Thank you for joining us and welcome to the Planet Labs PBC Third Quarter of Fiscal 2026 Earnings Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please raise your hand. If you have dialed in to today's call, please press 9 to raise your hand. 6 to unmute. I will now hand the conference over to Cleo Palmer-Poroner, Director of Investor Relations.

Thanks, operator, and hello, everyone. This is Cleo Palmer-Poroner, Director of Investor Relations at Planet Labs PBC. Welcome to Planet's 2026 earnings call. I'm 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. 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 afternoon, 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, Cleo, and welcome everyone joining us today. It was another strong quarter, so let's dive in. To briefly summarize the financials, we generated $81.3 million in revenue, representing approximately 33% growth year over year, marking another quarter of growth acceleration. Non-GAAP gross margin was 60% in the quarter, and adjusted EBITDA profit came in at $5.6 million, representing our fourth sequential quarter of adjusted EBITDA profitability. Our backlog was $734.5 million at the end of the quarter, representing a year-over-year increase of 216%. Once again, we delivered positive free cash flow for the third quarter in a row, reinforcing our expectation of being free cash flow positive for the full fiscal year. I'm particularly proud to report that with a strong performance in Q3, we are now also expected to be adjusted EBITDA positive in FY 2026. An excellent milestone for the team as we work to strike a balance between profit and growth. Turning to sales highlights, I'll start with the defense and intelligence sector, where Q3 revenue accelerated to over 70% growth year on year, up over 15% quarter over quarter, all driven by strong performance in our data subscription and solutions businesses, as well as our satellite services business. As previously announced, we were awarded a prime contract under the LUNO b program by the National Geospatial Intelligence Agency for a $12.8 million initial award with partner Cimmax. The award is for advanced analytics for maritime operations and reconnaissance. Under this program, we will provide the NGA with AI-enabled maritime domain awareness solutions, which include vessel detections and monitoring over key areas of interest in Asia Pacific. We're honored to have been selected and excited to be expanding this relationship. The National Reconnaissance Office renewed its baseline contract for PlanetScope board area monitoring data under the…

Start by echoing Will's remarks and saying that Q3 was another outstanding quarter with strong execution by our teams around the globe. I was particularly proud of our finance and operations teams who added to our list of accomplishments by raising $400 million of convertible debt in September and hosting a highly successful investment Day at the New York Stock Exchange in October, where we provided an in-depth update on momentum in the business, our go-to-market focus. Turning to the quarter's results, as Will highlighted, revenue came in at $81.3 million, representing approximately 33% year-over-year growth. The outperformance was driven primarily by our defense and intelligence and civil government customers, as well as continued progress against our JSAT satellite services contract. We saw upside during the quarter from the Luno B win with the NGA, as well as contribution from some one-time factors, which supported our better-than-expected results. During the third quarter, revenue from the Defense and Intelligence sector grew significantly year on year, driven largely by wins with the NGA, the US Navy, and international defense and intelligence customers. The commercial sector was down in part due to seasonality in the sector in addition to our shift in focus towards larger accounts. Civil government revenue was up modestly with strength from international customers in the sector, offset primarily by the end of our contract with Norway for their NICFI program. We're pleased to see strong uptake of our AI-enabled solutions in the government markets, contributing particularly to defense and intelligence wins in the quarter. Turning to our regional revenue breakdown, growth was distributed across the globe in the third quarter, with approximate revenue growth of 38% year over year in both Asia Pacific and EMEA, 30% in North America, and 7% in Latin America. As of the end of…

Thank you. We will now begin the question and answer session. Please limit yourself to one question and one follow-up. A reminder that if you would like to ask a question, please raise your hand. If you have dialed in to today's call, please press 9 to raise your hand. 6 to unmute. Please standby as we compile the Q and A roster. And our first question comes from the line of Ryan Koontz with Needham. Your line is open. Please go ahead.

Great. Thanks for the question. Terrific quarter, guys. Just outstanding, in the October quarter. I wanted to ask about the guide a little bit here. You know, in terms of the revenue and the margin guide down, is the revenue down on one-time benefits on usage in the past quarter and then the gross margin guide down, is that mostly tied to some of your large international programs you're ramping?

Great. Thanks, Ryan. Appreciate the question. In terms of Q3 to Q4 trends, a couple of factors to keep in mind. So I did highlight that there are some one-time items in Q3. Those can be related to renewals of certain contracts that have archived components. You know, anytime we have any kind of bonus payments or deliverables, that can factor into a quarter that obviously wouldn't continue into the next. And then I mentioned there was some upside that was driven by the timing of landing new business. That does continue into Q4, and you see that rolling through. That's balanced against, we mentioned that both the NASA contract and the EOCL contracts were downsized. So we have to factor that revenue drop into the Q4 guidance. So that is fully factored into the guidance that we've given, and that results in that quarter-to-quarter flatness just like down that we guided to. In terms of margin, we're both investing in the opportunity that we see as we've highlighted, investing into execution against our satellite services contracts, which continue to perform well. And that also causes some margin compression quarter to quarter. So those are the factors it really comes down to mix of business. And the fact that we are investing because we see a lot of opportunity in front of us.

Great. Actually, thanks. And just a clarification, on those partner fees, are those front-loaded in some way before revenue hits? Or, you know, how should we think about how those kinda behave in the future?

No. They align to revenue.

Got it. Perfect. And maybe a quick question on the acquisition of Bedrock. I mean, which sectors are these guys focused on, and what sort of data does Bedrock integrate?

Yeah. Good question. Bedrock is fantastic. It's a small team, but they're very, very talented at the intersection of remote sensing, AI, and national security. Very, very good team there. What we see them doing, I mean, we already worked with them on that with actual customers as we're building out our GMS solution, and it's been working really well. And we thought bringing them in-house would help us to scale and speed that execution faster and make it more efficient to the margins point we were just discussing.

Got it. And what sorts of data do they deal with? Is it all primarily your data, or do they bring other data sources together?

Well, they have done multiple different datasets in the past, public and primarily, though, security datasets on contract with the government. So it's a variety of things. And it's a sort of versatile approach that they've been doing using embeddings, a technology we've been also working with in our AI modeling work. And so it's a kind of very generic scalable solution that can work across different data streams.

Great. Thanks, Will. Thanks, Ashley.

No worries.

Thank you.

Your next question comes from the line of Edison Yu with Deutsche Bank. Your line is open. Please go ahead.

Hi. Thank you, and congrats on the very impressive quarter. Want to ask about Project SunCatcher. There's been a lot of talk, a lot of excitement about, you know, data centers in space. Can you give us a sense on how you think about just feasibility and viability of this, and how does one kind of measure that going forward?

Yeah. Well, thanks on the quarter. We agree. It's really great. And, yeah, SunCatcher is really exciting. I do think it's a very viable project long term. It's, you know, we have spoken in the space sector for some decades about how as space infrastructure costs come down, it eventually makes more sense to put compute into space and other energy-intensive infrastructure. And your point about the feasibility of scaling it, well, that is hard. Right? And there's only a couple of companies in the world that have done scaled constellations, basically, SpaceX, and therefore, knowing how to put that get costs down is something that really is an incredible advantage we have. It's a competitive position in going into this. It's one of the reasons, obviously, we're very proud Google selected us. That's obviously one of the reasons for that. I see a huge market opportunity here. I do in the long run. This is just an R&D at this phase. This is an R&D contract. We're gonna do these couple of demo satellites. That would test out some of the critical components of that, like, shedding heat from the TPUs into outer space and doing the formation flying, so that building towards a cluster system approach, which is the architecture that the Google and Planet teams have been designing towards. And we think the most efficient approach to this. So yeah, so in summary, it's early days. But an exciting potential project for Planet. Really exciting.

Just one follow-up. I think you mentioned in the prepared remarks that you're using the same bus as Owl. Are there any special kind of design changes you need to make on the bus? Anything you do differently? Just from a, I guess, engineering perspective given it's a TPU?

Yeah. I mean, there's a few things, but not much. On the scale of things. For example, we've been expanding the number of solar panels a bit and a few things like that. But on the scale of the hard complex things of the avionics and all those systems, how they work together, it's primarily the same at this stage. And that's why I mean, you know, there's two big reasons we did this project at the tactical level. One was how aligned it was to our OWL project for the point on the same path. And the second is that there's an option on a big program in the future. You know, to the earlier, I mean, I think this is a big market. So let's take advantage of the fact that we're one of the couple of companies that can do I'll just add as well that, you know, Planet, we've been saying, is a space and AI company. And I think, you know, we have the credibility to say that we're the first one in a way to prove that. We've obviously got scaled satellites stuff. So we had space company. We've got that scale use of AI based on our daily scan, and we've already been putting NVIDIA chips in space on satellites, including the ones that were launched just twelve days ago. And so we are already familiar with building compute in space. So it's a natural extension of where we're going to think about AI and space together in this way, and so Planet is incredibly well positioned that, we believe.

Thank you very much.

Thank you.

Your next question comes from the line of Mike Latimore at Northland. Your line is open. Please go ahead.

Excellent. Thanks. Yeah. Excellent results. I guess, on the quarter, I think you said JSAT was one of the drivers of maybe the upside. Can you talk a little bit about is JSAT sort of ahead of schedule and maybe just generally how is the JSAT in Germany deals proceeding relative to maybe your internal timelines?

Yeah. You know, obviously, this was the first time we had engaged in this type of contract. And so while we have obviously agreed milestones with the end customer, we gave ourselves some flexibility for, you know, when certain milestones might get hit for the year and, you know, obviously, that flexibility translates also into how we guide. And so that team continuing to execute and, you know, meet and hopefully exceed the customer's expectations also results in upside in our financial forecast.

I would just add. Yeah. I mean, overall, things are going very well with those programs. And, you know, we're very focused on committed commitments to those customers. And, yeah, things are going great. And the pipeline of opportunities for both of yours is going really well as well. So, yeah, we're very happy with that side of the business too.

Very good. Ashley, did you say that you expect the fourth quarter implied growth rate to be sort of continue into fiscal 2027, is that what you said?

I did. Yeah. So as we're, you know, as we're looking at the shape of the business, and kind of the drivers of growth, you know, Q4 is pretty indicative of how we see things going forward. You know, I've mentioned the change in the government contracts. You know, those go into full effect in Q4. We've obviously continued to land new business and expand relationships both with the US government and international government. And we expect, you know, across all of the areas of business, to continue to focus on, you know, converting the pipeline that we have. So we're very comfortable with that as kind of a target for growth going into fiscal 2027 and, you know, also as we think about margins next year, you know, that's a pretty good benchmark to use as a reference.

And we said at the beginning of the year, we would accelerate revenue growth rate, and here we are, and we can it's nice to be in a position where we can see that continuing into next year.

And then the only qualifier I'd add to that is reference back to the Investor Day materials where, obviously, you know, we're thinking about FY '27 very actively right now, and we continue to uphold a commitment to targeting EBITDA breakeven or better as well as maintaining our annual cash flow positivity.

Okay. Excellent. Congrats.

Thank you.

Your next question comes from the line of Colin Canfield with Cantor Fitzgerald. Your line is open. Please go ahead. Colin, are you there?

You may be muted, Colin. You may have to unmute yourself.

Thank you. Apologies. Zoom mechanics. So just going back to the pipeline that you put together for the Investor Day, call it 20 contracts, average contract value of $170 million. That tracks pretty closely to kind of the F-35 friends and family. So as we think of kind of drawing comparisons between that portfolio of opportunities and the companies that we're looking at, how do you kind of think about the sizing and magnitude of those awards? I mean, is it fair to assume that like we could see 20% of that pipeline convert and maybe the magnitude of that pipeline looking similar as a factor of the JSAT and Germany deal such that maybe it's $100 million awards upfront? Like, how do we think about kind of just the timing and magnitude of that pipeline?

Well, yeah. I mean, firstly, I mean, I think Planet is extremely well positioned for this market. I mean, our techno I mean, we're the only ones that have built hundreds of earth imaging satellites. We did 600 so far. So these countries, when they want sovereign satellites, especially at least in optical, with obvious first call. And, yeah, we feel well positioned against those 20 or so opportunities. We're focused on half a dozen or so that are a little bit more mature, and those ones are doing very, very well. When we really go in, I think we've got a higher probability than that. But, you know, time will tell exactly how this turns out. We are committed to really executing on this business side and being a reliable partner with these countries, building off a long-term relationship we've had with them in most cases. And so, yeah, overall, feeling very good about where this can. Did that answer your question? I'm not sure of the subtleties in your question.

Yeah. No worries. I think timing probably might be a little bit too aggressive in terms of answering the question. So good to hear that you're well positioned and looking forward to seeing those awards. Maybe pivoting to putting some numbers around SunCatcher. So if we think of the eighty eighty-one cluster concept, let's call it, you know, $50 to $300,000 per satellite, a million per cluster, is it fair to assume that that has some value capture tail on top of that such that it can be above, call it, an initial award of $81 million? And then just a high-level question, as we think of Google's R&D budget of, call it, $30 billion a year, and the concept that a lot of these AI, you know, people that are basically chasing data centers and the like, are now pivoting that R&D spend from the development of the systems to the scaling of systems and that scaling of systems likely going through space infrastructure versus terrestrial? So maybe $81 million, is that fair? Or is it above that? And how do we think of kind of that longer-term scaling opportunity into that Google R&D wallet?

Got it. Yeah. Well, firstly, what we're on contract to do with Google is a couple of demo satellites. It's really just the testing early phase. So we're not getting into the scale cluster. You're referring to the paper that they put out where they were talking about 81 satellites in the cluster. That's more to do with the architecture that we're building long term. I think you're right to point out that this would, you know, this would take significant R&D dollars, and these companies are gonna be willing to put dollars behind it. Because if it has the cost advantages, which we believe it will, and, you know, the experiments will need to show that, we will, this is a scaled operation. It would require thousands of satellites and many other things. It's just but at this point, we're very early on. And I think it's important to think about, you know, Google's choosing us in this process is a huge compliment to us, of course. But one of the reasons is that we're one of the few companies that has done this at scale, as I said in prior remarks. And so even though it's at an R&D scale at this stage, we think we're one of the few players that can really build that out. It is not trivial to put up huge numbers of satellites in a cost-efficient way. There's literally only a couple of companies in the world that have done that. And to boot, Planet, as I was mentioning in my earlier remarks, really, the first proven space and AI company. We've already put fast processes in space. We already do a huge amount of AI work. And so our collaboration and a bunch of that AI work with Google, we've got a partnership with the Gemini team. And we've got a long trusted record working with them. So, you know, I think Planet is well positioned. Again, this is an early option, early contract on R&D, but it's an option on a big long-term future. The plan is well positioned to be taking part on. Does that answer your question?

Yep. I think so. So thank you for the color as always. Appreciate it.

No problem.

Thank you. Your next comes from the line of Jeff Van Rhee with Craig Hallum Capital. Your line is open. Please go ahead.

Great. Thanks. Thanks for taking the question. I have my congratulations. Just a few left for me. Will, on the compute front, you know, as it relates to, obviously, congrats on what you're doing with Google, and you've been ahead of that embedding compute into your platform already. Just talk about the demand pull. You're pushing it, but to what degree are people ready to consume it, demanding it, having use cases already pegged out and driving value from it?

You mean demanding compute in space?

Yep.

Well, look. I mean, this is really talking about putting compute in space because it ultimately has launch costs and satellite infrastructure costs come down. There's a point at which it becomes more economically feasible to put those entire data centers in space. So it's not about any particular compute demand. It's about the entire compute demand in principle. But that, you know, depends on us getting that cost threshold. You know, I think it's the position of Google and Planet that we are just, you know, a few years away from that, and therefore, it's the right time starting to invest in the R&D. There are some types of compute demand that more lend themselves to space than others. But, generally, we're talking about, you know, the entirety of that business. And I would just say, I think, you know, I think, certainly to Sundar, he, you know, he was talking about this last week and talking about how in ten years' time, he thinks most compute will be going up to space. So that's the way I perceive it too. So that's the way I think we should think about it. Does that make sense? As opposed to any particular piece of the compute sector?

Yeah. Understood. That's fair. Two last, if I could then. One, as it relates to Pelican, congrats, you know, real quick First Light imagery. Is there a number in the sky or a particular point in time this year? Just talk maybe to whatever degree you can share how that revenue layers in if it just tends to be very gradual, they're gonna be lumps in that. So that would be the first question. And then my last would just be, on EOCL. Obviously, the cutbacks in the first place shocked everybody. Just wondering if you have any more clarity on what might replace what they've taken away if there's any clarity there. So those two questions. Appreciate it.

Yeah. Absolutely. Let me take the second one first. I mean, I just came back from DC, and I can tell you there is a lot of interest in this administration in leveraging new tech to drive real mission value. And in the DOD. And we sit firmly in that area. And so we are seeing them leaning in. So despite what you're seeing there with the EOCL, it's growing. But more importantly, they are leaning in heavily. In fact, I mean, we see this, of course, in the numbers already. You know, the Lunar award, the navy expansion, and so on. They're already leaning into this stuff, but I think we're gonna see it in a big way coming. So I think the outlook is really very positive. What's the first part of the question again?

First part of the question is, you know, as we continue to launch Pelicans, how do we see revenue flowing in? And I see it more gradual. Build any of that. Yeah. As we continue to bring on contracts, and, obviously, if we'd land bigger contracts, we talked about we have a framework contract in place already for Pelican or for high res in general with USG under EOCL. There's opportunities to expand that. There's opportunities, obviously, to expand with many of our existing customers and new customers. So nothing at this point that would cause me to say there's gonna be irregularities in it. It's, yeah, I think it's roughly linear as we scale it, and they're scaling as the sky starts ramping down, and then we're building towards what we've said before, ultimately, a 30 satellite fleet with 30 revisits a day, thirty minutes latency, and all this. And, yeah, we're already seeing customers very excited about leveraging that data, and I'm glad you saw that first line as impressive for the team to bring that out the next day. I think the first light came out. So it's really fast how quickly they're able to process all of this and get those satellites up to it's almost routinized at this point that we can launch these satellites and get them going. It's really cool.

Absolutely. Congrats on the quarter, guys.

Thank you. Thank you.

Thank you.

And a quick reminder to keep it to one question and one follow-up, please. Our next question comes from the line of Christine Lee Weg with Morgan Stanley. Your line is open. Please go ahead.

Great. Good afternoon, everyone. Thanks for taking my question. I guess, look, you've delivered four consecutive quarters of positive adjusted EBITDA. And, you know, the loss for Q4 is really driven by incremental investments, which are all good problems. I was wondering, can you parse out how much these investments are for Q4, their duration into fiscal year 2027? And if we take out these investments, would fiscal year 2027 be adjusted EBITDA profitable?

Thanks, Christine. Appreciate the question. So first of all, at the Investor Day, I talked about the fact that for fiscal 2027, we are targeting EBITDA profitability as one of the metrics that as we're doing our fiscal 2027 planning, we are keeping in mind. So breakeven or better. So I'd urge you to look back at some of those materials where we talked about just general framing for thinking about that year. For Q4 specifically, it's, you know, kind of a step up as we're ramping up some new contracts. And then scaling the revenue alongside of it. As that revenue continues to scale, that gives us the opportunity to sustain these investments but get to that adjusted EBITDA breakeven or better goal. So, really, the key for us is balancing the opportunity for growth that we see with, you know, sustaining profitability across the business. Hope that helps.

Yes. Super helpful. And if I could do a follow on, you know, the AXA contract that you mentioned earlier, if you think about the opportunity set for that kind of insurance type business, when you sign on incremental customers, how scalable is your capability set there regarding you sign on new customers and have incrementally higher profit? Like, how do we think about that versus incremental investments you would have to make if you sign on customers similar to what they're already doing?

Yeah. I and highly scalable. And, I mean, the direct margins of this sort of data business is extremely high. I mean, in the nineties percent. What we did with AXA is really cool because just think about it very practically. They're trying to make claims processing more efficient. Let's take natural disasters like floods or fires. Have quicker assessments of losses and damages. And instead of people having to send individuals out to check, they can, in many cases, just check that with the satellite imagery automatically from their computer. I mean, this is a huge efficiency saving across a big business. That's why AXA is not just bought some data for their own use. They're also putting it on their platform exactly to your point about scaling it up to other insurance companies in their network, in their partner network on their platform. So they're providing the platform, these other. And, yeah, the incremental margins on that are really great. And, you know, I've seen lots of potential customers like that in the future. We think the commercial business is gonna continue to grow really well in the long term, and I mean, things like insurance and finance, we believe are massive markets for us to go over. After. So hope that answers the questions.

Thank you. Very, very excited about that.

Great. Thank you.

Thank you. Our next question comes from the line of Trevor Walsh with Citizens JMP. Your line is open. Please go ahead.

Great. Can you guys hear me okay?

Yep.

Cool. Thanks for taking the questions. I guess around the Luno b contract, and the upside in the quarter, for Will or for Ashley jump ball. But can you maybe explain or go in a little bit more detail as to how that just seems like a very from kind of signing the contracting quarter and then having it immediately kinda lead to recognize or whatever. It seems like a nicer just better, I guess, execution. And is it is that more is that actually what happened, or was there some details around the POC being set up beforehand and just kinda getting off with that customer right away? Specific to NGA? Or I guess I'm trying to understand there's gonna be more, yeah, more kind of potential with that with some of these DNI you kinda sign the deal and then leads to kind of immediate revenue impact. In that actual quarter. Thanks.

Yeah. I mean, look. We're ready to go on these things. We've already got the data. We've already got the analytics. So they can just turn it on. And the great thing I mean, sometimes the government can be slow initially, but when they go, it can just be straight away. And so we just turn it on, and that's exactly what happened in this case. You know? It's great to read that we prime that, and it's, you know, a really substantive award. And it's in an area we've talked about that NGA are leaning into, broad area, looking with AI on top, and it is an area that Planet believes we are we believe we're really well positioned to do take. And, you know, that's that's for maritime domain one. It's a bit like our navy program and the navy has subsequently in the extensions been doing that as a sole source of war because we're the only ones that can do it. That also speeds things up. Faster. But, yeah, the main ramp here was just because we were ready to go. And as soon as they would they turn us on, we were on.

Terrific. Great. Thanks a lot. Really helpful. Color. May actually, a follow-up maybe for you. Just circling back to JSAT, and the Pelican revenues, understand that the JSAT's not included in your ACV metrics as far as the recurring piece of revenue. But can you just help us understand or remind us exactly how when as you build the 10 or so satellites specific to JSAT, and that revenue flows in, is that gonna create kind of a one-time nonrecurring type of bump in a particular quarter, which we won't really see in that ACV metric because you're not including in there. And so in other words, you'd have a big revenue bump, but you still have that's not but you have 97, you know, percent kind of similar to this quarter. Type of a metric. So not a good way to necessarily kinda track that, if that makes sense. Can you maybe just help us understand the dynamics there?

Yeah. Happy to. And I mean, basically, you can see this in our when we talk about RPOs and backlog and next twelve-month revenue. It is more gradual. There might be some lumpiness quarter to quarter, but it's minimal. It's not something that's gonna, you know, cause things to swing wildly. But so I would say the majority of our revenue still is coming from our traditional ACV business, and it is a very good indicator that we use both on, you know, internal managing that growth versus profitability balance, also looking at the health of the business, looking at renewal rates and that recurring revenue. And then the nice thing about contracts like JSAT and other constellation services contracts that were either, you know, engaged or pursuing. Is it actually aligns the revenue quite nicely to the lifetime of the satellite. So while there is an upfront component of the revenue, there is also, you know, a managed component of the revenue that spreads the revenue over the lifetime of the satellite. So it's a mix. It's a little hard to overlay it directly to our traditional ACV metrics, which is why we exclude it. But it is still very predictable revenue, and, obviously, enables us to accelerate the build-out of that 30 Polycom fleet that we talked about, which we think gives us some a great competitive advantage and competitive offering.

Great. Awesome. Super helpful. Thanks both for the questions.

Great. Thanks, Trevor.

Your next question comes from the line of Greg Pendy with Clear Street. Your line is open. Please go ahead. A reminder to unmute yourself, Greg.

Hey, guys. Thanks for taking my question and congrats on the quarter. Just a real quick one. I think you mentioned there was some weakness in agriculture on the commercial side and some seasonality. Is that just the overall pressure we're hearing about in the agricultural sector? And could you just provide a little bit of color on that?

Yeah. Sure. Actually, it's not weakness. It's seasonality, and it's just the timing of deliverables and usage around those contracts. As I've mentioned, we get these annual commit contracts, but some of them are recognized ratably, and some of them are recognized based on usage depending on the nature of the product the customer's purchased. And so in this case, you see a lot of usage in the harvesting or preharvesting periods. For operational efficiencies, and then you see that drop off as you get later into the harvest harvesting cycles. And so that's just seasonality that we would expect year to year. Actually, we're pleased with the stability that we're seeing in the agricultural business, and I think that's largely driven by the shift in that we've made over the last couple of years to move out of more of the marketing arms of the agriculture sector and really be embedded into the operations of our customers. So I'm actually very pleased with the progress we're seeing in the ag and see that as a potential growth vector for us in the future.

Yeah. If I just have one more thing, it's that we have figured out how to align our business model with this. And now we believe we're in a stronger position to help serve that market. But you're right that the overall segment has been having challenges.

That's very helpful. Thanks a lot.

Thank you. Our next question comes from the line of Chris Quilty with Quilty Space. Please. Your line is open. Please go ahead.

Thanks, guys. Following on the earlier talk of the pipeline, you know, $170 million deals, and the fact that you're doing the factory expansion in Berlin. What do you expect you'll need in terms of production rate? And is that, you know, where are you at today, and where do you expect to scale in the next year? And is that sufficient capacity with those two facilities, you know, should the opportunity show?

Yeah. Well, obviously, we are building those facilities both of our expansion here and what we're doing in Berlin exactly to build towards the demand that we expect to see. So, yeah, we're obviously trying to do that. As I think we said at the time of announcing the Berlin manufacturing side, that will roughly double our capacity to build the Pelican satellites. And we're excited to say we're making some really good headway there. Found the place, and now our next year, we'll be going into operations there. So excited by that. But yeah, we're obviously trying to match that demand. We are seeing very strong demand for deals that include building new satellites and for deals that involve leveraging existing satellites both. Remember that the mix between those two affects whether or we have to launch new satellite. But on both sides, we're seeing good traction. And I think what's great about this, again, is that it will pace the CapEx of our deploying that 30 satellite fleet or more. You know? I think that we're in a great position with so much demand there that will help build out our full fleet.

And I would just add to that, Chris, that the team does a really good job of making these different fleets very synergistic. So just as a reminder, the Tanager leverages the same as the Pelican. We highlighted that we're leveraging the for the SunCatcher program, and that enables us to also be very efficient in how we utilize space both for the R&D front and the manufacturing side. So it enables us to run a pretty efficient operation through and through.

Gotcha. But, again, Will said he doubled you'll double production to no number given, but I was just asking for a number.

Yeah. I don't wanna specify that right now just because of competitive reasons.

No. Fair enough. And, you know, again, on the Tanager, any update there? I mean, are you finding a killer app market or application with the hyperspectral? What are your thoughts on scaling with the technology?

Yes. Well, Tanager just got to its first year of being in orbit. Had great traction so far. You know, one of the things we're really pleased about is our California partnership, a powerful proof point that has shown that they are able to find methane leaks across California, stop them, have real incremental benefits for both those businesses as well as for the environment. And we're committed under that program to do the first four of those challenges. Yeah. So it's obviously, as we've said before, that's a very new kind of capability. Hyperspectral imagery. But so far, the results have been really impressive. The signal-to-noise ratio on that satellite, the quality of the data is producing that is and it's been beyond what we our expectations, and the users are starting to report good results. And not just in the civil government side, we have early interest in the defense intelligence sector as well.

Great. And, congrats on the Pelican turnaround on First Light. I think was it a record?

Yeah. It was certainly yeah. I think that might have been our record. I mean, the team just keeps on getting better and better. I mean, just to put it in perspective, when I started in the space sector, you know, a couple decades ago, this is a really complex process planning for launch. And now it's and commissioning and all of that process. And our team does this in their sleep at this point. It's incredible how well we do these operations, and I'm incredibly proud of how quickly they and efficiently they build us out lives. Get them to launch vehicle, launch them, commission them, contact them, commission them, and then provide those capabilities to customers rapidly and, yeah, continue to get continue to be impressed by that.

Gotcha. And we've got the is it the next two satellites going up will be next-gen 30 centimeter and can you just remind us what is the fundamental difference in the, you know, driver for the improvement? Is it altitude, you know, taking satellites down below four twenty, or is it some change to the payload itself that you've learned from the first iteration?

Yeah. It's both. It's upgraded telescopes on those future generations, those v twos, as well as we are flying them lower as well. So, yeah, it's a bit of both. So some of those improvements can happen existing satellites, and some of those improvements have to wait for the latest satellites. But we will be doing those next year. I won't go into more details, but it's basically, it'd be exciting to have them up to.

Very cool. Looking forward to it.

Thanks.

That is 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, operator. Yeah. So I think in summary, Q3 was another excellent quarter for the company. The business is humming both across the data and solutions business, which we see rapidly scaling. We saw the major expansion, the LunarView award, and more. Those efforts in AI are paying off. And the satellite services, we have strong execution and a strong and maturing pipeline. It was great to see us all of this leading to us beating our revenue guidance again in Q3 and raising our forecast for the full year. Given our robust backlog and recent wins, we're excited to share that we believe that we're well positioned to continue the end-of-year growth rate into next year. So and since last quarter closed, we launched those 38 satellites and brought in Bedrock and announced SunCatcher, with Google. Which is a new and exciting R&D initiative at this scale, but a lot of promise for the future. So the team is just executing at pace. I'm incredibly proud of everyone for the phenomenal execution this quarter and excited for what lies ahead. Thanks again for joining everyone.

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