Earnings call transcript: Planet Labs Q2 2025 sees revenue growth, stock surges

Planet Labs PBC (PL) reported its Q2 2025 earnings, showcasing a notable revenue increase and a positive earnings surprise. The company posted an earnings per share (EPS) of -$0.03, beating the forecasted -$0.05, while revenue reached $73.4 million, exceeding expectations of $66.07 million. Following the announcement, Planet Labs’ stock surged 18.07% in premarket trading, reflecting investor optimism. According to InvestingPro data, the stock has demonstrated impressive momentum with a 267% return over the past year, though current analysis suggests the stock is trading above its Fair Value.

Key Takeaways

• Revenue growth of 20% year-over-year, reaching $73.4 million.
• EPS beat expectations with a surprise of 40%.
• Stock price rose by 18.07% in premarket trading.
• Strong performance in defense and intelligence sectors with 41% growth.
• Continued profitability with an adjusted EBITDA of $6.4 million.

Company Performance

Planet Labs demonstrated strong growth in Q2 2025, driven by increased demand in the defense and intelligence sectors, which grew by 41% year-over-year. The company also reported a significant backlog increase of 245%, indicating a robust pipeline of future business. Despite a flat performance in North America and a slight decline in Latin America, regional growth in Asia-Pacific and EMEA was impressive, exceeding 50% and 30% respectively. InvestingPro data reveals the company maintains impressive gross profit margins of 58.3% and holds more cash than debt on its balance sheet, positioning it well for continued expansion.

Financial Highlights

• Revenue: $73.4 million, up 20% year-over-year.
• EPS: -$0.03, compared to a forecast of -$0.05.
• Non-GAAP Gross Margin: 61%, up from 58% last year.
• Adjusted EBITDA: $6.4 million, marking the third consecutive profitable quarter.
• Free Cash Flow: $54.3 million, with a 39% free cash flow margin.

Earnings vs. Forecast

Planet Labs reported an EPS of -$0.03, beating the forecast of -$0.05 by 40%. Revenue also surpassed expectations, coming in at $73.4 million against a forecast of $66.07 million. This positive surprise in both EPS and revenue highlights the company’s ability to outperform market expectations, contributing to the stock’s significant premarket rise.

Market Reaction

The market reacted positively to Planet Labs’ earnings report, with the stock price increasing by 18.07% in premarket trading. The current stock price of $7.71 is close to its 52-week high of $7.719, indicating strong investor confidence. This movement contrasts with broader market trends, where many tech stocks have faced volatility. InvestingPro metrics show the stock has gained over 64% in the past six months, though investors should note its beta of 1.82 indicates higher volatility than the market. For deeper insights into Planet Labs’ valuation and growth potential, explore the comprehensive Pro Research Report available on InvestingPro.

Outlook & Guidance

Looking ahead, Planet Labs provided Q3 revenue guidance of $71-$74 million and full fiscal year 2026 revenue projections of $281-$289 million. The company expects to remain free cash flow positive for the fiscal year and plans capital expenditures between $65-$75 million. An Investor Day is scheduled for October 16, 2025, which may provide further insights into strategic initiatives.

Executive Commentary

CEO Will Marshall emphasized the company’s unique positioning in the space and AI sectors, stating, "Planet Labs PBC is the only space company that’s truly central to AI." He also expressed confidence in the company’s strategic direction, saying, "Our business is humming."

Risks and Challenges

• Potential supply chain disruptions could impact satellite deployment.
• Market saturation in North America may limit growth opportunities.
• Macroeconomic pressures could affect commercial sector expansion.
• Dependence on defense and intelligence sectors may pose risks if geopolitical dynamics shift.
• Competition from other satellite service providers could intensify.

Q&A

During the earnings call, analysts inquired about Planet Labs’ maritime domain awareness solutions and potential AI partnerships with companies like Anthropic, Google, and NVIDIA. The company also elaborated on its satellite services contract structures and highlighted opportunities for expansion in the commercial sector.

Full transcript - Planet Labs PBC (PL) Q2 2026:

Chris, Unspecified Moderator/Operator, Planet Labs: By competitors in our industry. These and other key performance indicators are discussed in more detail in our press release and our earnings update presentation, which are intended to accompany our prepared remarks. At this point, I’d now like to turn the call over to Will Marshall, Planet’s CEO, Chairperson, and Co-Founder. Over to you, Will.

Will Marshall, CEO, Chairperson, and Co-Founder, Planet Labs: Thanks, Chris, and hello everyone. Thanks for joining us today. It’s exciting to be back at the New York Stock Exchange. In the three and a half years since we rang the bell and went public, we’ve come a long way. We’ve launched nearly 200 satellites on six rockets, including our next-generation Pelican and Tanager satellites. We’ve shifted our data business towards selling solutions, leveraging AI to enable speed and scale. We’ve leaned into our strength in agile aerospace to bring to market our new satellite services offering, and we’ve more than doubled our revenue run rate while driving bottom-line performance to reach adjusted EBITDA and free cash flow profitability milestones. In a world that has changed dramatically with heightened global security challenges and rapid adoption of AI, Planet’s capabilities are proving to be more valuable to customers than ever. We’re eager to share the latest, so let’s dive in.

Planet’s Q2 financial results reflect the team’s excellent execution in two key initiatives: delivering integrated global insights through AI-enabled solutions on top of our daily scan and rapidly expanding our satellite services business. To briefly summarize the financials, we generated $73.4 million in revenue, representing approximately 20% year-over-year growth, marking another quarter of growth reacceleration. Non-GAAP gross margin was 61% in the quarter, up from 58% a year ago, and adjusted EBITDA profit came in at $6.4 million, representing our third sequential quarter of adjusted EBITDA profitability. We also achieved our second consecutive quarter of positive free cash flow, delivering year-to-date cash flow from operating activities of $85.1 million and year-to-date free cash flow of $54.3 million, representing free cash flow margin of approximately 39%.

Our backlog increased to $736.1 million at the end of the quarter, representing a year-over-year increase of 245%, which provides us with excellent visibility to revenue over the next 12 to 24 months and gives us confidence in our growth acceleration into FY27. We are delighted to share that with the strong Q2 performance, we are now expecting to be free cash flow positive this fiscal year, over a year ahead of our prior target and a major milestone for the company. Turning to sales highlights, I’ll start with the defense and intelligence sector, where Q2 revenue accelerated to approximately 41% growth year-on-year and up approximately 14% quarter-over-quarter, driven by strong performance with our core data and solutions business, as well as our satellite services contract with JSAT. I’d like to share two wins from the quarter that are incremental to those we announced in our July press conference.

First, we were awarded an additional seven-figure option by the Defense Innovation Unit, part of the U.S. Department of Defense, under our hybrid space architecture pilot. This option expands the capacity of our existing hybrid space architecture pilot, which we announced over the summer. The short-term pilot is focused on delivering vital indications and warnings. This contract demonstrates how customers can leverage Planet’s daily scan and extensive data archive to monitor sites of strategic interest for critical changes and threats. Second, the U.S. National Reconnaissance Office expanded its contract with us under the EOCL program to include PlanetScope monitoring and maritime domain awareness in support of national security, counter-narcotics, and disaster response efforts. This award is in addition to the contract option we announced in July, which extended Planet’s provision of daily monitoring and high-resolution tasking data and maintained our prior EOCL performance level from June through October 2025.

To recap our July wins for our AI-enabled solutions, we announced pivotal contracts with customers, including NATO and the U.S. Department of Defense, for use cases such as persistent space-based surveillance, enhanced indications and warning, and critical maritime domain awareness functions. Similarly, our landmark collaboration with the German government for satellite services also includes a multi-year eight-figure ACV renewal for access to PlanetScope data and maritime domain awareness with our partner SIMAX. More broadly, we continue to see robust demand for downstream products that embed our capabilities into customers’ operations, enhance situational awareness, and support informed decision-making. Turning to the civil government sector, where the second quarter revenue was down approximately 4% year-over-year, largely due to the expiration of our partnership with Norway, NIKFI, and relatively flat quarter-over-quarter, we continue to see significant growth opportunities in this sector, especially for Planet monitoring and enforcement and disaster response applications.

To share a few recent highlights, we signed a seven-figure ACV renewal with the UK Rural Payments Agency. The UK government uses Planet’s data to support its Environment Land Management program, which involves countrywide monitoring of a wide range of environmental and agricultural features. Earlier this year, we entered a new relationship with the Panamanian Ministry of Environment, kicking off a strategic collaboration to strengthen continuous monitoring of the province of Darien, where illegal mining, deforestation, and unauthorized land use, as well as unpermitted road development, are expanding. Planet’s broad area monitoring solutions support the ministry in detecting illicit activities, generating actual insights that enhance enforcement, governance, and protection of Panama’s natural resources. Like our work with the Brazilian Federal Police, this application of our solutions shows how Planet can help serve both security and sustainability challenges, sometimes simultaneously.

Shifting finally to the commercial sector, where revenue grew approximately 6% year-over-year and approximately 13% quarter-over-quarter, driven in part by strong execution in the agriculture and energy sector. To share a couple of customer highlights, we announced a new six-figure win with FarmDar, a global agricultural technology company. Through this contract, FarmDar has access to Planet’s deep archive of PlanetScope data, including base maps, to inform its crop insights platform, enabling more precise crop detection, field boundary identification, and arable land mapping. We also continue to partner with SwissRe, a leading global reinsurer for innovative drought insurance solutions. To share a recent proof point, SwissRe leveraged PlanetScope and NDVI data to create a new drought insurance policy in Syria that provided early assistance to nearly 120,000 people, resulting in a payout of $7.9 million, demonstrating the power of Planet data in addressing food and essential needs in crisis situations.

Next, onto our growing satellite services offering. In July, we announced a €240 million multi-year satellite services collaboration with Germany. This is our second win in 2025 in satellite services. The deal includes dedicated capacity on Pelican satellites, leveraging Pelicans, which are already under development. The team is also continuing to execute well on our contract with JSAT, which contributed to our revenue upside in the quarter. Overall, we’re seeing very strong demand signals for satellite services, driven by the current geopolitical landscape and the desire for sovereign access to space. We’re therefore aggressively pursuing strategic opportunities, and I’m pleased to report that our pipeline is maturing very well. Turning now to the exceptional execution by our Space Systems teams. Just two weeks ago, we were very excited to have two of our high-resolution Pelican satellites launch into orbit. We have successfully contacted these satellites, and they’re now undergoing commissioning.

More broadly, we’re extremely pleased with the progress of our Pelican program. The production line is now fully ramped, and we now have four Pelicans in orbit and multiple Pelican launches slated for the next year. In August, we celebrated the one-year anniversary of Tanager-1, our first hyperspectral satellite. To date, our partners at Carbon Mapper have leveraged Tanager’s powerful dataset to detect methane and CO2 plumes across 3,000 sources. We’re incredibly excited about the future of this program and to see what our partners and customers achieve with this powerful dataset. Overall, then, we’re incredibly pleased with the strong results we delivered in Q2. The business is humming for both our data and solutions and our new satellite services offerings.

We’re capitalizing on the ongoing AI revolution, for which we’re extremely well positioned, and we’ve made excellent progress in our profitability goals and on building a strong cash-flow-generating business for the long term. I’d like to take a moment to commend our entire Planet team on a phenomenal quarter and thank them for their drive and dedication to delivering for our customers. It is your commitment and teamwork that makes this all possible. With that, I’ll turn it over to Ashley to discuss our financials. Over to you, Ash.

Ashley, CFO, Planet Labs: Thanks, Will. I’ll start by echoing Will’s remarks in saying that Q2 was another excellent quarter, with strong execution by our teams around the globe. Revenue came in at $73.4 million, representing approximately 20% year-over-year growth. Strength was primarily driven by key wins with defense and intelligence customers, higher than expected usage by some of our government accounts, and steady progress against our new JSAT contract. During the second quarter, revenue from the defense and intelligence sector grew approximately 41% year-over-year. The commercial sector grew approximately 6% year-over-year, and civil government revenue was down approximately 4% year-over-year, impacted primarily by the end of our contract with Norway for their NIKFI program. We’re pleased to see the strong uptake of our AI-enabled solutions in the government markets, as well as the health of our customer relationships in the agricultural and energy sectors.

Switching to our regional revenue breakdown, for the second quarter, revenue grew more than 50% year-over-year in Asia-Pacific, more than 30% in EMEA, while North America revenue was roughly flat year-over-year and Latin America revenue was down slightly. The strength in Asia-Pacific and EMEA was driven by multiple customers in the defense and intelligence sector, while North America reflects the quarter-to-quarter variability in timing of pilot contracts with the U.S. government. As of the end of Q2, our end-of-period customer count was 908 customers, lower on a sequential basis, reflecting our direct sales team’s intentional shift to focus on large customer opportunities and leveraging our self-serve platform to provide access to our data for other customers. As a reminder, Planet Insights platform customers are not included in our end-of-period customer count.

We continue to see strong revenue growth and thus a solid increase in average revenue per customer as a positive indicator that our sales team’s focus on landing and expanding high-value accounts is yielding results. As we shift to some of our ACV metrics, I want to remind you that the JSAT multi-year satellite services contract is not included in our ACV metrics, although it is included in our RPOs and backlog, which we’ll discuss in a moment. Recurring ACV was 98% of our end-of-period ACV book of business, reflecting our continued focus on selling subscription data contracts and solutions as opposed to one-time professional or engineering services. Over 85% of our end-of-period ACV book of business consists of annual or multi-year contracts. Net dollar retention rate at the end of Q2 was 107%, and net dollar retention rate with win-backs was 108%.

Turning to gross margin, non-GAAP gross margin for the second quarter was 61%, compared to 58% in the second quarter of fiscal year 2025, demonstrating improvement year-over-year. This result is better than expected, primarily driven by the revenue outperformance in the quarter, in particular from our usage-based data subscription customers, which results in very high margin revenue upside. Adjusted EBITDA profit was $6.4 million for Q2, better than expected, primarily driven by revenue outperformance in the quarter and disciplined OpEx spend. This marks our third sequential quarter of adjusted EBITDA profitability. Capital expenditures in Q2, which include our capitalized software development, were approximately $21.5 million. This was toward the upper end of our guidance range, driven largely by the catch-up spending from Q1 that we discussed on our last earnings call, including for launch payments and procurements for our Pelican and Tanager satellites.

As a reminder, we’re currently in a growth CapEx investment cycle as we build out our next-generation fleets to capture the market opportunity in front of us. Turning to the balance sheet, we ended the quarter with approximately $271.5 million of cash, cash equivalents, and short-term investments, an increase of approximately $45 million sequentially. This marks our second sequential quarter of increasing our cash position. During the first half of the year, we generated approximately $85.1 million in net cash from operating activities and $54.3 million in free cash flow. Our focus remains on managing the business to enable sustainable cash flow generation through efficient growth across our data, solutions, and satellite services revenue streams.

At the end of Q2, our remaining performance obligations, or RPOs, were approximately $690 million, up approximately 516% year-over-year, of which approximately 32% apply to the next 12 months and 57% to the next 24 months. We estimate our backlog, which includes contracts with a termination for convenience clause, which is common in our U.S. federal contracts and occasionally found in other customer contracts, to be approximately $736 million, up approximately 245% year-over-year. Approximately 35% of our backlog applies to the next 12 months and 59% to the next two years. We believe this backlog provides us with good visibility to sustain our revenue growth rate heading into fiscal 2027. Now let me turn to our guidance for the third quarter and full year for fiscal 2026. In Q3, we’re expecting revenue to be between $71 million and $74 million.

As in previous quarters, when we’ve seen elevated usage patterns, our guidance assumes that we will see those customers return back to historical levels to manage consumption within their annual budgets. We expect non-GAAP gross margin for the quarter to be between 55% and 57%. Our adjusted EBITDA range for the third quarter is expected to be between $4 million to break even, reflective of the variability of our expenses quarter to quarter and our tight focus on cost controls and efficiencies, even as we invest in strategic growth initiatives. We are planning for capital expenditures of approximately $18 million to $24 million in Q3. For the full fiscal year 2026, we now expect revenue to be between $281 million and $289 million.

This increase in range for our outlook reflects our strong performance in Q2 and the improved visibility for the back half of the year, even as we continue to monitor the evolving landscape of U.S. government budgets. We expect non-GAAP gross margin for fiscal 2026 to be between 55% to 57%, unchanged from the guidance provided on our prior call. We expect our adjusted EBITDA loss for fiscal 2026 to be in a range from $7 million to break even, again reflecting the investments we’re making in downstream solutions and our space systems capabilities. We are planning for capital expenditures of approximately $65 million to $75 million for the year, reflecting increased investments we’re making in our Pelican, Tanager, and SuperDove fleets to put us in a strong position to meet the accelerating market demand.

As Will referenced earlier, we also expect to be free cash flow positive on an annual basis this year, over a year earlier than the target we’d previously shared. It’s worth also taking a moment to highlight that Q2 represented our first rolling 12 months of free cash flow profitability, something our team should be very proud of, given the work they all contributed to get us to this milestone. Before we turn to Q&A, I’d like to let everyone know that we’re hosting an Investor Day on Thursday, October 16, 2025, both in New York City and virtually. Please visit our Investor Relations website to learn more. We intend to cover our growth outlook, market opportunity, and much more at the event. We hope you’re able to join us. Operator, that concludes our comments, and we can now take questions.

Operator: Thank you. We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you’d like to ask a question, please raise your hand now. If you have dialed into today’s call, please press star nine to raise your hand and star six to unmute. Please stand by while we compile the Q&A roster. Your first question comes from the line of Colin Michael Canfield with Cantor Fitzgerald. Your line is open. Please go ahead.

Unidentified Analysts, Various Analysts, Various: Hey, thank you for the question. Maybe starting out on growth dynamics, if you can kind of talk us through how much of Germany and JSAT is within the backlog that’s posted today and how to think about kind of the growth mechanics within the U.S. Department of Defense. Just kind of looking at like the contract award around naval maritime domain awareness and maybe pointing to kind of trends you see where Planet Labs PBC can deal directly more with combatant command controls. Thanks.

Will Marshall, CEO, Chairperson, and Co-Founder, Planet Labs: Maybe I can start with the latter point. I just actually came back from BC and met a bunch of leaders there on some of this. Yeah, I’m a very strong partner with that and the government brings huge value. That expansion, you know, particularly leans into our maritime domain awareness and planned scope solutions. That could do a hint, to be honest, to your question, which is they’re leaning more into this broad area of monitoring capabilities, whether that’s our GMS solution or our MDA solution. You saw the wins, obviously, with the U.S. Navy earlier and our work with the Defense Innovation Unit. Overall, we see them leaning into that.

Ashley, CFO, Planet Labs: In terms of the amount that those contracts are included in, how does that backlog, the full amount, be in those numbers, and obviously recognized over multiple years?

Unidentified Analysts, Various Analysts, Various: Got it. As we think about, not to preview Investor Day targets a little bit, but like multi-year free cash flow dynamics, if you can kind of give us a high-level concept of the working capital schedule related to those awards, as well as the other international awards that I think we talked about last call around sizing the pipe as being similarly sized, maybe a little bit smaller than Germany and JSAT. Contemplating the working capital payments from those two customers, as well as the other international opportunities, is there a right way to think about the conceptual free cash flow ladder from here, given those working capital benefits? Thank you.

Ashley, CFO, Planet Labs: Yeah, without getting too specific, I’d say, you know, generally speaking, what we see from these satellite services contracts is they are positive for us from a working capital perspective, and it enables us to build out the fleet without needing to fund those build-outs from our balance sheet. The specifics will obviously vary quarter to quarter with, you know, a decent amount weighted in the early years of the contract, and then, you know, later milestones as the contract progresses to more of the managed services.

Operator: Thank you. Your next question comes from the line of Trevor James Walsh with JMP Securities. Your line is open. Please go ahead.

Unidentified Analysts, Various Analysts, Various: Great. Can you guys hear me okay? Terrific. Thanks for taking the questions. Maybe just a quick one for you, Will. You’ve talked about this in different ways before, but could you maybe just give an update on the pipeline of the services type of contracts? I’m trying to kind of understand where are you ring-fenced or guardrailed, if at all, around those. Is it just the ability to get Pelicans out the door to service those contracts? Is it more just finding the right customers that want to do it at a scale that makes it economically viable for you guys? Maybe you can just walk through how you’re thinking about not just the size of the pipeline, but what you can actually execute there, if that makes sense.

Will Marshall, CEO, Chairperson, and Co-Founder, Planet Labs: Yeah. Look, I mean, we’re just seeing a lot of strong demand within that. I said last time, we’re working with a number of strategic partners that we’ve often worked with for many years before. The deal in collaboration with Germany fits that bucket as well. We’ve been working with them for many years to get a trusted relationship. There are a lot more opportunities we’re going after, and it’s across the world as well as a global demand. We’re feeling very good and we’re leaning into that demand. I mentioned in the remarks that that time has been showing very well. We’re very pleased with that second deal being done in satellite services later this year.

I just want to touch on how synergistic that is with the core business as well because these things enable us to build more satellites that then have more capacity and more revisit rates for the whole rest of our customer base. It really is a win-win for trying to best ourselves and the rest of our customer base.

Unidentified Analysts, Various Analysts, Various: Great. Awesome. I appreciate the color. Maybe one quick follow-up for you, Ashley. Just with the good outperformance on the gross margins, and I know you talked through kind of some of the elements there that helped to contribute to that, how should we just think about that heading into, obviously, not so much even the balance of the year, but just heading into next fiscal around, you know, is that still going to have some variability around that gross margin number just based on kind of what you’re doing with JSAT and others, or can we expect that now hitting that plus 60% watermark to hold in the next, you know, call it year, year and a half?

Ashley, CFO, Planet Labs: Yeah, I’d call it on Q2, as I said, that upside in gross margin was really driven by strong usage payments. We see upside in the data subscription revenue. Obviously, that’s a very high margin business, and Josh is at the bottom line. As we look forward on gross margin, as you allow, just the mix of revenue will cause margin to be different. Obviously, we feel that it’s about the ability to expand gross profit and continue to drive overall profitability on the business. The margin number will likely vary as we see, as we progress into the build phase of some of these satellite services contracts, which are lower margin in the earlier years, and obviously expand to be higher margin in the later years.

Will Marshall, CEO, Chairperson, and Co-Founder, Planet Labs: If I could just go back and add one other thing, satellite services, just to sort of put, I think we’re competitively very well positioned to win this market because of our ability for staff integration, ability to build satellites quickly. Just to give you a tiny sense of that, the partnership we did in collaboration with Germany, we already launched one satellite for them. This was already in the planning, but the fact that we were able to get in their own eyes that fast within a couple of months is unprecedented. No one else can do that, so it really puts us in a strong position.

Unidentified Analysts, Various Analysts, Various: Great. Thanks, both. Appreciate it.

Operator: Thank you. Your next question comes from the line of Michael James Latimore from Northland. Your line is open. Please go ahead.

Michael James Latimore/Caleb Henry, Analyst, Northland/Quilty Space: All right. Yeah, great. Congrats on the strong results here. I guess with regard to the usage levels, can you comment a little bit more on that? You know, what do you see as driving that? Are any of your customers sort of, I don’t know, discussing early renewals and maybe expansions early or anything like that? Are they paying overage? Just a little bit more color on the usage dynamic. Is it continuing so far in the third quarter to be strong?

Ashley, CFO, Planet Labs: Yeah, thanks for the question, Mike. Generally speaking, when we see an uptick in usage like that, just to be safe, given the dynamics around government budgets, we don’t assume that will continue in the subsequent quarters, but instead look at historical pacing and try to adjust accordingly so that our overall assumption would be they stay within their annual budgets. We have seen some dynamics where customers have sought early renewals. There is always the potential that we could see that usage continue. Again, a lot of it depends on what their availability is to doing an early renewal, getting early access to budget dollars, et cetera. Like I said in the prepared remarks, to be safe, we look at historical patterns and assume that in our heads.

Michael James Latimore/Caleb Henry, Analyst, Northland/Quilty Space: Yeah, makes sense. On the EOCL deal, it sounds like you’ve expanded your opportunity there. Is there a new timeframe for the renewal beyond October?

Will Marshall, CEO, Chairperson, and Co-Founder, Planet Labs: No, I mean, we continue to be very keen on what we’re doing there and seeing that expansion coming in once leaning into our core area analytics that I had said before. We’re leaning more into commercial solutions and services overall, we’re thinking of that plan as well. Shooting for that. Yeah, I would obviously argue more on the EOCL too.

Operator: Thank you. Your next question comes from the line of Ryan Boyer Koontz from Needham. Your line is open. Please go ahead.

Unidentified Analysts, Various Analysts, Various: Great, thanks. On your satellite services deal, maybe just stepping back a bit, can you reflect on what % or maybe kind of range of those satellite capacities you have kind of nailed up with these deals for Japan and Germany? I mean, these dedicated satellites you’re building for them, what % of these satellite capacity is included in your contracts? Is it 100% capacity?

Will Marshall, CEO, Chairperson, and Co-Founder, Planet Labs: Yeah. We mentioned when we did the deal with Japan, it was a tiny fraction of our capacity. The majority of our capacity, the rest of our capacity, is still continuing to provide to our other customers. It really is a win-win in that. It’s in that sovereign capacity in that area, in that case in the around the Fiji region. That’s where we get to task, at least the significant majority. The partnership in collaboration with Germany, I’ve just obviously been exploring the Europe theater since we’ve handed that. I’ll just point out, again, it’s slightly different from the Japan deal in that we’re not, we’re leveraging existing built plans for Pelican for that rather than new ones. It has a slightly different structure financially. That, again, is a small fraction of the overall capacity because it’s primarily just in the European context.

Unidentified Analysts, Various Analysts, Various: Thank you. On maritime domain awareness, any updates there on your kind of solutions approach? It sounds like a really hot area. What type of partners are you working with? I know you’ve talked a lot about SIMAX in the past. Any updates on your maritime domain awareness solutions from a product perspective?

Will Marshall, CEO, Chairperson, and Co-Founder, Planet Labs: Yeah, no, we’re right at the right place with progress there. I mean, you saw our expansion with the U.S. Navy. That was a marquee one. We had mentioned previously that that was sole source because they recognized also that no one else could provide that span. They’re looking across the larger South China Sea for innovations of ships doing illegal things. That just sets it clear no one else has that span of that large area, and so they sole source to us. We’ve seen it enter into a number of our other partnerships, including one with NATO and others. We’re very excited by the maritime domain awareness. Yeah, it is our most mature AI-enabled solution, and we have a strong line of others that we’re going after.

It is also part of our deal with the collaboration with Germany because in addition to the satellite services component of that, there’s an eight-figure annual contract for data and solutions as well as part of that deal. That includes maritime domain awareness as part of one of those solutions. Really, this gets our ability to scan large areas and look for unknown unknowns rather than just the known knowns that these larger communities really focused on to start with. It’s giving a very holy grail in a way. It is a unique position because of our daily standing.

Operator: Thank you. As a reminder, if you’d like to ask a question, please raise your hand. If you have dialed into today’s call, please press star nine to raise your hand and star six to unmute. Your next question comes from the line of Daniel Hibschman with Craig Hallum. Your line is open. Please go ahead.

Daniel Hibschman, Analyst, Craig Hallum: Hey, yeah, this is Daniel Hibschman on for Jeffrey Van Rhee. Will, Ashley, congrats on, you know, another really great quarter. I just wanted to start in on maybe if we could double-click on commercial, you know, really strong quarter there, the 16% sequential growth. I think the first year-over-year growth for commercial in about two years. A really great quarter for that line and a little bit of an inflection for it back to growth. Maybe we could just, you know, you said about energy and agriculture driving some strength there, but maybe if you could expand a little bit on what’s happening and what you see kind of going forward for that business.

Will Marshall, CEO, Chairperson, and Co-Founder, Planet Labs: Energy and agriculture, but also insurance. I mentioned the SwissRe partnership, which is a particular example that really created high ROI. I think overall we’re right that we’re starting to see that turnaround. Remember when we’re building these solutions for DNI, they are often translatable to other areas. We were just talking about maritime domain awareness. Think about how that could be useful for the maritime sector, right? Not just for navies and coast guards. Our solutions for civil government are also relevant for the commercial sector. We have, I think, tremendous value. One of the amazing things, again, about our baby STEM is that it’s, rather than just a parsing system, it opens up these markets, right? We have that differentiation above the rest of the observation players in that we can serve agriculture, insurance, disaster response, and so on. You need large area coverage to do that.

I expect that to be driven even more as AI enables solutions in these areas. The traditional challenge has been extracting out the actual insights from our imagery, and AI is making that easier and easier. We’re starting with our focus on solutions and sensitive intelligence, but I believe there’ll be cancellations into the commercial sector, and we’re beginning to see that.

Operator: Thank you. Your next question comes from the line of Gregory Pendi from ClearStreet. Your line is open. Please go ahead.

Unidentified Analysts, Various Analysts, Various: Hi, can you hear me? Sorry about that. Thanks for taking my question. Just was wondering, can you provide us a possible update on where the Anthropic relationship is and how that’s been developing and what we can possibly expect, you know, through the course of the year?

Will Marshall, CEO, Chairperson, and Co-Founder, Planet Labs: Yeah, I mean, firstly, I’m really bullish on AI in general. A tool for our data scan, speed that I knew, expanding usability, scaling up capabilities. What we’re doing with Anthropic in particular is helping to fine-tune the cloud model on our data. You know, those models are pretty good out of the box. If you’re showing them satellite imagery, these new multimodal visual language models are really good at describing the image, being able to do basic analysis on those images. That’s without fine-tuning. Those models haven’t seen much satellite data. Our thinking together as a collaboration is that if we expose it to far more satellite imagery, it will be much more accurate and scalable at that capability too. No, actually, Anthropic isn’t the only one. We’re also doing a partnership with Google on some months of collaboration.

Then with NVIDIA on the chips, including the Snapdragon chips and our own platforms that we launched on both of the platforms that we just launched two weeks ago. Both AI upstairs and AI downstairs, we’re focused on, and it’s just, it really is that we’re in a unique position, and it’s a very, very exciting time. I go so far as to say that really Planet Labs PBC is the only space company that’s truly central to AI. We still send the AI company. I think this is a fascinating time, and we’re excited about those collaborations within that.

Unidentified Analysts, Various Analysts, Various: That’s very helpful. Thanks a lot.

Operator: Thank you. Your next question comes from the line of Caleb Henry with Quilty Space. Your line is open. Please go ahead.

Michael James Latimore/Caleb Henry, Analyst, Northland/Quilty Space: Sorry, can you hear me? Am I coming through? Okay, thanks. Two questions. The first was just about the Tanager fleet. I was wondering if there’s kind of any more planning around how to monetize that going forward and if you have any more visibility into what that might look like as a future constellation.

Will Marshall, CEO, Chairperson, and Co-Founder, Planet Labs: Yeah, absolutely. Obviously, we’re kind of at our one-year anniversary milestone, and that important methane detection work that we do in collaboration with Carbon Mapper is detecting now 3,000 sources of emissions. It’s been fantastic to see the results of that. We had two solid revenue opportunities already. One is with Carbon Mapper itself, and the other is with California that we’ve been at earlier this year. We think California can leverage this technology to monitor emissions and get ahead of those sort of planet goals that they have. We believe there’s a strong commercial and intelligence at the data base that we are just beginning on to provide those data. It’s early days still on that. It’s a relatively new market, but we are very pleased with the performance.

Michael James Latimore/Caleb Henry, Analyst, Northland/Quilty Space: Okay, thanks. My other question is just about backlog. Forgive me if I missed the answer to this one already, but it’s grown really fast. I was wondering if you could share anything about the kind of average length or how revenues are distributed from that backlog, if that’s more front-loaded or linear over the next couple of years.

Will Marshall, CEO, Chairperson, and Co-Founder, Planet Labs: Yeah, I’d be happy to talk more about backlog right now. It’s going up 245% year-over-year. We feel very good about that. Ashley, do you have anything to share on the?

Ashley, CFO, Planet Labs: Yeah, and the revenue as well as our time, it seems to be broken down in what % is expected to be recognized over 12 months versus the next 24 months. Generally speaking, the large contracts that we’ve announced this year with our partner in Japan, as well as in collaboration with Germany, were the drivers of that backlog increase. In addition, we announced in July, as well as additional contracts that were called today that are seven-figure higher contracts for some of the solutions that we are bringing to market. It’s the combination of those factors that’s really driving that large increase. Obviously, the larger satellite services contracts are going to be missed over multiple years. We do allow % in 12 to 24 months. Solutions contracts when we talk about seven and eight figures, particularly to AC metrics.

Operator: Thank you. That’s all the time we have for questions today. I will now turn the call back to Will Marshall, CEO and Co-Founder, for closing remarks.

Will Marshall, CEO, Chairperson, and Co-Founder, Planet Labs: Thanks everyone for joining. Overall, I’d say our business is humming. I can feel great about the work of our teams to get us there. Both on the core business is stemming. You saw those deals with NATO and Indo-Papan. The constellation of satellite services business is humming with that second deal. As a result, our financials are humming, the cash and backlog in particular are unparalleled. This all gives us confidence about solid growth acceleration, locked in for FY2027. We’re feeling very good and paying attention really well.

Operator: This concludes today’s call. Thank you for attending. You may now disconnect.

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