Planet Labs PBC — Form 10-Q Summary
Reporting period: Three and nine months ended October 31, 2022; filed December 14, 2022. Planet provides satellite imagery, data, and analytics through subscription and usage-based contracts. Amounts below are in U.S. dollars; financial statement figures are unaudited.
Financial performance and position
| Metric | Q3 2022 | Q3 2021 | Nine months 2022 | Nine months 2021 |
|---|---|---|---|---|
| Revenue | $49.7 million | $31.7 million | $138.3 million | $94.1 million |
| Gross profit / margin | $25.0 million / 50% | $10.9 million / 34% | $64.9 million / 47% | $34.3 million / 36% |
| Operating loss | $42.6 million | $28.3 million | $133.0 million | $70.8 million |
| Net loss | $40.2 million | $41.5 million | $124.1 million | $91.2 million |
| Adjusted EBITDA, non-GAAP | $(12.4) million | $(12.3) million | $(39.1) million | $(24.4) million |
Q3 revenue increased 57% year over year, driven by $12.3 million in expansion of existing customer contracts and $5.7 million from customer growth. Nine-month revenue rose 47%, reflecting $32.5 million in existing-customer expansion and $11.7 million from customer growth. Customer count reached 864, up 16% year over year; nine-month net dollar retention was 122.6%, versus 98.0%.
Operating expenses grew 72% in Q3 and 88% for the nine-month period, led by higher research and development, sales and marketing, and general and administrative costs. Stock-based compensation was $19.4 million in Q3 and $59.8 million for nine months, versus $4.6 million and $12.6 million, respectively, in 2021. Q3 net loss improved slightly despite a higher operating loss, partly because the prior-year quarter included a $10.2 million fair-value loss and interest expense.
Cash flow and liquidity: Nine-month operating cash use was $59.1 million, compared with $21.0 million in 2021. Investing cash use was $237.5 million, largely reflecting $239.3 million of purchases of available-for-sale securities; financing provided $6.4 million. Cash, cash equivalents, and restricted cash fell by $292.0 million to $204.8 million. At October 31, Planet also held $226.2 million of short-term investments, for $425.3 million of cash and short-term investments available for current operations. Current assets were $480.6 million and current liabilities $109.9 million.
Planet had no debt outstanding. Total liabilities were $153.1 million and stockholders’ equity was $594.2 million. Nine-month capital expenditures were $10.7 million, or 7.8% of revenue, versus 9.3% a year earlier. No separate cash-flow forecast or formal financial guidance is provided in the filing.
Outlook, risks, and notable items
- Management expects operating losses and negative operating cash flows to continue as it invests in its platform, products, sales, and market expansion. It expects cost of revenue, operating expenses, and capital expenditures to increase; it also anticipates near-term increases in research and development, sales and marketing, and public-company costs.
- Management believes cash on hand and anticipated operating cash flows will cover obligations due over the next 12 months. It cautions that additional financing could be needed for acquisitions, accelerated satellite manufacturing, competitive pressures, or regulatory requirements; financing may not be available on favorable terms.
- Remaining performance obligations were $130.8 million, including $47.7 million of deferred revenue and $83.1 million of contracted revenue to be invoiced later. Planet expects to recognize approximately 81% within 12 months and 96% within 24 months; these amounts are not equivalent to guaranteed future revenue.
- Q3 revenue includes a $2.1 million out-of-period adjustment. Google is both a customer and a hosting-services provider: Planet recognized $3.3 million of Google-related revenue in Q3 and $9.7 million for nine months. Hosting commitments to Google totaled $160.0 million as of October 31, 2022, extending through January 2028.
- Other commitments include $17.6 million of operating lease liabilities and $1.1 million of future satellite launch purchase commitments. The filing reports no material pending legal proceedings.
- Key risks include customer retention and expansion, seasonality, satellite failure and launch-provider availability, regulatory approvals, cybersecurity, competition, and economic conditions. The filing added a risk disclosure that financial-market volatility could impair its available-for-sale investment portfolio. Two customers represented 23% of Q3 revenue; two represented 18% and 10% of nine-month revenue.
- Management reported disclosure controls were effective at the reasonable-assurance level and no material change in internal control over financial reporting during the quarter. The company is an emerging growth company and uses the extended transition period for new accounting standards.
Most important facts for investors to verify
- Whether strong reported revenue growth and retention continue, and how much growth comes from customer expansion versus new customers.
- Whether gross-margin gains can offset rapid operating-expense growth and elevated stock-based compensation.
- Operating cash burn and investment liquidity, including fair-value and credit risks in the $226.2 million investment portfolio.
- Revenue quality: the $2.1 million out-of-period adjustment, customer concentration, and the durability of Google-related revenue and hosting arrangements.
- Whether the $130.8 million of remaining performance obligations converts to recognized revenue on the expected schedule, considering exclusions for options and certain cancellable or unfunded contracts.
- Execution and funding needs for satellite operations and product expansion, alongside regulatory, launch-provider, and other disclosed risks.