Planet Reports Financial Results for Second Quarter of Fiscal 2024

Capital Expenditures as a Percentage of Revenue: The Company defines capital expenditures as purchases of property and equipment plus capitalized internally developed software development costs, which are included in our statements of cash flows from investing activities. The Company defines Capital Expenditures as a Percentage of Revenue as the total amount of capital expenditures divided by total revenue in the reported period. Capital Expenditures as a Percentage of Revenue is a performance measure that we use to evaluate the appropriate level of capital expenditures needed to support demand for the Company’s data services and related revenue, and to provide a comparable view of the Company’s performance relative to other earth observation companies, which may invest significantly greater amounts in their satellites to deliver their data to customers. The Company uses an agile space systems strategy, which means we invest in a larger number of significantly lower cost satellites and software infrastructure to automate the management of the satellites and to deliver the Company’s data to clients. As a result of the Company’s strategy and business model, the Company’s capital expenditures may be more similar to software companies with large data center infrastructure costs. Therefore, the Company believes it is important to look at the level of capital expenditure investments relative to revenue when evaluating the Company’s performance relative to other earth observation companies or to other software and data companies with significant data center infrastructure investment requirements. The Company believes Capital Expenditures as a Percentage of Revenue is a useful metric for investors because it provides visibility to the level of capital expenditures required to operate the Company and the Company’s relative capital efficiency.

Forward-looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally relate to future events or Planet's future financial or operating performance. In some cases, you can identify forward looking statements because they contain words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “target,” “anticipate,” “intend,” “develop,” “evolve,” “plan,” “seek,” “may,” “will,” “could,” “can,” “should,” “would,” “believes,” “predicts,” “potential,” “strategy,” “opportunity,” “aim,” “conviction,” “continue,” “positioned” or the negative of these words or other similar terms or expressions that concern Planet's expectations, strategy, priorities, plans or intentions. Forward-looking statements in this release include, but are not limited to, statements regarding Planet’s financial guidance and outlook, Planet’s path to profitability, Planet’s expectations regarding the acquisition of Sinergise, Planet’s expectations regarding future product performance, and Planet’s expectations regarding market and customer trends. Planet’s expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected, including risks related to the macroeconomic environment and risks regarding our ability to forecast our performance due to our limited operating history. The forward-looking statements contained in this release are also subject to other risks and uncertainties, including those more fully described in Planet's filings with the Securities and Exchange Commission (“SEC”), including our Annual Report on Form 10-K and any subsequent filings with the SEC the Company may make. All forward-looking statements reflect the Company’s beliefs and assumptions only as of the date of this press release. The Company undertakes no obligation to update forward-looking statements to reflect future events or circumstances, except as may be required by law. The Company’s results for the quarter ended July 31, 2023 are not necessarily indicative of its operating results for any future periods.

PLANET
CONSOLIDATED BALANCE SHEETS (unaudited)

(In thousands)	July 31, 2023			January 31, 2023
Assets
Current assets
Cash and cash equivalents	$	118,808		$	181,892
Short-term investments		248,979			226,868
Accounts receivable, net		40,349			38,952
Prepaid expenses and other current assets		19,725			27,943
Total current assets		427,861			475,655
Property and equipment, net		120,193			108,091
Capitalized internal-use software, net		12,992			11,417
Goodwill		112,750			112,748
Intangible assets, net		14,867			14,831
Restricted cash and cash equivalents, non-current		5,707			5,657
Operating lease right-of-use assets		23,485			20,403
Other non-current assets		2,562			3,921
Total assets	$	720,417		$	752,723
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	3,825		$	6,900
Accrued and other current liabilities		37,841			46,022
Deferred revenue		56,575			51,900
Liability from early exercise of stock options		10,757			12,550
Operating lease liabilities, current		7,261			4,885
Total current liabilities		116,259			122,257
Deferred revenue		18,186			2,882
Deferred hosting costs		9,605			8,679
Public and private placement warrant liabilities		9,499			16,670
Operating lease liabilities, non-current		19,139			17,145
Contingent consideration		5,926			7,499
Other non-current liabilities		2,235			1,487
Total liabilities		180,849			176,619
Commitments and contingencies
Stockholders’ equity
Common stock		27			27
Additional paid-in capital		1,549,920			1,513,102
Accumulated other comprehensive income		1,336			2,271
Accumulated deficit		(1,011,715	)		(939,296	)
Total stockholders’ equity		539,568			576,104
Total liabilities and stockholders’ equity	$	720,417		$	752,723

PLANET
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

	Three Months Ended July 31,						Six Months Ended July 31,
(In thousands, except share and per share amounts)		2023			2022			2023			2022
Revenue	$	53,761		$	48,450		$	106,464		$	88,577
Cost of revenue		27,469			24,977			52,025			48,605
Gross profit		26,292			23,473			54,439			39,972
Operating expenses
Research and development		26,741			26,737			54,927			51,487
Sales and marketing		22,310			19,483			45,435			38,338
General and administrative		20,521			19,893			42,049			40,501
Total operating expenses		69,572			66,113			142,411			130,326
Loss from operations		(43,280	)		(42,640	)		(87,972	)		(90,354	)
Interest income		3,802			1,311			8,308			1,423
Change in fair value of warrant liabilities		1,226			2,112			7,171			5,388
Other income (expense), net		859			(158	)		963			122
Total other income (expense), net		5,887			3,265			16,442			6,933
Loss before provision for income taxes		(37,393	)		(39,375	)		(71,530	)		(83,421	)
Provision for income taxes		582			154			889			468
Net loss	$	(37,975	)	$	(39,529	)	$	(72,419	)	$	(83,889	)
Basic and diluted net loss per share attributable to common stockholders	$	(0.14	)	$	(0.15	)	$	(0.26	)	$	(0.32	)
Basic and diluted weighted-average common shares outstanding used in computing net loss per share attributable to common stockholders		275,053,198			266,212,489			273,723,006			265,168,341

PLANET
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (unaudited)

	Three Months Ended July 31,						Six Months Ended July 31,
(In thousands)		2023			2022			2023			2022
Net loss	$	(37,975	)	$	(39,529	)	$	(72,419	)	$	(83,889	)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment		169			142			124			317
Change in fair value of available-for-sale securities		(515	)		303			(1,059	)		303
Other comprehensive income (loss), net of tax		(346	)		445			(935	)		620
Comprehensive loss	$	(38,321	)	$	(39,084	)	$	(73,354	)	$	(83,269	)

PLANET
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

	Six Months Ended July 31,
(In thousands)		2023			2022
Operating activities
Net loss	$	(72,419	)	$	(83,889	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization		22,408			23,213
Stock-based compensation, net of capitalized cost		32,013			40,403
Change in fair value of warrant liabilities		(7,171	)		(5,388	)
Change in fair value of contingent consideration		(527	)		—
Other		(2,747	)		485
Changes in operating assets and liabilities
Accounts receivable		(1,588	)		18,595
Prepaid expenses and other assets		5,152			(4,432	)
Accounts payable, accrued and other liabilities		(17,164	)		(1,866	)
Deferred revenue		19,957			(15,165	)
Deferred hosting costs		1,082			(760	)
Net cash used in operating activities		(21,004	)		(28,804	)
Investing activities
Purchases of property and equipment		(21,709	)		(6,509	)
Capitalized internal-use software		(1,998	)		(1,271	)
Maturities of available-for-sale securities		106,762			—
Sales of available-for-sale securities		990			—
Purchases of available-for-sale securities		(127,703	)		(195,113	)
Other		(644	)		(293	)
Net cash used in investing activities		(44,302	)		(203,186	)
Financing activities
Proceeds from the exercise of common stock options		6,358			6,418
Class A common stock withheld to satisfy employee tax withholding obligations		(4,753	)		(2,164	)
Payment of transaction costs related to the Business Combination		—			(326	)
Other		(15	)		122
Net cash provided by financing activities		1,590			4,050
Effect of exchange rate changes on cash and cash equivalents, and restricted cash and cash equivalents		155			(1,118	)
Net decrease in cash and cash equivalents, and restricted cash and cash equivalents		(63,561	)		(229,058	)
Cash and cash equivalents, and restricted cash and cash equivalents at the beginning of the period		188,076			496,814
Cash and cash equivalents, and restricted cash and cash equivalents at the end of the period	$	124,515		$	267,756

PLANET
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA (unaudited)

	Three Months Ended July 31,						Six Months Ended July 31,
(in thousands)		2023			2022			2023			2022
Net loss	$	(37,975	)	$	(39,529	)	$	(72,419	)	$	(83,889	)
Interest income		(3,802	)		(1,311	)		(8,308	)		(1,423	)
Income tax provision		582			154			889			468
Depreciation and amortization		12,160			11,588			22,408			23,213
Change in fair value of warrant liabilities		(1,226	)		(2,112	)		(7,171	)		(5,388	)
Stock-based compensation		16,657			20,581			32,013			40,403
Other (income) expense, net		(859	)		158			(963	)		(122	)
Adjusted EBITDA	$	(14,463	)	$	(10,471	)	$	(33,551	)	$	(26,738	)

PLANET
RECONCILIATION OF U.S. GAAP TO NON-GAAP FINANCIAL MEASURES (unaudited)

	Three Months Ended July 31,						Six Months Ended July 31,
(In thousands)		2023			2022			2023			2022
Reconciliation of cost of revenue:
GAAP cost of revenue	$	27,469		$	24,977		$	52,025		$	48,605
Less: Stock-based compensation		1,063			1,357			1,968			2,676
Less: Amortization of acquired intangible assets		439			366			878			797
Non-GAAP cost of revenue	$	25,967		$	23,254		$	49,179		$	45,132

Reconciliation of gross profit:
GAAP gross profit	$	26,292		$	23,473		$	54,439		$	39,972
Add: Stock-based compensation		1,063			1,357			1,968			2,676
Add: Amortization of acquired intangible assets		439			366			878			797
Non-GAAP gross profit	$	27,794		$	25,196		$	57,285		$	43,445
GAAP gross margin		49	%		48	%		51	%		45	%
Non-GAAP gross margin		52	%		52	%		54	%		49	%

Reconciliation of operating expenses:
GAAP research and development	$	26,741		$	26,737		$	54,927		$	51,487
Less: Stock-based compensation		6,929			8,503			12,899			16,732
Less: Amortization of acquired intangible assets		—			—			—			—
Non-GAAP research and development	$	19,812		$	18,234		$	42,028		$	34,755
GAAP sales and marketing	$	22,310		$	19,483		$	45,435		$	38,338
Less: Stock-based compensation		3,121			3,757			6,201			7,394
Less: Amortization of acquired intangible assets		202			153			403			305
Non-GAAP sales and marketing	$	18,987		$	15,573		$	38,831		$	30,639
GAAP general and administrative	$	20,521		$	19,893		$	42,049		$	40,501
Less: Stock-based compensation		5,544			6,964			10,945			13,601
Less: Amortization of acquired intangible assets		80			80			161			160
Non-GAAP general and administrative	$	14,897		$	12,849		$	30,943		$	26,740

Reconciliation of loss from operations
GAAP loss from operations	$	(43,280	)	$	(42,640	)	$	(87,972	)	$	(90,354	)
Add: Stock-based compensation		16,657			20,581			32,013			40,403
Add: Amortization of acquired intangible assets		721			599			1,442			1,262
Non-GAAP loss from operations	$	(25,902	)	$	(21,460	)	$	(54,517	)	$	(48,689	)

PLANET
RECONCILIATION OF U.S. GAAP TO NON-GAAP FINANCIAL MEASURES (unaudited)

	Three Months Ended July 31,						Six Months Ended July 31,
(In thousands, except share and per share amounts)		2023			2022			2023			2022
Reconciliation of net loss
GAAP net loss	$	(37,975	)	$	(39,529	)	$	(72,419	)	$	(83,889	)
Add: Stock-based compensation		16,657			20,581			32,013			40,403
Add: Amortization of acquired intangible assets		721			599			1,442			1,262
Income tax effect of non-GAAP adjustments		—			—			—			—
Non-GAAP net loss	$	(20,597	)	$	(18,349	)	$	(38,964	)	$	(42,224	)

Reconciliation of net loss per share, diluted
GAAP net loss	$	(37,975	)	$	(39,529	)	$	(72,419	)	$	(83,889	)
Non-GAAP net loss	$	(20,597	)	$	(18,349	)	$	(38,964	)	$	(42,224	)

GAAP net loss per share, basic and diluted (1)	$	(0.14	)	$	(0.15	)	$	(0.26	)	$	(0.32	)
Add: Stock-based compensation		0.06			0.08			0.12			0.15
Add: Amortization of acquired intangible assets		—			—			0.01			—
Income tax effect of non-GAAP adjustments		—			—			—			—
Non-GAAP net loss per share, diluted (2) (3)	$	(0.07	)	$	(0.07	)	$	(0.14	)	$	(0.16	)

Weighted-average shares used in computing GAAP net loss per share, basic and diluted (1)		275,053,198			266,212,489			273,723,006			265,168,341
Weighted-average shares used in computing Non-GAAP net loss per share, diluted (2)		275,053,198			266,212,489			273,723,006			265,168,341

(1) Basic and diluted GAAP net loss per share was the same for each period presented as the inclusion of all potential Class A common stock and Class B common stock outstanding would have been anti-dilutive.
(2) Non-GAAP net loss per share, diluted is calculated using weighted-average shares, adjusted for dilutive potential shares assumed outstanding during the period. No adjustment was made to weighted-average shares for each period presented as the inclusion of all potential Class A common stock and Class B common stock outstanding would have been anti-dilutive.
(3) Totals may not sum due to rounding. Figures are calculated based upon the respective underlying non-rounded data.

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