Fireside Chat

Oct 19, 2021

Hello, and welcome. I'm Jarrod Banks, Editor at Large here at IPO Edge, and we've got another exciting fireside chat for everyone today. Today, we'll be talking with the CEO and CEO of Planet Labs, which is merging with the SPAC called Dmy Technology Group four, that's N Y S E DmyQ. And before we meet our esteemed guests, we'll just run through a little bit of housekeeping. One of the great things about this event is that viewers get to ask questions to our guests, and you can do that by submitting questions via the Zoom portal or e mailing at editoripo edge dot com. And a reminder that the replay will be available about an hour after we finish the event at ipoeds.com. If you can't watch the whole thing or you want to watch it again, it will be up. So let's just watch a quick video to give us an overview about Planet. A decade ago, out of a Silicon Valley garage, Planet began its stellar journey. We've always had the goal of empowering humanity with imagery of the planet taken on a more frequent basis. To achieve that, we'd have to act differently. Agile aerospace, as we called it, meant doing away with bulky billion dollar satellites with drawn out launch cycles. Instead, we'd design and build our own. Tiny, inexpensive earth imaging powerhouses delivering data on demand. And now we're at the point where we can image the entire earth every single day, and it's a new capability that humanity has never had before. Our constellation of nearly 200 Earth observation satellites currently orbiting Earth is the largest ever, and we've amassed a ten year archive of proprietary data that grows by 15 terabytes every day, creating a search engine for the planet. Google indexed what's on the Internet and made it searchable. We're indexing what's on the Earth and making it searchable. To unlock the value in this vast dataset, we've ever evolving needs. Businesses today operate faster than ever before. Last month's data is no longer sufficient. Last week's data is no longer sufficient. You need today's data. All of this innovation has resulted in significant barriers to entry, which place Planet miles ahead of the competition. This is just gonna get better and more ubiquitous all the time, and there's a market for it. And Planet, is a company that's really at the forefront of all of this. The industry worked is you had very big, very expensive satellites that only the very wealthiest of countries, wealthiest of companies could afford to task and get an image of what might be transpiring at a point in time and in a very specific place. Planet is different because we've taken the approach of we want to create a data set that can apply to any industry and any company, any government of any size. We operate at very high margin because we are already capturing the entire earth every single day. The cost of serving each new customer is very low. Little wonder then that our data is deployed across a staggering array of applications from farmers seeking higher crop yields to governments needing visibility into urban development and many other applications for businesses that simply demand mission critical insights. We've been doing research around precision agriculture and the promise of precision agriculture. Planet Data realized that promise. We rely on planet SkySat imagery to produce elevation maps that allow us to know how floods are going to move across the floodplain. And so that way, we know who's in danger and where they can go to be safe. Planet data is really revolutionary to our industry where never before have we been able to get this daily imagery everywhere on the globe, not only in the major food producing countries where we might have national capacity for Earth observation already, but we have this everywhere. The market opportunity for Planet's daily data is enormous, and it comes at a time when its urgency cannot be overstated. The earth is changing more quickly than ever and in ways that are dramatically disrupting economies, society, and the environment. Planet's opportunity is massive. We sit at the center of two of the most important, multi trillion dollar trends in the world today, digital transformation and sustainability. They affect every company in every industry and government around the world. Planet has built a Bloomberg like terminal for Earth data, the world's first web geo platform empowering organizations to make informed decisions and navigate these economic shifts. Come join us as we work to change the future. Very cool. Let's bring on cofounder and CEO, Will Marshall. Will, welcome to the program. Hey, thanks for having us, Jarrod and Alexandra. Great. So now Planet is a data subscription business delivering insights about daily change on Earth. But I wonder if you could give us a very high level overview of what exactly the company does. Yes, absolutely. Happy to do that. And I'm looking forward to this being a very open Q and A session. Let me just tell some basics about the company is just in a couple of slides that will help to give the very, very top level perspective. I really want to keep most of this just Q and A. But like this slide, I think, helps give people a bit of sense of where we're at as a company today. So we're simultaneously a space company, a software company and a data company. We have satellite back end, we build data on top of that and software services that enable analytics of that data. This slide gives you a little bit about Planet at a Glance. So we're like 200 satellites in orbit today. It's the largest earth imaging fleet in human history. With those image about 300,000,000 square kilometers of area per day, that's about twice the earth's landmass. So we image some land areas multiple times. And most of it, we just scan once per day. Just to give you a sense of scale, that's about 100x more imaging in area coverage per day than any other earth imaging player, about 100x. And then all of that, we process to be what we call machine learning ready, so analytics ready. So harmonize the pixels so that the user on top of that, the client just gets to have a seamless interface to build their tools, ML code or other analytics software. On the business side, just over GBP 100,000,000 in revenue last year. So we're at January fiscal year end, so FY 'twenty one was last year. So that's last year. Looking in the rearview mirror, just over GBP 110,000,000 in revenue. Most of that, over 90%, is recurring revenue. So we're really a data subscription business that these metrics show. Also, just the gross margins, just point out on this slide because I think it shows why we're one to many model. I mean, sell each image multiple times. Any image that comes down from our satellites, we can sell it to lots of users. We can sell it to ag customer, that civil government customer and so on. And every time, the incremental cost of selling our imagery to the next player is, of course, really low. It's just the compute and egress cost of selling that image. So all the analytics feed on top of that. So it's very, very high margins. 62% is already including is for our PlanetScript business, which is 73% of our revenue last year, and that includes the cost of the satellites. Most people think, oh my god, you're building satellites and operating satellites must be terrible gross margin. That 62% is going up very fast and already includes the cost of the satellite. So we've really made very efficient satellite systems. Just a couple more slides then. Next slide. Just this just is the video that just shows a little bit more how it works. So we have 180 satellites in a polar orbit, sun synchronous orbit, it's called. And they each take an image set of images as they go down. It's just vertically a strip of image, but the earth rotates underneath. So that by the time the next satellite comes, it takes a strip next to the previous one. So they end up being like a line scanner for the earth. Every day, because the earth rotates in twenty four hours, we scan the whole earth. We also have a set of SkySats, which are higher resolution images that can have resolution up to 50 centimeters and can take images on any particular place. We just did this really cool thing last year. We launched two sets of three satellites on two SpaceX rockets into two inclined planes that enable us to revisit any particular location up to 12 times per day. And that's the fastest revisit system of any earth imaging system on the planet or off the planet in this case. So anyway, that's roughly how our system works. If you go to the next slide, that's a little bit about the back end. And of course, as a space geek, I could spend hours talking about that bit, but I'm not going to. In the interest of time, really, what I wanted to speak to very, very briefly is that what's exciting is what does this mean for the customer. And what the customer looks at is something like this. It's like the imagery served up. It's a bit like Google Earth, but you have today's image and yesterday's image and the day before, and you have over 1,000 actually, over 1,500 images for every point on the Earth's landmass on average. So just imagine a time series of imagery, and you can set up your bespoke areas of interest and time of interest and fees, analytical fees. You can say, just show me the boats in the ports in my area or just show me the agricultural output. And we have those sort of analytical feeds. In the end, the customers are subscribing to these data feeds, whether in agriculture, there's agriculture farm feeds. If they're in civil government, they might be getting into feeds of all the new roads or buildings in the area or the imagery itself. Like Google uses the imagery itself to then inform and improve the maps. But like however they're digesting it, it's data feeds. And that's why we are liking it to a Bloomberg terminal. A lot of people are familiar with Bloomberg terminal. It provides data feeds into people's workflows and helps them make smarter decisions, Whether that's the imagery itself or the analytics on top of that, we are doing the same. And just like Bloomberg, it's a high data business is a high growth, high margins business, and it's high stickiness. That means when people have integrated this data into their workflow, it's very hard to switch because now they're calibrated to that and so on. And so that's why we think of it. But Bloomberg, there are some difference with Bloomberg. Obviously, there's limitations to that analogy. We're not certainly talking about a physical terminal, of course, we're talking about web interface. But the main differences are that we whereas Bloomberg mainly aggregates open source data that's available, financial data and provides data analytics on top of that. We have a proprietary data set from our 200 satellite fleet that enable this. And we service multiple vertical markets, not just finance, although finance is a market we serve. And so we think of it as Bloomberg plus plus Obviously, that's a great analogy for us that Bloomberg is a very successful business. But I really think, in all honesty, there's it does look and feel like a Bloomberg data business and not a satellite business, right? We're not selling satellite data feeds. So just one final slide, have just to tee up our discussion, just to talk just a tiny bit about some of the use cases that people actually get value out of our imagery. It's not just for shits and giggles. This is imagery that is really enabling smarter decisions economically and so on. So in agriculture, our data enables improvements of crop yields. So if each three by three meter box, we can actually tell with our spectral bands how well the crop is doing. Is it wheat or is it soy? And how well is it doing? And that enables it. When we do that across the whole farmers' field, we can then determine this area has got blight or this area needs more fertilizer or this is when the crop is ready to be harvested. All that sort of intelligence helps what's called precision or digital agriculture, improve enables improvements of crop yields of tens of percent, which is a big deal with agriculture. And we can do this for all the farmers' fields across the entire world every day. So big companies like Corteva and others are using our data across wide areas. Can't be done with drones. They just don't have the coverage. Can't be done with the higher resolution zooming satellites that everyone else has. Only we have the scan of the whole earth every day, and agriculture is 25% of the land mass of the earth. Just to mention a couple of others, and I won't go in the same length of depth. But defense and intelligence, we enable countries to seize new threats around the corner that they didn't know. We discovered a missile site in Eastern Iran that people didn't know about. We found new threats. And that's super important for countries to know about what threats are emerging around the world. In civil government, we help countries respond to floods and fires, disaster response and code enforcement. So just to give you a couple of examples, we've been helping the German government recently with the floods that happened with the California state versus counties, with the Dixie and other fires that were happening here in California. And the code enforcement is really fascinating. It's where counties and states use our data to enforce code like we work with Humboldt County as an example, and they use our data to check on cannabis growing. And cannabis growing is actually legal in Humboldt, but you have to have a permit. And they check the permits using our satellite data. And other counties use it for checking building permission, road construction efforts and so on. Mapping is companies like Google that use I mean, Google does something incredibly sophisticated. Every time they find something's getting out of date in a map, they automatically task one of the satellites. The satellites takes a picture. They automatically extract out that new road, that new train station, whatever it is, and then update the map. And they do that tens of thousands of times a year in an automated fully automated process. I won't go through the rest of the vertical markets. I need to say that the ones on the left hand side, the majority of our revenue, it's roughly 25% for those four on the left hand side, not quite, but last year sort of 25%, 25%, 2515% or something on those, like tenfold, and all the rest is that final bit. The ones on the right hand side, however, are going to be big in our future, finance, insurance, energy. Our data is super relevant. But those in the like finance, mean, have huge alpha on a lot of the world's commodities, like agriculture commodities, like output from all the world's raw material mines, all the world's shipping and transportation network. But those hedge funds don't want pretty pictures. They want time series calibrated data. We haven't yet got to that. So what we're doing in going public is exciting because for two reasons. One is that we're ready and another thing is that we're feeling this pull. We're having a lot of finance companies. And what this going public means for Planet is we will have the capital to put more boots on the ground to go after the huge market opportunities, especially the ones in the left hand four, and more software to go up the stack for the right hand vertical markets that need more analytics to enable them to get going. So with that, I'll leave it there. But that's a quick overview of Planet and some of the use cases and a quick snapshot of the financials just so that people have a sort of level set. I mean, it's absolutely incredible. And you could imagine if you were a commodities trader, you would really need a product like this. So going public, that's a great segue to my next question before I bring on our other panelists. Why a SPAC? Why now? Great questions. Well, firstly, why now? Because I mean, the first thing is do a company should analyze, do you want to go public? And we have been analyzing that for some years, and we always thought that was the right thing in the end. The question was when. And Ashley, our CFO, has been with us for one years. Point We've been preparing. We've had audited finances for three years. And we were getting to the point where we felt we were ready. We had a mature satellite segment, over 200 satellites operating. We had a data business. We had clear product to market fit in those four left hand verticals I was just saying. And we were doing a serious amount of revenue, right, over £100,000,000 in revenue last year. We felt that it was at the right stage to go public. Why SPAC? Well, it's an efficient vehicle to do it. It was ideal for our kind of company because we could do it quickly. We could talk a little bit about the future. And I think that we found a great partner in D and Y who've done this many times before, saw the real value of us, not just as a satellite company, as a data and analytics company, and saw the value proposition to sustainability. And so I would say that's the reason we chose SPAC. And then we found some great PIPE investors, right, with BlackRock leading the PIPE, with Marc Benioff coming in a big way, Google coming in. We just upped the PIPE with CPP, the Canadian Pension Fund, which we're really stoked to have them in. And just one final thing about the SPAC process, we're also feeling this pull right now. Everyone wants our data. And why? It's because the whole planet is trying to transition to a sustainable economy, ESG targets for companies, emissions targets for countries. And what do they need when they're transitioning to a sustainable economy? The first thing, they set these goals and then they're like, well, we need to measure it. That's the very next thing because otherwise, they can't manage it. And so we can measure those ESG targets. We can measure those emissions. And so we're feeling the pull of the market. And so this is the right time to go public for us. The market pull is there, and so we're leaning into it. That's a great answer. I'm going to bring in my colleague, Alexandra, now and Ashley Johnson, the CFO. And take it away, Alexandra. Yes. Great to be with you both. And we would encourage our audience to keep submitting questions. We already have a few going, but hope to foster a really great discussion. So Ashley, tell us a bit more about Planet's one to many data subscription business model. Know, Will alluded to the fact that your incremental operating costs become very low as more users are added. So tell us about that. Yes. Thank you, and it's great to be here. When I joined the company about one years point ago, what struck me is that while from the outside, everybody is really focused on the fact that Planet has totally revolutionized how to build satellites and design satellites through its agile aerospace, the business model is actually very similar to a data infrastructure SaaS company. So any company that's building software solutions on top of complex data center infrastructure, that business model looks very similar to our own. We've built proprietary data and analytics on top of our data center. It's just that our data center happens to be in space. So when you look at the business model, the metrics are very similar. So we have 90% recurring revenue. Our customers are subscribing to these data feeds over multiple years. On a dollar weighted basis, 70% of our contracts are multiyear, on average about two point five years. Our customers are embedding our data into their business intelligence. So they want to lock in pricing over multiple years. So actually on the commercial side of our business, the non governmental side, our contracts are skewing closer to three years on average on a dollar weighted basis. And so when you look at these types of metrics, you know, a net dollar retention rate greater than 110%, these types of metrics are very analogous to SaaS companies and other data as a service companies. Yeah. And then what you know, there's so many potential end user, you know, opportunities for Planet. I mean, from agriculture to, sounds like military intelligence, it just seems endless. Can you talk about which of these vertical markets will drive the most growth in the future and potential tailwinds? Yes. It's interesting. As Will mentioned, in the near term, we see a lot of the growth coming from the core markets, which have historically been users of geospatial data. So this is the agricultural industry, civil governments, defense and intelligence and mapping. And as we ramp up our sales team globally, we expect a lot of the near term growth to be in those markets. But the exciting inflection for this company is as new markets understand the value of the data that we're bringing and are embedding it in their business intelligence systems. And so that's like financial services companies that are trying to understand land use for their commercial loan portfolios, that are trying to assess insurance risk related to wildfires and flooding. They're trying to model out the impact of climate change on their overall municipal bond portfolios. They're trying to predict commodities prices as a result of global agricultural production of different commodities. And then also, a lot of pull across all markets because of the heightened focus on ESG and environmental impact. So the ability to really measure the E in those ESG scores and understand what is the true environmental impact of that supply chain footprint and have consistent scoring across companies. All of these are indicators of the types of inflection that we expect to see in our business in these new markets that are just really opening their eyes to the power of our data sets. Yeah. And just along those lines, of questions of privacy or legality issues, like, you able to anonymize the status so that individuals aren't ever individually identifiable? I mean, I guess the the reference that comes to mind is almost like the Truman Show, Big Brother is watching you. What would you say to critics that bring those kind of issues up? Will, why don't you take this one? Yeah. I'm happy to. Look. I mean, remember that we're about 500 kilometers up, so, this is not, like, right over your head. This is like us taking a picture with our telescope from here in San Francisco to Los Angeles and seeing things, right? That means that we can't see a person in our medium resolution imagery and even in a high resolution, very, very difficult. Maybe you can start seeing crowds of people. You certainly can't identify a person from space. It's just too far away. Even the big satellites can't do that, like even the big government one. Drones can because they're they could be five meters above your head or five kilometers above your head even there with it's still 100 times further away than if they were five kilometers up, right? So where a plane might fly. So you remember the distance. You really what satellites are good for is wide scale scanning, right? And that's why our applications are things like agriculture because that's 25% of the land mass of the earth. You just can't do that with drones, but we have sufficient resolution to provide precision agricultural benefits, right, subfield understanding of crop health. Similarly, on the military side, it's more like scanning for new threats. On disaster response, it's finding all the fires across the whole of California or helping floods because we automatically scan the whole world. We have the day before and the day after for a flood. And that's really important to have timely information in that scan before you been able to fly airplanes or anything else. So it's wide scale effects like that that affect and help our use cases. The use cases are sort of focused on that. The advantage satellites have is they're going eight kilometers per second. So they cover vast territories, right, that planes and drones and other things can't. But the good thing about that is that they're so far away, they don't touch really personal privacy so much. That's great. And then, Ashley, how does Planet's business model how is this transforming the Earth observation industry at large? That's a great question. So when you think about historically, the Earth observation industry, around satellites, has been about building very big, very expensive satellites that can take, you know, can capture images, but really on demand. And so when the fundamental capacity of those satellites is limited, they're looking in very specific places. And so from that end, the satellite manufacturer has to be thinking about how do they optimize the revenue per satellite, which typically translates into the highest bidder, which typically translates into a government buyer. And so that's how the historical industry has really been focused is very big players that are servicing a government customer. And in some cases, you can see in the public filings, the U. S. Government, for example, may represent as much as 80% of revenues. That's a very different value proposition than what Planet has built. Because we are scanning the earth every single day, we're effectively taking images of what anybody might want to look at. So we don't have to be tasked on demand. We already have that image, and we can sell that data multiple times over. And every incremental customer is really just dropping profits to the bottom line for us that we can then reinvest in the capability of those satellites. And so it's a fundamentally different proposition when you're talking about a one to many subscription model versus a one to one tasking model. Now we do have high 21 high resolution satellites. We have the highest revisit rate of any point on earth of satellite providers in the earth observation industry. And what that enables us to do is to combine the two data sets to increase the capabilities of the analytics and the robustness of those analytics as well as to scan for the things that our customers may not know they need to look for and then task the satellites to zoom in and learn more. So the multimodal fleet that we have is also very unique in the industry. And we think we're fundamentally transforming the way the market thinks about accessibility to and usability of satellite data. Yes. And talking more about those vertical markets and kind of the scope of Planet's end users, can you give us a bit more along the lines of the revenue breakdown for government usership versus commercial? Yes. So we've Will mentioned, have four core markets today that make up the majority of our revenue. So our largest market is civil government. That last year, our fiscal 'twenty one was 24% of our revenue. Here we go, nice slide to break it down. Second largest market was agriculture, and that's one where we're seeing a lot of growth this year as we've really been attacking that market as we've expanded our commercial sales team. And then defense and intelligence, another sector within government, represents about 22% of our revenue as of last year. And then as Will mentioned, mapping is kind of a close fourth, but about 17% of revenue last year. That 14% other is really where we see opportunity over the long term to expand the reach of our business. So that's opportunities in financial services, insurance, forestry, and the energy markets, which really are nascent markets for us today. Yes. And then let's talk a bit more before we get into some of the financial nitty gritty about kind of new markets and growth forecasting. What analytics and solutions and products are going to be deployed to address new markets, new customers? Yes. So it's really building on top of the platform that we have today. So today, our customers can access our data a couple of ways. So one is through our own web based interface, which we call Planet Explorer, or they can use subscription APIs to ingest our data into whatever systems they might be using on their side. So we have partnerships with Esri. We integrate into Google Earth Engine and other tools that may be in use by our customers on their desktop. As we think of the opportunity going forward, it's really building on top of that solution stack. So building more APIs to be able to integrate into other analytics solutions as well as building our own analytics solutions inside of Explorer to enable our customers to interact with the data however they are most comfortable and using whatever tools they're most accustomed to. I don't know, Will, if you have anything to add on the platform side. I mean, obviously, that's a significant area of focus. Our main areas of focus with this capital that we're getting through this process are in sales and marketing and then going up the software stack. And that's a lot to do with analytics that enable our new vertical markets. It's actually it helps our current vertical markets because even, say, the big ag companies are asking us, hey, you just do this image processing step? Can you just do this analytics piece for us? Because we prefer to focus on the farmers. Great. We can do that, add that value and go up the value proposition there and gain more share per planet. On the but it also opens out, so they're going up the stack, opens out the new vertical markets that aren't addressable until you get to a certain stage, like the finance one I mentioned. Great. And then how is Planet Data measuring results in the growing ESG market? How what is Planet's strategy to build, buy, or partner to move up the stack as you just had alluded to, Ashley? So a lot of different ways for our data to be used for sustainability purposes. So for example, we have partnerships underway to look at incorporating Planet's data into ESG scores. So we're working with Fortune 100 customers so that they can understand their global supply chain footprint and the impact of the minerals that they may be sourcing for their own products and what type of environmental footprint are those mining practices having on the planet, being able to track that measure it, report out on it as part of their own sustainability commitments. Will, do you want to talk a little bit about just kind of the relevance of Planet Data to you and SDGs and other larger global efforts? Yes. I mean, very much so. Mean, look, we think of planet data as enabling this sustainability transition, right? And I mentioned that the whole world is trying to do that. We looked at the UN Sustainable Development Goals and found that our data is relevant to measuring 13 of the 17 SEGs from food security because of our agriculture, water security, all these things. And what does that mean? It means that every one of those things, whether you're a company or a government that's trying to transition to a sustainable practice, You have to measure that piece. And our data set is really foundational to measuring the natural capital, which we have to take into account. We're presuming it's all for free. And what is natural capital? It's the trees, it's the water, it's the pollution, it's the air, it's all these things. And Planet is a daily snapshot of where we're with our natural capital. So when companies are trying to measure their ESG targets, the E is, of course, environment, It's in supply chain. It's like understanding risks of assets to disasters. It's about like floods or fires. It's about understanding do their supply chains come from sustainable sources, and so we can help them to measure that. Does their paper come from a sustainable forest, etcetera, etcetera. And so all of that is all about measuring natural capital and our data set, we think, is foundational to that transaction transition. Awesome. And then, Ashley, let's get into a little bit more of the Planet's financial model. Can you go over some of the KPIs? Sure. So as I talked about earlier, some of the things that we manage from a financial KPIs is very similar to what you might see from a SaaS company. So we're reporting out on what percentage of our revenue is recurring. So as of the last quarter, it was 93% of our revenue is recurring in nature. We're tracking our average contract length. So as this metric shows, over 70% are in multiyear deals. And as I referenced earlier, on a dollar weighted basis, we're trending around two point five years on average for our average contract length. Net dollar retention rate is a really important metric that we manage as a business. We start with a book of business at the beginning of the year, and we look as the year goes along, how that business is renewing and expanding to measure the net dollar retention rate. We also have a supplemental metric that we provide to investors as disclosed in our S-four around net dollar retention rate, including win backs. So a customer that may have lost budget in prior periods or might have taken longer beyond the renewal date to navigate the renewal, We factor that in a supplemental metric, which is the net dollar retention rate plus win backs. And that as a metric increased 14% year over year 14 percentage points year over year from our fiscal 'twenty to our fiscal 'twenty one. And that's a metric that we report out on regularly. And then we're looking at how many customers we have. So we do have a bit of an eightytwenty rule with a large concentration in our largest customers in terms of revenue, but a broad array of customers with whom we're engaging and really looking to drive expansion of that footprint. So the land and expand sales motion is one that is very familiar to our enterprise sales reps around the world. And so the more customers we have, the more opportunity we have to drive expansion in our core customer base. Yes. That's super interesting. Can you go over like the margin sorry, the margin profile and CapEx requirements of Planet? Yes. So we'll talk about in the beginning that we have two fleets of satellites. So one is our medium resolution satellites, our PlanetScope satellites or Dove satellites. They cost on approximately $300,000 per satellites, including the bill of materials, labor and launch costs that get capitalized. They typically have a useful life of about three to five years. In our financial model, we assume it around three years. So we're roughly assuming we're replenishing onethree of that fleet every year. Our high resolution satellites are more expensive. We acquired them from Google a few years back. We are still amortizing the cost of those satellites through our cost of goods sold. But as we look at our next generation high resolution satellites, we anticipate that those will cost more in the order of magnitude of about $4,000,000 per satellite, have a useful life of, we assume five years, although our SkySat satellites have actually have achieved a useful life greater than six years and we estimate nine years. And so if you use that five year useful life, assume you're roughly replenishing that fleet about onefive every year. So that's kind of how we've factored it into the model. And that results in CapEx as a percentage of revenue really trending down as our revenue scales. So last year, our satellite CapEx was about 18% of revenue. This year, it will be closer to 10%. I think our total CapEx as a percentage of revenue in Q2 was around 9%. And our steady state for CapEx as a percentage of revenue, we model around 5% to 8%, and that's inclusive of our satellite costs as well as any capitalized software, other capitalized expenditures. So again, as you think about what businesses are most analogous to Planet, it really does look like a data center SaaS company in terms of CapEx as a percentage of revenue on a steady state basis. Yes. And then in addition to Planet's Dove constellation, you recently announced the new satellite Pelican. Can you talk about how this fits into your financial model and revenue acceleration? Yes. So I'll touch briefly on financial model, then Will can talk about kind of how we think about it from a market perspective. But this is effectively our next as we think about the next generation of our high resolution satellites. And so as we think about replenishing the SkySat fleet, it's really with greater capabilities and using that agile aerospace model to drive down our overall cost of maintaining the fleet. And so that and as we drive those costs down, we increase the capabilities of that fleet. So Will can talk a little bit about what we've been sharing on that front. Yes. Panacon is really exciting. It's our next generation Hi Res, as Ashley was just saying. So this what this is going to have is even higher resolution. And so our current system is 50 centimeters, and this is going to go significantly higher than that and higher revisit rates. So we're already imaging up to 12 times per day in a particular location, certainly depending on latitude, and we're going to increase on that. We haven't released all the specs because we want to be a little have some fun secrets for later, but it's going to be exciting. And there's some really, really cool technology aboard. And this is all, by the way, going to cost even less than the previous satellite iterations, about 3x less. So we, as a company, have something that's important that we have all of our satellite capabilities built and designed and built in house, something also distinguishes us from most of the competitors in the arena. And that makes a big difference. Because if you go and buy your satellites from Lockheed, say, it's a very sort of government process because they're used to doing government contracting. And you'll buy your $1,000,000,000 satellite. In fact, the last satellite from Matar, for example, costs over $800,000,000 for a single satellite. That's more than we spent on all of our satellites combined, right? And by having it vertically integrated in house, we can design build satellites much faster, much, much lower cost and iterate the capability to what the customer needs. Just last year, we increased our doves by 5x data rate per satellite per day by adding spectral bands, adding faster radios, adding more larger sensor. We went from a 29 megapixel sensor to a 47 megapixel sensor, so on and so forth. As the technology improves, we call it strapping space to Moore's Law. We want as the technology underlying gets better, we want to constantly put that in space. And so our goal is to constantly improve, that's that Pelican is the next evolution in our high resolution fleet. It's all very, very exciting technology and outlook. And we've got some really great, very informed questions coming in. I'm going to throw this back to my colleague, Jared Banks, and to start fostering this, what will be, I think, a very robust discussion from our audience. Thanks, Alexandra. And we promise we will get to as many of the audience questions If we can't get to them all, we will pass them on to Will and Ashley. So don't worry about that. Okay. Let's start here. Here's one from Roberto. How many satellites would you say you will need to be as efficient as you would like? And approximately, how many satellites do you think you will have for next year? Well, actually, I think the quick answer to this is that we've done building the fleets that we wanted to build that enable us to operate the core parts of our business. So the 180 Dove satellites is complete. It does the daily scan. And last year, which was actually a very busy year, we launched 89 satellites on five rockets, all during COVID. So space did not slow down for COVID. But that the final set that I said, the two sets of three satellites on the two SpaceX launches of the high resolution system completed our high resolution system. So with those two systems complete, we are now in maintenance mode largely, right? So we're constantly refreshing when as we need every year, but it's basically maintenance mode, which is why actually you can talk to this in more detail if anyone's interested, the CapEx that we're talking about as a percentage of revenue is now it was 18% last year. It's projected to be just under 10% this year. And so we're going down and maybe to even the long term range is going be 5% to 8%. So we're really a capital efficient business despite having to do it, and that's because we're now in maintenance mode. We have a fully scaled and operational satellite fleet. Now it's mainly around go to market, using that data to service all the vertical markets and adding analytics to enable others. Fantastic. Here's a question about when the SPAC transaction will close. Now that hasn't been given out yet. But I would just like to point out that if you do buy shares of DMYQ, they will automatically convert into Planet shares once that SPAC transaction does close. Yes. And that will be PL on the New York Stock Exchange afterwards. But yes, DMYQ is the SPAC vehicle. Got that. So no need to worry. Okay. Moving on. What's on the road map for the coming years in regards to hardware and software? Well, there's lots of exciting stuff. Mean, I mentioned, like this last year, we increased the amount of data per satellite 5x. We also increased our resolution from 70 centimeters to 50 centimeters on our high resolution system and increased the number of revisits from 2x or 3x a day to up to 12x per day. We are going to continue on those sort of high growth vectors in better and better data. So the first thing on the hardware side is constantly investing in those next generation satellites that enable a better and better data sets. And better data means higher resolution, more spectral bands and more frequent revisits, so more cadence. But I think even more important is what we're doing on the software side. I mean, this I also asked the question on the software side. And as I said, the main thing is going up the stack, as we call it, to enable us to service different vertical markets and get more value out of the existing ones. And so that means things like adding better analytics, adding more bespoke analytics, adding more building up more towards indicators, not just so like if we could do crop soy yield for the whole world per day, that would be very interesting to a lot of players, right? We haven't got to that sort of aggregated analytics or statistics yet. So that's going to take some time and calibration and so on. We've got the raw data for it, but now we need to add some of the analytics there. So a lot of the growth areas in software. In fact, I think our software team is projected to grow about 300% over the next five years, whereas the Space team, which was we'll continue to invest in, is only growing about 30 or 40% over that similar time horizon, just to give you a sense of the scale. So yes, we're investing in Space, but we're investing even more on the software side. Right. Right. Next question. Are there any restrictions for imagery for certain countries or locations on earth? Do you foresee any future restrictions arising? Roughly speaking, no. There's an international treaty that enables any country to take pictures of anyone else from space. Unlike planes, where you have to fly in their plane, in their air territory. In space, you're above any country's territory, and so you can take a picture. We are restricted from supplying data to certain parties. There's an embargoed list of entities, both countries, organizations and people that we can't service our data to under U. S. And EU law. And we have an ethics committee to check any of our prospective customers before we take them on to ensure that there's no issues to do with ethical bad uses of our data. I think that's pretty unlikely, but we do keep a check on it because we do really think it's important But for the most part, our technology is bent towards good, and we can supply it to most people. And we think that's a great thing. The more people that access this information, the better. Right. Now you touched on this at the beginning, but I want to go back to some of those verticals. We have a question here. You're diversified across several verticals, but are there one or two that investors should watch closely for the most growth in coming years? I would say agriculture is really exciting because we've got so many ag customers. I think there's we will grow that market significantly. We've already got a couple of customers that are in the sort of 10,000,000 a year kind of range, and we expect them to grow. And there's 30 or 50 more ag companies at that scale. Well, that's a big growth opportunity for us. Long term, as I've already mentioned, I'm most excited about finance because of the alpha that we have. But that's a longer term play. Ashley, anything to add on that? No, I think you hit the right core markets. Obviously, civil government is also a very big area of growth for us. We've done a lot of expansion contracts with these civil governments that have understood how our use case can help them provide better services and infrastructure to the people to be able to monitor sustainable development and those types of practices and to provide emergency and disaster response. So a lot of civil governments to target around the world, and that's another area where I expect near term growth. Okay. Let's turn to competition for a little bit. Now in your investor deck, you pointed out that you've got a big head start over would be rivals. But are there any serious competitors investors should be aware of? Well, look, firstly, I think competition is good for everyone. But we've got a huge, huge lead in this scanning system that no one else has, and it would take many years for them to catch up. And that addresses big markets. So just touching on that just a little bit again. So we have 200 satellites operating. They collect about 100x the area of any other player per day. And that is what enables us to service these big new markets like agriculture, forestry, maritime and so on. And I think a couple of things that people when you look on the surface, there's a few companies, of course, that have satellites doing imagery. But basically all the other players are tasked. So they task their satellites to take targets that customers ask for. That makes it inherently more like a one to one model because they give that imagery then to that customer, but it's rarely of interest to other players. Our scan is automatically of the whole earth, and we don't provide it exclusively to any one customer. And we, in fact, we clip and ship it to multiple customers. And that means that we have this one to many model. So I think the summary sort of is that we've got this unique daily scan, which no one else has and can touch. And it would take many years for anyone to and that's what services the most of the vertical markets that we're excited about and we think most of our vertical markets today, but also where the growth areas are. And it would take many years for anyone to build such a system. So it's very hard to get to what we've built and almost impossible to catch up because we, of course, we're not going to sit on our hands there. But also, it is impossible to go back and get the archive. We now have 1,500 images for every point in the Earth's landmass, and that is where all the training happens. So machine learning, if you ask any machine learning expert, they will say the most important thing is the data archive or the training data, right, that you can train your algorithms. We've got this stack of data. And as far as I'm aware, I'm a physicist, I've thought a lot about this, you can't no one's invented a time machine yet to go back in time and erect a satellite fleet to collect the data that they need to do the training. So that archive is super important for all the analytics that we're building now on top. And just if I can layer on top of that, you can see the difference in our business model also in the financials. So most of the other vendors or suppliers in the market calculate their gross margins excluding the cost of the satellites, so excluding the depreciation and amortization of that significant investment. When you do that, for Planet, our gross margins would be roughly 75% today. So we are already a very high gross margin business. Our incremental cost to serve a new customer is extremely low. So our direct margins, we calculate around 94% to 96%. When you look at others, they have much lower gross margins, which is indicative of really building bespoke solutions for a single customer, which by definition is going to be a much more expensive value proposition and a much less scalable model. So I do think that technology is a huge differentiator for us. We have a substantial lead, but our business model is also a significant competitive differentiation. Great. And Ashley, staying with you, when will you be cash flow positive? And will the SPAC deal provide enough cash to fund the biz until it's cash flow positive? So that is the intention. So as I mentioned, we do have very high gross margins. So our investments are really in the building out of our commercial organization, so growing our feet on the street and increasing our marketing spend as well as the investments that Will referenced in our software team. So really investing and hiring the engineering team to build that platform capability and enhanced analytics to expand our share of wallet with our customers and expand our market share. With those investments, we anticipate we'll need approximately $200,000,000 to fund the company to cash flow breakeven. And again, these are projections that are contingent on a lot of things happening, which we've described in the S-four. So I do encourage everybody to read and understand the assumptions underlying that model. But nonetheless, we anticipate that the capital that we've raised from the PIPE investors should fund the company to cash flow breakeven, which leaves the capital that we receive from the SPAC that's in trust as effectively dry powder to enable us to have a stronger balance sheet, pay down some of the existing debt that's on the business. We have about $65,000,000 of bank debt on the business as well as to enable us to have capital for consolidating in the industry as we see appropriate. Right. Okay. How do you consolidate your place in the emergent and fast changing on the tech side new space industry? Well, this is a fun one. I mean, look, the space industry is undergoing a bit of a renaissance. But like all the excitement is in the rockets and the billionaires going up and their rockets and all this stuff. But I think the true excitement, the true upshot is all these new data sets. Really, like, that's the excitement. And there's been about a 4x reduction in launch costs, but there's been about a 1,000 fold increase in capability performance of satellites. And that's a revolution, right? That's not like the Model T Forward moment. This is more like the mainframe to desktop computers moment for IT. So aerospace is undertaking a big revolution. Of course, there's Planet and SpaceX alone have about half the satellites in orbit. So it's producing lots of new satellites, right? And Planet and SpaceX are sort of pioneering the way in communications and Earth observation, respectively. And what's the main upshot of those satellite fleets? It's either producing or transporting massive new data sets about the Earth. And that has huge implications for the Earth economy and for transitioning to a sustainable economy. And so people think of space in this renaissance, and they're thinking rockets and billionaires and the moon and Mars. I think of the data economy, the earth and all the applications that are happening here. And I'm excited about the rockets, too, but I think I'm even more excited about how this data is relevant to the earth's economy. And I think that's the trillion dollar opportunity here, not the rockets. So that's what we're going after. Great. I think that's a great way to end it. Very positive note. My thanks to our guests, Will and Ashley here today. This has been a great discussion. I promise we will get those questions over to planets, and they can certainly respond. And thank you to the audience members and my co host, Alexandra. Thanks very much, folks. Thanks for having us. We're really excited to go public, thanks for having us on the show. Thank you very much. Thanks a lot. Signing off.