Planet Labs PBC Q4 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Michael Latimore - Northland Securities - Analyst : Yes. On sales cycles and new deal sizes, how are they trending now versus four to five months ago?

Question: Michael Latimore - Northland Securities - Analyst : Got it. And then I think there was a eight-figure expansion deal that was kind of effectively in the pipeline last quarter. Any update on that one?

Question: Michael Latimore - Northland Securities - Analyst : Got it. And just last, do you have an updated net promoter score, NPS?

Question: Michael Latimore - Northland Securities - Analyst : All right, great. Thanks a lot.

Question: Jason Gursky - Citigroup Inc. - Analyst : Great. Thanks, everybody. Will, maybe this is a question for you. Talk a little bit about the SkySats and the transition to the Pelicans. If, for whatever reason, there's a delay or gap in capability set that comes about as you retire some of these SkySats before the Pelicans get up there. Do you have any contracts that would be at risk today where you're currently performing on a contract and if for whatever reason, there was a gap in that capability set that you would not be able to perform on?

Question: Jason Gursky - Citigroup Inc. - Analyst : Maybe ask that different way, same topic. How many SkySats after these three go retire we have left? And how many do you need to perform on your existing contracts?

Question: Jason Gursky - Citigroup Inc. - Analyst : Okay, great. Thanks. And then, Ashley, a couple for you. Can you get to break -- EBITDA breakeven with your current revenue run rate, what you've got here projected in the first quarter 2025?

Question: Jason Gursky - Citigroup Inc. - Analyst : But I guess the question is roughly $60 million a quarter. Can the business be EBITDA breakeven?

Question: Jason Gursky - Citigroup Inc. - Analyst : Yes. Okay. And then on cash flow, maybe talk a little bit about expectations around when the cash flow number gets to breakeven and turns positive, the timing and drivers of that.

Question: Jason Gursky - Citigroup Inc. - Analyst : Okay, well, last one for me. On the large government opportunities that you've got there on Slide 23, which is the outlook slide, can you talk a little bit about the geographic demand with the government customers and where the sources of those opportunities are?

Question: Jason Gursky - Citigroup Inc. - Analyst : Right. Okay. Thank you very much for the time, guys.

Question: Trevor Walsh - JMP Securities - Analyst : Great. Thanks, team, for taking the questions. Will, maybe I'll start with you, if that's okay. Could you maybe talk a little bit more about the NIWC Pacific contract from the perspective of -- I think you had mentioned that other governments might be able to operationalize kind of a similar type of use case. I guess, how sensitive is the US Navy's program around this? Whereas you might not be able to kind of share all the learnings from that particular contract and then replicate it for other governments? And then secondarily kind of around that contract, what's the opportunity for expansion within that? Would that just be kind of broadening the area of interest kind of to beyond the Pacific and to other geos? Or is there just additional kind of imagery services that could come along -- I guess, give us a little sense of how that might expand over time? That'd be great.

Question: Trevor Walsh - JMP Securities - Analyst : Awesome. Thanks both for the color on that and good segue for me. So thanks. On the commercial business front, you talked about kind of the budget constraints leading to some of the results for the year within that part of the business. What are -- I guess, the outside of just the broader kind of macro things that we've all been talking about for the last 18, 24 months are there any other just technical hurdles or things for that part of the business to just really start going and kind of getting back to fuller health? Or is it really just once people feel like interest rates are kind of normalizing or whatever that looks like, then budgets -- dollars are available and it's just a flip of the switch? Or are there other kind of convincing, I guess, that you would need to do around just kind of the value of the solutions?

Question: Trevor Walsh - JMP Securities - Analyst : Got it. Okay, that's helpful. Ashley, maybe just a couple of last quick ones for you, if I can. The acceleration in new customer logos was great in the quarter. Can you provide just any -- was there anything in particular that you think kind of helped to achieve that? I mean, I know you've been talking about greater efficiencies around your go-to-market processes, so I'm assuming that kind of helps. But was there anything else just out of the ordinary in the quarter that also can kind of contribute to that metric?

Question: Jason Gursky - Citigroup Inc. - Analyst : Great. And then lastly, the NDRR number, it looks like and I'm just looking on the slide deck, so we're working on the same sheet of music. It looks like the kind of delta between the pure NDRR number and the one with winbacks is essentially converging. It's coming together. Does that make the winbacks kind of less meaningful as a kind of a separate call out? And is that essentially happening less and less as the numbers would sort of dictate? And is that -- or is this more just -- is that something I guess you'll continue to sort of report and look into kind of on a quarterly, yearly basis?

Question: Trevor Walsh - JMP Securities - Analyst : Got it. Okay. Thanks all. Appreciate the questions.

Question: Noah Poponak - Goldman Sachs Group, Inc. - Analyst : It sounds like you're saying that the decision to not provide full year 2025 annual guidance is less downside uncertainty and more upside uncertainty, I guess, as you're alluding to these large prospects, but where you don't know if and when they'll land. You've given that the 1Q guidance where the growth rate is somewhat consistent with full year 2024 and that's on your toughest year-over-year compare that you'll face this year by far. And so, I guess, is it a reasonable base case for all of us on the outside to assume 2025's growth rate looking similar to 2024 is kind of a floor. And REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 28, 2024 / 9:00PM, PL.N - Q4 2024 Planet Labs PBC Earnings Call then there's upside depending on when the large opportunities land, if they land, or is that too optimistic? Are there scenarios where the growth rate decelerates? Is there a scenario where revenue is down?

Question: Noah Poponak - Goldman Sachs Group, Inc. - Analyst : Okay. Do you anticipate that you will have a range at some point through the year?

Question: Noah Poponak - Goldman Sachs Group, Inc. - Analyst : Okay. And, Ashley, remind me, over the past few years, on average, or maybe just kind of directionally as a framework, how much of your annual revenue do you book and deliver within the year versus it was in the backlog when you entered the year?

Question: Noah Poponak - Goldman Sachs Group, Inc. - Analyst : Okay. And then just last one I wanted to ask about is on the capital plan, the $14 million to $17 million for the first quarter is a pretty big number compared to the run rate, although last year you had one quarter in that range. I guess, is that anomalous, or is that a run rate? What's the full year look like? And I guess, where do we -- how does that sort of start to normalize as a percentage of revenue overtime? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 28, 2024 / 9:00PM, PL.N - Q4 2024 Planet Labs PBC Earnings Call

Question: Noah Poponak - Goldman Sachs Group, Inc. - Analyst : Okay. Okay. Thank you.

Question: Jeff Van Rhee - Craig-Hallum Capital Group LLC - Analyst : Great. Thanks for taking the questions. I guess, this would probably be for Kevin and Ashley. On the sales execution, with the transition going on, I think it'd be good just to get a sense of where you feel you are now with respect to sales execution. So, number one, just where are you? What's working? What's not? And generally speaking, what needs to change?

Question: Jeff Van Rhee - Craig-Hallum Capital Group LLC - Analyst : Okay, got it. And then, with respect to the commercial and maybe more specifically ag, I mean, in general, ag names in the space have been lifting their head for a little while now. Curious if you're seeing the same or any changes in behavior in ag, and just fundamentally trying to understand the weakness in ag and commercial in general. Is it a function of the solutions needing to be more, I guess, I'd say, productized or easier to consume? Maybe a more demonstrable ROI? I mean, there's both landing new customers and there's retaining, and those two factors would obviously weigh, but just thoughts on commercial and ag and maybe why it's been as soft as it has. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 28, 2024 / 9:00PM, PL.N - Q4 2024 Planet Labs PBC Earnings Call

Question: Laura Lee - Deutsche Bank AG - Analyst : Just a quick one from us. So what's your initial view on the space, commercial and it's a space as well, obviously, Scotia and the kind of value you see there are some other things for the people now you refer to the reports that came out recently about now?

Question: Laura Lee - Deutsche Bank AG - Analyst : Yes.

Question: Chris Quilty - Quilty Space - Analyst : Ashley, follow-up on your CapEx discussions, you talked about the growth versus maintenance capital. What do you consider Pelican? And if it's the former, when do we start sort of folding in the growth CapEx associated with that process?

Question: Chris Quilty - Quilty Space - Analyst : Great explanation. Next question and the budget, did we pass a defense budget or did we extend the CR? Doesn't mean we're in CR. I honestly don't have the mental capacity for it. But I suspect from your perspective, obviously, you've got lots of contracts on the horizon here, and there's a lot of IT budget going on. (multiple speakers) Well, I have two quick questions, can you start new programs in our new program starts imports, so to close some of these opportunities. And the second one kind of what sort of system response are you seeing? I mean, CRs are nothing new. We do them every year, but are you seeing anything where it's freezing up more than normal? Or is this just like same old thing?

Question: Chris Quilty - Quilty Space - Analyst : And final question. The solar cycle, I guess is real --

Question: Chris Quilty - Quilty Space - Analyst : But several other companies in the industry, you saw some older satellites. So to an early demise, I mean, you probably got some good data out of that event? And was it at this point looking back? Was it kind of an event that happened? And I haven't seen anything pointing to that yet, but clearly higher on the solar cycle? And do you have good enough data to say? Yes, if we see higher. So order activity level, which I think is what they're predicting for the next couple of years, we still feel really good about where the satellites are operating

Question: Chris Quilty - Quilty Space - Analyst : Great. Hear's to better weather.