Transcript:

Caroline Woods: Joining me now, Will Marshall, CEO of Planet. Will, thanks so much for joining me at the desk.

Will Marshall: Great to be here. Thanks.

Caroline Woods: So let’s talk a bit about Planet to kick things off, ticker symbol PL. It’s the largest Earth imaging fleet. You basically take pictures of Earth from space, and then those pictures help you do what?

Will Marshall: Well, first of all, most importantly, we take pictures of the entire Earth landmass once a day. That’s the unique thing that Planet does. We have a line scanner that scans the entire Earth landmass. It’s orders of magnitude more than any other player. With all that extra imagery, what do we do? We help real world problems around the world, from farmers to improving agricultural yields to security monitoring for the Navy in the South China Sea and everything in between.

Caroline Woods: Yeah, I saw natural disaster surveillance. You mentioned environmental monitoring, maritime surveillance. So — and then I understand you have new satellites called Owls, powered by NVIDIA chips that promise high-res images that are then analyzed within an hour. So tell me, or give me an example of a real world decision that can be made faster because of that.

Will Marshall: Absolutely. These Owl fleets — we call them Owls because they’ve got big eyes and they’re wise because they have all this compute on them, more compute on the edge. So they have bigger eyes so they can see more detailed things on the ground — 1 meter resolution rather than 3 meter resolution. So 10 times higher resolution on the ground. And then in addition, we’re getting the imagery back and analyzed within an hour. That’s using NVIDIA chips. What’s that useful for, you ask? Well, one use case would be disaster response. So you imagine after a fire — a fire like the one in L.A. — quickly, the responders want to know what is damaged, which building do they need to go to help evacuate people from, bring relief in some other way. And then the insurance companies want to be able to analyze what risks do they have in their properties and do assessments of that to help claims and adjustments. But time matters. And resolution matters to do that detailed assessment. So that’s the use case this can power.

Caroline Woods: When it comes to defense and intelligence operations, you know, we’ve certainly seen a rise in geopolitical tensions and defense spending. So how do you balance between domestic business and international?

Will Marshall: Well, we’re obviously a naturally global capability. We image the whole world. So we provide to users all around the world. Just here today at our investor day, I was talking to one of our customers, the former Minister of Defense, Oleksii Reznikov from Ukraine, because we’ve been helping them since the beginning of the war to help them assess threats outside their borders and help them monitor to try and get ahead of that. So it’s critical for finding new threats around the world. We do a lot of stuff in sustainability — tracking deforestation across the entire Brazilian Amazon every day. If you’re tracking for new roads, or as I said, the Navy is tracking ships in the South China Sea. We’re useful across sustainability, security, and our mission is broadly to help bring that transparency and information that helps bring accountability, whether that’s in sustainability or security around the whole planet every day.

Caroline Woods: How much of your business is commercial versus government contract?

Will Marshall: It’s about a third commercial and a third — just about 20% of commercial, about 30% civil government, and about 40% and 50% now defense and intelligence.

Caroline Woods: And how do you set yourself apart from some of your competitors?

Will Marshall: Well, we don’t really have any competitors doing the daily scan, which is the most essential thing. What’s useful about that is that it opens up all these use cases like agriculture. All the other players are tasked systems, so they take a picture. If you say, “Hey, I want a picture here,” they’ll take a picture here. But we’ve already collected the whole Earth, so we have about two orders of magnitude more coverage. We cover the whole Earth every day, whereas they only cover a spot or two. That opens up these new applications — agriculture, forestry, disaster response, maritime domain awareness, and so on. And I think the perhaps biggest implication of that is actually in AI also, because we image the whole Earth every day, and we’ve done that for eight years now. So we have 3,000 layers for every point on the Earth’s landmass on average. So that’s an immense dataset to train AI models about the real world, because all the AI models are moving towards trying to understand the real world — not so that you can just ask questions about the text of the internet that you can do on ChatGPT. Imagine you can ask questions about the physical world — for that insurance, that disaster response, that holiday trip, what have you. I mean, the power of being able to ask the whole Earth questions, rather than just the text of the internet, is tantalizing, and that’s because of our daily scan.

Caroline Woods: It’s pretty cool stuff. But to your point, you’ve been doing this for years at this point. Yet if you take a look at the stock performance this year alone, it’s up something like 240% year to date. So what’s behind that growth, and why do you think there’s so much investor interest this year?

Will Marshall: Yeah, well, I think a couple of things. Firstly, our business is just humming right now. We’ve got two main aspects of our business that we’re focused on. One is what we call AI-enabled solutions, where we’re monitoring large areas. And the second we opened up last year, which is to start selling satellites dedicated to countries where they need it. And both are taking off. We did two big satellite deals — one with Japan, one with Germany — a couple million each. And then we’ve done six. And then just today we announced one more. So seven of these deals where we’re monitoring large areas with AI on top. So that business is humming. And then I think there’s another just a backdrop — that people are understanding now that space is more than just a cool thing like rockets and satellites. This can really help the Earth’s economy. It can help us with sustainability and big challenges around world security. And finally, it’s super relevant to AI because, I mean, every industry is relevant to AI — AI is playing in everything. But literally, AI is only as good as the dataset it’s trained on. So if you train it on the text of the internet, you get answers about the text of the internet. But if you could train it on the whole world’s data, then you get answers about the real world. It’s a tantalizing prospect. So space and AI are particularly relevant for one another, and I see quite a convergence there.

Caroline Woods: As it relates to the investment thesis, though, to your point, it’s very much tied into the space trade as well. But some look at that as highly speculative and risky. So I guess two-part question: can the growth continue, and what do you say to those investors who say, “Too risky for me”?

Will Marshall: Well, not only will the growth continue, I see it accelerating. And look, you only need to look at our financials. From the last quarter, we reported $45 million of free cash flow positive in the last quarter. So we’re already a cash positive business — but not quite profitable yet.

Caroline Woods: Well, no.

Will Marshall: No, we’re EBITDA profitable and cash profitable. And we said we’ll be cash flow positive for the full year — a year ahead of plan because of the business traction. We were growing at 20% year over year, and we see that accelerating because our backlog, we reported last quarter, grew 245% over the last 12 months to $736 million. So that gives us tremendous foresight into the future that we can depend upon. That’s why we’re already very confident that we see growth accelerating even beyond where we are today. So we’re a profitable business. Also, we have plenty of cash on hand, and we’re growing fast. So I think it’s a great investor thesis.

Caroline Woods: OK, so just to wrap — I’m biased, but as CEO of the company — just to wrap things up, looking five to ten years out, what role do you see Planet playing when it comes to sustainability, when it comes to global security, and just overall decision-making?

Will Marshall: Well, look, I see every country needing to have better eyes about what’s going on for security around its landscape. We’re seeing the changing geopolitics really demand that. And I see the merger with AI as these AIs move from the machine learning that they were doing to the large language models and foundation models like ChatGPT and the equivalents today — which talk about the text of the internet — towards what I call planetary intelligence, or Earth intelligence, where anyone can ask questions about that. And what will that do? That will open up this capability for not just the geeks who know about satellite imagery, but to everyone else who could ask basic questions in plain language and get answers back. I mean, it’s tantalizing — that will open up by orders of magnitude the number of people that could benefit from and get answers to our data.

Caroline Woods: All right. We’ll leave it there. Will, thanks so much for joining us. It’s been a pleasure. That’s Will Marshall, CEO of Planet.