Planet Labs PBC (PL) 2025 Q2 Earnings Call Summary

Optimistic Highlights

• Record Revenue

Generated a record $61.1 million in revenue, representing 14% year-on-year growth, driven by the government sector.

• Improved Gross Margin

Non-GAAP gross margin for the quarter was 58%, better than expected due to cloud infrastructure efficiencies and deal mix.

• Successful Satellite Launches

Successfully launched the first Tanager satellite and 36 new SuperDoves, all of which are undergoing commissioning.

• Strong Government Sector Growth

Defence and Intelligence sector revenue grew over 30% year-over-year, with significant deals including NATO and an international defence customer.

• Organizational Efficiency

Implemented organizational changes, including a 17% headcount reduction, to improve operational efficiency and align resources with market opportunities.

Pessimistic Highlights

• Commercial Sector Headwinds

Continued macroeconomic headwinds and challenges in the agriculture sector impacted commercial sector performance.

• Net Dollar Retention Rate

Net dollar retention rate was 99%, reflecting delays in bookings for large opportunities and commercial sector headwinds.

• Restructuring Costs

Incurred approximately $10.5 million in one-time nonrecurring charges related to restructuring.

• RPO and Backlog Fluctuations

Remaining performance obligations (RPO) and backlog showed fluctuations due to timing of renewals and multi-year contracts.

• Uncertain Timing of Large Deals

Difficulty in predicting the timing and size of large customer wins, particularly in the government sector.

Company Outlook

• Positive Government Sector Outlook

Strong demand signals from the government sector, with a healthy pipeline of seven and eight-figure opportunities.

• Adjusted EBITDA Profitability Target

On track to achieve adjusted EBITDA profitability by Q4 of this fiscal year.

• Continued Investment in Technology

Preparing to ship the Pelican-2 satellite, which includes advanced features like NVIDIA's Jetson GPU module for edge compute.

• Focus on Operational Efficiency

New industry-aligned operating model expected to support sustainable long-term growth and profitability.

• Revenue Guidance

For Q3, expecting revenue between $61 million and $64 million, representing 10% to 16% year-over-year growth.

Q & A Highlights

• Q: North America and RPO Fluctuations (Ryan Koontz, Needham & Company)

A: Timing of renewals and larger opportunities, particularly with government entities, create lumpiness. Commercial sector performance also impacts growth rates. (Ashley Johnson)

• Q: Gross Margin Improvement (Ryan Koontz, Needham & Company)

A: Driven by cloud infrastructure efficiencies, mix of business, and new customer onboarding. (Ashley Johnson)

• Q: Gross Margin Baseline (Mike Latimore, Northland)

A: Targeting to sustain and improve current gross margin levels, though mix of business can cause fluctuations. (Ashley Johnson)

• Q: Update on Pilots (Mike Latimore, Northland)

A: Successful pilots with AI on PlanetScope daily scan, with more expected later this year. (Will Marshall)

• Q: NATO Contract Details (Kristine Liwag, Morgan Stanley)

A: Introductory partnership with significant potential, as governments have committed up to a billion dollars over five years. (Will Marshall)

• Q: Tanager Satellite Contributions (Kristine Liwag, Morgan Stanley)

A: Early product work with multiple entities, including oil and gas operators and ag companies, to develop use cases. (Will Marshall)

• Q: NGA AI Labeling Program (Kristine Liwag, Morgan Stanley)

A: Focused on labeling of data, which is not Planet's core area. Better fit for combining foundation models with Planet's data. (Will Marshall)

• Q: Go-to-Market Changes (Trevor Walsh, JMP)

A: Aligning broader commercial organization and product teams with customer demands to accelerate growth. (Ashley Johnson)

• Q: Guidance and Large Government Contracts (Trevor Walsh, JMP)

A: Taking a quarter-by-quarter approach due to variability in mix of business and revenue recognition. (Ashley Johnson)

• Q: US Government Pilots (Jason Gursky, Citi)

A: Successful pilots with potential for large-scale contracts, but new programs and budgets take time to establish. (Will Marshall)

• Q: Revenue Level for Cash Flow Breakeven (Jason Gursky, Citi)

A: Focus on maintaining a cost structure to preserve cash and achieve EBITDA profitability, with careful pacing of CapEx investments. (Ashley Johnson)

• Q: Economic Indicator Monitoring Program (Anthony Valentini, Goldman Sachs)

A: Applying for opportunities under the new Luno program, which focuses on analytics on top of satellite data. (Will Marshall)

• Q: International Growth (Caleb Henry, Quilty Space)

A: Strong product-market fit in regions focused on sustainability initiatives, driving growth in Latin America and Asia Pacific. (Ashley Johnson)

• Q: Pelican Fleet Size (Caleb Henry, Quilty Space)

A: Filed for up to 32 satellites, with the ability to throttle deployment based on demand. (Will Marshall)