. Thank you. Yeah, no, we feel relatively good about our supply chains. We do think a lot about the supply chain risk, of course, and showing that up. And we have made some investments to stockpile things that we really think are critical components. Most of that is relatively straightforward for us. I mean, we're relatively small numbers still on most of the global scales. So actually anything to add to that? No, I mean, I obviously took up guidance on the year for CapEx. And part of that is, you know, we want to make sure that we don't run into any of those constraints. So we're looking at longer lead time items and making sure that we're making advanced procurements so that we can move at the pace of demand. Excellent. Thank you. No problem.

Your next question comes from the line of Mike Lattimore with Northland Capital Markets. Your line is open. Please go ahead. Great. Yeah, thanks so much. On the queryable earth offering, I guess you call it AI application now, when might you see this get to general availability and then how are you thinking about monetizing it? Yeah, great questions. I mean, look, we're really pleased with how the interest of folks into that application, some of the emerging use cases that we're seeing are really incredible. We're really still in a learning journey. It's a beta mode for a reason. We're learning what and really trying to hone the app into what is valuable for customers. and then we'll think about the marketing and go to market pieces of it so we're more focused on that value creation first but the general way in which it's helping is it's enabling people to get going really quickly like what's the quick way of getting a rough idea does Planet have data that could be relevant for this and what's the quick answer and then The other piece of it is just lowering the barriers of entry for non-geospatial experts such that they can get going again without any such team in the loop.

And that means also that it opens up to all of those organizations that don't have geospatial teams at all. Now, there's all sorts of caveats with it. We're learning. It's just early days. But I think Planet is in a unique position with one of the most fantastic data sets that could be combined with LLMs to make an incredible offering that is differentiated in the marketplace entirely. I mean, again, all those LLM companies are focused on building real world models and to do that, they need real world data. And we have arguably the most incredible data set of real world data to train up that. And so we're focusing on doing that ourselves. Yeah, definitely. Great. And then on the pipeline, when you say 25% is near term, is near term like 12 months? And then also... within that near-term bucket, any color on regions that are more prominent? Yeah, what we mean by near-term is quarters, not years. And what we mean by, I mean, in terms of geography, I mean, at least three geographies of import, EMEA, APAC, and North America are all playing significantly into our pipeline. And yeah, I mean, we're very pleased to have about a billion dollars in that near-term bucket.

All right, thanks, and an impressive rule of 40 this quarter. Yeah, rule of 70.

Your next question comes from the line of Trevor Walsh with Citizens. Your line is open. Please go ahead. Great. Thanks all for taking the questions. Will, I wanted to maybe start with you around a comment you made for that $8 million deal with NGA. I think you had said that Planet was the only provider in the mix for that deal, which is impressive, not I think for any customer, but certainly for a U.S. government where that's not really the standard playbook. So I'm just maybe from like a broader competitive perspective, are you seeing that type of situation more where you guys are the only kind of game in town around certain deals or RFPs? and if so, what do you think might be driving that? Is that the bread and butter core ability of PlanetScope or other newer type of capabilities? Well, yeah, it's because of our daily scan. And we have seen it before in the case of the US Navy. That was also sole source awarded. Actually, they competed it the first time. But then once they realized what we had, they sole sourced it on the second time. So we have seen that on occasion. Obviously, governments do really prefer to have multiple vendors if they can.

So this really means they've checked all the boxes and checked that there's no other options. And Yeah, exactly. Underlying that is our daily scan, which is simply no one else does that. I mean, you can look this up. Anyone can look this up. No one has a sufficient number of Earth imaging satellites in the right kind of plane and all this to do a daily scan. And so if you want to monitor for new threats and monitor things consistently, we're the only game in town. Now, that doesn't mean there's not other market opportunities for tasking and other things. Obviously, we're playing in that game as well. But in that particular area, which especially in the security front is about finding new threats, we're kind of the only game in town. Got it. Helpful. Ashley, maybe for you, but we'll also feel free to chime in. I think kind of as I just looked over the last few quarters, it looked like D&I is now, I think, at a higher watermark in terms of total revenue contribution in the quarter, 70% disque, and then at the same time, international is kind of overtaking by a pretty good clip the North America business.

So just wondering how much of that is really just a function of Germany and J-SAT flowing, and maybe even the Swedish deal now flowing through the model, and that's just sort of a natural occurrence of those two metrics reaching those kind of higher contribution levels, or if or is that really more of like what the, you know, the story of planet is kind of in the future, kind of going forward, at least, is it more of an international DNI focused type of opportunity really that you guys are chasing ultimately? So you hit on it at the beginning of your question as we are realizing backlog into revenue and delivering against our satellite services contracts. That hits primarily international as well as defense and intelligence.

Now, Will talked about the fact that we just signed our first civil government satellite services deal in August. and we do think that there's a meaningful opportunity for us in in the civil government arena and We also see a lot of opportunity for growth in civil government and commercial generally with the daily scan plus AI highlighted the fact that we're seeing a lot of interest in data center monitoring across insurance, the energy sector and financial services. I read a report recently that by 2030, Thank you so much for joining us. and not requiring GIS experts in order to derive value from the data. Great. Thanks both for the questions.

Your next question comes from the line of Ryan Koontz with Needham & Co. Your line is open. Please go ahead. Great. Thanks for the question. and Greg Corder. Ashley, I wanted to ask you about the dynamics that we're seeing in RPO here, just to simplify it for us here. We're seeing a step down in total, but a real healthy step up in current RPO. Is this primarily driven by kind of progress on these set services deals, these big, large and dangerous deals you're just speaking about, or are there other trends at play here in terms of shorter duration contracts outside of those? Yeah, it's a really good question. Obviously the current RPO and current backlog is directly attributable to the fact that we are making progress against some of these larger contracts. And as we continue to execute, we absolutely expect to translate that from backlog into revenue. And then just generally speaking, we've talked about the fact that we're exploring new markets. So those are going to be more short term pilot deals and pilot opportunities. As we transition those into program of record, we would expect those to turn into longer term deals. So I think there's a bit of some and some on that.

But as Will said, there's also a lot of opportunity in our pipeline. And as we convert that, we'd certainly expect to continue to see backlog to grow. So it's going to be a little inconsistent quarter to quarter, other than the fact that we absolutely are executing against the backlog and transitioning that into revenue. Makes perfect sense. Thanks. Another question on maritime domain awareness. You guys have had a lot of success there. Are you seeing any changes in the competitive environment? I did see an announcement of one of your partners that's working with a competitor now. You can share about the competitive environment in maritime domain. Yeah, I mean, there are a number of companies out there doing the some of the analytics on top of data. But I mean, in terms of the core data set that it depends upon, again, we're the only one doing a daily scan. I mean, I mean, you know, we image 10s of millions of square kilometers of ocean territory, I mentioned the US Navy partnership, just in the last question, and that one alone images 13 million square kilometers of ocean territory.

Just to give you a sense, that's far more area coverage than any other, at least Western company doing earth imaging. That alone is bigger than the United States area of ocean territory that they are looking at. And so no one else is doing that. So yeah, so the underlying data set is core to that application. So there's a number of players, you know, playing on the top of the analytics, like combining AIS data, SAR data, R data, other sort of AI to predict ships and things like this. But they all need our data as far as I'm concerned. Got it. Thanks so much.

Thank you.

Your next question comes from the line of Michael Filatov with Barenburg. Your line is open. Please go ahead. Hi, Will, Ashley, Cleo. So just two questions for me. The first one, there's a view out there that some customers might ideally want a single provider across multiple sensing modalities. So optical, SAR, RF, thermal, you name it, rather than integrating point solutions themselves. So you've got Tanadro and Hyperspectral, but the core of the business remains optical. Can you talk about how you think about the idea of broadening the Sensor portfolio? And if you agree with that idea, whether that's primarily an organic development path for Planet or whether M&A could play a role with the balance sheet you've got now? And then I'll follow up with one more. Yeah, I mean, look, I think electro optic is the mainstay, biggest piece of the market when you look at that biggest areas of applications, biggest market across all the segments, I think, especially in civil government and commercial, it will be the biggest area of expansion as well.

Thank you very much. for them and others have done the same and so and we're willing to work with others and partner on that front and so we feel that we're in good position again daily scan is is hard on SAR because you would you would need a lot and there's a lot of power considerations that are much more power hungry and so the base change detection system we still think is the right right thing to focus on optical first so we think that's the core of the market we're focused on that we're partnerships um and other things in the other areas. Sure. And just a follow up on the image archive as an AI asset. One thing I'd like to understand a bit better is data consistency across generations. I assume spectral calibration varies across Dove, SkySat, Pelican fleets, and then archive spans, multiple hardware iterations. So how much sort of normalization work is required before that data is genuinely training ready for a given commercial model or for your customers to utilize? Yeah, well, I mean, we essentially make our data backwards compatible. So as we enhance it, we always make it such that you can get the subset of the previous iteration with it.

So doves, for example, had eight spectral bands, but they kept the four spectral bands of, sorry, super doves had eight of the doves had four, but they kept the same four. And We do a lot of calibration work. All of these fleets are calibrated to Landsat, Sentinel, MODIS. These are government missions that have high calibration accuracy that we calibrate our data to. So such that people can be assured that when they get an analytic feed from us in a next generation, they always can continue that. By the way, that is a huge barrier to entry because it's This sort of calibration is really hard and there's a huge archive involved. I think people often underestimate the value of our archive, but it's central to all of the applications. GMS, for example, relies that work with the NGA. Thank you very much. And so not only is our data unique in terms of the daily scan, it's unique because we have the archive. So even if someone had a daily scan suddenly today, they wouldn't have the archive to go back and find all these things for several years. So we've got quite a lead there.

I think people often underestimate that exact point that you made, which is the calibration over time so that you have a very high signal to noise ratio. That has been a very significant investment that Planet has made over the years and makes the change detection analytics that we do on top of the data valuable to our customers. Great. Thank you, guys.

Your next question comes from the line of Jeff Van Ree with Craig Hallam Capital Group. Your line is open. Please go ahead. Hey, guys, this is Daniel for Jeff. Maybe we'll start on the pipeline, the four billion new sovereign deal pipeline number you gave, which is huge and real impressive. Maybe if you could just give us any other context you can around that in terms of how that's been trending quarter over quarter, year over year. Any call-outs on the composition of that? Any concentrations, geography, otherwise? Is there any other context around that number? Very interesting. Yeah, I mean, so it's been growing in number of deals in total size. And I think the key thing we were trying to point out with the 1 billion part of it, the 25% of it is maturation. I also mentioned earlier, we have getting both smaller deals and bigger deals into the pot. So bigger than we had thought, and smaller than we had thought. So that's quite interesting. It's spreading out a little bit. And, and it's transitioned officially from just defense.

It was so into civil government, there was a few Other deals like the German one that are in the mix as well, although it's still mainly defense and intelligence ones, which we always wanted. We want our solutions to transition to civil government and commercial, and we want our consolation services to transition. We often think of DNI as our forward-leaning partner. So, yeah, we're very pleased with that momentum and to geography. Again, I said there's three geos that are really driving that. And it's it's pretty strong in all three of those. I wouldn't say there's one like outstanding place amongst them. helpful and then Ashley on the model and you know I take it to Q3 sequential revenue decline that's guided that that's probably due to the the step off in in one time since satellite services so that that makes sense as we look to Q4 then what's implied for Q4 looks like there's a real strong bounce back in the revenue if anything you wanted to call out there is that just sort of standard course you know deals are ramping over time or anything in particular to call out in terms of lumpy rev rec and any other rec events to call out in the balance of the year.

Yeah, no, I think you hit on it. Q2 was really about a step up due to the point-in-time revenue. And I expect there to, as we continue to sign more satellite services deals that will both increase the variability in the short term, but over the long term, probably normalize. In terms of the back half of this year, it's delivering against our backlog and really executing. And from... From there, it'll be landing and expanding with new business. So generally speaking, we feel very good about how business is trending. And I also wanted to point out, you saw that the gross margin went up and is sustaining up, and that's really great as well.

Our next question comes from the line of Noah Popinak with Goldman Sachs. Your line is open. Please go ahead. Hello, everyone. How's it going? Good. Maybe just following up on that discussion there on the outlook for the rest of the year and the margins, I recognize you raised the EBITDA, but it implies lower margins in the back half versus the first half. Can you talk us through where in the cost structure that's happening, why that's happening, and maybe how we should think about how that progresses into next year? So not a significant change in margins, but you're right to call out that it is a modest decline in gross margins. And that's simply just mix of business. So we are continuing to drive scale overall in the business. That's the strength to our one to many business model. But, you know, again, Satellite services are going to be different margin profile depending on where we are in delivery across those deals. That'll impact the mix of business. And so you'll see some variability quarter to quarter on gross margin. We were obviously really pleased this quarter to still deliver 59% non-gap gross margins, even with a meaningful step up in delivery against our backlog.

Got it. Is there a way to think, Ashley, at this point about, you know, there was a long-term profitability framework provided, you know, in the company, you know, several years back, earlier days. Is there a way to think about the revenue base now after a lot of changes in the business and in strategy that's required to achieve that long-term profitability model? Yeah. There's not necessarily a minimum revenue if that's effectively what you're asking. We talked through last fall when we had our investor day, those same long-term financial targets and kind of how we see them evolving over time. We still see this as a business that can deliver very healthy, adjusted EBITDA profitability, so 25% plus, and with that healthy free cash flow dynamics. and gross margins. We amended that a bit to say north of 60% because it really is going to depend on that mix of business. But as we're demonstrating, even as we continue to fold more satellite services business into our revenue, we're maintaining high gross margins.

So you know generally speaking we are on track to continue to expand and the main thing right now is we see so much market opportunity that we are leaning into to that and investing across the board. Okay that's great and then just lastly for me on the on the CapEx increase could you just further detail a bit what's behind that it's a pretty large What is that for? yeah it's effectively um look see it as investments in pelican and owl so um as will highlight it it's it's it's strength of pipeline um we don't know ultimately how those deals will shake out in terms of dedicated capacity versus sovereign so as we are stepping up um investing and having that pelican capacity we operate under the assumption that those will be Robert Henry Schingler, Similarly, there's a lot of interest in OWL. So we announced this last year. We've been talking to our customers and understanding from them Thank you for joining us. Super helpful. Thank you so much. Thank you. In the interest of time, please limit yourself to one question as we continue our Q&A.

Your next question comes from the line of Christine Leweg with Morgan Stanley. Your line is open. Please go ahead. Hi, this is Kyle Benvenuto on for Christine. Congrats on the quarter and thank you for taking my question. One on the balance sheet for you. You raised 120 million through the ATM during the quarter and you ended with roughly 865 million of cash in short-term investments while generating positive free cash flow. What changed in either the opportunity set or your investment requirements that made it attractive to increase The raise of equity here. And should we think of the capital as primarily supporting OWL and additional manufacturing capacity such as the CapEx increase you just discussed or for other strategic opportunities or simply just adding balance sheet flexibility? Thank you. Yeah, absolutely. I would really anchor it on the latter. It's that strategic balance sheet flexibility. You know, our target is on an annual basis to be free cash flow positive. So that means we're generating enough operating cash flow to support the CapEx investments in scaling up our next generation fleets. So, you know, we are... Very diligent about how we are adding that capital to the balance sheet, making sure that we're sensitive to dilution as we know our shareholders are. But at the same time, we want to be in a position to make strategic moves that can accelerate our market capture and make sure that we can deliver for the broadest customer base possible.

Your next question comes from the line of Greg Pendy with Clear Street. Your line is open. Please go ahead. Yeah, thanks a lot. So you've talked about the owl upgrade cycle. And I think, Will, you mentioned that it's 10 times more data. I assume that going from three to one and then the 2D area scaling is how you're getting the 10 times increase. But just how should we then translate that as analysis? I mean, is this mean that it's going to drive from a financial impact more usage or is it just, is there a price increase opportunity? Yeah, definitely a price increase opportunity. I mean, this is considerably more information and so it opens up more applications. Again, think of things like vehicles where a meter you can start telling more about the type or even ID vehicles. I'll give you a specific example in maritime domain awareness. We can typically ID the vessel if it's under 30, if it's over 30 meters in size. At that point, we can actually say it's this vessel with this IMO number, which is really helpful. Smaller vessels we can see, but we can't ID them. If it's one metre, you would expect that roughly to divide in three so that you can see a 10 metre vessel.

That's really important because there's a lot of fishing vessels and other things that are in that sort of 10 to 30 metre class. So it's things like that. It opens up more opportunities, different kinds of applications. In that case, going from military ships to maybe submarines. commercial ships and fishing vessels and things like that so it opens up other applications so definitely and we already have customers interested in that and for sure they're expecting the prices to go up The other thing that OWL delivers, which we'll highlight, excuse me, highlighted is that it's 10 times faster. So we're incorporating into the satellite things like AI capabilities, being able to do that onboard detection and analysis, as well as satellite to satellite communication, which can enable the data to get back to our customers faster. So it's on multiple vectors that this is much more valuable data to our customers. And so, yes, we would certainly expect that to be commensurate in terms of the price we can charge. Very exciting. Thanks a lot.

Thank you.

Your next question comes from the line of Gabriel Floret with Cantor Fitzgerald. Your line is open. Please go ahead. Good afternoon. Thank you for the question. This is Gabriel Floret on for Colin. How does the team's balance of domestic opportunities range across the Pentagon's FY26 budget, FY27 CR, and FY27 requests? To what extent can we see planet programs put left as program officers drive balance in commercial offerings? Well, great question. This administration is really leaning into commercial solutions. And one of the interesting pieces also, especially ones where the company has already gone and invested and is building the system already. So the government gets to just benefit from that. And then they're really leaning in. and we see it across the board there's substantial programs that we have our eye on this year is coming in their government FY27 and that hasn't yet passed through Congress so we'll be tracking all of that and how it results after reconciliation but just know that there are meaningful expansion of commercial type operational budgets across the board, NGA, NRO for the intelligence community, the department itself. So it's getting a lot of budgets for new spac

Q1 2027 Earnings Call — June 4, 2026

Analyst Colin Canfield (Cantor): Hey, thank you for the question. Maybe if you could talk about the remaining opportunities, like all within the context of, if we go back to September's investor day slides and call it roughly three to $4 billion pipeline, can you maybe rank order the remaining opportunities among intelligence customers and maybe split that out between international and then U.S. And then if you can provide any color on kind of how you think about maybe near-term award opportunities and how it splits within that matrix. Thank you.

Executive Ashley (Title): I mean, obviously, Colin, you know, we're not going to give too much color on the specifics of our pipeline. What we'd say is it continues to be robust. We updated last quarter that it had increased since our analyst day, and we continue to be very well positioned just with the proof points that we actually already have. As you recall, when we signed the opportunity funded by the German government last summer, we were able to get them their first satellite on the next rocket launch. And with Sweden, we similarly just announced that the first satellite for their contract went up on our most recent launch of three Pelicans. So we are very well positioned on the basis that we've got great solutions. We can get these customers up and running on our data and AI-based solutions very quickly, while we also rapidly move them through our pipeline of production or our production line to get their first sovereign satellites into orbit. So strong pipeline continues to be very healthy. It is balanced geographically. And I think Planet's well positioned. Anything you'd add, Will?

Executive Will (Title): No, I mean, I think it's just we're seeing really robust demand here. And we said last time how that had increased in at least qualitative way and both in size and in number of deals. And as Ashley was pointing out, I mean, what we have here is that we can execute really fast. Countries really like that. They can get immediate access to our satellites that are in orbit for both the data and the AI-enabled solutions. Quickly get sovereign satellites up in space and you know the one with Sweden I'd also point out as a great example. They got immediate data services from our satellites and then within four months the first sovereign satellite in orbit. I mean basically we're the only ones that can do that. It's really unheard of. Traditional aerospace industry would take, you know, normally decades to do that sort of capability. And here we are offering that just four months after signing a contract. So that's unprecedented in the sector. It speaks to our differentiation. And that's why governments are coming to Planet for that kind of solution.

Analyst: That's great. I appreciate the color. And maybe pivoting over to data centers, if you could talk about any color on initial discussions that you and Google are having with the chip suppliers. And then maybe talk about kind of what do you think are the key engineering signposts that investors should look for as Planet on-ramps for orbital compute?

Executive Will (Title): Yeah, well, it's a very exciting area. Obviously, what we're doing with Google is an early tech demo, and on the chip side, it's all leveraging their TPU architecture, testing those work in space, which is one of the questions. I'm pretty confident about that side of it. But we're also testing things like inter-satellite links because we reformation flying these sort of satellites together. And now the technologies, the radiation, the radiators for the power, that's one of the other core technologies that we have to develop a little bit here. I mean, stepping back a little bit, what I'd say is that it's very clear to me that this is going to make sense fiscally and from an engineering standpoint. Within 10 years, it will definitely be cheaper to do it in space than on the ground. As to exactly how fast we can do it between now and then, I think that depends on some of these engineering questions that we'll be tackling in these early tech demos. So, you know, again, early days, but a really exciting field. And you see, you know, there's a lot of players going into it. And we think Planet is well positioned because of our history of doing hundreds of satellites before. We're one of the few players that have done that. We've already put fast computers, GPUs, NVIDIA GPUs in space. We already do a lot of stuff with AI, as you're aware. And so we're well positioned for this sector.

Analyst Edison Yu (Deutsche Bank): Great. Thank you for taking our questions. I wanted to first follow up on the Orbital Data Center. In your kind of early work around the engineering, do you have a sense on what kind of compute density is realistic in the next couple of years? And I think the framework has been sort of kilowatts per ton. And so any sense on what you guys are seeing there? Is it realistic to be like 80, 100? What's up there for now?

Executive Will (Title): Well, thanks for the question, Edison. I mean, I'm not getting into those sort of technical specifics at this stage. I mean, remember, this is really, as Google likes to put it, a moonshot at the present time. It's going to be an iterative project that we the capabilities in space. But I will point out that there's several interlaced challenges to do with the radiators and the interconnects between all the different satellites as well as the computers on board any one satellite. And there will be multiple. And that complex trade space, I think a lot of people are focused just on the launch cost. But it is a lot to do with the efficiency of your chips. And because the excess energy you have to give up in heat, you have to radiate out. And so efficiency of chips plays a really important part, as well as the networking of those together and the firmware to optimize all of it. So it's a very complex trade space. And one of the things Planet is really good at is that sort of thing and doing really good systems engineering to bring down costs for that sort of spacecraft system. Again, early days but those are the kind of problems we're tackling.

Analyst Edison Yu (Deutsche Bank): Understood. And then I wanted to ask you about the essay you put out very recently on planetary intelligence.

Executive Will (Title): Yes, and you know, obviously I think some very profound and thought-provoking ideas. I guess in a more operational sense, what do you think is kind of the next call it two or three years? How do we see that sort of manifest either in the business or in the industry? Like what are some paths you could envision to see that manifest more like commercial operational basis?

Executive Will (Title): Well, I mean, that's very much the first part of what I was talking to in that planetary intelligence essay, which is the merger of earth imaging data with AI and the large language models that are really unlocking the value latent in Earth imaging data in new ways and lowering the barriers to entry. And I think that's what is most exciting. It doesn't depend on the future phases of compute in space or something. I think that that sort of supercharges this when we get to that phase. It's natural that sensing at a planetary level is done in space. We've done that for years. The compute is going to follow, and they'll lead into this new planetary intelligence era. But way before that, like right now, Earth imaging data and other sort of space data sets and AI enabling us to do more real-world models, more real-world models, open up real-world applications on the ground today in farming, in energy, in insurance, and so on. Entities that we serve today are big governments, big enterprise commercial players. And this, in principle, can enable that to be lowered, right? And I think that's the most exciting thing now. And so that's what we're mostly focused on. But it's cool to do the tech damage for computing space as well, because in the long term, that could be very exciting, too.

Analyst: Thank you very much.

Analyst Jeff Van Ree (Craig Hallam Capital Group): Great. Thanks for taking the questions. Will, on the AI side, interesting, exciting. You've got the beta program now up with a natural language query. Can you just talk about the scope of the trial? How many participants? Thoughts on when that goes GA? And I'd love to hear maybe in your mind what are a couple of more compelling use cases you're seeing people playing with right now?

Executive Will (Title): Well, firstly, it's very early days. So let me just say, I mean, we're in a beta testing mode, as I mentioned in the prepared remarks. And again, just like the answer to the prior question, this is about unlocking the latent value in our data more easily and more simply, especially expanding the number of users that could get value out of that really fast speed, scale, and simplicity, basically, all in one. But it's early days in the testing, so I'm not going to get into the specific numbers, but we have a cohort of beta testers just so that we can find where are the best value use cases that we could dive into and how do we improve that product so that it's better able to serve those use cases. So very early days, but what's tantalizing about it is that Planet historically has faced this solution gap. That is that our data in principle can answer a lot of questions. In practice, it's difficult. You have to build these solutions. We've been focused on these AI-powered solutions, especially the defense and intelligence, MDA, GMS.

In principle, this direction can help a lot of others by enabling people to be able to build bespoke solutions on top of our data leveraging this kind of technology which can unlock that for a lot more players. And we know that value is there and AI is ready to help us to get to that quicker, I think. So that's the exciting thing and it's also where Planet is so uniquely positioned because all of this is because of our daily scan. Our daily scan is really so unique because no one else in the Earth observation sector really is doing that sort of daily scan, at least not commercially. And that is the basis for all these applications across wider areas where you don't have to task a satellite, but it already covers all the land you're interested, whether it's for agriculture, energy, and so on. And that's really great for these AI models.

Analyst: Yeah, I mean, I think it certainly has potential to break open the commercial and civil TAMs for you. Maybe one last quick one for you. On the Pelican 1s up and ramping nicely 50 centimeters, you talked about the tech demo on Pelican 2 going to 30 centimeters. Just any crew swags on kind of based on prior experience, how long you would expect a tech demo for and broad brush sort of strokes on when you think those Pelican 2s start going up commercially?

Executive Will (Title): I don't comment on that specifically, but we have got a bunch more launches this year. We are ramped and at pace on the Pelican Gen 1s, as you're aware. We already launched three of those earlier this year, including that first one for Sweden. And we're excited about that Gen 2 launch. But it is a tech demo at this stage. So a couple of technologies that it has on it, you know, it's got a bit of a bigger telescope to enable it to get to that 30 centimeters, and it also has satellite-to-satellite communications as well as the NVIDIA chips that we're flying with the other ones. And that in combination is what enables the more real-time insights going from hours, latency for getting analysis after you take a picture to minutes. And so that's the biggest improvement. It's even more important, I would say, than the resolution improvement, although both are important. But we'll get back to you once we get that in orbit, start seeing how it performs. But we're ready to scale that fleet, too, and excited about the program.

Executive Will (Title): Yeah, I think it's important just to highlight that across our satellite fleets, as you know, we tend to repurpose a lot of the components. So there's a lot of commonalities, even as we iterate on various aspects, whether that's improving latency, improving the payload for resolution. So that enables us to have a much faster pace of iteration than you might typically see in hardware iterations, especially in space. So I would say stay tuned. There's a lot of fun stuff coming.

Analyst Mike Lattimore (Northland Capital Markets): All right, great. Yeah, thank you. Congrats on the quarter. You know, over the last several quarters, you've highlighted Europe as being an area of urgency and increasing demand. I guess, is that still kind of the most hot spot within the pipeline or is the pipeline urgency broadening?

Executive Will (Title): I'd say it's very global. I mean, we have a strong interest in Asia, US as well, North America. It's strong. But I think you're right. Europe is probably our strongest area. EMEA is strong, as you saw in the breakdown, very strong growth in that region. And obviously, all of the global interest is driven by a lot of this geopolitical trend. It's driving demand because of political uncertainty. And in this uncertainty, people want their own sovereign space capabilities, their own access to information about threats in their neighborhood. And we can provide that relatively quickly and affordably. So countries are coming to us. Europe is perhaps most stressed by that kind of situation. So obviously that is driving strong demand there. And of course, we also have a very strong European base. We have hundreds of employees in Europe and a lot of facilities, mission control center in Berlin. And as you're aware, we now have opening and manufacturing site for our Pelican, our most advanced Pelican spacecraft in Berlin as well, approximately doubling our manufacturing capacity. So we're really leaning into that market opportunity, planets well positioned there as well.

Analyst Mike Lattimore (Northland Capital Markets): Great. And then on the commercial side, nice change in the trajectory there this quarter. Yes. Are the drivers of that change, you know, sustainable or was there some, you know, one-offs this quarter? How do you think about commercial?

Executive Ashley (Title): I think it's very sustainable. And, you know, one of the things about the agriculture partnerships that we mentioned is that we've really turned it around to a point where we really aligned that business model with the agricultural partners that we're doing with, like the John Deere piece that we announced yesterday. As they do well, we do well. And that, so, you know, we took a reset in that area, but now we're growing it, and so we feel good. I'm very happy about that growth as well. Ashley, anything to add?

Executive Ashley (Title): Yeah, I would just say, you know, the comments that we made earlier, both around the AI solutions that we have, like things like GMS or MDA, as well as, you know, this beta of a new natural language-based interface, is really enabling us to engage with customers that haven't historically really thought about how they might integrate GIS into or GIS data sets into their modeling and analysis. So even in financial services sector, when you think about what things like GMS or MDA can do, it's really unlocking kind of a view into changes in global supply chains and patterns and understanding when a change in pattern could lead to some type of economic indicator of change or market impact. So we're excited. It's, you know, we are early days in, certainly in the AI application, but also even in exploring how the solutions that we've, you know, initially explored primarily in defense and intelligence are unlocking opportunities for us in the commercial sector. So we remain very optimistic about how the commercial sector can be a major growth factor for us in the years to come.

Analyst Christine Leeweg (Morgan Stanley): Hi, this is Gabby Nosselman on for Christine. Thanks for taking the question, and congratulations on the quarter. Since last quarter, Planet moved from a 14-day delay in Middle East imagery access to an indefinite restriction for imagery in the conflict region. Have you seen any change in customer behavior as a result? And since the news came out in early April and with recent ceasefire talks, is there any anticipated timeline or framework for restoring satellite imagery access in the Middle East?

Executive Will (Title): Yeah, thanks for the question, Christine. When there are conflicts around the world, we always have to balance operational security needs for civilians or military personnel in the area with public interest. And I just noticed something that's, I think, been confused a little bit in media reporting on this is that all of our core customers continue to have access in that area straight away. It's really about publication that could lead to operational security challenges that folks are worried about legitimately and that we're putting a delay in place for. So most of our core customers continue to have data access. And of course, the intent is to unwind that as the conflict resolves. And so our stakeholders, obviously around the board, care about this and we do too. And I think that the strong demand we've seen in the region is excellent despite that. And just so you're aware, we do have a managed access program for media clients as well. It's just moved to a push model, which is rather more similar to other folks in the Earth observation sector, where we provide imagery on an as-needed basis where we can, where it's not going to hurt security operations in the region. And that means that articles continue to happen in the press as well.

Analyst: Guys, that's super helpful, Culler. Thank you for the clarity. And a quick follow-up. Defense and intelligence is clearly becoming a larger portion of revenue and has been the fastest grower for quite some time now. We also highlighted some nice civil, government, and commercial wins during the quarter. I mean, as we look ahead, how should we think about the size and growth of civil and commercial relative to defense and intelligence?

Executive Will (Title): Well, I think that's an excellent question. And the way I view it is long term, I believe the civil and commercial sectors will be bigger than defense intelligence. We're obviously leaning into defense intelligence right now because there is such strong demand and it makes sense for us to lean in there. We're very needed. But as we were just talking about AI, that helps us unlock these other areas. I think that's the right way to think about it. It helps us to accelerate that. And yeah, I mean, just the breadth of use cases in commercial, all the sectors we've talked about before, we believe that many tens of billion dollars of TAM to go after in commercial and civil. And so we're going to go after those. But I think for the immediate focus, defense and intelligence is the best place to focus because there's such strong demand. And also a very sophisticated customer that provides us with feedback that helps make our solutions even stronger and we think ultimately much more broadly applicable.

Analyst Jeremy Jason (Citi): Hi, this is Jeremy Jason on for John Godden. Congrats on the quarter. I just kind of wanted to ask, what are the upcoming milestones for the key programs that you're looking forward to, just for clarity's sake, and can you provide any color on, like, the timeline for those?

Executive Will (Title): Which key programs are you referring to? Involvement in, for example, OWL. You guys mentioned that in the remarks.

Executive Will (Title): Oh, like the tech demos, yeah. So there we're building our first tech demo spacecraft scheduled for the end of this year. It's a lot of synergy with the Suncatcher. So we're using the same bus as the Suncatcher. That's the project with Google for compute in space. Same bus, different payload, just like we did with Tanager and Pelican. Same bus, different payload. And so we're building that. And we're very pleased with how that's progressing. It's still being built right now. It's early days. So we'll let you know when there's updates.

Analyst Trevor Walsh (Citizens): Great. Hale, thanks for taking the question. Will, and maybe Ashley, if you want to add as well, there was a smaller competitor, but a competitor that announced a win in late April, kind of end of year quarter, of their own satellite sovereign deal, much smaller than anything you guys have booked. But I was just curious if you're seeing just based on your own success and that being pretty widely known and publicized, if you're seeing more competition specifically in that space kind of working for government agencies, international, et cetera. And then kind of relatedly is there a minimum deal size that you all would entertain as far as structuring more where the sovereign or the entity owns the actual satellite so something more in a jset kind of realm?

Executive Will (Title): Good question. So I mean, look, I don't think competitive landscape has changed very much. I don't know which deal you're referring to, but obviously, there are other players that can build Earth imaging satellites for countries, but really our differentiator, as I mentioned, is proven track record, having launched hundreds of satellites doing Earth imaging before, and the speed of delivery. The speed of delivery in months rather than years, sometimes decades, for these systems. And also cost performance, I would add, having had that long track record, we've got the cost down of our satellites a lot, so sometimes, you know, these things are radically lower cost. We might be launching 10 satellites for the same cost as people were before or companies were before launching just one or more. And so, you know, that is all those differentiators make us strong in the market. And we haven't had too many cases where we see others competing with us. We feel pretty strong.

Executive Ashley (Title): And I would just add, you know, we're able to compete on all of the points that Will just made in terms of speed and performance and cost effectiveness. We also are the only ones that can enable these customers to get up and running immediately on the network of satellites that we have, a combination of the daily scan and the analytics on top, which help inform them where to look and how to best optimize the sovereign capabilities as they're building them out, including how they want those in orbit so that they can get the best performance ultimately out of the fleet that we would build for them. And we can very cost-effectively get them up and running through a dedicated capacity service or tasking credits so that they immediately are getting the eyes that they need to understand what's going on around them. So it's not just the ability to be best in class in delivering satellites, which obviously we are, but it's also the fact that we have the network of satellites and capabilities, the daily scan and the analytic solutions on top of it that bring value on day one.

Analyst Ryan Coons (Needham & Co.): Great, thanks. Question for Ashley on gross margins. Surprised again to the upside here. Maybe give us a bridge or unpack what the upside was on mix. Obviously, satellite services, deals, are those lower margins not contributing as much? Maybe help unpack the mix a little bit for us. Thank you.

Executive Ashley (Title): Yeah, it's my favorite kind of upside. It's sales performance. As you know, we typically... For the purposes of our own planning, you know, assume pre-back half-weighted sales execution that just gives us, you know, headroom on that front. And when they bring in something like a figure international deal early and that drives, you know, data and solutions revenue. That's very high margin upside in the quarter. So I really attribute this to the excellent performance of our sales team and the delivery teams that get those customers up and running so that we're going from contract to revenue very, very, very quickly. The business model that we have where delivering data comes at relatively low marginal cost means that when we drive upside on revenue, you see that fall to the bottom line, and in this case, it definitely stopped by a gross margin along the way and drove upside.

Analyst: And, Ashley, that was for your deal you signed in this quarter?

Executive Ashley (Title): That's right.

Analyst Steven Varhaftig (Wedbush Securities): Thanks for taking the question. Congrats on the quarter, everybody. So, Ashley, just a question for you, because it seems like there's a lot of different focuses for capital investments. You're thinking about the R&D for new AI-enabled solutions. You're thinking about the CapEx ramp. I mean, you really do have a strong balance sheet. So what would you say is the priority from a capital allocation perspective? And then if I can add just one more on to that, is the company still looking at M&A opportunities? I know that you haven't shied away from it, but want to get a little more color on that opportunity. Thanks.

Executive Ashley (Title): Thank you for the question. We're obviously very proud of our balance sheet, and it's a great asset, especially when we're delivering such a mission-critical service to really important customers. It gives them a lot of comfort to see that we have both a strong business and a strong balance sheet to go with it. When we think about capital allocation, as you might imagine, we are a very innovative company, and we are never short on ideas. But we always have the customer at the center of what we do and our understanding what do customers need that can really unlock market opportunity for us. So I'd say the investments that we're making are really prioritizing growth and market capture. So how can we sustain or even expand our growth rates and then continue to drive high margins? And we gave the rule of 40 framework, revenue growth rate plus EBITDA margin, as one way that we think about making sure that we're balancing making these investments, but also running a good business that generates profits, that generates free cash flow, and always has an eye to how we scale our profit margins and free cash flow margins can expand.

So a lot of exciting things, incredibly innovative teams, but also really doing it in service of market capture and delivering value to customers. And on the M&A side that you brought up, we're mainly focused on execution and have most of what we need. We will do things like the Bedrock acquisition that we did that enhances our AI-powered solutions in really good ways. And that team's working really well, by the way, and very integrated into our AI-powered solutions, especially in the defense intelligence space. We'll continue to look out for things that could be accretive, especially to the core business product or business synergies. But again, I think we have most of what we need and so we're many heads down focused on executing the deals we have.

Analyst Greg Pendy (Clear Street): Hey guys, thanks for taking my question. Just a real quick one. As you have so many things that's going on, especially later in this year with the first owl and then subsequent launches to fall in 2027. Are there any stress areas in either the supply chain or launch that could move things around?

Executive Will (Title): Yeah, we're seeing launch be a little bit more competitive than it used to be. But, you know, Planet has used to working with a lot of different players. We've launched 40 rockets, I think, on 10 different launch vehicles. And so we know how to do that and we have a long history in relationships with various launch providers. And I would also say, despite a little bit of extra competition for the space right now, there's a lot of new players coming onto the floor right now, and so we're excited about them. We're excited about what they can offer as well and increase competitiveness in the launch sector. As for the supply chain, nothing material to point out, but one of the things we look at is buying down risk in supply chain by buying components. And that's one of the reasons that we're focused more on growth than profitability where we need to do that to show up risk.

Executive Will (Title): No, I just say, you know, in some of our prior quarters, we've talked about the fact that, you know, we've taken up our CapEx capital expenditures specifically to make sure we're looking at those areas where we can buy in advance to de-risk any supply chain but also get better pricing by buying more up front. So it is something that we keep an eye on and manage, I think, quite successfully. And generally speaking, the team has a very resilient supply chain.

Analyst: That's very helpful. Thanks a lot.

Executive Will (Title): Thank you. That's all the time we have for questions today. I will now turn the call back to Will Marshall, CEO and co-founder, for closing remarks.

Executive Will (Title): Thanks, everyone. Well, we feel like we had an excellent start to the year, really good momentum. Obviously, on the financial side, it was great that we got to 42% growth, hitting all of 40, the third consecutive quarter, 900 million in backlog. We feel very solid about the finances. And obviously, it was great on the space side to have our first launch, to send our first Gen 2 tech demo to the launch site, launch Sweden's first sovereign satellite.