Closing Bell - Manifest Space: Planet Labs Posts Quarterly Results with CEO Will Marshall 3/20/25

Episode Date: March 20, 2025

Planet Labs marked its first quarter of profitability by adjusted EBITDA. The satellite imagery and earth observation data company saw its backlog surge in the fiscal fourth quarter by 115%. Co-founder, Chair & CEO Will Marshall joins Morgan Brennan to discuss the quarter and why he sees the company as being at an inflection point.

Planet Labs reporting quarterly results today marking the first quarter of profitability by one metric adjusted EBITDA. The satellite imagery and Earth observation data company saw its backlog surge in the fiscal fourth quarter by 115% as it inked deals with Japan's JSTAR and others. Planet's chairperson, CEO and co-founder, Will Marshall says the company is at an inflection point. Last year was a quite an exciting and transformational year at Planet. We spent, The Air Person CEO and co-founder, Will Marshall, says the company is at an inflection point. Last year was quite an exciting and transformational year at Planet. We launched over 70 satellites, including our first Tanager satellite, our second Pelican spacecraft,

and we launched our Planet Insights platform. We realigned our market opportunity around vertical markets. We did move towards solution selling so many things, but that and that gives us a pretty strong results and most of all it set up us up really well for the coming year. Planet touts the largest earth observation fleet of imaging satellites. It designs, builds and operates them for both government and commercial customers. And the fleet is getting bigger. On this episode, Planets' Will Marshall on new satellites, working with AI chip giant NVIDIA, and how artificial intelligence is unlocking the promise of space-based

data. I'm Morgan Brennan and this is Manifest Space. Joining me now Planet Labs CEO, co-founder, and chairperson Will Marshall. Will, it's great to speak with you on the heels of Q4 earnings here. So let's start right there in terms of what we saw for the quarter and the fact that you're reporting record revenue, record gap and non-gap gross margins and a huge spike in your backlog as well. Yeah we're really pleased about that because it really gives us a lot of visibility into the coming year and to growth, revenue growth acceleration. Yeah, the the the the

earning results for the last year were roughly in line. Most of all, we reached our objective that we set a few years ago of getting the adjusted EBITDA positive. And that was a huge milestone for the company because we spent several years on positive. And that was a huge milestone for the company because we spent several years on that. Last year was quite an exciting and transformational year at Planet. We launched over 70 satellites, including our first Tanager satellite, our second Pelican spacecraft. And we launched our Planet Insights platform. We realigned our market opportunity around vertical markets. We did move towards solution selling so many things,

but that gives us pretty strong results. And most of all, it set us up really well for the coming year. So in terms of expectations for the coming year, what are they? And I asked that looking at your forecast both for Q1 revenue and for full year revenue, it looks like they're a bit shy of Wall Street consensus, but to the extent you can share some color about milestones that we should be watching for. Well we're putting out a plan that we feel very confident that we can hit. It is a strong growth but it's accelerating growth and what we can say is, as you mentioned, that we can hit. It is a strong growth but it's accelerating growth and what we can say is,

as you mentioned, that we've got really strong increase in backlog. Our backlog of business grew more than doubled quarter on quarter because of a lot of the deals we've been making and that it gives us not just the ability to give guidance for this full year, and we believe that's good, but then it also gives us line of sight towards strong revenue growth acceleration next year. And we've even put out that we are able to have line of sight to get to positive cash flow in the 24-month period as well well and we sit on a pretty good cash balance so we feel very good that we don't need to go back to the financial markets for any further capital infusion. Planet is good to go.

Sounds like you've hit an inflection point. You marked a number, inked a number of contracts in the last couple of months. One of the biggest, $230 million with JSAT. What's meaningful about that partnership? Well, it's really meaningful because it's the first big deal where we're building satellites for a country. So, Japan, through our partners with JSAT, have asked us to build 10 Pelican spacecraft. It's a $230 million program, as you mentioned, and it gives them dedicated satellites in their area of interest in that area of Asia. Meanwhile, in addition to that, it enables us to provide those extra satellites to all of our other

customers. And so there's a lot of upside potential for Planet as well. We believe this is a very win-win sort of partnership. It pays for all of our capital expenditure upfront for building all those satellites, gives that customer first access to that new capability and gives all of the rest of our customers this faster revisit, more capacity and so on. And moreover, it's really starting a more bold foray into what we call the satellite services market where we actually build satellites for customers as well as just providing data. And the reason we are entering into that market is that we felt a lot of demand. Of course, Planet has launched the most Earth observation satellites of any company in history and lots of countries, especially in an increasingly

fragmented world, want dedicated access to those satellites to ensure that they can get that security information, dedicate to them, and so we are leaning into that demand that we're feeling. So in addition to the Japan deal, we have a handful of other partnerships that we're now pursuing along similar lines with other countries. So it's a big opportunity for Planet. You mentioned Pelican 2 joining Pelican 1. You've released these first light images as well. How quickly can you get these satellites to orbit? And walk me through the differences between the Pelican constellation and the Tanager constellation and the value they bring to customers. Happy to do it.

Well, Pelican is an upgrade on our SkySat fleet, our high resolution tasking optical imagery. It's better in all ways. It's higher resolution. It's going to have more revisit rates. It's got higher capacity per satellite. And most of all, it flies this latest Nvidia chip that enables us to do AI on the edge.

It's got the fastest processor in space as far as they're aware and so we can do customer queries like detect ships and give me answers that then can go very quickly to our customers. So we're 10xing the tenfold decrease in the amount of time from someone asking a question to getting the answer through this system. Really big improvement. That satellite is performing better than expected in space, the first full Pelican, and it's, you see the imagery here, it's super high resolution. We feel very good about the quality of that satellite. So we are ramping up production. We're building more than a hundred spacecraft here in the United States in the next couple of years. Very exciting.

And we've got several new more launches this year for Pelican. The Nvidia piece of this is really interesting to me because we're coming out of Nvidia's annual GTC developers conference too. And there was a lot of news, but some of the news was space related, maybe being overlooked by some of the more near-term things around chips and chip offerings. But Nvidia's been making these investments and striking these partnerships, including with your company, to build out this AI infrastructure and architecture in space. Jensen Wong even talked about it this week, this idea of data centers from space. How does this evolve and what does it mean for planet? Well, first of all, it means, as I mentioned,

getting answers quicker to our users by putting these chips, these GPUs, upstairs in our satellite so that instead of downloading the image and then do the processing downstairs, we can do it upstairs and get then the answer back within minutes rather than hours. For example, just think of the disaster response after the LA wildfires.

We were helping as quickly as we could, but it still took several hours before we had images. And then AI on top that then did building damage assessment to help relief operators, the fire relief operators there. If we could get that down to minutes, minutes means helping save lives. This is important for our customers. It's important in the security arena as well.

Our defense and intelligence users want faster access to data. There's many use cases where this is of value. I also realized I didn't answer your question about the difference between that and tanager Tanager is a hyperspectral satellite So that has 400 spectral bands and this one can do things like detect methane leaks and co2 leaks and gas facilities No one wants that those companies don't want that because it's just wasted methane We don't want that for global warming.

You add those things together. It's that. So they're serving in different markets, oil and gas and civil government. And that's opening up new markets, whereas Pelican is an extension of our high resolution tasking business that enables us to get rapid optical imagery of places for

customer needs. You've also announced a partnership with Anthropic to use the Claude LLMs, the large language models as well to run that data. So when you talk about getting results down to minutes, what does it take to get there? How far away is that? Oh, that's going to start happening later this year. I mean, we have an incredible capability of that chip on the satellite, as well as AI systems that we're

going to run on the edge. The Anthropic partnership is really exciting as well. And basically, what we're doing with Anthropic is fine-tuning Claude on satellite data. So these large language models or foundational models haven't seen much satellite imagery. They've grabbed stuff on the web. That's mainly cats and dogs in people's pictures, but it's not actually much satellite data. So here we're working with Anthropic to train it on much more satellite data. What will that do?

That will mean that it's more accurate at understanding and analyzing satellite imagery. Dario, the CEO of Anthropic and I were very impressed how out of the gate Claude could analyze satellite imagery and we were convinced that if we did more training like that we would get more even more accurate. Now what does this really mean for the customers because that's what really matters in the end. What it means is they can get answers quicker. Imagine you're a civil government and you say a county that wants to understand land use change over time in your county. Well, this, Claude can do that pretty much natively

if you give it a series of images. So we can make it faster for people to get answers. Also expands the amount of people that could get value out of our data because it just becomes so much easier to analyze satellite data. So customers from our biggest to our smallest could get value out of this. So we think it accelerates our market potential.

In fact, in earnings, we spoke a lot to some of our AI driven solutions, maritime domain awareness, where people want to look at large areas of the ocean and detect ships and identify them and predict where they're going and things like this. AI is enabling that. It was never possible before.

That's driving a lot of our core business. But we also see these sort of partnerships with Anthropic and others that we're working with to leverage foundation models are going to accelerate that even further. And Planet is just in such a unique position because we have the biggest geospatial data set, 3,000 images on every point on the Earth's landmass to train these models. And AI companies are trying to do real world problems and we are trying to, you know, AI helps us extract out that value faster and quicker from our data So it's a match made in heaven and sitting here in San Francisco where we're a few blocks from antropic a few books another way from open AI a few books another way from Google's Gemini team we feel in the middle of it both

literally and Metaphorically I've had a number of conversations now I've had a number of conversations now with folks that believe that Earth observation, geospatial, that we're on the cusp of a GPS moment for this area of intelligence and this specific industry. Do you see it the same way? Does AI actually now propel the promise of that to reality to greater people? 100%.

I mean, planets mission, when we set out, was to image the whole world every day. Everyone knows that bit, but it's also to make it accessible and actionable. And AI just accelerates that time dramatically. I even did a TED talk called Queryable Earth, where we were talking about how we could, you know, potentially have a semantic interface to all this data,

and then just enable anyone to ask basic queries. That felt a fair way off and now I think it feels much much closer and that really drives practical value for our customers. It's doing that today, we're investing a lot in it both for our core vertical markets and in this way in which it could expand the number of users to democratize access to satellite data. Let's also not forget how it can help our biggest users. Even our biggest users get lost in the amount of data that we have sometimes,

and AI enables them to search through it really efficiently and effectively. We also announced a partnership with the Defense Innovation Unit that is looking at using AI on top of our data to search data in large areas for threat detection. It's very, very interesting how even our biggest users can get value out of AI on this. But it definitely democratizes and expands the market.

So yes, I think this is a huge moment for geospatial data. And I think Planet, because we don't just do tasking of specific areas, but do this daily scan and therefore have 3000 images for every point on the landmass of the earth to train all these models sits in a unique place to collaborate with AI models to extract that value. Well, the Trump administration in place

and a focus on public private partnerships potentially, changes to government contracting models and acquisition. What are your expectations from a policy standpoint, what's going to mean for Planet and other commercial space players? Well, look, the new US administration wants to drive to greater efficiency, and they are leaning into commercial capabilities. That plays very much into the kind of services we have provided the government in the past. We can help them to do cheaper satellite missions

and provide data sets that they can gather faster and more quickly and more affordably from planet than doing it themselves. We have done that many times. We've worked with NASA on missions, like the Tanager mission we were talking about earlier. It's actually a collaboration with us and NASA JPL. It was going to cost them way more, like hundreds of millions of dollars per spacecraft to do

that mission. But we, in this partnership, enable that to be done much more affordably. That enables NASA to do those missions faster, more effectively, and deliver incredible value very quickly. We can do the same thing in the Defense Department and the intelligence community in the US. So we work with them. So I actually think there's an opportunity, there's risks as well, but I generally think the opportunities outweigh the risks for planet.

And I'd also note that internationally we're seeing because of the fragmentation of what's happening in the world geopolitically, actually that is driving countries. We are getting more knocks on the door because they need secure access to satellites ever more to ensure that they have a common understanding of what's going on in the world and those threats that may affect their nations. So we are standing ready to help these transitions. So finally, in light of that trade policy tariffs, possibility of retaliatory tariffs,

is that something that could affect Planet if it moves forward in any way or no, you're largely immune because you're manufacturing here in the US? Yeah, we mainly manufacturing in the US and there's no immediate areas of concern. Of course, we don't know exactly what's gonna come like any other company and so we're watching it.

But most of our supply chain is pretty secure at the minute. All right well Marshall of Planet Labs always great to speak with you thank you so much for taking the time. That does it for this episode of Manifest Space. Make sure you never miss a launch by following us wherever you get your podcasts and by watching our coverage on Closing Bell Overtime. I'm Morgan Brennan.