Planet Labs PBC

Notes to Unaudited Condensed Consolidated Financial Statements

(1)Organization

Planet Labs PBC (“Planet,” or the “Company”) was founded to design, construct, and launch constellations of satellites with the intent of providing high cadence geospatial data delivered to customers via an online platform. The Company’s mission is to use space to help life on Earth, by imaging the world every day and making global change visible, accessible, and actionable. The Company is headquartered in San Francisco, California, with operations throughout the United States (“U.S.”), Canada, Asia and Europe.

On July 7, 2021, Planet Labs Inc. (“Former Planet”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) with dMY Technology Group, Inc. IV (“dMY IV”), a special purpose acquisition company (“SPAC”) incorporated in Delaware on December 15, 2020, Photon Merger Sub, Inc., a Delaware corporation and a direct wholly owned subsidiary of dMY IV (“First Merger Sub”), and Photon Merger Sub Two, LLC, a Delaware limited liability company and a direct wholly owned subsidiary of dMY IV (“Second Merger Sub”). Pursuant to the Merger Agreement, upon the favorable vote of dMY IV’s stockholders on December 3, 2021, on December 7, 2021, First Merger Sub merged with and into Former Planet (the “Surviving Corporation”), with Former Planet surviving the merger as a wholly owned subsidiary of dMY IV (the “First Merger”), and pursuant to Former Planet’s election immediately following the First Merger and as part of the same overall transaction as the First Merger, the Surviving Corporation merged with and into dMY IV, with dMY IV surviving the merger (the “Business Combination”). Following the completion of the Business Combination, dMY IV was renamed Planet Labs PBC.

Former Planet was incorporated in the state of Delaware on December 28, 2010. Former Planet was originally incorporated as Cosmogia Inc., and the name was subsequently changed to Planet Labs Inc. on June 24, 2013.

(2)Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying condensed consolidated financial statements are unaudited; however, in the opinion of management they include all normal and recurring adjustments necessary for a fair presentation of the Company’s unaudited condensed consolidated financial statements for the periods presented. Operating results for the three and nine months ended October 31, 2024 are not necessarily indicative of the results expected for the fiscal year ending January 31, 2025 or any other future period.

The unaudited condensed consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and include the accounts of Planet Labs PBC and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. The Company’s fiscal year end is January 31.

Certain notes or other information that are normally required by U.S. GAAP have been condensed or omitted if they substantially duplicate the disclosures contained in the Company’s annual audited consolidated financial statements. Accordingly, the unaudited condensed consolidated financial statements should be read in connection with the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2024 (the “2024 Form 10-K”).

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The significant estimates and assumptions that affect the Company’s unaudited condensed consolidated financial statements include, but are not limited to, the useful lives of property and equipment, capitalized internal-use software and intangible assets, the Company’s incremental borrowing rate for operating leases, allowances for credit losses for available-for-sale debt securities and accounts receivable, estimates related to revenue recognition, including the assessment of performance obligations within a contract and the determination of standalone selling price (“SSP”) for each performance obligation, assumptions used to measure stock-based compensation, the fair value of private placement warrant liabilities, the fair value of assets acquired and liabilities assumed from business combinations, the fair value of contingent consideration for business combinations, the impairment of long-lived assets and goodwill, the recognition, measurement and valuation of current and deferred income taxes and uncertain tax positions, and contingencies.

These estimates and assumptions are based on management’s best estimates and judgment. Management regularly evaluates its estimates and assumptions using historical experience and other factors; however, due to the inherent uncertainties in making estimates, actual results could differ from those estimates and such differences may be material.

Due to current geopolitical events, including the war in Ukraine and the Israel-Hamas conflict, there is ongoing uncertainty and disruption in the global economy and financial markets. The Company is not aware of any specific event or circumstance that would require an update to its estimates or assumptions or a revision of the carrying value of its assets or liabilities. These estimates and assumptions may change in the future, as new events occur, and additional information is obtained.

Segments

Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company has determined that it operates inone operating segment andone reportable segment, as the CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance.

See Note 3, Revenue, for revenue by geographic region. See Note 6, Balance Sheet Components, for long-lived assets by geographic region.

Concentration of Credit Risk and Other Risks and Uncertainties

Financial instruments that potentially subject the Company to a concentration of credit risk consist principally of cash, cash equivalents, short-term investments and accounts receivable. By their nature, all such financial instruments involve risks, including the credit risk of nonperformance by counterparties. The Company’s cash, cash equivalents and short-term investments are deposited with or held by financial institutions in the U.S., Canada, Germany, the Netherlands, Slovenia, Austria, and Singapore. The Company generally does not require collateral to support the obligations of the counterparties and deposits at financial institutions may, at times, be in excess of federal or national insured limits or deposit-guarantee limits in each of the respective countries. The Company has not experienced material losses on its deposits. The maximum amount of loss at October 31, 2024 that the Company would incur if parties to cash, cash equivalents, and short-term investments failed completely to perform according to the terms of the contracts is $239.8 million.

Accounts receivable are typically unsecured and are derived from revenue earned from customers across various countries. One customer accounted for 10% of accounts receivable as of October 31, 2024. As of January 31, 2024, no customer accounted for 10% or more of accounts receivable.

For the three and nine months ended October 31, 2024, one customer accounted for 19% of revenue. For the three and nine months ended October 31, 2023, one customer accounted for 21% and 22% of revenue, respectively.

The Company’s offerings depend on continued and new approvals from the Federal Communications Commission (“FCC”), National Oceanic and Atmospheric Administration (“NOAA”), and other U.S. and international regulatory agencies for the Company to continue its operations. There can be no assurance that the Company’s operations will continue to receive the necessary approvals or that such operations will be supported by the U.S. government or other governments. If the Company was denied such approvals, if such approvals were delayed, or if the U.S. government’s or other governments’ policies change, these events may have a material adverse impact on the Company’s financial position and results of operations.

Significant Accounting Policies

The Company’s significant accounting policies are included in Note 2 of its Consolidated Financial Statements included in the 2024 Form 10-K.

Recent Pronouncements Not Yet Adopted

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (“Topic 280”): Improvements to Reportable Segment Disclosures, which clarifies that entities with a single reportable segment are subject to both new and existing segment reporting requirements under ASC 280, and modifies certain segment disclosure requirements. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (“Topic 740”): Improvements to Income Tax Disclosures, to enhance the transparency and decision usefulness of income tax disclosures, primarily through changes around the effective tax rate reconciliation and income taxes paid information. The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact on its consolidated financial statements and related disclosures.

(3)Revenue

Deferred Revenue

During the nine months ended October 31, 2024 and 2023, the Company recognized revenue of $61.6 million and $45.7 million, respectively, that had been included in deferred revenue as of January 31, 2024 and 2023, respectively.

Remaining Performance Obligations

The Company often enters into multi-year imagery licensing arrangements with its customers, whereby the Company generally invoices the amount for the first year of the contract at signing followed by subsequent annual invoices. Remaining performance obligations represent the amount of contracted future revenue that has not yet been recognized, which includes both deferred revenue and non-cancelable contracted revenue that will be invoiced and recognized in revenue in future periods. The Company’s remaining performance obligations were $145.9 million as of October 31, 2024, which consists of both deferred revenue of $77.7 million and non-cancelable contracted revenue that will be invoiced in future periods of $68.2 million. The Company expects to recognize approximately 82% of the remaining performance obligation over the next 12 months, approximately 98% of the remaining obligation over the next 24 months, and the remainder thereafter.

Remaining performance obligations do not include unexercised contract options, written orders where funding has not been appropriated and contracts which provide the customer with a right to terminate for convenience without incurring a substantive termination penalty.

Disaggregation of Revenue

The following table disaggregates revenue by major geographic region:

No single country other than the U.S. accounted for more than 10% of revenue for the three and nine months ended October 31, 2024 and 2023.

Costs to Obtain and Fulfill a Contract

Commissions paid to the Company’s direct sales force are considered incremental costs of obtaining a contract with a customer. Accordingly, commissions are capitalized when incurred and amortized to sales and marketing expense over the period of benefit from the underlying contracts. The period of benefit from the underlying contract is consistent with the timing of transfer to the performance obligations to which the capitalized costs relate, and is generally consistent with the contract term.

During the three and nine months ended October 31, 2024, the Company capitalized $0.7 million and $1.4 million of deferred commission expenditures to be amortized in future periods, respectively. The Company’s amortization of deferred commission expenditures was $0.8 million and $2.1 million for the three and nine month periods ended October 31, 2024, respectively.

During the three and nine months ended October 31, 2023, the Company capitalized $0.6 million and $1.1 million of deferred commission expenditures to be amortized in future periods, respectively. The Company’s amortization of deferred commission expenditures was $0.4 million and $1.7 million for the three and nine month periods ended October 31, 2023, respectively.

As of October 31, 2024 and January 31, 2024, deferred commissions consisted of the following:

The current portion of deferred commissions are included in prepaid expenses and other current assets on the condensed consolidated balance sheets. The non-current portion of deferred commissions are included in other non-current assets on the condensed consolidated balance sheets.

(4)Fair Value of Financial Assets and Liabilities

Assets and liabilities recognized or disclosed at fair value in the financial statements are categorized based upon the level of judgment associated with the inputs used to measure their respective fair values.

The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis for recognition or disclosure purposes as of October 31, 2024 and January 31, 2024 by level within the fair value hierarchy. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and considers factors specific to the asset or liability.

The fair value of cash held in banks and accrued and other current liabilities approximate the stated carrying value due to the short time to maturity and are excluded from the tables above.

Money Market Funds

The fair value of the Company’s money market funds is based on quoted active market prices for the funds and is determined using the market approach. There were no realized or unrealized gains or losses on money market funds for the three and nine months ended October 31, 2024 and 2023.

Short-term Investments

The fair value of the Company’s short-term investments classified within Level 1 are valued using quoted active market prices for the securities. The fair value of the Company’s short-term investments classified within Level 2 are valued using third-party pricing services. The pricing services utilize industry standard valuation models. Inputs utilized include market pricing based on real-time trade data for the same or similar securities and other significant inputs derived from or corroborated by observable market data.

Public and Private Placement Warrants

The Public Warrants are classified within Level 1 as they are publicly traded and had an observable market price in an active market.

The Private Placement Warrants (excluding the Private Placement Vesting Warrants) were valued based on a Black-Scholes option pricing model. Due to the market condition vesting requirements, the fair value of the Private Placement Vesting Warrants were valued using a model based on multiple stock price paths developed through the use of a Monte Carlo simulation that incorporates into the valuation the possibility that the market condition targets may not be satisfied. The Private Placement Warrants were collectively classified as a Level 3 measurement within the fair value hierarchy because these valuation models involve the use of unobservable inputs relating to the Company’s estimate of its expected stock volatility. The expected volatility input utilized for the fair value measurements of the Private Placement Warrants as of October 31, 2024 and January 31, 2024 was 70%.

Contingent Consideration for Acquisitions

The Company has recorded contingent consideration liabilities in connection with its acquisitions of Salo Sciences and Sinergise (see Note 5, Acquisitions, for the acquisition of Sinergise. See Note 6 of the Company’s Consolidated Financial Statements included in the 2024 Form 10-K). The Company measures the fair value of the contingent consideration liabilities based on significant inputs not observable in the market, which caused them to be classified as a Level 3 measurement within the fair value hierarchy.

The fair value of the contingent consideration liability for the Salo Sciences technical milestone payments is determined based on the present value of the probability-weighted payments for each of the two milestones. The significant unobservable inputs used in the fair value measurement are management’s estimate of the probability to achieve the technical milestone criteria and the discount rate. The Company determined that both of the technical milestone criteria were achieved during the nine months ended October 31, 2024.

The fair value of the contingent consideration liability for the Salo Sciences customer contract earnout payments is determined using a Monte Carlo simulation. The fair value estimate involves a simulation of future customer contract cash collections during thefour-year performance period, the probability of entering into contracts with the named customers and discounting the probability-weighed earnout payments to present value. The significant unobservable inputs used in the fair value measurement are management’s estimate of obtaining the customer contracts, including probabilities, timing and contract values, and management’s estimate of the discount rate.

The fair value of the contingent consideration liability for the Sinergise customer consent escrow is determined based on the present value of the probability-weighted payments based on the likelihood of the customer consent being achieved. The significant unobservable input used in the fair value measurement is management’s estimate of the likelihood of the customer consent being achieved.

Level 3 Disclosures

The following is a roll-forward of Level 3 liabilities measured at fair value for the three and nine months ended October 31, 2024 and 2023:

• The current portion of the contingent consideration liabilities balances of $4.4 million and $7.0 million as of October 31, 2024 and January 31, 2024, respectively, are included within accrued and other current liabilities. Changes in fair value of the contingent consideration liability for the Salo Sciences technical milestone payments are included within research and development expenses. Changes in fair value of the Salo Sciences contingent consideration liability for customer contract earnout payments are included within sales and marketing expenses. Changes in fair value of the contingent consideration liability for the Sinergise acquisition customer consent escrow payments are included within general and administrative expenses. During the three months ended October 31, 2024, evidence of the Sinergise acquisition customer consent was received and the $7.5 million in escrow was released to Sinergise.

Other

The Company measures certain non-financial assets including property and equipment, and other intangible assets at fair value on a non-recurring basis in periods after initial measurement in circumstances when the fair value of such assets are impaired below their recorded cost. As of October 31, 2024 and January 31, 2024, there were no material non-financial assets recorded at fair value.

(5)Acquisition

Sinergise

On March 26, 2023, the Company entered into an asset purchase agreement with Holding Sinergise d.o.o., a company existing under the laws of Slovenia (“Sinergise”), and its subsidiaries and certain shareholders of Sinergise, to acquire the cloud-based geo-spatial analysis products, platforms and solutions business from Sinergise. On August 4, 2023, the Company completed the acquisition.

The acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations. The acquisition date fair value of the consideration transferred was approximately $41.1 million, and consisted of the following:

The common stock issued consisted of 6,745,438 shares of the Company’s Class A common stock. The fair value of the Class A common stock was determined based on the closing market price on the date of the acquisition.

In April 2024, the Company paid $1.1 million of additional consideration in connection with the finalization of the net working capital adjustment relating to the Company’s acquisition of Sinergise. The additional amount was accounted for as a measurement period adjustment and resulted in a $1.1 million addition of goodwill during the nine months ended October 31, 2024.

Pursuant to the terms of the asset purchase agreement, the Company placed $5.0 million of cash consideration into an escrow account to secure potential indemnification obligations and any customary post-closing adjustments for working capital and indebtedness (the “Indemnity Escrow”). The amount held in the escrow account is to be released to Sinergise upon thetwo-year anniversary of the acquisition close date. The Company recorded a liability of $5.0 million for the Indemnity Escrow.

Pursuant to the terms of the asset purchase agreement, the Company placed an additional $7.5 million of cash consideration into an escrow account related to obtaining customer consent for a contract acquired in connection with the acquisition (the “Customer Consent Escrow”). The amount held in the escrow account is to be released to Sinergise upon the Company receiving evidence of the customer consent. If evidence of the customer consent is not received on or prior to the two year anniversary of the acquisition close date, the amount held in the Customer Consent Escrow is to be released to the Company. Additionally, the amount held in the Customer Consent Escrow is to be released to the Company if the customer contract is terminated or suspended on or prior to thetwo year anniversary of the acquisition close date. The Company determined that the customer consent contingency represents contingent consideration. The fair value of the contingent consideration liability as of the acquisition date was determined to be $5.8 million. Refer to Note 4 for information relating to the valuation of the Customer Consent Escrow contingent consideration.

Cash held in escrow related to the acquisition is recorded within restricted cash and cash equivalents in the Company’s condensed consolidated balance sheets.

The following table summarizes the fair value of the assets acquired and liabilities assumed as of the date of acquisition, after considering the measurement period adjustment described above:

The identifiable intangible assets were measured at fair value. The developed technology was valued using the royalty method under the income approach. The customer relationships were valued using the excess earnings method under the income approach. The developed technology was assigned an estimated useful life of 8 years and the customer relationships were assigned an estimated useful life of 9 years.

The excess of purchase consideration over the fair value of other assets acquired and liabilities assumed was recorded as goodwill. The goodwill primarily represents the value expected from the synergies created through the operational enhancement benefits resulting from the integration of Sinergise into the Company and the combination of Sinergise’s products and solutions with the Company’s existing products. Approximately $0.7 million of the goodwill is deductible for tax purposes.

The financial results of Sinergise are included in the condensed consolidated financial statements from the date of acquisition. Pro forma results of operations have not been presented as the effect of this acquisition was not material to the condensed consolidated financial statements.

Acquisition-related costs associated with the transaction were $0.2 million and $2.1 million for the three and nine months ended October 31, 2023, respectively. These costs were recorded within selling, general and administrative expenses.

Certain employees of Sinergise, which became employees of the Company, were paid cash transaction bonuses totaling $2.3 million in connection with the closing of the acquisition. The transaction bonuses were accounted for as a transaction separate from the business combination. Accordingly, $2.3 million of the consideration paid by the Company was allocated to the transaction bonuses and was recorded within the Company’s condensed consolidated statements of operations as summarized in the table below:

(6)Balance Sheet Components

Cash and Cash Equivalents, and Restricted Cash and Cash Equivalents

Cash and cash equivalents include interest-bearing bank deposits, money market funds and other highly liquid investments with maturities of 90 days or less at the date of purchase.

The Company had restricted cash and cash equivalents balances of $11.0 million and $18.3 million as of October 31, 2024 and January 31, 2024, respectively.

The restricted cash and cash equivalents balances as of October 31, 2024 primarily consisted of $5.0 million of consideration placed in escrow in connection with the Sinergise acquisition and $4.0 million of collateral money market investments for the Company’s headquarters and other domestic office operating leases. The restricted cash and cash equivalents balances as of January 31, 2024 primarily consisted of $12.5 million of consideration placed in escrow in connection with the Sinergise acquisition and $4.0 million of collateral money market investments for the Company’s headquarters and other domestic office operating leases.

A reconciliation of the Company’s cash and cash equivalents and restricted cash and cash equivalents in the condensed consolidated balance sheets to total cash and cash equivalents, and restricted cash and cash equivalents in the condensed consolidated statements of cash flows as of October 31, 2024 and January 31, 2024 is as follows:

Short-term Investments

Short-term investments consisted of the following as of October 31, 2024 and January 31, 2024:

The following table summarizes the contracted maturities of the Company’s short-term investments as of October 31, 2024 and January 31, 2024:

Property and Equipment, Net

Property and equipment, net consists of the following:

Property and equipment, net as of October 31, 2024 included $2.8 million of satellite manufacturing costs that were previously classified as prepaid expenses and other current assets as of January 31, 2024.

The Company’s long-lived assets by geographic region are as follows:

The Company concluded that satellites in service continue to be owned by the U.S. entity and accordingly are classified as U.S. assets in the table above. No single country other than the U.S. accounted for more than 10% of total property and equipment, net, as of October 31, 2024 and January 31, 2024.

Total depreciation expense for the three and nine months ended October 31, 2024 was $8.0 million and $30.3 million, respectively, of which $7.2 million and $27.9 million, respectively, was depreciation expense specific to satellites. Total depreciation expense for the three and nine months ended October 31, 2023 was $11.9 million and $31.4 million, respectively, of which $11.1 million and $29.5 million, respectively, was depreciation expense specific to satellites.

Capitalized Internal-Use Software Development Costs

Capitalized internal-use software costs, net of accumulated amortization consists of the following:

Amortization expense for capitalized internal-use software for the three and nine months ended October 31, 2024 was $0.6 million and $1.8 million, respectively. Amortization expense for capitalized internal-use software for the three and nine months ended October 31, 2023 was $0.5 million and $1.4 million, respectively.

Goodwill and Intangible Assets

Goodwill and Intangible assets consists of the following:

Amortization expense for intangible assets for the three and nine months ended October 31, 2024 was $1.5 million and $4.3 million, respectively. Amortization expense for intangible assets for the three and nine months ended October 31, 2023 was $1.3 million and $3.3 million, respectively.

The change in the carrying amount of goodwill during the nine months ended October 31, 2024 and 2023 is as follows:

In April 2024, the Company paid $1.1 million of additional consideration in connection with the finalization of the net working capital adjustment relating to the Company’s acquisition of Sinergise. The additional amount was accounted for as a measurement period adjustment and resulted in a $1.1 million addition of goodwill during the nine months ended October 31, 2024.

Accrued and Other Current Liabilities

Accrued liabilities and other current liabilities consist of the following:

(7)Restructuring

2024 Headcount Reduction

In June 2024, the Company announced a plan to reduce its global headcount by approximately 17% of the Company’s total number of employees prior to the reduction (the “2024 headcount reduction”). This action was taken consistent with the Company’s ongoing focus on aligning its resources to the market opportunity, improving operational efficiency, and supporting the long-term growth of the business.

As a result of the 2024 headcount reduction, the Company recognized costs for one-time employee termination benefits consisting of severance and other employee costs. The Company also recognized a stock-based compensation benefit primarily related to the reversal of previously recognized stock-based compensation expenses for unvested stock awards. A summary of the restructuring charges recognized during the three and nine months ended October 31, 2024 is provided in the tables below:

There wereno restructuring charges recognized during the three and nine months ended October 31, 2023 related to the 2024 headcount reduction.

The following table summarizes the Company’s liability recognized in connection with the 2024 headcount reduction, which is recorded within accrued and other current liabilities in the condensed consolidated balance sheets:

The headcount reductions, including the remaining cash payments, are expected to be substantially complete by the end of the fiscal year ending January 31, 2025.

2023 Headcount Reduction

In August 2023, the Company announced a plan to reduce its global headcount by approximately 10% of the Company’s total number of employees prior to the reduction (the “2023 headcount reduction”). This action was taken to increase the Company’s focus on its high priority growth opportunities and operational efficiency.

As a result of the 2023 headcount reduction, the Company recognized costs for one-time employee termination benefits consisting of severance and other employee costs. The Company also recognized a stock-based compensation benefit primarily related to the reversal of previously recognized stock-based compensation expenses for unvested stock awards. A summary of the restructuring charges recognized during the three and nine months ended October 31, 2023 is provided in the table below:

There wereno restructuring charges recognized during the three and nine months ended October 31, 2024 related to the 2023 headcount reduction.

The 2023 headcount reduction, including cash payments, was substantially complete as of January 31, 2024.

(8)Leases

The Company’s leasing activities primarily consist of real estate leases for its operations, including office space, and certain ground station service agreements that convey the right to control the use of specified equipment and facilities. The Company assesses whether each lease is an operating or finance lease at the lease commencement date. As of October 31, 2024, the Company had no finance leases.

Operating lease costs were $2.4 million and $7.1 million for the three and nine months ended October 31, 2024, respectively. Operating lease costs were $2.1 million and $6.1 million for the three and nine months ended October 31, 2023, respectively. Variable lease expenses and short-term lease expenses were immaterial for the three and nine months ended October 31, 2024 and 2023.

Operating cash flows from operating leases were $2.6 million and $7.5 million for the three and nine months ended October 31, 2024, respectively. Operating cash flows from operating leases were $2.3 million and $5.0 million for the three and nine months ended October 31, 2023, respectively.

Right of use assets obtained in exchange for operating lease liabilities were $1.2 million and $4.3 million for the three and nine months ended October 31, 2024, respectively. Right of use assets obtained in exchange for operating lease liabilities were $0.3 million and $6.5 million for the three and nine months ended October 31, 2023, respectively.

Maturities of operating lease liabilities as of October 31, 2024 were as follows:

(9)Research and Development Arrangements

Research and Development Services Agreement

In December 2020, the Company entered into a development services agreement, whereby the Company agreed to provide the technical knowledge and services to design and develop certain prototype satellites and deliver and test early data collected (the “R&D Services Agreement”). The R&D Services Agreement, including subsequent amendments to such agreement, provides for funding of $46.4 million to be paid to the Company as specified milestones are achieved. The R&D Services Agreement is unrelated to the Company’s ordinary business activities. The Company has discretion in managing the activities under the R&D Services Agreement and retains all developed intellectual property. The Company has no obligation to repay any of the funds received regardless of the outcome of the development work; therefore, the arrangement is accounted for as funded research and development pursuant to ASC 730-20, Research and Development. As ASC 730-20 does not indicate the accounting model for research and development services, the Company determined the total transaction price is recognized over the agreement term as a reduction of research and development expenses based on a cost incurred method.

During the three and nine months ended October 31, 2024, the Company recognized $2.9 million and $7.2 million of funding and incurred $2.9 million and $6.5 million of research and development expenses, respectively, in connection with the R&D Services Agreement. During the three and nine months ended October 31, 2023, the Company recognized $6.8 million and $14.8 million of funding and incurred $7.6 million and $15.6 million of research and development expenses, respectively. As of October 31, 2024 and January 31, 2024, the Company had received a total of $46.4 million and $45.8 million, respectively, of funding under the R&D Services Agreement.

NASA Communication Services Project

In connection with its Communication Services Project (“CSP”), the National Aeronautics and Space Administration (“NASA”) selected certain satellite communications providers that NASA will fund to develop and demonstrate near-Earth space communication services that may support future NASA missions using commercial technology. In June 2022 and August 2022, the Company entered into separate agreements withtwo of the satellite communications providers selected by NASA whereby the Company agreed to participate in the NASA CSP as a subcontractor. The agreements provide for the Company to receive aggregate funding of $40.5 million to be paid as milestones are completed. The Company determined that the agreements are in the scope of ASC 912-730, Contractors – Federal Government – Research and Development (“ASC 912-730”). In accordance with ASC 912-730, funding is recognized over the term of each agreement as a reduction of research and development expenses based on a cost incurred method.

During the three and nine months ended October 31, 2024, the Company recognized $2.5 million and $7.6 million of funding, respectively, and incurred $2.5 million and $7.6 million of research and development expenses, respectively, in connection with the NASA CSP. During the three and nine months ended October 31, 2023, the Company recognized $1.2 million and $9.2 million of funding, respectively, and incurred $1.2 million and $8.4 million of research and development expenses, respectively, in connection with the NASA CSP. As of October 31, 2024 and January 31, 2024, the Company had received a total of $27.6 million and $13.9 million, respectively, of funding in connection with the NASA CSP.

In July 2023, projected costs related to certain of our research and development arrangements were revised down as a result of operational decisions. This change in estimate resulted in a $2.2 million cumulative increase of funding recognized for certain of our research and development arrangements for the nine months ended October 31, 2023.

(10)Commitments and Contingencies

Other

The Company has minimum purchase commitments for hosting services from Google through January 31, 2028 (see Note 12). Future minimum purchase commitments under the noncancelable hosting service agreement with Google as of October 31, 2024 are as follows:

Legal Proceedings

Delaware Class Action

A stockholder class action was filed in the Court of Chancery of the State of Delaware on August 19, 2024, against the former officers and directors of dMY IV and the Company. The complaint alleges that the individual defendants breached various fiduciary duties to the dMY IV stockholders and that the Company aided and abetted such breaches. The case is brought on behalf of a purported class of holders of dMY IV Class A Common Stock who held such stock prior to the redemption deadline for the Business Combination, did not exercise the right to redeem their shares, and were allegedly injured. Defendants filed a motion to dismiss the complaint on November 12, 2024.

For many legal matters, particularly those in early stages, the Company cannot reasonably estimate the possible loss (or range of loss), if any. The Company records an accrual for legal matters at the time or times it determines that a loss is both probable and reasonably estimable. Regarding matters for which no accrual has been made (including the potential for losses in excess of amounts accrued), the Company currently believes, based on its own investigations, that any losses (or ranges of losses) that are reasonably possible and estimable will not, in the aggregate, have a material adverse effect on its financial position, results of operations, or cash flows. However, the ultimate outcome of legal proceedings involves judgments, estimates, and inherent uncertainties and cannot be predicted with certainty. Should the ultimate outcome of any legal matter be unfavorable, the Company's business, financial condition, results of operations, or cash flows could be materially and adversely affected. The Company may also incur substantial legal fees, which are expensed as incurred, in defending against legal claims.

Contingencies

The Company may have certain contingent liabilities that arise in the ordinary course of business activities including those arising from disputes and claims and events arising from revenue contracts entered into by the Company. The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated.

Indemnification

The Company enters into standard indemnification arrangements in the ordinary course of business. Pursuant to these arrangements, the Company indemnifies, holds harmless, and agrees to reimburse the indemnified parties for losses suffered or incurred by the indemnified party, in connection with any trade secret, copyright, patent, or other intellectual property infringement claim by any third-party with respect to its technology. The term of these indemnification agreements is generally perpetual after the execution of the agreement. The Company has not incurred costs to defend lawsuits or settle claims related to these indemnification agreements. In the event that one or more of these matters were to result in a claim against the Company, an adverse outcome, including a judgment or settlement, may cause a material adverse effect on the Company’s future business, operating results or financial condition. It is not possible to determine the maximum potential amount under these contracts due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement.

The Company has entered into indemnification agreements with its directors and officers that may require the Company to indemnify them against liabilities that may arise by reason of their status or service as directors or officers, other than liabilities arising from willful misconduct of the individual.

To date, we have not incurred any material costs and have not accrued any liabilities in the consolidated financial statements as a result of these provisions.

(11)Warrants

Public and Private Placement Warrants

In connection with dMY IV’s initial public offering, which occurred on March 9, 2021, dMY IV issued 34,500,000 units, each unit consisting ofone share of Class A common stock of dMY IV and one-fifth ofone redeemable warrant, at a price of $10.00 per unit. Each whole warrant entitles the holder to purchaseone share of Class A common stock at an exercise price of $11.50 per share, subject to adjustment (the “Public Warrants”). Simultaneously with the closing of its initial public offering, dMY IV completed the private sale of 5,933,333 warrants to dMY Sponsor IV, LLC (the “dMY Sponsor”) at a purchase price of $1.50 per warrant (the “Private Placement Warrants”). Each Private Placement Warrant is exercisable forone share of Class A common stock at $11.50 per share.

Additionally, pursuant to a lock-up agreement entered into with the dMY Sponsor in connection with the Business Combination,2,966,667 of the Private Placement Warrants are subject to vesting conditions (the “Private Placement Vesting Warrants”). The Private Placement Vesting Warrants vest infour equal tranches (i) when the closing price of Class A common stock equals or exceeds $15.00, $17.00, $19.00 and $21.00, over any 20 trading days within any 30 day trading period prior to December 7, 2026 or (ii) when the Company consummates a change of control transaction prior to December 7, 2026 that entitles its stockholders to receive a per share consideration of at least $15.00, $17.00, $19.00 and $21.00. Any right to Private Placement Vesting Warrants that remains unvested on the first business day after five years from the closing of the Business Combination will be forfeited without any further consideration.

As of October 31, 2024 and January 31, 2024, there were 6,899,982 Public Warrants and 5,933,333 Private Placement Warrants, including 2,966,667 Private Placement Vesting Warrants, outstanding.

Warrants to Purchase Class A Common Stock

In addition to the Public and Private Placement Warrants, there were 1,065,594 warrants to purchase shares of Class A common stock with a weighted average exercise price of $9.384 which were outstanding and exercisable as of October 31, 2024 and January 31, 2024. As of October 31, 2024, the outstanding warrants have a weighted average remaining term of 5.4 years.

(12)Related Party Transactions

As of October 31, 2024 and January 31, 2024, Google held 31,942,641 shares of the Company’s Class A common stock, and, as such, owned greater than 10% of outstanding shares of the Company’s Class A common stock.

In April 2017, the Company and Google entered into afive year content license agreement pursuant to which the Company licensed content to Google. In April 2022, the agreement automatically renewed for a period ofone year and in April 2023, the agreement expired. For the nine months ended October 31, 2023, the Company recognized revenue of $0.3 million related to this content license agreement.

In July 2023, the Company and Google entered into aone year content license agreement pursuant to which the Company agreed to license content to Google and provide certain of its products in exchange for a $1.0 million fee. The agreement also provides for the Company to receive up to $2.0 million in value of Google cloud credits that the Company can apply against the cost of Google cloud services it utilizes to fulfill its obligations under the agreement. The Company determined that the Google cloud credits represent non-cash variable consideration which is included in the transaction price for the agreement, subject to the guidance on estimating variable consideration within ASC 606, Revenue from Contracts with Customers. The agreement does not include extension or renewal terms. In August 2024, the content license agreement was amended to extend the term until November 2024 in exchange for a $0.3 million fee. For the three and nine months ended October 31, 2024, the Company recognized revenue of $0.3 million related to the content license agreement. The Company recognized immaterial revenue related to the content license agreement for the three months ended October 31, 2023 and recognized revenue of $1.0 million for the nine months ended October 31, 2023.

The Company purchases hosting and other services from Google, of which $11.8 million and $12.1 million is deferred as of October 31, 2024 and January 31, 2024, respectively. The Company recorded $6.2 million of expense during the three months ended October 31, 2024 relating to hosting and other services provided by Google, of which $5.6 million was classified as cost of revenue and $0.6 million was classified as research and development. The Company recorded $20.6 million of expense during the nine months ended October 31, 2024 relating to hosting and other services provided by Google, of which $18.5 million was classified as cost of revenue and $2.1 million was classified as research and development.

The Company recorded $7.5 million of expense during the three months ended October 31, 2023 relating to hosting and other services provided by Google, of which $6.7 million was classified as cost of revenue and $0.8 million was classified as research and development. The Company recorded $21.6 million of expense during the nine months ended October 31, 2023 relating to hosting and other services provided by Google, of which $19.4 million was classified as cost of revenue and $2.2 million was classified as research and development.

As of October 31, 2024 and January 31, 2024, the Company’s accrued and other current liabilities balance included $2.4 million and $2.5 million related to hosting and other services provided by Google, respectively.

On June 28, 2021, the Company amended the terms of its hosting agreement with Google. The amendment, among other things, increased the aggregate purchase commitments to $193.0 million. The amended agreement commenced on August 1, 2021 and extends through January 31, 2028. See Note 10, Commitments and Contingencies, for future Google hosting purchase commitments, including the amended commitments, as of October 31, 2024.

(13)Stock-based Compensation

The Company's equity incentive plans are described in Note 16, Stock-based Compensation, in the Notes to the Consolidated Financial Statements in the 2024 Form 10-K.

Stock-Based Compensation

The following table summarizes stock-based compensation expense recognized related to awards granted to employees and nonemployees, as follows:

Stock Options

A summary of stock option activity is as follows:

As of October 31, 2024, total unrecognized compensation cost related to stock options was$6.5 million, which is expected to be recognized over a period of 1.1 years.

Restricted Stock Units

A summary of Restricted Stock Unit (“RSU”) activity is as follows:

During the nine months ended October 31, 2024, the Company granted 26,642,464 RSUs, which generally vest over four years, subject to the recipient’s continued service through each applicable vesting date.

Stock-based compensation expense recognized for RSUs during the three and nine months ended October 31, 2024 was $9.9 million and $30.2 million, respectively. Stock-based compensation expense recognized for RSUs during the three and nine months ended October 31, 2023 was $8.6 million and $29.2 million, respectively. As of October 31, 2024, total unrecognized compensation cost related to RSUs was$103.8 million. These costs are expected to be recognized over a period of approximately 2.8 years.

Performance Vesting Restricted Stock Units

During the nine months ended October 31, 2024, the Company granted 348,222 performance vesting restricted stock units (“PSUs”) to certain members of the Company’s senior management. A portion of the PSUs are subject to vesting requirements related to the achievement of certain revenue and adjusted EBITDA targets for the first half of the fiscal year ended January 31, 2025 and the remaining portion is subject to vesting requirements related to the achievement of certain revenue and adjusted EBITDA targets for the entire fiscal year ended January 31, 2025. Vesting is also subject to continued service through the applicable vesting dates, and the actual number of PSUs that may vest ranges from 0% to 125% of the PSUs granted based on achievement of the targets.

Stock-based compensation expense recognized for PSUs during the three and nine months ended October 31, 2024 was $0.3 million and $0.8 million, respectively. Stock-based compensation expense recognized for PSUs during the three and nine months ended October 31, 2023 was $0.3 million and $0.7 million, respectively. As of October 31, 2024, total unrecognized compensation cost related to PSUs was $0.2 million. These costs are expected to be recognized over a period of approximately 0.4 years.

Employee Stock Purchase Program

Beginning in April 2024, the Company's eligible employees were able to begin participating in the Company's Employee Stock Purchase Program (“ESPP”). The ESPP allows eligible participants to contribute up to 10% of their eligible compensation towards the purchase of Class A common stock at a discounted price, subject to certain limitations. The purchase price of the shares on each purchase date is equal to 85% of the lower of the fair market value of Class A common stock on the first and last trading days of each offering period. The offerings under the ESPP are currently designed to be intended to qualify under Section 423 of the Internal Revenue Code. The Company estimates the fair value of each purchase right under the ESPP on the date of grant using the Black-Scholes valuation model and uses the straight-line attribution approach to record the expense over thesix-month offering period.

Stock-based compensation expense recognized related to ESPP during the three and nine months ended October 31, 2024 was $0.2 million and $0.4 million, respectively. As of October 31, 2024, total unrecognized compensation cost related to ESPP was $0.4 million. These costs are expected to be recognized over a period of approximately 0.4 years.

Early Exercises of Stock Options

The Planet Labs Inc. Amended and Restated 2011 Stock Incentive Plan provided for the early exercise of stock options for certain individuals as determined by the Company’s board of directors. Shares of common stock issued upon early exercises of unvested options are not deemed, for accounting purposes, to be issued until those shares vest according to their respective vesting schedules and accordingly, the consideration received for early exercises is initially recorded as a liability and reclassified to common stock and additional paid-in capital as the underlying awards vest. As of October 31, 2024, the Company had a $6.3 million liability recorded for the early exercise of unvested stock options, and the related number of unvested shares subject to repurchase was 643,370.

Earn-out Shares

Pursuant to the Merger Agreement, Former Planet equity award holders have the right to receive Earn-out Shares that are contingently issuable in shares of Class A common stock. The Earn-out Shares may be earned infour equal tranches (i) when the closing price of Class A common stock equals or exceeds $15.00, $17.00, $19.00 and $21.00, over any 20 trading days within any 30 day trading period prior to December 7, 2026 or (ii) when the Company consummates a change of control transaction prior to December 7, 2026 that entitles its stockholders to receive a per share consideration of at least $15.00, $17.00, $19.00 and $21.00.

No Earn-out Shares vested during the three and nine months ended October 31, 2024. As of October 31, 2024, there were 2,984,494 Earn-out Shares outstanding relating to Former Planet equity award holders.

During the three and nine months ended October 31, 2023, the Company recognized $0.4 million and $4.2 million of stock-based compensation expense related to the Earn-out Shares, respectively. As of October 31, 2024, there wasno remaining unrecognized compensation cost related to the Earn-out Shares.

Other Stock-based Compensation

In connection with the acquisition of VanderSat B.V. (“VanderSat”) on December 13, 2021, the Company issued 543,391 shares of Class A common stock to an employee and former owner of VanderSat which are accounted for as stock-based compensation because the shares were subject to forfeiture based on post-acquisition time-based service vesting. The shares vested in quarterly increments overtwo years commencing on December 13, 2021. As of October 31, 2024 and January 31, 2024, there was no unrecognized compensation cost related to these shares. During the three and nine months ended October 31, 2023, the Company recognized $0.6 million and $1.9 million of stock-based compensation expense related to these shares, respectively.

(14) Income Taxes

During the three months ended October 31, 2024, the Company recorded animmaterial amount of income tax expense. During the nine months ended October 31, 2024, the Company recorded $1.4 million of income tax expense. During the three and nine months ended October 31, 2023, the Company recorded income tax expense of $0.4 million and $1.2 million, respectively. For the three and nine months ended October 31, 2024 and 2023, the income tax expense was primarily driven by the current tax on foreign earnings. The effective tax rates for the three and nine months ended October 31, 2024 and 2023 differed from the federal statutory tax rate primarily due to the valuation allowance on the majority of the Company’s U.S. and foreign deferred tax assets and foreign rate differences.

The Company evaluates its tax positions on a quarterly basis and revises its estimates accordingly. Gross unrecognized tax benefits were $9.8 million and $8.7 million as of October 31, 2024 and January 31, 2024, respectively. The gross unrecognized tax benefits, if recognized, would not affect the effective tax rate due to the valuation allowance against the deferred tax assets. The Company determined thatno accrual for interest and penalties was required as of October 31, 2024 and January 31, 2024 andno such expenses were incurred in the periods presented.

The Company does not anticipate the total amounts of unrecognized tax benefits to significantly increase or decrease in the next twelve months.

The Company files U.S. federal, various state and foreign income tax returns. The Company is not currently under audit by any taxing authorities. All tax years remain open to examination by taxing jurisdictions to which the Company is subject.

(15)Net Loss Per Share Attributable to Common Stockholders

The Company computes net loss per share of the Class A common stock and Class B common stock using the two-class method required for participating securities. Basic and diluted net loss per share are the same for each class of common stock because they are entitled to the same liquidation and dividend rights. The following table sets forth the computation of basic and diluted loss per Class A common stock and Class B common stock (amounts in thousands, except share and per share amounts):

Basic and diluted 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.

The following table presents the potential common stock outstanding that was excluded from the computation of diluted net loss per share of common stock as of the periods presented because including them would have been antidilutive: