Ladies and gentlemen, thank you for joining us, and welcome to the Planet Labs PBC Second Quarter of Fiscal 2026 Earnings Call. [Operator Instructions] I will now hand the conference over to Chris Genualdi, VP of Investor Relations. Please go ahead.

Thanks, operator, and hello, everyone. Welcome to Planet's Second Quarter of Fiscal Year 2026 Earnings Call. I'm here at the New York Stock Exchange joined by Will Marshall and Ashley Johnson, who will provide a recap of our results and discuss our current outlook. We encourage everyone to please reference the earnings press release and earnings update presentation for today's call, which are available on our Investor Relations website. Before we begin, we'd like to remind everyone that we will make forward-looking statements related to future events or our financial outlook. Any forward-looking statements are based on management's current outlook, plans, estimates, expectations and projections. The inclusion of such forward-looking information should not be regarded as a representation by Planet that future plans, estimates or expectations will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions as detailed in our SEC filings which can be found at www.sec.gov. Our actual results or performance may differ materially from those indicated by such forward-looking statements, and we undertake no responsibility to update such forward-looking statements to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. During the call, we will also discuss historic and forward-looking non-GAAP financial measures. We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. We believe that these measures provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making. For more information on the non-GAAP financial measures, please see the reconciliation tables provided in our press release issued earlier this morning, which is available on our website at investors.planet.com. Further, throughout this call, we provide a number of key performance indicators used by management and often used by competitors in our industry. These and other key performance indicators are discussed in more detail in our press release and our earnings update presentation, which are intended to accompany our prepared remarks. At this point, I'd now like to turn the call over to Will Marshall, Planet's CEO, Chairperson and Co-Founder. Over to you, Will.

Thanks, Chris, and hello, everyone. Thanks for joining us today. It's exciting to be back at the New York Stock Exchange. In the 3.5 years since we rang the bell and went public, we've come a long way. We've launched nearly 200 satellites on 6 rockets, including our next-generation Pelican and Tanager satellites. We shifted our data business towards selling solutions, leveraging AI to enable speed and scale. We've leaned into our strength in Agile Aerospace to bring to market our new satellite services offering, and we've more than doubled our revenue run rate while driving bottom line performance to reach adjusted EBITDA and free cash flow profitability milestones. In a world that has changed dramatically with heightened global security challenges and rapid adoption of AI, Planet's capabilities are proving to be more valuable to customers than ever. We're eager to share the latest, so let's dive in. Planet's Q2 financial results reflect the team's excellent execution in 2 key initiatives: delivering integrated global insights through AI-enabled solutions the top our daily scan and rapidly expanding our satellite services business. To briefly summarize the financials, we generated $73.4 million in revenue, representing approximately 20% year-over-year growth, marking another quarter of growth reacceleration. Non-GAAP gross margin was 61% in the quarter, up from 58% a year ago. And adjusted EBITDA profit came in at $6.4 million, representing our third sequential quarter of adjusted EBITDA profitability. We also achieved our second consecutive quarter of positive free cash flow, delivering year-to-date cash flow from operating activities of $85.1 million and year-to-date free cash flow of $54.3 million, representing free cash flow margin of approximately 39%. Our backlog increased to $736.1 million at the end of the quarter, representing a year-over-year increase of 245%, which provides us with excellent visibility to revenue over the…

Thanks, Will. I'll start by echoing Will's remarks and saying that Q2 was another excellent quarter with strong execution by our teams around the globe. Revenue came in at $73.4 million, representing approximately 20% year-over-year growth. Strength was primarily driven by key wins with defense and intelligence customers, higher-than-expected usage by some of our government accounts and steady progress against our new JSAT contract. During the second quarter, revenue from the Defense and Intelligence sector grew approximately 41% year-over-year. The commercial sector grew approximately 6% year-on-year and civil government revenue was down approximately 4% year-on-year, impacted primarily by the end of our contract with Norway for their NICFI program. We're pleased to see the strong uptake of our AI-enabled solutions in the government markets as well as the health of our customer relationships in the agricultural and energy sectors. Switching to our regional revenue breakdown. For the second quarter, revenue grew more than 50% year-over-year in Asia Pacific, more than 30% in EMEA while North America revenue was roughly flat year-on-year and Latin American revenue was down slightly. The strength in Asia Pacific and EMEA was driven by multiple customers in the defense and intelligence sector, while North America reflects the quarter-to-quarter variability and timing of pilot contracts with the U.S. government. As of the end of Q2, our end-of-period customer count was 908 customers, lower on a sequential basis, reflecting our direct sales team's intentional shift to focus on larger customer opportunities and leveraging our self-serve platform to provide access to our data for other customers. As a reminder, Planet Insight Platform customers are not included in our end-of-period customer count. We continue to see strong revenue growth and thus a solid increase in average revenue per customer as a positive indicator that our sales team's focus on landing…

[Operator Instructions] And your first question comes from the line of Colin Canfield with Cantor Fitzgerald.

Maybe just starting out on growth dynamics. If you can kind of talk us through how much of Germany and JSAT is within the backlog that's posted today and how to think about kind of the growth mechanics within the DoD. So just kind of looking at like the contract award around naval maritime domain awareness and maybe pointing to kind of trends you see where Planet Labs can deal directly more with combat and command controls.

Maybe I can start with the latter point. I just actually came back from D.C. and leaders there on some of this -- we have a very strong partnership there and the government gains huge value and that expansion particularly leans into our maritime domain awareness and PlanetScope solutions, and that gives you a hint to the answer to your question, which is they're leaning more into this broad area of monitoring capabilities, whether that's our GMS solution or MDA solution. And you saw the wins, obviously, with the U.S. Navy earlier and our work with the Defense Innovation unit. So overall, we see them leaning into that.

In terms of the amount of those contracts included in backlog, the full amount would be in those numbers and obviously recognized over multiple years.

Got it. And then as we think about kind of not to preview Investor Day targets a little bit, but like multiyear free cash flow dynamics, if you can kind of give us a high level kind of concept of the working capital schedule related to those awards as well as the other international awards that I think we talked about last call around sizing the pipe as being similarly sized, maybe a little bit smaller than Germany and JSAT. So kind of contemplating the working capital payments from those 2 customers as well as the other international opportunities? Is there a right way to think about kind of the conceptual free cash flow ladder from here given those working capital benefits?

Yes. Without getting too specifics, I'd say, generally speaking, what we see from the satellite services contracts is that they are positive for us from a working capital perspective and enables us to build out the fleet without needing to fund those build-outs from our balance sheet. The specifics will obviously vary quarter-to-quarter with a decent amount weighted in the early years of the contract and then later milestones as the contract progresses to more of the managed services component.

Your next question comes from the line of Trevor Walsh with JMP Securities.

Can you guys hear me okay?

Yes.

Terrific. Maybe just a quick one for you, Will. And you've talked about this in different ways before, but could you maybe just give an update on the pipeline of the services type of contracts? And really, I'm trying to kind of understand where are you ring-fenced or guardrailed, if at all, around those? Is it just the ability to get Pelicans out the door to service those contracts? Is it more just finding the right customers that want to kind of do it at a scale that kind of makes it economically viable for you guys? Just maybe just walk through how you're thinking about not just the size of the pipeline, but what you can actually execute there, if that makes sense.

Yes. Look, I mean, we're just seeing a lot of strong demand there. I said last time, we're working with a number of strategic partners that we've often worked with for many years before. The deal in collaboration with Germany into that bucket as well. We've been working with them for many years. We have a trusted relationship. There are a lot of more opportunities we're going after, and it's across the world as well as the global demand. So we're feeling very good and we're leaning into that. I mentioned in my prepared remarks that, that pipeline is maturing very well. So we're very pleased with that second deal being done in satellite services later this year. And I just want to touch on how synergistic that is with the core business as well because these things enable us to build more satellites but then have more capacity and more revisit rates for the whole rest of our customer base. And so it really is a win-win for the prime customer ourselves and the rest of our customer base.

Great. Awesome. I appreciate the color. And maybe one quick follow-up for you, Ashley. Just with the good outperformance on gross margins. And I know you talked through kind of some of the elements there that helped to contribute to that. But how should we just think about that kind of heading into, obviously, not so much even the balance of the year, but just heading into next fiscal around, is that still going to have some variability around that gross margin number just based on kind of what you're doing with JSAT and others? Or can we kind of expect that now kind of hitting that plus 60% watermark to hold in the next, call it, year, 1.5 years?

Yes. I'd call out on Q2, as I said, that upside in gross margin was really driven by strong usage dynamics. And we see upside in the data subscription revenue, obviously, that's very high-margin business and drops to the bottom line. As we look forward on gross margin, as you called out, just the mix of revenue will cause margin to be different. Obviously, we feel very good about the ability to expand gross profit and continue to drive overall profitability on the business. But the margin number will likely vary as we see -- as we progress into the build phase of some of these satellite services contracts, which are lower margin than the earlier years and obviously Scan to be higher margin in the years to come.

And if I can just go back and add one other thing on satellite services, just to sort of -- I think we're competitively very well positioned to win this market because of our ability, our full stack integration ability to build satellites quickly. And just to give you a tiny sense of that, the partnership we did in collaboration with Germany, we already launched one satellite for them. This was already in the planning, but the fact that we were able to get their own eyes that fast within a couple of months is unprecedented and no one else can do that. And so it really puts us in a strong position.

Your next question comes from the line of Mike Latimore from Northland.

All right. Yes. Great. Congrats on the strong results here. I guess, with regard to the usage levels, can you comment a little bit more on that? What do you see is driving that? Are any of your customers sort of, I don't know, discussing early renewals and maybe expansions early or anything like that? Or are they paying over? Just a little more color on the usage dynamic. And is it continuing so far in the third quarter to be strong?

Yes. Thanks for the question, Mike. Generally speaking, when we see an uptick in usage like that, just to be safe given the dynamics around government budgets, we don't assume that, that will continue into subsequent quarters, but instead look at historical pacing and try to adjust accordingly so that our overall assumption would be they stay within their annual budgets. But we have seen some dynamics where our customers have sought early renewals. So there is always the potential that we could see that usage continue. But again, a lot of it depends on what their availability is to doing an early renewal, getting early access to budget, budget dollars, et cetera. So like I said in the prepared remarks, to be safe, we look at historical patterns and assume that in our guidance going forward.

Makes sense. And then on the EOCL deal, it sounds like you've expanded your opportunity there. Is there a new time frame for the renewal beyond October?

No. I mean, but we continue to be very proud of what we're doing there and seeing that expansion come in that one is leaning into our area analytics, like I said before. And so -- and we provide great value. And as I said, I just came from D.C. have meeting a bunch of the leaders there. And this administration is leaning more into commercial solutions and services overall. So we think that Planet is well positioned for that. And so yes, we'll obviously update you more on the EOCL as we know.

Your next question comes from the line of Ryan Koontz from Needham.

Great. On your satellite services deal, maybe just stepping back a bit, can you reflect on what percentage or maybe kind of range of those satellite capacities you have kind of nailed up with these deals for Japan and Germany?

What do you mean what percentage? Do you mean...

I mean these dedicated satellites you're building for them, what percentage of these satellite capacities included in your contracts. Is it 100% capacity?

Yes. Well, we mentioned when we did the deal with Japan that, that was a tiny fraction of our capacity because the majority of our capacity in the rest of world capacity is still continuing to provide to our other customers. So it really is a win-win in that capacity in the area, in that case, mainly around the Asia region and the rest of the world, we get start that is the significant majority. The new partnership in collaboration with Germany start to focus more in the Europe theater, so to speak. And that, I'll just point out, again, it's slightly different from the Japan deal in that we're not -- we are leveraging existing build plans for Pelicans for that rather than new ones. And so -- it has a slightly different structure financially. But that, again, is a small fraction of the overall capacity because it's primarily just in the European context.

Yes. Great. And then on Maritime Domain Awareness, any updates there on your kind of solutions approach? It sounds like a really hot area. What type of partners you're working with? I know you've talked a lot about SynMax in the past. Any updates on your Maritime Domain Awareness solutions from a product perspective?

Yes. No, we're very pleased with the progress there. I mean you saw our expansion with the U.S. Navy. That was a marquee one. And we have mentioned previously that, that was sole sourced because they recognize also that no one else could provide that scan and they're looking across a large area of the South China Sea for indications of ships doing illegal things. And that just simply no one else has that scan of that large area. And so they sold source it to us. And then we've seen it enter into a number of our other partnerships, including one with NATO and others. So we're very excited by the Maritime Domain Awareness. It is our most mature AI-enabled solution, and we have a strong pipeline of others that we're going after. It is also a part of our deal with collaboration with Germany that was in addition to the satellite services component of that is an 8-figure annual contract for data and solutions as well as part of that deal. And that includes Maritime Domain Awareness as one of those solutions. So really, this gets our ability to scan large areas and look for unknown -- unknowns rather than just the known knowns that the intelligence community is really focused on to start with. It's getting their holy grail in a way. And is uniquely positioned because of our daily scan to do that.

[Operator Instructions] Your next question comes from the line of Daniel Hibshman, with Craig Hallum.

This is Daniel Hibshman on for Jeff Van Rhee. And well, Ashley, congrats on another really great quarter. I just wanted to start in on maybe if we could double-click on commercial, really strong quarter there, the 16% sequential growth. And I think the first year-over-year growth for commercial in about 2 years. So a really great quarter for that line and a little bit of an inflection for it back to growth. Maybe we could just -- you said about energy and agriculture driving some strength there, but maybe if you could expand a little bit on what's happening and what you see kind of going forward for that business?

Yes. Energy and agriculture, but also insurance. I mentioned the Swiss Re partnership, which where a particular example that really created high ROI. I think overall, you're right that we're starting to see that turnaround. Remember, when we're building these solutions for D&I, they are often translatable to other areas. We were just talking about Maritime Domain Awareness, think about how that could be useful for the maritime sector, right, not just for navies and coast guards. And our ag solutions for civil government are also relevant for the commercial sector. So we have, I think, tremendous value. One of the amazing things again about our daily scan is that rather than just tasking system is that it opens up these markets, right? That's -- we have that differentiation compared with the rest of the earth observation players that we can serve agriculture insurance, disaster response, so on because they need large area coverage to do that. So I expect that to be driven even more as AI enables solutions in these areas because the traditional challenge has been extracting out the actual insights from our imagery and AI is making that easier and easier. So we're starting with our focus on solutions on defense and intelligence. But I believe there will be translations into the commercial sector, and we're beginning to see that.

Your next question comes from the line of Gregory Pendy from Clear Street.

Just was wondering, can you probably provide us a possible update on where the anthropic relationship is and how that's been developing and what we can possibly expect through the course of the year?

Yes. I mean, firstly, I'm really bullish on AI in general and incredibly important tool for data scan, speed time to value, expanding usability, scaling up capabilities. What we're doing with Anthropic, in particular, is helping to fine-tune the model on our data. Those models are pretty good out of the box. If you show them satellite imagery, these new multimodal visual language models are really good at describing the image, being able to do basic analysis on those images. And that's without fine-tuning. Those models haven't seen much satellite data. So our thinking together as a collaboration is that if we expose it to far more satellite imagery, it will be much more accurate and scalable at that capability too. Remember our partnership with Anthropic is not the only one. We're also doing -- have a partnership with Google on a similar sort of collaboration. And then with NVIDIA on the chips that including the Jetson Orin platforms that we launched on both of the Pelicans that we just launched 2 weeks ago. So both AI upstairs and AI downstairs, we're focused on. And it's just -- it really is -- we're in a unique position, and it's a very, very exciting time. I go as far as to say that really Planet is the only space company that's truly central to AI with space and AI company. So I think this is a fascinating time, and we're excited about those collaborations that we're doing with other companies and our own internal work.

Your next question comes from the line of Caleb Henry with Quilty Space.

Two questions. First was just about the Tanager fleet. I was wondering if there's kind of any more planning around how to monetize that going forward? And if you have any more visibility into what that might look like as a future constellation?

Yes, absolutely. So firstly, again, we're proud of our 1-year anniversary milestone and that important methane detection work that we do in collaboration with Carbon Mapper detecting our 3,000 sources of emissions. It's been fantastic to see the results of that in. We have 2 solid revenue opportunities already for that. One is with Carbon Mapper itself and the other is California as we've announced earlier this year. And we think California is a powerful proof point of how other government, state and local can leverage this technology to monitor emissions and get ahead of those sort of climate goals that they have. We believe there's a strong commercial and defense intelligence application of this that we're only just beginning on to provide those data. And so it's early days still on that. It's a relatively new market, but we are very pleased with the performance of that instrument.

Okay. And then my other question is just about backlog. Forgive me if I missed the answer to this one already, but it's grown really fast. I was wondering if you could share anything about the kind of average length of how revenues are distributed from that backlog if that's more front-loaded or linear over the next couple of years?

Yes, we're happy to talk more about backlog right now, going up 245% year-over-year. We feel very good about that. Ashley, do you have anything to share on the...

Yes. In the prepared remarks as well as in our 10-Q, you can see the breakdown and what percentage is expected to be recognized over 12 months versus the next 24 months. But generally speaking, the large contracts that we've announced this year, both with our partner in Japan as well as in collaboration with Germany were big drivers of that backlog increase. In addition, we announced in July as well as additional contracts on the call today that are 7-figure and higher contracts for some of the solutions that we are bringing to market. And it's the combination of those factors that's really driving backlog increase. Obviously, the larger satellite services contracts are recognized over multiple years. And so we do call out what percentage is in 12 to 24 months. And solutions contracts when we talk about 7 and 8 figures, we're typically referring to the ACV metrics.

Thank you. That's all the time we have for questions today. I will now turn the call back to Will Marshall, CEO and Co-Founder, for closing remarks.

Thanks, everyone, for joining. Look, overall, I would say our business is humming, and I feel very proud of the work of our teams to get us there, both on the core business is humming. You saw those deals with NATO and INDOPACOM. The constellation of satellite services business is humming with our second deal. And as a result, our financials are humming, the cash and backlog in particular, I'm proud of. And this all gives us confidence about solid growth acceleration locked in for FY '27. So we're feeling very good. Thanks for paying attention, and we're really proud of the work of the team to get us there.

And this concludes today's call. Thank you for attending. You may now disconnect.