Planet Labs PBC (NYSE:PL) Q3 2024 Earnings Call Transcript

Will Marshall: Yeah, I mean, the two biggest ones that we presently have are the NRO’s EOCL and there’s lots of expansion opportunity there. The relationship is very good and the other is on the civil side with NASA, which is called CSDA, and you can track that and the budgets are very healthy going into that. So those are the two biggest ones that I can name off the cuff. We could try and get back to you if you want further details on that.

Noah Poponak: Okay. Great. On the commercial side, Ashley, you made a comment about working with your partner network kind of like, while you wait for the end market to come back to you or the set of end markets come back to you or I guess maybe the macro to come back. Can you expand on that like what are you actually doing? Why are the partner networks willing to do that? How does that help you once demand comes back?

Ashley Fieglein Johnson: I think it’s more about the fact that the market on the commercial side is still relatively immature especially when you think about the broader market opportunity and they will require solutions that incorporate our data and extract value from the data for them because they’re unlikely, for example, to have geospatial analysts on staff. So really it’s about making it easier for our partners to develop those solutions that will effectively drive the value to the end customer. So that’s effectively what I meant by really leaning into the partner ecosystem to drive that ultimate value to the end customer in the commercial market to really get that market off the ground.

Will Marshall: And if I could just add to keep our sales reps focused on the big deal opportunities, which are primarily right this second in civil government and defense and intelligence. So we see a huge future in commercial. We continue to see that and we continue to do deals. I mentioned a few in my prepared remarks, right, but the biggest ones in defense and intelligence and civil government and so we want to focus our energies on that. So it’s both because they need solutions, that Ashley was saying, but also because we want to focus our attention on the pipe of opportunities and progressing them through to close and that’s more in civil government and defense and intelligence.

Ashley Fieglein Johnson: But there are commercial markets that are more advanced and we will obviously continue to sell into them including agriculture and insurance for example.

Noah Poponak: Okay. Great. Thank you so much. I appreciate it.

Operator: Thank you. Our next question comes from Edison Yu with Deutsche Bank. Please proceed.

Edison Yu: Thanks for taking our questions. Wanted to ask about the cadence of growth. Since in Q4, the implied is 6% to 11%, do you think that represents perhaps the bottom given that some of the headwinds go away in the first quarter, do we see that sort of a bottom in terms of year-over-year growth?

Ashley Fieglein Johnson: I think it’s important to understand that one of the biggest headwinds that we had. Coming into this year was the legacy contract that came to an end. So Q4 will mark the end of that headwind. We’re obviously leaning into a lot of opportunity that we see and especially with large expansions with existing customers leaning into the opportunity in the government sector and the timing of when that business lands. Obviously, will determine ultimately how our growth accelerates going beyond Q4. We remain very optimistic about the ability of our teams to execute in the market that’s there for us just based on the continued pull that we feel and we’ve had challenges this year with timing of bringing that new business in and the longer sales cycles, but still remain very optimistic in our ability to reaccelerate growth. Anything to add there, Will?

Will Marshall: Yeah. I mean I would only say, of course, we’re not satisfied with that sort of growth rate, we want to continue to drive towards higher growth rates, we think that is possible. I’m firmly convinced that that’s possible. And we got a huge pipeline that we’re working on. We please tell you that it’s progressing in stage, we’re moving things along and we are closing some deals, it is still taking a bit too long, and with our job to go close it. You’ve heard how we are focused. Our efforts are really focused right now to improve that execution, focusing on the big deals, trying to automate the small deals, making it easy to work at Planet, just trying to reduce the time to value for customers so that we can land and expand them. We’re very focused on those efforts that the areas are in our control to improve win rates and so on that pipe, but that’s where we’re heads down and focused. We certainly think it’s possible to accelerate growth.

Edison Yu: Understood. Longer term question, in terms of the commercial market, do you have a view on when that might kind of turn around? I understand it’s probably not anytime in the near term, but is this a couple of years, is this five years? Just when do you think that can kind of reaccelerate meaningfully in the future?

Will Marshall: I would say a few things, some of the headwinds we saw are macro driven, like in the agriculture market, which where we saw some headwinds, that is macro-driven, and so, when that ends, but I also think that we are continuing to see deals — I mentioned some of the deals that we did on the commercial side, and as Ashley mentioned, we have a lot of opportunities to make tooling and simplified ability to access that. We launched the Sentinel Hub, a platform that enables low-touch access, so that people have — and tools so that they can start building products and services and we’re working closely with partners that have good solutions for specific vertical markets. I’ll just add finally, that just like in the — I mentioned earlier in the government sector, AI is a strong tailwind, I think the same is true here, it’s going to help a lot, and it’s because AI helps skip a bunch of steps in getting to answers.