Planet Labs PBC Q4 FY2025 earnings call

• Shifted go-to-market to a vertically-focused approach and sold a $230 million commercial agreement with JSAT, involving building, launching, and operating 10 high-resolution Pelican satellites for JSAT.
• Launched 74 satellites in the year, including Pelican 2 and Tanager 1. Pelican 2 is performing well, and Tanager 1 is producing hyperspectral data with improvements in tasking capacities.
• Launched the Planet Insights platform and delivered the Global Forest Carbon Monitoring product. Released a physics-based resolution sharpening technique and advanced low-touch enablement in the platform.
• In the defense and intelligence sector, revenue grew >20% full year, with awards like a contract to build a prototype for the Defense Innovation Unit and selection as a prime for the National Geospatial Intelligence Agency's contract. In the civil government sector, full-year revenue grew ~15%, with deals like a multi-year contract with the European Space Agency. In the commercial sector, saw renewals/expansions with Bayer and Syngenta, focusing on solutions via the Planet Insights platform in agriculture, natural resources, etc.
• Collaborated with Anthropic to explore combining satellite data and foundation models for new capabilities.

For the full fiscal year 2025, Planet Labs generated a record $244.4 million in revenue, representing an 11% year-over-year growth. The fourth quarter was a record quarter for revenue, with $61.6 million in revenue. The defense and intelligence sector saw revenue grow more than 20% for the full fiscal year 2025. The civil government sector had full-year revenue growth of approximately 15% year-over-year. The commercial sector faced headwinds but showed signs of stabilization in recent quarters. Non-GAAP gross margin for the fourth quarter was a record 65%, compared to 58% in Q4 2024, and full-year non-GAAP gross margin was 60%, up from 54% in FY 2024. Adjusted EBITDA was positive $2.4 million in Q4, marking the first quarter of adjusted EBITDA profitability. Backlog increased to almost $0.5 billion in the quarter, up over 100% year-over-year and approximately 115% quarter-over-quarter.

• Q1 2026 revenue expected to be between $61 million and $63 million, non-GAAP gross margin between 58% and 60%, adjusted EBITDA loss between minus $3 million and minus $2 million.
• FY 2026 revenue expected to be between $260 million and $280 million, non-GAAP gross margin between 55% to 57%, adjusted EBITDA loss expected to be similar to FY 2025 with a range of minus $13 million to minus $7 million, planning for capital expenditures of $50 million to $65 million, aiming to reduce cash burn by approximately 50% and see path to positive cash flow in next 24 months.
• FY 2027 aims to double revenue growth rate compared to FY 2026, driven by JSAT deal, AI-enabled solutions, and Pelican/Tanager data coming online.

• Forward-looking statements subject to risks and uncertainties as detailed in SEC filings.
• Geopolitical and economic uncertainties that could affect revenue recognition and contract execution.
• Timing risks related to satellite launches and the execution of long-term contracts, including judgment in estimating costs and profit for performance obligations.

Q: Focusing on the pre-cash flow dynamics, if we could maybe just kind of flesh out the bridge, including what's moving in and out of CapEx and gross margin, as well as some of the working capitals assumptions you're making in 26. And then given that the company made some commentary on 27, if we can kind of just flesh out a little bit what the cadence looks like to getting to pre-cash flow positive.

A: Thanks, Colin. So as we talked about, we are in a peak CapEx investment cycle this year. So that's reflected in the guidance that we gave for CapEx for the full year and is also reflected in my commentary about expecting our cash burn to be roughly half this year versus last year. As I mentioned, the JSAT contract is structured in such a way that the cash payments are relatively front end loaded, which enables us to fund working capital for the program. So it's the balance of our traditional business, obviously with high gross margins and very strong collection experience with our customer base. Managing our expenses across the board very carefully. And then at the same time, investing in both the JSAT program and the building and launching of the Pelican and Tanager fleet. So, as I mentioned, this year we're expecting cash burn to be roughly half. And based on our current view of the business, we could see getting to cash flow profitability over the next 24 months.

Q: I want to ask on the AI deal with Anthropic. In terms of the discussions you have with them, how are you thinking about the ultimate monetization of these, whether it's used to a model or whether it's just selling data to them? How are you sort of thinking about the way to actually make a lot of money off this?

A: Good question. Well, I'm personally very excited about that partnership. It's really, really cool. And there's others that we're doing in a similar vein. I mean, it's a really exciting time, as I said in the prepared remarks. It's extraordinary, the development in AI. And we feel right in the middle of it, literally, as well, because we're a few blocks away from Anthropic, a few blocks away from OpenAI, a few blocks away from the Google Gemini team here in San Francisco. And so you sort of feel it. And our data set, as I mentioned in the remarks, is just sort of sitting credible, a unique data set to train these models on as these companies try to deal with real world problems. They need real world data. You can't very well deal with disaster response or security with any sort of synthetic data. And so Planet data is really very primed for that. Ultimate monetization, I think our near term focus there is on these solutions that we're building with AI. They are AI enabled by the maritime domain awareness, like looking over large ocean territory for ships and then identification of them and so on. That sort of thing, we have real business to go after. We've already got meaningful revenue there. We're growing that with focus. And there's others like GMS and AMS that Ashley mentioned. And then as for the foundation efforts of the kind that we're doing with Anthropic, it's a little bit more experimental, but the in principle benefit there is really great because it can speed time to value. We've been very impressed with how these foundation models out of the box can do analysis on satellite data, can code against our API, can do things that speed up our ability of our existing customers to get from zero to something that has value and answers meaningful questions, as well as opening up a new set of potential clients that could get value who don't have geospatial expertise at all. And so this is an accelerant overall. It's early days on the foundation stuff, but the work we're doing on MDA and everything is really near term value that we're driving and growing our business.

Q: Ashley, at the end of your remarks there you talked about AI, Pelican, Tanager, and new satellite service wins as a revenue opportunity in 27. Would those be incremental to the doubling of the growth rate or are those included in that doubling of the growth rate goal?

A: Yes. Great question. So in the remarks about the ability to double the growth rate based on the backlog that we have, that is literally pointing to the contracts that we have and have secured and our views as to, one, our ability to renew that business and then also execute against the business that's there that is multi-year in nature. Upside to that growth rate is some of the areas that we talked about that we're investing in. So as Will just said, AI, we believe, is an incredible accelerant to delivering value to our customers and to enabling these solutions that we are building out with partners. In addition, if we sign any additional contracts on the satellite services front, that would be upside to that acceleration and growth rate. And then finally, bringing the Pelican and Tanagers online gives us an opportunity to increase the data that we're selling with our existing customers as well as bring new customers in. So those are all upside to the current visibility that we have to the growth rate of our business.

Q: With regards to the revenue guide, Ashley, how much does that contemplate the current chaotic situation in Washington? Obviously, it's a very dynamic situation, but it seems that there are already impacts. I assume you're contemplating some impact in that revenue guide, just the state of things there, either on the civil, especially on the civil side, I'm guessing. Any color you can share there?

A: Look, I think we've attempted to take an appropriately conservative approach to our guidance. So reflecting potential risks related to macro pressures, timing of new business. So that would include ways that the uncertainty in the current environment might cause new business to be delayed. Also factoring in customer usage patterns that we've seen have variability in the past. And then we have a brand new satellite services contract, which is a new revenue recognition methodology for us. And so we are being appropriately conservative about how we see that revenue pacing in over the course of the year. So while it's not possible to reflect every potential outcome related to the current geopolitical and economic environment. We believe, actually, that solutions such as ours are core to government efficiency. And that in many ways, the current environment can be opportunity for companies like Planet that bring much more efficient means of getting these kinds of insights and data. And we see this both domestically and internationally as driving a lot of opportunity for us. I don't know if you want to add anything there, Will.

A: Yes. I could, actually. I mean, there are real opportunities in this. As Ashley's saying, they're pushing towards efficiency. Planet is not just hypothetically able to do that. We've done that before. We've done that for NASA. We've done that for DoD. We've done that for the intelligence community. And so we're actually seeing opportunities like that arise. We're actively working with those agencies on that. And we feel like we're in a good position. And as Ashley mentioned, also internationally, this is creating a reaction that actually countries need and are demanding this sort of capability sooner. And we've seen a lot of interest in that, including in sovereign satellites. And Planet is in a unique position to service that. We've also seen increased budgets and an incredibly increased urgency for that in those countries as well. So Planet, I think, can lean into some of that changing geopolitical dynamics pretty successfully. Of course, there's risks, but I would say the opportunities definitely outweigh them.