Planet Labs PBC

Previous wording

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand the results of operations and financial condition of Planet Labs PBC. The MD&A is provided as a supplement to and should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included in Part I, Item I of this Quarterly Report on Form 10-Q, as well as our audited annual consolidated financial statements and related notes as disclosed in our Annual Report on Form 10-K for the fiscal year ended January 31, 2024 (the “2024 Form 10-K”). This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in Part II, Item 1A, “Risk Factors” in this Quarterly Report and Part I, Item 1A, “Risk Factors” of our 2024 Form 10-K. Actual results may differ materially from those contained in any forward-looking statements. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

Current wording

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand the results of operations and financial condition of Planet Labs PBC. The MD&A is provided as a supplement to and should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included in Part I, Item I of this Quarterly Report on Form 10-Q, as well as our audited annual consolidated financial statements and related notes as disclosed in our Annual Report on Form 10-K for the fiscal year ended January 31, 2025 (the “2025 Form 10-K”). This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in Part II, Item 1A, “Risk Factors” in this Quarterly Report. Actual results may differ materially from those contained in any forward-looking statements. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

Previous wording

To help further our mission, we have developed advanced satellite technology that increases the cost performance of each satellite. This has enabled us to launch large fleets of satellites at lower cost and in turn record over 2,700 images on average for every point on Earth’s landmass, a non-replicable historical archive for analytics, machine learning, and insights. We have advanced data processing capabilities that enable us to produce “AI-ready” data sets. As this data set continues to grow, we believe its value to our customers will further increase.

Current wording

To help further our mission, we have developed advanced satellite technology that increases the cost performance of each satellite. This has enabled us to launch large fleets of satellites at lower cost and in turn record over 3,000 images on average for every point on Earth’s landmass, a non-replicable historical archive that can power analytics, machine learning, and insights. We have advanced data processing capabilities that enable us to produce “AI-ready” data sets and have partnered with third-parties to offer AI-enabled data solutions. As these data sets continue to grow and we continue to develop these partnerships, we believe the value of our data and analytics solutions to our customers will further increase.

Previous wording

Our proprietary data set and analytics are delivered pursuant to subscription and usage-based data licensing agreements and are accessed by our customers through our online platform and subscription APIs. We believe our efficient cost structure, one-to-many business model and differentiated data set have enabled us to grow our customer base across multiple vertical markets. As of October 31, 2024, our End of Period (“EoP”) Customer Count was 1,015 customers, which represented 4% year-over-year growth when compared to October 31, 2023. For a definition of EoP Customer Count see the section titled “Key Operational and Business Metrics.” Over 90% of our ACV Book of Business (as defined below) consists of annual or multi-year contracts. Our average contract length continues to be approximately two years, weighted on an annual contract value basis.

Current wording

Our proprietary data set and analytics are delivered pursuant to subscription and usage-based data licensing agreements and are accessed by our customers through our online platform and subscription APIs. We believe our efficient cost structure, one-to-many business model and differentiated data set have enabled the growth of our business.

Previous wording

We primarily generate revenue through selling licenses to our data and analytics to customers over an entirely cloud-based platform via fixed price subscription and usage-based contracts. Data licensing subscriptions and minimum commitment usage-based contracts provide a large recurring revenue base for our business with a low incremental cost to serve each additional customer. Payment terms of our customer agreements are most commonly in advance on an either quarterly or annual basis, although a small number of large contracts have required payment terms that are monthly or quarterly in arrears. Additionally, we also generate a small amount of revenue from sales of third-party imagery, professional services, and customer support.

Current wording

We primarily generate revenue through selling licenses to our data and analytics to customers over a cloud-based platform via fixed price subscription and usage-based contracts. Data licensing subscriptions and minimum commitment usage-based contracts provide a large recurring revenue base for our business with a low incremental cost to serve each additional customer. Payment terms of our customer agreements are most commonly in advance on an either quarterly or annual basis, although a small number of large contracts have required payment terms that are monthly or quarterly in arrears. Additionally, we also generate a small amount of revenue from sales of third-party imagery, professional services, and customer support. From time to time, we have also entered into strategic satellite services and technologies partnerships in which we build and operate satellites for our partners.

Previous wording

We plan to invest in sales, marketing, and software solutions to expand within our existing customer base and further penetrate vertical markets in which end users are early adopters of geospatial data, such as civil government, agriculture, and defense and intelligence.

Current wording

We have invested in our sales and marketing efforts to address the vertical markets in which we operate, as well as in software solutions to expand within our existing customer base. We plan to further penetrate vertical markets in which end users are early adopters of geospatial data, such as civil government, agriculture, and defense and intelligence through targeted sales and marketing activities and continued investment in new solutions for these verticals.

Previous wording

We plan to invest in our offerings to make our data more actionable and accessible to a larger group of customers and users, including non-geospatial experts such as data and business analysts in government and commercial organizations. We believe this will help us address use cases in key emerging markets such as energy, infrastructure, finance, insurance, and consumer packaged goods. We also intend to partner with companies building vertical market solutions, such as independent software vendors, as well as business intelligence and analytics providers. While we have customers and partners today in many of these verticals, we believe enhancing our data to meet their needs has the potential to accelerate the proliferation of our data and analytics usage across more end users. Additionally, we currently have multiple partners with solutions that rapidly generate insights for customers using our proprietary data and AI technology. Their capabilities include training models on our proprietary data to find any object of interest to a user over broad areas of land or sea. We believe recent and ongoing advancements in AI will support making our datasets more accessible to customers and users across new and existing verticals by speeding customer time to value through these capabilities.

Current wording

We plan to invest in our offerings to make our data more actionable and accessible to a larger group of customers and users, including non-geospatial experts such as data and business analysts in government and commercial organizations. We believe this will help us address use cases in key emerging markets such as energy, infrastructure, finance, insurance, and consumer packaged goods. We also intend to partner with companies building vertical market solutions, such as independent software vendors, as well as business intelligence and analytics providers. While we have customers and partners today in many of these verticals, we believe enhancing our data to meet their needs has the potential to accelerate the proliferation of our data and analytics usage across more end users. Additionally, we currently have multiple partners with solutions that rapidly generate insights for their customers using our licensed proprietary data and Planet Analytics or their AI technology. Their capabilities include training models on our proprietary data to find any object of interest to a user over broad areas of land or sea. We believe recent and ongoing industry advancements in AI will support making our datasets more accessible to customers and users across new and existing verticals by speeding customer time to value through these capabilities.

Previous wording

Continued Investment in Data Products:

Current wording

Continued Investment in Data Products and Solutions:

Previous wording

We plan to make strategic investments in building new sensors to capture additional data sets from space. As we grow our customer base and the use cases we can address, we believe we can better understand what additional data sets our customers are eager to access and therefore which sensors might enable us to capture additional data that is valuable to such customers. By leveraging our agile aerospace approach to space systems, we believe we are well-positioned to introduce new Earth observation sensors into orbit to capture new types of data with greater capital efficiency and speed than other satellite data providers. Having these capabilities can deepen our value proposition to customers and help us both acquire new customers and expand our offering to existing customers.

Current wording

New Sensors & Data Sets: We plan to make strategic investments in building new sensors to capture additional data sets from space. As we grow our customer base and the use cases we can address, we believe we can better understand what additional data sets our customers are eager to access and therefore which sensors might enable us to capture additional data that is valuable to such customers. By leveraging our agile aerospace approach to space systems, we believe we are well-positioned to introduce new Earth observation sensors into orbit to capture new types of data with greater capital efficiency and speed than other satellite data providers. Having these capabilities can deepen our value proposition to customers and help us both acquire new customers and expand our offering to existing customers.

Previous wording

We believe that our financial condition and result of operations have been, and will continue to be, affected by a number of factors that present significant opportunities for us but also pose risks and challenges, including those discussed below, in Part II, Item 1A “Risk Factors” of this Quarterly Report and in Part I, Item 1A, “Risk Factors” of our 2024 Form 10-K.

Current wording

We believe that our financial condition and result of operations have been, and will continue to be, affected by a number of factors that present significant opportunities for us but also pose risks and challenges, including those discussed below, in Part II, Item 1A “Risk Factors” of this Quarterly Report.

Previous wording

Attracting new customers is an important factor affecting our future growth and operating performance. We believe our ability to attract customers will be driven by our ability to continue to improve our data and offer software and analytic solutions that make our data easier to consume and integrate into our customers’ workflows, our success in offering new data sets and products to solve customer problems, increases in our global sales presence and increases in our marketing investments. As part of this strategy, we have recently made Planet’s data available for purchase directly through our Planet Insights Platform, which facilitates rapid user adoption, particularly by empowering users to self-service our solutions without formal sales interaction. We believe this serves as a natural entry point for some of our smaller accounts, enabling them to realize the value of Planet’s offerings, leading to broader awareness of our solutions throughout their networks and organizations.

Current wording

Attracting new customers is an important factor affecting our future growth and operating performance. We believe our ability to attract customers will be driven by our ability to continue to improve our data and offer software and analytic solutions that make our data easier to consume and integrate into our customers’ workflows, our success in offering new data sets and products to solve customer problems, increases in our global sales presence and increases in our marketing investments. As part of this strategy, we have recently made Planet’s data available for purchase directly through our Planet Insights Platform (which has integrated the former Sentinel Hub platform), which facilitates rapid user adoption, particularly by empowering users to self-service our solutions without formal sales interaction. We believe this serves as a natural entry point for some of our smaller accounts, enabling them to realize the value of Planet’s offerings, leading to broader awareness of our solutions throughout their networks and organizations.

Previous wording

In addition, we plan to continue investing in making our data more digestible and accessible to non-technical business users and to build solutions to address more use cases and expand our addressable market. As a result of this strategy, we anticipate our research and development expenditures may generally increase over time. We will also aim to expand our reach with customers by partnering with independent software vendors and solution providers who are building vertical market-specific solutions. While we have customers and partners today in many markets, we believe that our increased investment in developing software analytics solutions has the potential to accelerate the usage of our data and analytics across broader audiences. Additionally, the timing of securing new customer contracts, including when it occurs during the year and the length of the sales cycle, as well as the size of the contracts, can impact our operating performance.

Current wording

In addition, we plan to continue investing in making our data more digestible and accessible to non-technical business users and to build solutions to address more use cases and expand our addressable market. As a result of this strategy, we anticipate continuing to invest in our research and development. We will also aim to expand our reach with customers by partnering with independent software vendors and solution providers who are building vertical market-specific solutions. While we have customers and partners today in many markets, we believe that our increased investment in developing software analytics solutions has the potential to accelerate the usage of our data and analytics across broader audiences. Additionally, the timing of securing new customer contracts, including when it occurs during the year and the length of the sales cycle, as well as the size of the contracts, can impact our operating performance.

Previous wording

To increase customer retention and expansion of revenue from existing customers, we are making a number of investments in our operations. Customer retention and expansion is driven by the speed with which our customers realize the value of our data once they become customers, our ability to cross-sell our different products to our existing customers and our ability to offer new products to our customers. Therefore, to increase customer retention and sales to existing customers, we have invested in our customer success function, continuous improvements to our existing data, and the software tools and analytic tools that make our data easier to consume. As a result of such investments, we anticipate our cost of revenue, operating expenses, and capital expenditures may generally increase as we continue to prioritize customer retention and expansion and consequently, we are likely to experience losses in the near term, delaying our ability to achieve profitability and adversely affecting cash flows.

Current wording

To increase customer retention and expansion of revenue from existing customers, we are making a number of investments in our operations. Customer retention and expansion is driven by the speed with which our customers realize the value of our data once they become customers, our ability to cross-sell our different products to our existing customers and our ability to offer new products to our customers. Therefore, to increase customer retention and sales to existing customers, we have invested in our customer success function, continuous improvements to our existing data, and the software tools and analytic tools that make our data easier to consume. As a result of such investments, we anticipate our cost of revenue, operating expenses, and capital expenditures may increase as we continue to prioritize customer retention and expansion.

Previous wording

In connection with the calculation of several of the key operational and business metrics we utilize, we calculate Annual Contract Value (“ACV”) for contracts of one year or greater as the total amount of value that a customer has contracted to pay for the most recent 12 month period for the contract, excluding customers that are exclusively Sentinel Hub self-service paying users. For short-term contracts (contracts less than 12 months), ACV is equal to total contract value.

Current wording

In connection with the calculation of several of the key operational and business metrics we utilize, we calculate Annual Contract Value (“ACV”) for contracts of one year or greater as the total amount of value that a customer has contracted to pay for the most recent 12 month period for the contract, excluding customers that are exclusively Planet Insights Platform (which has integrated the former Sentinel Hub platform) self-service paying users, as well as the value of any satellite services contracts. For short-term contracts (contracts less than 12 months), ACV is equal to total contract value.

Previous wording

We also calculate EoP ACV Book of Business in connection with the calculation of several of the key operational and business metrics we utilize. We define EoP ACV Book of Business as the sum of the ACV of all contracts that are active on the last day of the period pursuant to the effective dates and end dates of such contracts, excluding customers that are exclusively Sentinel Hub self-service paying users. Active contracts exclude any contract that has been canceled, expired prior to the last day of the period without renewing, or for any other reason is not expected to generate revenue in the subsequent period. For contracts ending on the last day of the period, the ACV is either updated to reflect the ACV of the renewed contract or, if the contract has not yet renewed or extended, the ACV is excluded from the EoP ACV Book of Business. We do not annualize short-term contracts in calculating our EoP ACV Book of Business. We calculate the ACV of usage-based contracts based on the committed contracted revenue or the revenue achieved on the usage-based contract in the prior 12-month period.

Current wording

We also calculate End of Period (“EoP”) ACV Book of Business in connection with the calculation of several of the key operational and business metrics we utilize. We define EoP ACV Book of Business as the sum of the ACV of all contracts that are active on the last day of the period pursuant to the effective dates and end dates of such contracts, excluding customers that are exclusively Planet Insights Platform self-service paying users. Active contracts exclude any contract that has been canceled, expired prior to the last day of the period without renewing, or for any other reason is not expected to generate revenue in the subsequent period. For contracts ending on the last day of the period, the ACV is either updated to reflect the ACV of the renewed contract or, if the contract has not yet renewed or extended, the ACV is excluded from the EoP ACV Book of Business. We do not annualize short-term contracts in calculating our EoP ACV Book of Business. We calculate the ACV of usage-based contracts based on the committed contracted revenue or the revenue achieved on the usage-based contract in the prior 12-month period.

Previous wording

We define Net Dollar Retention Rate as the percentage of ACV generated by existing customers in a given period as compared to the ACV of all contracts at the beginning of the fiscal year from the same set of existing customers. We define existing customers as customers with an active contract with Planet. We believe our Net Dollar Retention Rate is a useful metric for investors as it can be used to measure our ability to retain and grow revenue generated from our existing customers, on which our ability to drive long-term growth and profitability is, in part, dependent. We use Net Dollar Retention Rate to assess customer adoption of new products, inform opportunities to make improvements across our products, identify opportunities to improve operations, and manage go to market functions, as well as to understand how much future growth may come from cross-selling and up-selling customers. Management applies judgment in determining the value of active contracts in a given period, as set forth in the definition of ACV above. Net Dollar Retention Rate remained flat at 104% for both the nine months ended October 31, 2024 and 2023. This was primarily due to expansion of a large international contract, offset by delay in renewal of a certain government contract.

Current wording

We define Net Dollar Retention Rate as the percentage of ACV generated by existing customers in a given period as compared to the ACV of all contracts at the beginning of the fiscal year from the same set of existing customers. We define existing customers as customers with an active contract with Planet. We believe our Net Dollar Retention Rate is a useful metric for investors as it can be used to measure our ability to retain and grow revenue generated from our existing customers, on which our ability to drive long-term growth and profitability is, in part, dependent. We use Net Dollar Retention Rate to assess customer adoption of new products, inform opportunities to make improvements across our products, identify opportunities to improve operations, and manage go to market functions, as well as to understand how much future growth may come from cross-selling and up-selling customers. Management applies judgment in determining the value of active contracts in a given period, as set forth in the definition of ACV above. Net Dollar Retention Rate increased to 103% for the three months ended April 30, 2025, as compared to 100% for the three months ended April 30, 2024. The increase was primarily due to large government contract expansions.

Previous wording

We assess two metrics for net dollar retention—Net Dollar Retention Rate, as described above, and Net Dollar Retention Rate including winbacks. A winback is a previously existing customer that was inactive at the start of the measurement period but has reactivated during the measurement period. The reactivation period must be within 24 months from the last active contract with the customer; otherwise, the customer is counted as a new customer and therefore excluded from the retention rate metrics. We define Net Dollar Retention Rate including winbacks as the percentage of ACV generated by existing customers and winbacks in a given period as compared to the ACV of all contracts at the beginning of the fiscal year from the same set of existing customers. We believe this metric is useful to investors as it captures the value of customer contracts that resume business with Planet after being inactive and thereby provides a quantification of Planet’s ability to recapture lost business. Management uses this metric to understand the adoption of our products and long-term customer retention, as well as the success of marketing campaigns and sales initiatives in re-engaging inactive customers. Beyond the judgments underlying managements’ calculation of Net Dollar Retention Rate set forth above, there are no additional assumptions or estimates made in connection with Net Dollar Retention Rate including winbacks. Net Dollar Retention Rate including winbacks remained flat at 105% for both the nine months ended October 31, 2024 and 2023. This was primarily due to expansion with a large international contract, offset by delay in renewal of a certain government contract.

Current wording

We assess two metrics for net dollar retention—Net Dollar Retention Rate, as described above, and Net Dollar Retention Rate including winbacks. A winback is a previously existing customer that was inactive at the start of the measurement period but has reactivated during the measurement period. The reactivation period must be within 24 months from the last active contract with the customer; otherwise, the customer is counted as a new customer and therefore excluded from the retention rate metrics. We define Net Dollar Retention Rate including winbacks as the percentage of ACV generated by existing customers and winbacks in a given period as compared to the ACV of all contracts at the beginning of the fiscal year from the same set of existing customers. We believe this metric is useful to investors as it captures the value of customer contracts that resume business with Planet after being inactive and thereby provides a quantification of Planet’s ability to recapture lost business. Management uses this metric to understand the adoption of our products and long-term customer retention, as well as the success of marketing campaigns and sales initiatives in re-engaging inactive customers. Beyond the judgments underlying managements’ calculation of Net Dollar Retention Rate set forth above, there are no additional assumptions or estimates made in connection with Net Dollar Retention Rate including winbacks. Net Dollar Retention Rate including winbacks increased to 104% for the three months ended April 30, 2025, as compared to 101% for the three months ended April 30, 2024. The increase was primarily due to large government contract expansions.

Previous wording

We define EoP Customer Count as the total count of all existing customers at the end of the period excluding customers that are exclusively Sentinel Hub self-service paying users. For EoP Customer Count, we define existing customers as customers with an active contract with us at the end of the reported period. For the purpose of this metric, we define a customer as a distinct entity that uses our data or services. We sell directly to customers, as well as indirectly through our partner network. If a partner does not provide the end customer’s name, then the partner is reported as the customer. Each customer, regardless of the number of active opportunities with us, is counted only once. For example, if a customer utilizes multiple products of Planet, we only count that customer once for purposes of EoP Customer Count. A customer with multiple divisions, segments, or subsidiaries are also counted as a single unique customer based on the parent organization or parent account. For EoP Customer Count, we do not include users that only utilize our self-service Sentinel Hub web based ordering system, which we acquired in August 2023, and which offers standard starter packages on a monthly or annual basis. We believe excluding these users from EoP Customer Count creates a more useful metric, as we view the Sentinel Hub starter packages as entry points for smaller accounts, leading to broader awareness of our solutions throughout their networks and organizations. We believe EoP Customer Count is a useful metric for investors and management to track as it is an important indicator of the broader adoption of our platform and is a measure of our success in growing our market presence and penetration. Management applies judgment as to which customers are deemed to have an active contract in a period, as well as whether a customer is a distinct entity that uses our data or services. The EoP Customer Count increased to 1,015 as of October 31, 2024, as compared to 976 as of October 31, 2023. The increase was primarily attributable to the increased demand for our data.

Current wording

We define EoP Customer Count as the total count of all existing customers at the end of the period excluding customers that are exclusively Planet Insights Platform (which has integrated the former Sentinel Hub platform) self-service paying users. For EoP Customer Count, we define existing customers as customers with an active contract with us at the end of the reported period. For the purpose of this metric, we define a customer as a distinct entity that uses our data or services. We sell directly to customers, as well as indirectly through our partner network. If a partner does not provide the end customer’s name, then the partner is reported as the customer. Each customer, regardless of the number of active opportunities with us, is counted only once. For example, if a customer utilizes multiple products of Planet, we only count that customer once for purposes of EoP Customer Count. A customer with multiple divisions, segments, or subsidiaries are also counted as a single unique customer based on the parent organization or parent account. For EoP Customer Count, we do not include users that only utilize our self-service Planet Insights Platform web based ordering system, which we acquired in August 2023, and which offers standard starter packages on a monthly or annual basis. We believe excluding these users from EoP Customer Count creates a more useful metric, as we view the Planet Insights Platform starter packages as entry points for smaller accounts, leading to broader awareness of our solutions throughout their networks and organizations. We believe EoP Customer Count is a useful metric for investors and management to track as it is an important indicator of the broader adoption of our platform and is a measure of our success in growing our market presence and penetration. Management applies judgment as to which customers are deemed to have an active contract in a period, as well as whether a customer is a distinct entity that uses our data or services. The EoP Customer Count decreased to 919 as of April 30, 2025, as compared to 1,031 as of April 30, 2024. The decrease was primarily attributable to an increased focus on larger customers.

Previous wording

Percent of Recurring ACV is the portion of the total EoP ACV Book of Business that is recurring in nature. We define EoP ACV Book of Business as the sum of the ACV of all contracts that are active on the last day of the period pursuant to the effective dates and end dates of such contracts, excluding customers that are exclusively Sentinel Hub self-service paying users. We define Percent of Recurring ACV as the dollar value of all data subscription contracts and the committed portion of usage-based contracts (excluding customers that are exclusively Sentinel Hub self-service paying users) divided by the total dollar value of all contracts in our EoP ACV Book of Business. We believe Percent of Recurring ACV is useful to investors to better understand how much of our revenue is from customers that have the potential to renew their contracts over multiple years rather than being one-time in nature. We track Percent of Recurring ACV to inform estimates for the future revenue growth potential of our business and improve the predictability of our financial results. There are no significant estimates underlying management’s calculation of Percent of Recurring ACV, but management applies judgment as to which customers have an active contract at a period end for the purpose of determining EoP ACV Book of Business, which is used as part of the calculation of Percent of Recurring ACV. Percent of Recurring ACV increased to 97% for the six months ended October 31, 2024, as compared to 94% for the six months ended October 31, 2023. The increase was primarily attributable to expansions on existing contracts in the Government and Commercial Verticals.

Current wording

Percent of Recurring ACV is the portion of the total EoP ACV Book of Business that is recurring in nature. We define ACV Book of Business as the sum of the ACV of all contracts that are active on the last day of the period pursuant to the effective dates and end dates of such contracts, excluding customers that are exclusively Planet Insights Platform (which has integrated the former Sentinel Hub platform) self-service paying users, as well as the value of any satellite services contracts. We define Percent of Recurring ACV as the dollar value of all data subscription contracts and the committed portion of usage-based contracts (excluding customers that are exclusively Planet Insights Platform self-service paying users) divided by the total dollar value of all contracts in our EoP ACV Book of Business. We believe Percent of Recurring ACV is useful to investors to better understand how much of our revenue is from customers that have the potential to renew their contracts over multiple years rather than being one-time in nature. We track Percent of Recurring ACV to inform estimates for the future revenue growth potential of our business and improve the predictability of our financial results. There are no significant estimates underlying management’s calculation of Percent of Recurring ACV, but management applies judgment as to which customers have an active contract at a period end for the purpose of determining EoP ACV Book of Business, which is used as part of the calculation of Percent of Recurring ACV. Percent of Recurring ACV increased to 97% for the three months ended April 30, 2025, as compared to 95% for the three months ended April 30, 2024. The increase was primarily attributable to demand of data subscription and usage-based contracts from large government customers.

Previous wording

We define capital expenditures as purchases of property and equipment plus capitalized internally developed software development costs, which are included in our statements of cash flows from investing activities. We define Capital Expenditures as a Percentage of Revenue as the total amount of capital expenditures divided by total revenue in the reported period. Capital Expenditures as a Percentage of Revenue is a performance measure that we use to evaluate the appropriate level of capital expenditures needed to support demand for our data services and related revenue, and to provide a comparable view of our performance relative to other earth observation companies, which may invest significantly greater amounts in their satellites to deliver their data to customers. We use an agile space systems strategy, which means we invest in a larger number of significantly lower cost satellites and software infrastructure to automate the management of the satellites and to deliver our data to clients. As a result of our strategy and our business model, our capital expenditures may be more similar to software companies with large data center infrastructure costs. Therefore, we believe it is important to look at our level of capital expenditure investments relative to revenue when evaluating our performance relative to other earth observation companies or to other software and data companies with significant data center infrastructure investment requirements. We believe Capital Expenditures as a Percentage of Revenue is a useful metric for investors because it provides visibility to the level of capital expenditures required to operate our business and our relative capital efficiency. Capital Expenditures as a Percentage of Revenue decreased to 14% for the three months ended October 31, 2024, as compared to 16% for the three months ended October 31, 2023. The decrease was primarily attributable to an increase in revenue primarily driven by growth in the Civil Government and Defense and Intelligence Verticals. Capital Expenditures as a Percentage of Revenue remained flat at 20% for both the nine months ended October 31, 2024 and 2023.

Current wording

We define capital expenditures as purchases of property and equipment plus capitalized internally developed software development costs, which are included in our statements of cash flows from investing activities. We define Capital Expenditures as a Percentage of Revenue as the total amount of capital expenditures divided by total revenue in the reported period. Capital Expenditures as a Percentage of Revenue is a performance measure that we use to evaluate the appropriate level of capital expenditures needed to support demand for our data services and related revenue, and to provide a comparable view of our performance relative to other earth observation companies, which may invest significantly greater amounts in their satellites to deliver their data to customers. We use an agile space systems strategy, which means we invest in a larger number of significantly lower cost satellites and software infrastructure to automate the management of the satellites and to deliver our data to clients. As a result of our strategy and our business model, our capital expenditures may be more similar to software companies with large data center infrastructure costs. Therefore, we believe it is important to look at our level of capital expenditure investments relative to revenue when evaluating our performance relative to other earth observation companies or to other software and data companies with significant data center infrastructure investment requirements. We believe Capital Expenditures as a Percentage of Revenue is a useful metric for investors because it provides visibility to the level of capital expenditures required to operate our business and our relative capital efficiency. Capital Expenditures as a Percentage of Revenue decreased to 14% for the three months ended April 30, 2025, as compared to 19% for the three months ended April 30, 2024. The decrease was primarily attributable to an increase in revenue and timing of purchases. We expect our capital expenditures and working capital requirements to continue to increase in the foreseeable future as we seek to grow our business.

Previous wording

We expect cost of revenue to continue to increase as we invest in our delivery organization, incorporate third-party products into our solutions and introduce future product sets that may require higher compute capacity. As we continue to grow our subscription revenue contracts and increase the revenue associated with our analytic capabilities, we anticipate further economies of scale on our satellites and other infrastructure costs as we incur lower marginal cost with each new customer we add to our platform.

Current wording

We expect cost of revenue to continue to increase as we invest in our delivery organization, build and launch satellites for customers that have purchased satellite services, incorporate third-party products into our solutions and introduce future product sets that may require higher compute capacity. As we continue to grow our subscription revenue contracts and increase the revenue associated with our analytic capabilities, we anticipate further economies of scale on our satellites and other infrastructure costs as we incur lower marginal cost with each new customer we add to our platform.

Previous wording

Sales and marketing expenses primarily include costs incurred to market and distribute our products. Such costs include expenses related to advertising and conferences, sales commissions, salaries, benefits and stock-based compensation for our sales and marketing personnel and sales office expenses. Sales and marketing expenses also include fees for professional and consulting services principally consisting of public relations and independent contractor expenses. Sales and marketing costs are expensed as incurred.

Current wording

Sales and marketing expenses primarily include costs incurred to market and distribute our products. Such costs include expenses related to advertising and conferences, sales commissions, salaries, benefits and stock-based compensation for our sales and marketing personnel and sales office expenses. Sales and marketing expenses also include fees for professional and consulting services principally consisting of public relations and independent contractor expenses. Sales commissions are capitalized when incurred and amortized on a straight-line basis over the period of benefit. Other sales and marketing costs are expensed as incurred.

Previous wording

We expect to incur additional general and administrative expenses as a result of operating as a public company, including expenses related to compliance and reporting obligations of public companies, and increased costs for insurance, investor relations, and professional services. As the company grows, our general and administrative expenses may increase in future periods and vary from period to period as a percentage of revenue, but we expect to realize operating scale with respect to these expenses over time as we grow our revenue.

Current wording

We expect to continue to incur additional general and administrative expenses as a result of operating as a public company, including expenses related to compliance and reporting obligations of public companies, and increased costs for insurance, investor relations, and professional services. Our general and administrative expenses may increase in future periods and vary from period to period as a percentage of revenue, but we expect to continue to realize operating scale with respect to these expenses over time as we grow our revenue.

Previous wording

Other income, net, primarily consists of net gains or losses on foreign currency.

Current wording

Other income (expense), net, consists of net gains or losses on foreign currency and certain other non-operating income and expense items.

Previous wording

Revenue increased $21.0 million, or 13%, to $182.8 million for the nine months ended October 31, 2024 from $161.8 million for the nine months ended October 31, 2023. The increase was primarily due to a $12.6 million increase from total customer growth worldwide, including new customers acquired from the Sinergise acquisition and net expansion of existing customer contracts of $8.4 million. EoP Customer Count increased approximately 4% to 1,015 as of October 31, 2024 from 976 as of October 31, 2023. The increase in revenue was primarily driven by growth in the Civil Government and Defense and Intelligence Verticals.

Current wording

Revenue increased $5.8 million, or 10%, to $66.3 million for the three months ended April 30, 2025 from $60.4 million for the three months ended April 30, 2024. The increase was primarily due to a $9.4 million increase from new customer growth and partially offset by net contraction of existing customer contracts of $3.6 million. The increase in revenue was primarily driven by growth with Defense and Intelligence customers.

Previous wording

Cost of revenue decreased $5.6 million, or 19%, to $23.7 million for the three months ended October 31, 2024, from $29.4 million for the three months ended October 31, 2023. The decrease was primarily due to a $4.7 million decrease in depreciation expense, which was primarily due to certain high resolution satellites that have fully depreciated. The decrease was also partially due to a $1.1 million decrease in employee-related costs due to reduced headcount and a $1.0 million decrease in hosting costs. These decreases were partially offset by a $1.2 million increase in costs paid to solution partners and subcontractors.

Current wording

Cost of revenue increased $0.9 million, or 3%, to $29.7 million for the three months ended April 30, 2025, from $28.8 million for the three months ended April 30, 2024. The increase was primarily due to a $1.4 million increase in employee-related costs, which was primarily due to efforts towards completing our satellite services contract performance obligations. The increase was also partially due to a $0.7 million increase in stock-based compensation expense and a $0.5 million increase in costs paid to solution partners and subcontractors. These increases were partially offset by a $2.1 million decrease in depreciation expense, which was primarily due to a $4.1 million decrease resulting from certain high resolution satellites that have fully depreciated.

Previous wording

Research and development expenses decreased $7.8 million, or 24%, to $25.2 million for the three months ended October 31, 2024, from $33.0 million for the three months ended October 31, 2023. The decrease was primarily due to a $3.7 million decrease in purchases of material utilized for research and development activities and a $3.3 million decrease in severance and termination benefits charges associated with the 2023 headcount reduction. The decrease was also partially due to a $2.6 million decrease in employee-related costs due to reduced headcount and a $1.9 million decrease in non-recurring expenses related to transaction bonuses paid to Sinergise employees, which was allocated from the purchase consideration we paid in connection with the Sinergise acquisition in August 2023. These decreases were partially offset by a $2.3 million decrease in funding recognized for our research and development arrangements, and a $1.7 million increase in launch provider costs associated with the launch of a satellite classified as experimental.

Current wording

Research and development expenses decreased $2.5 million, or 10%, to $23.1 million for the three months ended April 30, 2025, from $25.6 million for the three months ended April 30, 2024. The decrease was primarily due to a $4.3 million decrease in employee-related costs, primarily due to reduced headcount. The decrease was also partially due to a $1.2 million decrease in spacecraft hardware costs for research and development activities and a $1.1 million decrease in stock-based compensation expense. These decreases were partially offset by a $3.7 million decrease in funding recognized for our research and development arrangements and a $0.3 million increase in software and maintenance costs.

Previous wording

Sales and marketing expenses decreased $4.2 million, or 6%, to $62.0 million, for the nine months ended October 31, 2024, from $66.2 million for the nine months ended October 31, 2023. The decrease was primarily due to a $3.8 million decrease in employee-related costs due to reduced headcount. The decrease was also partially due to a $1.0 million decrease in stock-based compensation expense, a $0.8 million decrease in marketing expense, and a $0.8 million decrease in employee travel and entertainment costs. These decreases were partially offset by a $2.5 million increase in severance and termination benefits charges associated with our headcount reductions.

Current wording

Sales and marketing expenses decreased $5.2 million, or 24%, to $16.3 million, for the three months ended April 30, 2025, from $21.5 million for the three months ended April 30, 2024. The decrease was primarily due to a $3.2 million decrease in employee-related costs, primarily due to reduced headcount. The decrease was also partially due to a $0.9 million decrease in marketing expenses driven by decreased event costs, a $0.5 million decrease in stock-based compensation expense, a $0.2 million decrease in travel and entertainment costs, and a $0.2 million decrease in professional and consulting costs.

Previous wording

General and administrative expenses decreased $2.0 million, or 10%, to $18.1 million for the three months ended October 31, 2024, from $20.1 million for the three months ended October 31, 2023. The decrease was primarily due to a $1.6 million decrease in severance and termination benefits charges associated with the 2023 headcount reduction. The decrease was also partially due to a $0.9 million decrease in employee-related costs due to reduced headcount, a $0.6 million decrease in our allowance for expected credit losses for accounts receivable, and a $0.5 million decrease related to recovery of previously written-off accounts receivable. These decreases were partially offset by a $1.1 million increase in legal costs and a $0.7 million increase in stock-based compensation.

Current wording

General and administrative expenses increased $0.8 million, or 4%, to $20.0 million for the three months ended April 30, 2025, from $19.2 million for the three months ended April 30, 2024. The increase was primarily due to a $1.8 million increase in our allowance for expected credit losses for accounts receivable. The increase was also partially due to a $0.4 million increase in legal expenses and a $0.4 million increase in stock-based compensation expense. These increases were partially offset by a $1.1 million decrease in audit fees and a $0.8 million decrease in employee-related costs, primarily due to reduced headcount.

Previous wording

Interest income decreased $1.0 million to $2.4 million for the three months ended October 31, 2024, from $3.4 million for the three months ended October 31, 2023. The decrease was primarily due to a decrease in our short-term investment balances.

Current wording

Interest income decreased $1.2 million, to $1.9 million for the three months ended April 30, 2025, from $3.1 million for the three months ended April 30, 2024. The decrease was primarily due to a decrease in the balances of our cash, cash equivalents and short-term investments.

Previous wording

The change in fair value of warrant liab ilities for both the three months ended October 31, 2024 and 2023 represents the change in fair value of the public and private placement warrants, which primarily fluctuates based on the change in trading price of our Class A common stock.

Current wording

The change in fair value of warrant liabilities for both the three month periods ended April 30, 2025 and 2024 represents the change in fair value of the public and private placement warrants, which primarily fluctuates based on the change in trading price of our Class A common stock.

Previous wording

Other income (expense), net of $0.7 million for the nine months ended October 31, 2024 includes the derecognition of a $1.3 million liability for which settlement is not considered probable. Other income (expense), net of $0.9 million for the nine months ended October 31, 2023 includes the recognition of an insurance claim recovery of $0.8 million associated with a high resolution satellite.

Current wording

Other expense, net was $1.2 million for the three months ended April 30, 2025 and includes $0.5 million of interest expense associated with a customer contract that contains a significant financing component. Other income, net was $1.1 million for the three months ended April 30, 2024 and primarily reflects the derecognition of a $1.3 million liability for which settlement is not considered probable.

Previous wording

Provision for income taxes was immaterial for the three months ended October 31, 2024 and $0.4 million for the three months ended October 31, 2023, respectively. For the three months ended October 31, 2024 and 2023, the income tax expense was primarily driven by the current tax on foreign earnings. The effective tax rate for the three months ended October 31, 2024 and 2023 differed from the federal statutory tax rate primarily due to the valuation allowance on the majority of our U.S. and foreign deferred tax assets and foreign rate differences.

Current wording

Provision for income taxes was $0.9 million and $0.4 million for the three months ended April 30, 2025 and 2024, respectively. For the three months ended April 30, 2025 and 2024, the income tax expense was primarily driven by the current tax on foreign earnings. The effective tax rates for the three months ended April 30, 2025 and 2024 differed from the federal statutory tax rate primarily due to the valuation allowance on the majority of our U.S. and foreign deferred tax assets and foreign rate differences.

Previous wording

We define and calculate Non-GAAP Gross Profit as gross profit adjusted for stock-based compensation, amortization of acquired intangible assets classified as cost of revenue, restructuring costs, and employee transaction bonuses in connection with the Sinergise business combination. We define Non-GAAP Gross Margin as Non-GAAP Gross Profit divided by revenue.

Current wording

We define and calculate Non-GAAP Gross Profit as gross profit adjusted for stock-based compensation, amortization of acquired intangible assets, restructuring costs, and employee transaction bonuses in connection with the Sinergise business combination. We define Non-GAAP Gross Margin as Non-GAAP Gross Profit divided by revenue.

Previous wording

We define and calculate Adjusted EBITDA as net income (loss) before the impact of interest income and expense, income tax expense and depreciation and amortization, and further adjusted for the following items: stock-based compensation, change in fair value of warrant liabilities, non-operating income and expenses such as foreign currency exchange gain or loss, restructuring costs, certain litigation expenses, and employee transaction bonuses in connection with the Sinergise business combination.

Current wording

We define and calculate Adjusted EBITDA as net income (loss) before the impact of interest income and expense, income tax provision and depreciation and amortization, and further adjusted for the following items: stock-based compensation, change in fair value of warrant liabilities, other income (expense), net, restructuring costs, certain litigation expenses, and employee transaction bonuses in connection with the Sinergise business combination.

Previous wording

(3)Expenses relating to the Delaware class action lawsuit. Refer to Note 10 “Commitments and Contingencies” to the condensed consolidated financial statements for further information.

Current wording

(1)Expenses relating to the Delaware class action lawsuit. Refer to Note 8 “Commitments and Contingencies” to our condensed consolidated financial statements in Item 1 of this Form 10-Q.

Previous wording

•Adjusted EBITDA does not include severance expense in conjunction with a reduction in headcount, which reduces cash available to us;

Current wording

•Adjusted EBITDA does not include severance expense in conjunction with restructuring events, which reduces cash available to us;

Previous wording

For remaining performance obligations as of October 31, 2024, the Company expects to recognize approximately 82% over the next 12 months, approximately 98% over the next 24 months, and the remainder thereafter. For Backlog as of October 31, 2024, the Company expects to recognize approximately 70% over the next 12 months, approximately 91% over the next 24 months, and the remainder thereafter.

Current wording

For remaining performance obligations and Backlog as of April 30, 2025, the Company expects to recognize approximately 45% over the next 12 months, approximately 76% over the next 24 months, and the remainder thereafter.

Previous wording

Since inception, we have incurred net losses and negative cash flows from operations. Our operations have historically been primarily funded by the net proceeds from the sale of our equity securities and borrowings under credit facilities, as well as cash received from our customers. We currently have no debt outstanding.

Current wording

Since inception, we have incurred net losses. We recorded positive net cash flows from operations for the three months ended April 30, 2025. Our operations have historically been primarily funded by the net proceeds from the sale of our equity securities and borrowings under credit facilities, as well as cash received from our customers. We currently have no debt outstanding.

Previous wording

As of October 31, 2024 and January 31, 2024, we had $139.0 million and $83.9 million, respectively, in cash and cash equivalents. Additionally, as of October 31, 2024 and January 31, 2024, we had short-term investments of $103.3 million and $215.0 million, respectively, which are highly liquid in nature and available for current operations. We believe our anticipated operating cash flows together with our cash on hand provide us with the ability to meet our obligations as they become due during the next 12 months.

Current wording

As of April 30, 2025 and January 31, 2025, we had $133.5 million and $118.0 million, respectively, in cash and cash equivalents. Additionally, as of April 30, 2025 and January 31, 2025, we had short-term investments of $92.6 million and $104.0 million, respectively, which are highly liquid in nature and available for current operations. We believe our anticipated operating cash flows together with our cash on hand provide us with the ability to meet our obligations as they become due during the next 12 months.

Previous wording

As of October 31, 2024, our principal contractual obligations and commitments include lease obligations for real estate and ground stations and minimum purchase commitments for hosting services from Google, LLC. Refer to Notes 8, 10, and 12 to our unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information regarding these cash requirements.

Current wording

As of April 30, 2025, our principal contractual obligations and commitments include lease obligations for real estate and ground stations and minimum purchase commitments for hosting services from Google, LLC. Refer to Notes 6, 8, and 10 to our unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information regarding these cash requirements.