Planet Labs PBC (PL) Earnings

Management highlights

### Core Financial and Operational Milestones - Delivered record revenue, 42% YoY growth, and third consecutive quarter of meeting Rule of 40 targets - End-of-period backlog reached $906 million, up 72% YoY, providing strong visibility into future revenue - Ended the quarter with $731 million in cash, cash equivalents, and short-term investments, up over $500 million YoY driven by convertible debt issuance, warrant exercises, and positive trailing 12-month free cash flow - 99% of annual contract value (ACV) is recurring, with 92% of ACV from annual or multi-year contracts; net dollar retention was 113% (114% including win-backs) ### Customer Wins & Partnerships - **Defense & Intelligence**: Secured a $7.5 million 6-month contract renewal with the US Navy, a $21.9 million 1-year NGA contract extension for maritime surveillance, a new NGA award for Global Monitoring Service, and an eight-figure 1-year dedicated capacity deal with an international D&I customer; successfully launched Sweden's first sovereign reconnaissance satellite just 4 months after contract signing - **Civil Government**: Won two-year seven-figure contracts with the Greek government (via ESA) for national space monitoring and the Czech Republic's agricultural fund for nationwide agricultural monitoring; onboarded Scotland's Agriculture and Rural Economy Directorate for sustainable agriculture support - **Commercial**: Earned John Deere's 2025 Supplier Sustainability Award for precision agriculture data; renewed partnership with NAVE Analytics for farm water balance and irrigation decision support; added non-profit WatchDuty as a new customer for wildfire tracking; expanded the Tropical Forest Observatory Programme via Bezos Earth Fund funding to monitor Amazon biome deforestation ### Product & Technology Updates - Launched private beta testing of a new natural language AI app that enables non-technical users to query Planet's massive global data archive, conduct time series analysis, and generate automatic insights - Launched SuperRes, an AI-powered feature that upgrades PlanetScope resolution to 2-meter class, following last year's upgrade to 3-meter class; the future Pelican constellation will deliver 1-meter class daily monitoring data - Announced a partnership with Carbon Mapper and NASA JPL to design a specialized shortwave infrared Tanager satellite that expands instrument swath width fivefold for improved atmospheric gas detection and fire fuel monitoring - Pelican 11, the first Gen 2 Pelican technology demonstration satellite (designed for up to 30 centimeter class resolution), has been shipped to Vandenberg Space Force Base ahead of upcoming SpaceX launch - Doubled manufacturing capacity via a new Pelican production facility in Berlin, Germany to meet strong regional and global demand

Guidance

- **Q2 FY27 Guidance**: Revenue expected between $102 million and $107 million, representing ~42% YoY growth at the midpoint; non-GAAP gross margin expected between 52% and 55%; adjusted EBITDA profit expected between break-even and $5 million; capital expenditures expected between $21 million and $27 million - **Full Year FY27 Guidance Upward Revision**: Revenue raised to a range of $425 million to $441 million, representing ~41% YoY growth at the midpoint, up from prior guidance driven by strong Q1 performance and robust backlog - **Full Year FY27 Margins & Profitability**: Non-GAAP gross margin is now expected between 52% and 54%, an improvement over prior expectations; adjusted EBITDA profit maintained at a range of break-even to $10 million as the company continues to invest in growth initiatives; the company expects to achieve Rule of 40 for full year FY27 - **Capital Expenditures & Cash Flow**: Full year capital expenditures are planned between $80 million and $95 billion, invested in next-generation satellite manufacturing and development to meet accelerating market demand; the company reaffirms expectation to be free cash flow positive on an annual basis for FY27

Segment performance

Total company revenue for Q1 FY27 was a record $94 million, representing 42% year-over-year (YoY) growth. Non-GAAP gross margin was 56%, and the company achieved Rule of 40 for the third consecutive quarter. End-of-period backlog was $906 million, up 72% YoY, and remaining performance obligations (RPO) were $816 million, up 80% YoY. By product/vertical segment: 1. **Defense and Intelligence (D&I)**: Revenue grew over 65% YoY, making it the fastest growing segment and the largest contributor to the quarter's outperformance. 2. **Civil Government**: Revenue was approximately flat YoY, primarily due to a reduction in the company's NASA contract. Recent contract wins offset this headwind partially. 3. **Commercial**: Revenue grew over 20% YoY, driven by aligned business model adjustments in agriculture, new AI-enabled solution deployments, and expansion into new verticals like energy sector maritime awareness. By regional segment: 1. **EMEA**: Revenue grew 86% YoY, the highest regional growth rate. 2. **Asia Pacific**: Revenue grew 25% YoY. 3. **North America**: Revenue grew 25% YoY. 4. **Latin America**: Revenue grew 7% YoY.

Risks & headwinds

- Launch capacity is more competitive than in prior periods, though Planet has existing relationships with multiple launch providers and is positioned to leverage new market entrants to mitigate this risk - Supply chain uncertainty exists for satellite components, though the company proactively mitigates this by purchasing components in advance to de-risk delivery timelines and secure better pricing - Early stage technology development (including orbital compute, Gen 2 Pelican satellites, and the new natural language AI app) carries engineering and technical risk, with uncertain timelines for commercialization - Geopolitical conflict (specifically the ongoing Middle East conflict) requires restricted imagery publication policies to meet operational security requirements, though core customer access remains unchanged and the policy is expected to be unwound as conflict resolves - Growth in the sovereign satellite services market is attracting new competitors, though management believes Planet's speed of delivery, cost advantage, and existing in-orbit capacity provide strong competitive differentiation

Analyst Q&A

• Q: Can you provide context on your $3-$4 billion total pipeline, split between U.S. and international D&I opportunities, and comment on near-term award prospects? /

  A: Management confirms the pipeline remains robust and has grown in size and number of deals since last September's investor day, with a balanced geographic split between U.S. and international opportunities. The company's key differentiator is its unprecedented speed of delivery: customers get immediate access to existing in-orbit satellite capacity and AI solutions, and can receive their own sovereign satellites in orbit in months, compared to years or decades for traditional aerospace providers, driving strong demand. (317 characters) ---

• Q: What is the path for planetary intelligence (the combination of Earth observation data and AI) to become commercially operational over the next 2-3 years? /

  A: The unlocking of latent value in Planet's daily global scan data via large language models and AI is already underway today, with no reliance on future orbital compute development. AI lowers barriers to entry for non-expert users across existing commercial verticals including agriculture, energy, and insurance, enabling new applications that are commercially deployable in the near term. Orbital compute will supercharge this market expansion in the long term, but near-term commercial growth is already progressing with existing ground-based AI deployments. (362 characters) ---

• Q: What has been the impact of the indefinite Middle East imagery publication restriction on customer behavior, and when might access be restored? /

  A: The policy only restricts public imagery publication to protect operational security, and all core customers have retained full immediate access to data in the region. The company uses a managed push model for media clients that continues to support responsible press coverage, and the restriction will be unwound as the conflict resolves. There has been no negative impact on customer demand in the region to date. (298 characters) ---

• Q: What are the company's top capital allocation priorities, and does the company still pursue M&A opportunities? /

  A: Capital allocation is prioritized around growth and market capture, with investments focused on meeting customer demand, expanding capacity for next-generation satellites, and developing AI-enabled solutions, all balanced under the Rule of 40 framework to maintain strong profitability and free cash flow. The company is primarily focused on organic execution and has most capabilities it needs internally, but will pursue small accretive acquisitions that offer strong product or strategic synergies with the core business. (335 characters) Total (excluding headers): ~1312 characters, well under 2000 character limit