Planet Labs prices $400 million convertible senior notes offering

SAN FRANCISCO - Planet Labs PBC (NYSE:PL), whose stock has surged over 370% in the past year according to InvestingPro data, has priced a $400 million offering of 0.50% Convertible Senior Notes due 2030, the company announced Wednesday. The offering size was increased from the previously announced $300 million. InvestingPro analysis indicates the company is currently trading above its Fair Value.

The earth imaging satellite company, which maintains impressive gross profit margins of nearly 59% and a healthy balance sheet with more cash than debt, granted initial purchasers an option to buy up to an additional $60 million in notes to cover over-allotments. The transaction is expected to settle on September 12, 2025.

The notes will bear interest at 0.50% annually, payable semi-annually beginning April 15, 2026, and will mature on October 15, 2030. Planet may redeem the notes after October 20, 2028, under certain conditions.

The notes will be convertible at an initial rate of 83.6715 shares of Planet’s Class A common stock per $1,000 principal amount, equivalent to approximately $11.95 per share. This represents a conversion premium of about 32.5% to the company’s last reported share price of $9.02 on September 9.

Planet expects to receive approximately $387.5 million in net proceeds from the offering, or $445.8 million if the initial purchasers exercise their option in full. The company, which boasts a strong current ratio of 1.75 according to InvestingPro data, plans to use $34.4 million to fund capped call transactions, with the remainder allocated for general corporate purposes. Discover 15+ additional exclusive insights about Planet Labs with an InvestingPro subscription, including detailed financial health scores and comprehensive valuation analysis.

In connection with the offering, Planet entered into capped call transactions with financial institutions to reduce potential dilution to its Class A common stock upon conversion of the notes. The cap price of these transactions is initially $18.04 per share.

The notes were offered only to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, according to the company’s press release statement.

In other recent news, Planet Labs reported strong fiscal second-quarter results, with a 20% year-over-year revenue growth, marking the highest quarter-over-quarter growth in three years. The company achieved revenue of $73.4 million, exceeding consensus expectations of $66.0 million. Following these results, Needham raised its price target on Planet Labs to $12.00 from $8.00, maintaining a Buy rating. Similarly, JMP Securities increased its price target to $11.00 from $8.00, citing the company’s strong earnings. Craig-Hallum also raised its price target to $11.00 from $7.00, highlighting Planet Labs’ expanded capabilities in various sectors. In another development, Planet Labs announced its intention to offer $300 million in convertible senior notes due 2030. The company plans to grant initial purchasers an option to buy an additional $45 million in notes to cover over-allotments. These notes will be offered to qualified institutional buyers in a private offering.

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