Group 1 - Planet Labs' share price has experienced significant volatility recently, particularly following its Q4 earnings report, which led to a notable drop in price [1] - Despite the appealing low price after the earnings miss, the recommendation remains a hold, indicating cautious optimism about the company's future performance [1] Group 2 - The article emphasizes the importance of identifying underappreciated companies that can provide value to investors, aligning with a contrarian investment philosophy [1]

Core Insights - Planet Labs has achieved a significant milestone by reporting break-even profits and a record sales figure of $66.3 million in its fiscal Q1 2026 earnings report, surpassing analyst expectations [2][4] - The company experienced a 10% year-over-year increase in sales, with 97% of its revenue being recurring, indicating strong customer retention and business stability [4] - For the first time, Planet Labs reported positive free cash flow of $8 million, although it still recorded a GAAP loss of $0.04 per share [5] Financial Performance - Analysts had anticipated a loss of $0.03 per share on sales of $62.3 million, but the actual sales were $66.3 million, leading to a stock price increase of 52.1% [2] - Gross profit margins improved from 52% in the previous year to 55% in the latest quarter, reflecting enhanced operational efficiency [4] - The company projects fiscal Q2 sales to be approximately $66 million, which is expected to be flat sequentially but up about 8% year-over-year [6] Future Outlook - For the full fiscal year, Planet Labs anticipates sales growth between 9% and 15%, targeting total sales of $265 million to $280 million [7] - Despite expectations of negative earnings and free cash flow for the year, the company is moving closer to achieving sustainable free cash flow, which may enhance its investment appeal [7]

Core Insights - Planet Labs reported its first-ever quarter of positive free cash flow at $8.0 million, exceeding quarterly estimates on both revenue and earnings [1] - The company's shares surged over 50% following the strong first-quarter earnings report, with revenue reaching $66.3 million, surpassing analyst expectations [2][3] - Planet Labs anticipates second-quarter sales between $65 million and $67 million, slightly above analyst projections [2] Financial Performance - The company achieved breakeven adjusted earnings for the first quarter, while analysts had predicted a loss of 4 cents per share [2] - Year-to-date, shares of Planet Labs have increased by over 50%, with an impressive 82% rise in the current quarter alone [3] Strategic Direction - CEO Will Marshall highlighted the strong demand signals and the company's focus on delivering global insights through AI-enabled solutions and expanding satellite services [3] - Planet Labs operates more than 200 satellites and has secured a $230 million contract for the rollout of next-generation Pelican satellites, marking a significant step into the satellite services business [4]

FISCAL 1Q'26 UPDATE June 4, 2025 SCHWETZINGEN PALACE • Schwetzingen, Germany • May 12, 2025 • Pelican Disclaimers All references to "Planet" or the "Company" in this presentation are references to Planet Labs PBC (NYSE: PL). Forward-looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally relate to future events ...

Group 1: Earnings Performance - Planet Labs PBC reported break-even quarterly earnings per share, surpassing the Zacks Consensus Estimate of a loss of $0.05, compared to a loss of $0.05 per share a year ago, indicating an earnings surprise of 100% [1] - The company posted revenues of $66.27 million for the quarter ended April 2025, exceeding the Zacks Consensus Estimate by 6.61%, and showing an increase from year-ago revenues of $60.44 million [2] Group 2: Stock Performance and Outlook - Planet Labs PBC shares have declined approximately 5% since the beginning of the year, while the S&P 500 has gained 1.5% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.05 on revenues of $64.67 million, and for the current fiscal year, it is -$0.20 on revenues of $269.42 million [7] Group 3: Industry Context - The Satellite and Communication industry, to which Planet Labs PBC belongs, is currently ranked in the bottom 30% of over 250 Zacks industries, suggesting potential challenges for stock performance [8]

Financial Data and Key Metrics Changes - The company generated $66.3 million in revenue for Q1 FY2026, representing approximately 10% year-over-year growth, exceeding expectations [7][21] - Non-GAAP gross margin improved to 59%, up from 55% a year ago [7][24] - Adjusted EBITDA profit was $1.2 million, marking the second consecutive quarter of profitability [7][21] - Positive cash flow from operating activities was $17.3 million, with the first-ever quarter of positive free cash flow at $8 million [8][26] - Remaining performance obligations (RPOs) were approximately $451.9 million, up 262% year-over-year [27] - Backlog increased to approximately $527 million, up 140% year-over-year [27] Business Line Data and Key Metrics Changes - Revenue from the defense and intelligence sector grew over 20% year-over-year, driven by strong performance in core data and solutions [10][21] - Civil government sector revenue was down year-over-year, primarily due to the expiration of the NICFI contract [11][21] - Commercial sector revenue was flat year-over-year, showing signs of stabilization [13][21] Market Data and Key Metrics Changes - Revenue grew more than 30% year-over-year in both EMEA and Asia Pacific regions, while North America and Latin America saw declines [22][21] - The end of period customer count was 919, reflecting a focus on large customers in core verticals [23] Company Strategy and Development Direction - The company aims to deliver integrated global insights via AI-enabled solutions and rapidly expand its satellite services offering [19][31] - A strategic shift towards downstream solutions is being validated with significant customer wins and demand signals [30][31] - The company is positioning itself as a reliable partner amid changing geopolitical landscapes, particularly in defense and intelligence [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the opportunities outweighing risks in the current dynamic environment [8][48] - The company anticipates revenue for Q2 FY2026 to be between $65 million and $67 million, with a full-year revenue expectation of $265 million to $280 million [28][29] - Management highlighted the importance of maintaining a path to sustainable cash flow generation [26][41] Other Important Information - The company is in a growth capital expenditure investment cycle, planning for approximately $50 million to $65 million in capital expenditures for the year [30] - The company is focusing on capital-efficient growth while ensuring high-margin business sustainability [41] Q&A Session Summary Question: Inquiry about AI partnership with Anthropic - Management discussed the partnership with Anthropic, focusing on fine-tuning models on satellite data to improve accuracy [35][36] Question: Free cash flow building blocks and working capital - Management highlighted the variability of working capital due to large contracts and emphasized a path to sustainable free cash flow generation [39][40] Question: Drivers of sequential growth in Q1 - Revenue outperformance was attributed to strong sales team performance, high customer engagement, and progress on the JSAT contract [44][45] Question: Demand in the defense and intelligence sector - Management noted strong demand driven by changing political landscapes and urgency for security solutions [46][48] Question: European Maritime deals and pipeline outlook - Management indicated a strategic shift in Europe driving urgency for maritime domain awareness solutions, with a strong pipeline expected [51][53] Question: NASA budget cuts and potential risks - Management acknowledged uncertainty due to budget cuts but emphasized opportunities for efficiency in government missions [67][68] Question: Gross margin dynamics and future outlook - Management discussed short-term impacts on gross margins due to partnerships and contracts but expects stabilization over the long term [60][62] Question: Government services budget dynamics - Management explained the implications of continuing resolutions (CRs) on contract growth and the need for efficiency in government services [85][86]

Financial Data and Key Metrics Changes - The company generated $66.3 million in revenue for Q1 2026, representing approximately 10% year-over-year growth, exceeding expectations [6][19] - Non-GAAP gross margin improved to 59%, up from 55% a year ago [6][22] - Adjusted EBITDA profit was $1.2 million, marking the second consecutive quarter of adjusted EBITDA profitability [6][19] - Positive cash flow from operating activities was $17.3 million, with the first-ever quarter of positive free cash flow at $8 million [6][24] - Remaining performance obligations (RPOs) were approximately $451.9 million, up 262% year-over-year [25] - Backlog increased to approximately $527 million, up 140% year-over-year [25] Business Line Data and Key Metrics Changes - Revenue from the defense and intelligence sector grew over 20% year-over-year, driven by strong performance in core data and solutions business [9][19] - Civil government sector revenue was down year-over-year, primarily due to the expiration of the NICFI contract [10][19] - Commercial sector revenue was flat year-over-year, showing signs of stabilization despite quarter-to-quarter variability [12][19] Market Data and Key Metrics Changes - Revenue grew more than 30% year-over-year in both EMEA and Asia Pacific regions, while North America and Latin America saw declines [20][21] - The end of period customer count was 919, reflecting a focus on large customers in core verticals [21] Company Strategy and Development Direction - The company aims to deliver integrated global insights via AI-enabled solutions and rapidly expand its satellite services offering [17][29] - The strategic shift towards downstream solutions is validated by significant customer wins and demand signals [28][29] - The company is positioning itself as a reliable partner amid changing geopolitical landscapes, particularly in defense and intelligence sectors [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the opportunities outweighing risks in the current dynamic environment [7][45] - The company anticipates revenue for Q2 to be between $65 million and $67 million, with full-year revenue expectations between $265 million and $280 million [26][27] - Management highlighted the importance of efficient growth and sustainable cash flow generation [24][28] Other Important Information - The company is in a growth capital expenditure investment cycle, planning for approximately $50 million to $65 million in capital expenditures for the year [28] - The company is focusing on enhancing its self-service purchasing offerings for small customers [14] Q&A Session Summary Question: Inquiry about AI partnership with Anthropic - Management discussed the partnership with Anthropic, focusing on fine-tuning models on satellite data to improve accuracy [34] Question: Free cash flow and working capital - Management acknowledged the variability in working capital due to large contracts and emphasized a path to sustainable free cash flow generation [39] Question: Drivers of sequential growth in Q1 - Revenue outperformance was attributed to strong sales team performance, increased customer engagement, and progress on the JSAT contract [42] Question: Demand in the defense sector - Management noted unprecedented demand for data and satellite services driven by changing political landscapes, particularly in Europe and Asia [45] Question: European Maritime deals - Management highlighted the urgency for maritime domain awareness solutions and the strategic shift in Europe towards enhanced security capabilities [49] Question: NASA budget cuts and potential risks - Management expressed confidence in their relationship with NASA and the potential for providing efficient solutions despite budget uncertainties [60][66] Question: Overall demand and usage patterns - Management indicated that while there are seasonal usage patterns, they are working to engage customers to sustain usage levels [67]

Business Agreements and Contracts - Planet entered into a multi-year $230.0 million commercial agreement with SKY Perfect JSAT to build and operate a constellation of ten high-resolution satellites, with payments based on specified milestones[127]. Financial Performance - Revenue increased by $5.8 million, or 10%, to $66.3 million for the three months ended April 30, 2025, from $60.4 million in 2024, mainly driven by new customer growth[158]. - Gross profit for the three months ended April 30, 2025, was $36.6 million, a 16% increase from $31.7 million in 2024[158]. - Net loss decreased to $(12.6) million for the three months ended April 30, 2025, from $(29.3) million in 2024, a reduction of $16.7 million or 57%[158]. - Adjusted EBITDA improved to $1.2 million for the three months ended April 30, 2025, compared to a loss of $8.4 million in the same period of 2024[176]. - Net cash provided by operating activities was $17.3 million for the three months ended April 30, 2025, compared to a cash outflow of $4.3 million in the same period of 2024[186]. Customer Metrics - The Net Dollar Retention Rate increased to 103% for the three months ended April 30, 2025, compared to 100% for the same period in 2024, primarily due to large government contract expansions[136]. - EoP Customer Count decreased to 919 as of April 30, 2025, from 1,031 as of April 30, 2024, attributed to a focus on larger customers[138]. - Percent of Recurring ACV rose to 97% for the three months ended April 30, 2025, up from 95% in the same period of 2024, driven by demand from large government customers[140]. Operational Efficiency - Loss from operations improved to $(22.8) million for the three months ended April 30, 2025, compared to $(34.6) million in 2024, reflecting a reduction of $11.8 million[158]. - Capital Expenditures as a Percentage of Revenue decreased to 14% for the three months ended April 30, 2025, from 19% in 2024, primarily due to increased revenue and timing of purchases[141]. - Cost of revenue increased by $0.9 million, or 3%, to $29.7 million for the three months ended April 30, 2025, primarily due to a $1.4 million increase in employee-related costs[160]. Investment and Growth Strategy - Planet plans to invest in expanding its offerings to make data more actionable and accessible to non-geospatial experts, targeting emerging markets such as energy, infrastructure, and finance[122]. - Planet aims to establish a platform ecosystem by developing software tools and APIs to enhance user experience and accelerate growth through network effects[124]. - The company plans to make strategic investments in new sensors to capture additional data sets, enhancing its value proposition to customers[125]. - Planet's growth strategy includes scaling in existing verticals and expanding into new verticals, with a focus on civil government, agriculture, and defense[121]. Market and Economic Factors - The company is exposed to market risks including foreign currency exchange risk, interest rate risk, and inflation risk, with no material changes since January 31, 2025[195]. - The company’s financial statements are prepared in accordance with U.S. GAAP, requiring estimates and judgments affecting reported amounts of assets and liabilities[193]. Seasonal Trends - The company has experienced seasonality in its business, with fluctuations in operating results due to customer behavior and usage patterns[132]. Backlog and Future Revenue - Backlog increased to $527.0 million as of April 30, 2025, from $503.7 million as of January 31, 2025, with approximately 45% expected to be recognized over the next 12 months[178].

Financial Performance - Record revenue in Q1 of fiscal year 2026 reached $66.3 million, up 10% year-over-year[1] - First quarter gross margin was 55%, compared to 52% in the same quarter of fiscal year 2025; non-GAAP gross margin was 59%, up from 55%[6] - First quarter adjusted EBITDA was $1.2 million, a significant improvement from a loss of $8.4 million in the same quarter of fiscal year 2025[6] - The Company reported a net loss of $12,628,000 for the quarter, an improvement compared to a net loss of $29,293,000 in the prior year[44] - Net loss for the three months ended April 30, 2025, was $12,628,000, a significant improvement from a net loss of $29,293,000 in the same period of 2024, representing a reduction of approximately 57%[47] - Adjusted EBITDA for the same period was $1,199,000, compared to a loss of $8,396,000 in 2024, indicating a positive turnaround[48] - Non-GAAP net income for the three months ended April 30, 2025, was $1,072,000, contrasting with a loss of $15,136,000 in 2024[49] Cash Flow and Liquidity - The company generated $17.3 million of net cash from operating activities and achieved positive free cash flow of $8.0 million for the first time[1] - Cash and cash equivalents at the end of the period increased to $145,604,000 from $125,733,000 in the previous year, marking a year-over-year increase of approximately 16%[45] - Free cash flow for the three months ended April 30, 2025, was $8,002,000, a recovery from a negative free cash flow of $15,653,000 in 2024[53] - The Company reported a net cash provided by operating activities of $17,346,000 for the three months ended April 30, 2025, compared to a cash used of $4,297,000 in 2024, showcasing improved cash flow management[45] Backlog and Future Revenue Potential - Remaining Performance Obligations (RPOs) increased by 262% year-over-year to $451.9 million; backlog grew by 140% year-over-year to $527.0 million[1] - The company expects to recognize approximately 45% of its backlog over the next 12 months, indicating strong revenue visibility[52] - Remaining performance obligations as of April 30, 2025, totaled $451,928,000, up from $412,829,000 at the end of January 2025, indicating growth in future revenue potential[52] Customer and Market Expansion - Planet was awarded an eight-figure ACV contract by a European defense & intelligence customer for PlanetScope and Maritime Domain Awareness products[7] - The company expanded its contract with the German government to include water monitoring services and insights from Planetary Variables[13] - The Net Dollar Retention Rate is a key metric for assessing revenue growth from existing customers, reflecting the Company's ability to retain and expand its customer base[38] - The Company’s EoP ACV book of business includes only active contracts, excluding self-service paying users, which helps in accurately assessing recurring revenue potential[33] - The EoP customer count at the end of the period is a critical indicator of market penetration and customer adoption of the Company's platform[35] Operational Efficiency - Capital expenditures as a percentage of revenue are monitored to evaluate the efficiency of investments relative to revenue generation, aligning with the Company's agile space systems strategy[36] - Total assets increased to $658,390,000 as of April 30, 2025, compared to $633,796,000 at the end of January 2025[42] - The Company’s total liabilities rose to $213,588,000, up from $192,510,000, indicating a need for careful management of financial obligations[42] Guidance and Projections - For Q2 of fiscal year 2026, revenue is expected to be in the range of $65 million to $67 million, with a non-GAAP gross margin of approximately 56% to 57%[10] - For the full fiscal year 2026, revenue is projected to be between $265 million and $280 million, with an expected adjusted EBITDA loss of approximately $12 million to $7 million[11] Product Development - Planet released a new Aircraft Detection Analytic Feed, automating the detection of aircraft globally, enhancing its AI-powered product offerings[13] - Non-GAAP gross profit for the three months ended April 30, 2025, was $38,850,000, compared to $33,348,000 in 2024, reflecting an increase of approximately 16.5%[48] - GAAP gross margin improved to 55% in 2025 from 52% in 2024, demonstrating enhanced operational efficiency[48]

Core Insights - The growing global interest in commercial satellite deployment for communications and climate monitoring is driving demand for space stocks like Rocket Lab USA (RKLB) and Planet Labs PBC (PL) [1] - Increased government investment in advanced space-based capabilities for defense is acting as a growth catalyst for these companies [1] Summary of Rocket Lab (RKLB) - Recent Achievements: Rocket Lab reported a 32% year-over-year revenue increase to $123 million for Q1 2025 and successfully launched over 200 spacecraft across 59 missions since 2017 [4][5] - Financial Stability: As of Q1 2025, Rocket Lab had cash and cash equivalents of $428 million, with current debt at $20 million and long-term debt at $419 million, indicating a moderate solvency position [6] - Challenges: High operating expenses due to investments in innovations and the capital-intensive nature of the space industry pose risks to profitability [7][8] Summary of Planet Labs (PL) - Recent Achievements: Planet Labs achieved an 11% year-over-year revenue increase to $244.4 million for fiscal 2025, with a gross margin improvement of 600 basis points to 60% [9][10] - Financial Stability: As of fiscal 2025, Planet Labs had cash and cash equivalents of $229 million, with no current or long-term debt, indicating a solid solvency position [13] - Challenges: The company is still in a growth phase and has not achieved sustained profitability, facing high R&D expenses and significant workforce reductions [14][15] Market Performance and Valuation - Stock Price Performance: Over the past three months, RKLB has increased by 54.1%, while PL has decreased by 6.6%. In the past year, RKLB shares surged by 588%, and PL shares increased by 116.9% [18] - Valuation Comparison: Planet Labs has a forward sales multiple of 4.18X, which is more attractive compared to Rocket Lab's 18.88X [19] Final Analysis - While both companies operate in high-growth segments, Rocket Lab appears better positioned for near-term opportunities due to stronger revenue momentum and stock performance [24] - Despite Planet Labs' more attractive valuation, Rocket Lab's upward earnings revisions for 2025 and 2026 suggest growing confidence in its future performance [25]