Planet Labs PBC (NYSE:PL) Q3 2023 Earnings Call Transcript

Operator: Thank you, Mr. Sullivan. The next question is from the line of Jeff Van Rhee with Craig-Hallum. You may proceed.

Jeff Van Rhee: Great. Thanks for taking my questions. Ashley, Will, great job. Great job to the team, love the gross margins. I’m sure you’re pretty satisfied with a lot of what you’re looking at here. On the pipeline, I have just two quick questions on the pipeline. Can you quantitatively talk, I’d love some sense of the overall growth in pipeline year-over-year? And if you can quantitatively –qualitatively just what’s really standing out in terms of the pipeline build?

Will Marshall: Well, I’m feeling really good about our pipeline overall. Both on the commercial and the government side, in fact, I’ve never quite seen so many big deals, to be honest. I think we counted over 40 deals greater than $1 million in our pipeline, which is pretty amazing. I’ve never seen quite that many. So, of course, these are big deals, so they can take some time. So it may not have an overnight but overall, the demand is incredibly strong, so we’re feeling good about it.

Jeff Van Rhee: How are eight figure deal is going to be?

Will Marshall: We have them a lot – they’re happening. So, what we do Ashley – how would you answer that?

Ashley Fieglein Johnson: Yes, how would I answer that, I would say that, the good news is we see them. Obviously, the challenge with eight-figure deals as they tend to be longer procurement cycles and they can cause variability quarter-to-quarter on the bookings. But the fact that we have the – see them in our pipeline and are closing them is really fantastic for the business. And quite often we see these as multi-year procurements which is also very helpful to us, to know that these are relationships that are signed up at the outset for the long-term.

Jeff Van Rhee: Yes. Makes sense. With the partners and then just one other question on the partner front, I mean, obviously AWS, Microsoft, Accenture, I mean a lot of heavy weight names right there. And I guess you’ve already had meaningful partner influences. From a quantitative way, how are you going to measure it? I mean, are you already measuring partner influence – partner led partner influence deals? Do you have any numbers you can share?

Ashley Fieglein Johnson: Yes. And in fact quite a large number of our deals are partner influenced, fewer of them are partner-led. But in a lot of cases we’re bringing a partner and particularly what we call our solution partners that are building that kind of last mile interface that specific to the customer use case or the customer geography or both. So we do have a robust partner ecosystem. As we think about these larger partnerships, we’re making fewer bets with those partners that view this as a really strategic opportunity. We’re early days in them. So we’ll be able to report on the progress of these relationships over time. But what’s exciting as you see, these big names at very high level thinking of this as a very strategic opportunity which signals that we’re not alone in seeing these tailwinds due to sustainability and digitization of the economy. Anything you want to add there, Will?

Will Marshall: No, I think it’s great.

Jeff Van Rhee: Yes. Good. Great. Congrats again. Thanks for taking the questions.

Will Marshall: That’s –

Ashley Fieglein Johnson: Thank you.

Will Marshall: Thank you.

Operator: Thank you, Mr. Van Rhee. The next question is from the line of Greg Mesniaeff with WestPark Capital. You may proceed.

Greg Mesniaeff: Yes, thank you. Question on your sales and marketing expense levels. Can you give us a little bit of color and guidance on what to expect going forward? I know you’ve had a pretty significant ramp in your sales force. And given the fact that you’re focusing your incremental wins on partnerships. How sales force intensive are those wins and how do you see the ramp in sales people continuing as you win more deals? Do you see that slowing down? Do you see it accelerating? I know you didn’t give any guidance on sales and marketing, but your number was up, non-GAAP sales and marketing was up pretty significantly year-over-year at just over $16 million for this quarter. Thanks.

Ashley Fieglein Johnson: Sure. Thanks for the question. And yes, as you point out, we’ve been investing significantly in our sales infrastructure. We talked about before we went public that a large reason for raising the capital was wanting to have more feet on the street, because there were a number of geographies where we weren’t even vertically aligned in our sales organization, because we just didn’t have enough AEs on the ground to do so. So we’ve been adding on that front, and with that comes a support infrastructure that you need to make a lot successful. So everything from our sales ops teams to our SDRs and sales engineers. And we’ve also been investing in customer success, making sure when we sign these customers, we’re getting them the value as early in that on ramping process as possible.

The goal now is to make that scalable and there are multiple ways to scale the sales infrastructure. One of them is through the continued automation that we’re building into the product to make it easier for customers to on-ramp and to make it lighter touch for the customer success teams. So they can cover a broader customer base. The other way is through partnership programs. So right now, I would say, most – if not, well the vast majority of our partners still have a Planet wrap involved in the sales process. Ultimately as the products become more advanced again on the customer onboarding et cetera, we can be lighter touch with our rep involvement in the sales process. So we’ve been scaling rapidly over the last year, we’ll obviously be focusing on making sure we get operational scale over the coming years.