Planet Reports Financial Results for Second Quarter of Fiscal Year 2023

September 12, 2022 04:05 PM Eastern Daylight Time SAN FRANCISCO--(BUSINESS WIRE)--Planet Labs PBC (NYSE: PL) ('Planet' or the 'Company'), a leading provider of daily data and insights about Earth, today announced financial results for its fiscal second quarter for the period ended July 31, 2022, demonstrating accelerated growth and momentum of its unique data subscription business.

'Planet's results for the second quarter exceeded expectations across the board and demonstrate the continued acceleration of our growth rate and robust demand for our unique Earth data solutions,' said Will Marshall, Planet's Co-Founder, Chief Executive Officer and Chairperson. 'In addition to the strength of our revenue and gross margin expansion during Q2, we're also pleased with the meaningful increase in net dollar retention rate, which we believe demonstrates that our investments in product and customer success are yielding results.'

Ashley Johnson, Planet's Chief Financial and Operating Officer, added, 'For the second quarter of fiscal year 2023, we delivered $48.5 million in revenue, a growth rate of 59% year-over-year, expanded Non-GAAP Gross Margin to 52%, and ended the quarter with $458 million of cash, cash equivalents and short-term investments. Q2 was an excellent quarter for Planet, and we're pleased with the continued momentum that we're seeing in the business.'

Fiscal Second Quarter 2022 Financial and Key Metric Highlights:

• Second quarter revenue increased 59% year-over-year to $48.5 million.
• Percent of Recurring Annual Contract Value (ACV) for the second quarter was 93%.
• End of Period (EoP) Customer Count increased 17% year-over-year to 855 customers.
• Net dollar retention rate for the quarter was 125%, while net dollar retention rate with winbacks was 127%.
• Second quarter gross margin expanded to 48%, compared to 35% in the second quarter of fiscal year 2022. Second quarter Non-GAAP Gross Margin(1) expanded to 52%, compared to 36% in the second quarter of fiscal year 2022.
• Ended the quarter with $458 million in cash, cash equivalents and short-term investments.

(1) Please see 'Planet's Use of Non-GAAP Financial Measures' below for a discussion on how Planet calculates the non-GAAP financial measures presented herein. In addition, please find below a reconciliation to the most directly comparable U.S. GAAP financial measure

Recent Business Highlights:

Growing Customer and Partner Relationships:

• German Federal Government: Planet announced that it is providing the German Federal Agency for Cartography and Geodesy (BKG) with daily, high-resolution satellite data for a huge variety of use cases, including crisis response, environmental management and nature conservation, as well as forest and agricultural monitoring. This is a pioneering contract – a country-wide partnership through which employees of more than 400 German federal institutions can gain access to Planet's data to help promote public and civil safety throughout the entire Federal Republic of Germany. This engagement follows an assessment by the central government that determined that Planet's data can help address the needs of the entire German Federal government.
• Organic Valley: Planet announced that it has completed a successful pilot program with Organic Valley, the organic food brand and independent cooperative of organic farmers. The program utilized satellite technology to efficiently measure pasture health on dairy farms. By using Planet's satellite data, participating Organic Valley farmers accessed reports created by the cooperative regarding their pastures which helped them assess pasture quality, thereby supporting herd nutrition, and contributing to sustainable agricultural practices like regenerative rotational grazing.
• NMSLO: The New Mexico State Land Office further expanded their relationship with Planet. Using Planet's road change detection analytics, the NMSLO has been able to detect roads that were created on protected land and has identified trespass violations resulting in up to $1 million in fines thus far. After the devastating beginning of the 2022 wildfire season, the New Mexico State Land Office has now begun using SkySat to monitor burn scars and severity, allowing the state to plan for potential flooding and debris flows along with mitigation efforts to restore the land.

Supporting Ukraine Response:

• Planet is supporting critical efforts in multiple areas by providing imagery to governments, aid and relief organizations, think tanks and the media. Planet continued that important work in Q2.
• NASA Harvest: The team at NASA Harvest, NASA's food security and agriculture program, used Planet data to complete a country-wide assessment of the health of grain in Ukraine and its effect on global grain supplies. As of August 2022, the Harvest team found that more cropland than was initially expected has been harvested and planted along both the Russian-occupied and Ukrainian-held territories. The team is also currently estimating a higher production out of the region than other publicly-sourced estimates.
• Windward: Maritime AI company Windward, when combining their AI-powered behavioral analytics models with Planet's daily imagery, found vessels engaging in dark activities and ship-to-ship (STS) operations in the Kerch Strait in June 2022 as part of what appeared to be a coordinated effort to launder grain allegedly stolen from Ukraine. The report found a 160% increase in dark activity in the Black Sea YoY, with 73% of those cases occurring after the war started.

Building New Technologies and Missions:

• NASA CSP: Planet announced that it is supporting NASA's Communication Services Project, or "CSP", alongside two partners, SES Government Solutions and Telesat Government Solutions, to demonstrate real-time space-to-space connectivity solutions from Planet's LEO satellites to other in-space communication satellites operated by SES and Telesat. Planet will work to demonstrate its state-of-the art communication technology stack involving real-time satellite connectivity for NASA's CSP, with the goal of further building its relationship with the agency and accelerating the deployment of low latency solutions for Planet customers.

Impact and Education:

Planet's robust Education and Research (E&R) program continues to enable new use cases of Planet's data and better forecasts of resultant environmental, economic and geopolitical effects. For example, researchers at Duke University and the California Air Resource Board recently used Planetscope data combined with novel AI analytical techniques to identify dangerous levels of fine particulate air pollution in Delhi and Beijing so that in the future such methods could be used to more efficiently mitigate the effects of poor air quality in cities around the world.

Financial Outlook

For the third quarter of fiscal year 2023, Planet expects revenue to be in the range of approximately $45 million to $48 million, representing approximately 47% year-over-year growth at the midpoint. Non-GAAP Gross Margin is expected to be between approximately 47% to 49%. Adjusted EBITDA is expected to be between approximately ($22) million and ($20) million. Capital Expenditure as a Percentage of Revenue is expected to be between approximately 16% and 19% of revenue for the third quarter.

For fiscal year 2023, Planet has increased its revenue outlook and expects it to be in the range of approximately $182 million to $190 million, representing approximately 42% growth at the midpoint. Non-GAAP Gross Margin is expected to be between approximately 49% to 51%. Adjusted EBITDA is expected to be between approximately ($68) million and ($60) million. Capital Expenditure as a Percentage of Revenue is expected to be between approximately 13% to 15% for the full fiscal year 2023.

Planet has not reconciled its Non-GAAP Gross Margin outlook, which is derived from Non-GAAP Gross Profit, or Adjusted EBITDA outlook to their most directly comparable GAAP measures (gross profit and net loss, respectively) because certain items that impact gross profit and net loss, such as stock-based compensation expenses and (in the case of Adjusted EBITDA) depreciation and amortization, are uncertain or out of Planet's control and cannot be reasonably predicted. The actual amount of these expenses during the third quarter of fiscal year 2023 and fiscal year 2023 will have a significant impact on Planet's future GAAP financial results. Accordingly, a reconciliation of Non-GAAP Gross Margin outlook and Adjusted EBITDA outlook to gross profit margin and net loss, respectively, is not available without unreasonable efforts.

The foregoing forward-looking statements reflect Planet's expectations as of today's date. Given the number of risk factors, uncertainties and assumptions discussed below, actual results may differ materially.

Webcast and Conference Call Information

Planet will host a conference call at 5:00 p.m. ET / 2:00 p.m. PT today, September 12, 2022. The webcast can be accessed at www.planet.com/investors/. A replay will be available approximately 2 hours following the event. If you would prefer to register for the conference call, please go to the following link: https://www.netroadshow.com/events/login?show=18e20112&confId=40434. You will then receive your access details via email.

Additionally, a supplemental presentation has been made available on Planet's investor relations page.

Investor Day 2022

Planet plans to host an Investor Day in San Francisco on Wednesday, October 12, 2022. The program is set to begin at 12:00 p.m. Eastern Time / 9:00 a.m. Pacific Time. The Investor Day program will feature sessions led by management, including Will Marshall, Co-Founder and CEO; Kevin Weil, President of Product and Business; and Ashley Johnson, Chief Financial Officer and Chief Operating Officer. The event will be accessible virtually. To attend virtually, please check planet.com/investors the week of October 10th. A recording will be available on Planet's Investor Relations website shortly after the event.

About Planet Labs PBC

Planet is a leading provider of global, daily satellite imagery and geospatial solutions. Planet is driven by a mission to image the world every day, and make change visible, accessible and actionable. Founded in 2010 by three NASA scientists, Planet designs, builds, and operates the largest Earth observation fleet of imaging satellites, capturing over 30 TB of data per day. Planet provides mission-critical data, advanced insights, and software solutions to over 800 customers, comprising the world's leading agriculture, forestry, intelligence, education and finance companies and government agencies, enabling users to simply and effectively derive unique value from satellite imagery. Planet is a public benefit corporation trading on the New York Stock Exchange as PL. To learn more visit www.planet.com and follow us on Twitter.

Planet's Use of Non-GAAP Financial Measures

This press release includes Non-GAAP Gross Profit, Non-GAAP Gross Margin, which is derived from Non-GAAP Gross Profit, Adjusted EBITDA, certain non-GAAP expenses described further below, Non-GAAP Loss from Operations, Non-GAAP Net Loss and Non-GAAP Net Loss per Diluted Share, which are non-GAAP performance measures that the Company uses to supplement its results presented in accordance with U.S. GAAP. The Company believes these non-GAAP financial measures are useful in evaluating its operating performance, as they are similar to measures reported by the Company's public competitors and are regularly used by analysts, institutional investors, and other interested parties in analyzing operating performance and prospects. Further, the Company believes such non-GAAP measures are helpful in highlighting trends in the Company's operating results because they exclude items that are not indicative of the Company's core operating performance. In addition, the Company includes these non-GAAP financial measures because they are used by management to evaluate the Company's core operating performance and trends and to make strategic decisions regarding the allocation of capital and new investments.

Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation from, as a substitute for, or superior to, measures of financial performance prepared in accordance with U.S. GAAP. Specifically, these measures should not be considered as an alternative to cost of revenue, gross profit, operating expenses, operating income, net income, earnings per share, or any other performance measures derived in accordance with U.S. GAAP or as an alternative to cash flows from operating activities as a measure of liquidity. The non-GAAP financial measures presented are not based on any standardized methodology prescribed by U.S. GAAP and are not necessarily comparable to similarly-titled measures presented by other companies. Further, the non-GAAP financial measures presented exclude stock-based compensation expenses, which has recently been, and will continue to be for the foreseeable future, a significant recurring expense for the Company's business and an important part of its compensation strategy.

Planet calculates these non-GAAP financial measures as follows:

Non-GAAP Gross Profit and Non-GAAP Gross Margin: The Company defines and calculates Non-GAAP Gross Profit as gross profit adjusted for stock-based compensation expenses and amortization of acquired intangible assets classified as cost of revenue, and Non-GAAP Gross Margin as the percentage of Non-GAAP Gross Profit to revenue.

Non-GAAP Expenses: The Company defines and calculates Non-GAAP cost of revenue, Non-GAAP research and development expenses, Non-GAAP sales and marketing expenses, and Non-GAAP general and administrative expenses as, in each case, the corresponding U.S. GAAP financial measure (cost of revenue, research and development expenses, sales and marketing expenses, and general and administrative expenses) adjusted for stock-based compensation expenses and amortization of acquired intangible assets that are classified within each of the corresponding U.S. GAAP financial measures.

Non-GA