Good afternoon. Thank you for attending today's Planet Labs PBC Q1 of Fiscal 2024 Earnings Call. My name is Anna, and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. If you would like to ask a question, please press star one. I would now like to pass the conference over to our host, Chris Genualdi, Vice President of Investor Relations. You may go ahead. Thanks, operator, and hello, everyone. Welcome to Planet's Q1 of 2024 earnings call. Before we begin today's call, we'd like to remind everyone that we may make forward-looking statements related to future events or financial outlook. We also reference qualified pipeline, which represents potential sales leads that have not yet executed contracts. Any forward-looking statements are based on management's current outlook, plans, estimates, expectations, and projections. The inclusion of such forward-looking information should not be regarded as a representation by Planet that future plans, estimates, or expectations will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions, as detailed in our SEC filings, which can be found at www.sec.gov. Our actual results or performance may differ materially from those indicated by such forward-looking statements, and we undertake no responsibility to update such forward-looking statements to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. During the call, we will also discuss non-GAAP financial measures. We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. We believe that these measures provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making. For more information on the non-GAAP financial measures, please see the reconciliation tables provided in our press release issued earlier this afternoon. Further, throughout this call, we provide a number of key performance indicators used by management and often used by competitors in our industry. These and other key performance indicators are discussed in more detail in our press release. Before we jump in, I'd like to encourage everyone to reference the slides we have posted on our investor relations website, which are intended to accompany our prepared remarks. Finally, for each of the customer contracts referenced during this call, please note that the revenue figures we cite will generally be recognized over the term of the contract, which can last several years. Further, the terms of these contracts can vary, and many of these contracts can be terminated by Planet or our customer prior to their maturity. As a result, we may not realize the total revenue expected for each such contract. At this time, I'd now like to turn the call over to Will Marshall, Planet's CEO, Chairperson, and Co-founder. Over to you, Will. Thanks, Chris, and hello, everyone. Thanks for joining the call today. Our Q1 financial results were solid. We generated $52.7 million in revenue, representing a 31% year-over-year growth, in line with our guidance. Non-GAAP gross margins expanded to 56%, up from 45% in the prior year, an 11 percentage point increase, showing the ability for our one-to-many data business model to drive significant margin expansion as revenue scales. We ended the Q1 with over 900 unique customers spanning across government and commercial markets. While our Q1 results were in line with our expectations, we faced some recent headwinds in April and May, which inform our guidance for the year, and I'll address this in a moment. Before that, I do want to underscore our sustained confidence in the market opportunity. In Q1, we saw the largest quarter for pipeline generation in the company's history. We saw rapid advancements in AI that are unlocking new possibilities with our dataset. We saw our products that are enabling our customers to address some of their most pressing security and sustainability challenges. That is all to say, we continue to see strong demand for our solutions. Let me now address our update to guidance for this year. The primary driver is that sales bookings came in lighter than we expected. In recent weeks, we observed a combination of factors coming together, including extended sales cycles, as well as some of our larger deal opportunities closing with smaller values than anticipated. We believe these recent changes reflect hesitation from customers as they enter a year with heightened budget uncertainty, as well as government procurement cycles taking longer than we expected. Because of our data subscription business model, lighter bookings in the beginning of the year have a more significant impact on the full-year revenue forecast than bookings in later quarters. Furthermore, because we believe this customer behavior may continue, we are revising our guidance, presuming these trends go on for the remainder of the fiscal year. To maintain our path to profitability at this lower assumed revenue growth rate, we are adjusting our expense plan. We have significantly throttled back our headcount expansion plans, which generate savings in the current year, but more importantly, we estimate these changes will reduce our annual runway expenses by more than $35 million going into next fiscal year. We believe this adjustment to our expense plan supports our standing objective to be adjusted EBITDA profitable no later than Q4 of next year. In scaling back our spend, we're prioritizing investments that support revenue for our core business and our path to profitability. We're focusing our resources on our highest ROI customers and opportunities, as well as looking at additional ways to optimize expenses. We are fortunate to have high gross margins and the operational levers in the business that enable us to do this. I'd like to emphasize that through this, we continue to believe we have sufficient capital on our balance sheet to capture the market opportunity, drive strong growth, and achieve cash flow breakeven without needing to raise further capital. As I stated earlier, our conviction in the opportunity for our business over the long term remains strong. Let me expand on some of the recent deals and other signals that give us confidence. Firstly, on demand, as mentioned, we generated a record amount of qualified pipeline opportunities in Q1. It was more than double the quarterly average of the prior year. For some additional color, let me mention that we added 5 new eight-figure potential customer opportunities to the pipeline for FY 2024 during this Q1. We've never seen anything like the scale of these large opportunities. Generating qualified pipeline lays the foundation for future growth year-over-year. It's up to us to convert that pipeline into bookings and revenue. Secondly, on AI. The recent advances in AI and the potential that generative AI and large language models, in particular, have to unlock value in our data, is a further catalyst to our existing tailwinds. On our last call, we shared how our partner, Synthetaic, ran AI models on our data archive to track the Chinese high-altitude balloon to its origin point. Synthetaic's analytics, when combined with the PlanetScope archive, function almost like a time machine for the Earth, allowing users to scalably search data back through time, going back 6 years. We've added a video to our investor relations website under the Videos tab, that shows Synthetaic's model running on Planet data and extracting insights. Their solution automates the analysis of large, unstructured data sets like ours, so that even a non-technical user can detect objects in minutes or train and deploy AI models radically faster than even traditional AI approaches. It's hard to overstate the power of this. Being able to search the world for objects on demand has huge value for defense and intelligence customers, civil governments, and for sustainability applications, too. It's been inspiring to watch the reaction of customers and prospects when they see the value that the combined capabilities of these models are, and our proprietary data unlock. We also signed a partnership with South Korea-based AI company, SI Analytics. SI Analytics plans to use Planet data for a North Korea ballistic missile operations search project, with the goal of enhancing global risk management and mitigating tensions in Asia and beyond. If you joined us in our user conference in April, you would have seen our demonstration of Queryable Earth, California, which you can find online. This is a proof of concept project from our ongoing collaboration with Microsoft. The Queryable California demo aims to show how next generation AI can make satellite data more accessible by making it searchable, conversational, and context aware. While only the video is available in your browser today, it's a glimpse of what's possible when you combine our proprietary data with industry-leading AI capabilities. It's another milestone in our journey towards building a Queryable Earth, a vision I outlined five years ago at TED 2018. These AI-centered partnerships are just the beginning. We see AI as a catalyst to help unlock the full potential of our deep data archive, which has the depth and consistency that others in the industry can't match, enabled by our unique Earth scanning constellation. AI models themselves hold little or no value without data to run on, but Planet data and AI is an incredibly powerful combination. In short, Planet sits on a treasure trove of real-time and archive data that is an incredible asset for this AI revolution. Thirdly, I'd like to share some additional business highlights that represent the pressing issues that our solutions are helping customers address. In the last month, we closed two multi-year deals with international customers centered around defense and intelligence applications, one in the eight figures through a partner and one in the seven figures. In a world of heightened global tensions, the need for greater security and transparency is clear. Recent global events are driving elevated interest in our capabilities amongst the defense and intelligence community. Turning to commercial clients, we extended our strategic partnership with AXA Climate, which I previewed on our prior call. AXA Climate is a leading provider of consultancy services, helping clients adapt to climate change and biodiversity loss. The partnership aims to offer continued satellite data-driven insights for the development of parametric insurance products. In Q1, we also closed a 7-figure, multi-year renewal and expansion with Syngenta, which will enable their use of PlanetScope to globally set the foundation for growth, new applications, and R&D in precision agriculture. Syngenta's existing work with Planet over the last several years has included using SkySat for monitoring corn and soy, as well as plot verification. Turning to climate and sustainability, we have a few partnerships to mention here. The United Arab Emirates is hosting this year's climate conference, COP28. With this context, we recently signed a partnership with the UAE Space Agency to build a regional satellite data-driven loss and damage atlas for climate change resilience. The initiative aims to provide our data to countries facing high degrees of climate risk so that they can better respond, make informed policy decisions, and enable financial programs for climate adaptation and mitigation. We are also seeing that sustainability regulation in various geographies is a significant catalyst for wide-scale adoption by civil government. Let me mention a few examples. Europe's Common Agricultural Policy, or CAP, drives the need for governments in Europe to monitor for compliance. Together with our partner, NEO, we closed a new deal with a Dutch paying agency. We're delivering Planet Fusion as part of the area monitoring system provided to the Netherlands by NEO, as part of their efforts, in turn, to increase automation of their monitoring. Relatedly, Planet won a multi-year, seven-figure open tender award from the Welsh government to support the design and implementation of the Rural Investment Schemes and the Sustainable Farming Scheme. Similar to CAP, coming down the pipe, we expect the newly adopted and far-reaching EU Regulation on Deforestation-free products to be a driver. It forces companies bringing any of 7 commodities into the EU to prove that they did not cause deforestation, all starting next year. In our view, satellite data is the scalable solution for monitoring to ensure compliance. Turning to South America, we recently signed a 7-figure multi-year contract with Bolivia's Institute for National Agrarian Reform, or INRA. It's our largest deal in a Spanish-speaking country. INRA is using PlanetScope and SkySat to map the country and monitor for good stewardship of public lands and title enforcement. They're also using our archive to gain insight into previous land use. Planet data has proven more cost-effective than the alternative of flying airplanes to capture imagery for INRA. On the sustainability thread, the Environmental Resources Management, or ERM, a global sustainability consultancy, also became a Planet partner. ERM brings deep subject matter expertise to clients across industries, contributing to more than 20,000 sustainability-related projects each year. The partnership is designed to expand their imagery, use cases, applications, and reporting capabilities, helping enable decision-makers to address their operational and sustainability goals. These recent wins are indicative of a diversity of customers we can serve and critical needs that our data address. Now, to give a brief update on the M&A front. This last week, we launched Planetary Variables Live on Planet Subscription API, enabled through the VanderSat acquisition. These products have opened new opportunities for us in markets like insurance. We've also been pleased with our recent acquisition of Salo Sciences. The integration is going well, and they have been successfully executing to plan. At our Planet Explore conference, we announced that we would add new Planetary Variables, building on that team's work. They have already delivered on multiple sales opportunities for Planet. Meanwhile, in Q1, we announced our intention to acquire the business of Sinergise. I'm pleased to say that it's still on track to close this quarter. We view the Sinergise acquisition as a key part of our strategy to bring the power of Earth observation to the mainstream and to position us to support regulatory programs such as the EU's Common Agricultural Policy that I mentioned earlier. To summarize, we delivered solid Q1 results and had our strongest pipeline generation quarter in the company's history. Bookings came in lighter than we expected, with some sales taking longer than expected and others landing at smaller values than anticipated. We're responding by adjusting our spending plans, prioritizing our investments on customers and opportunities where we see the highest ROI, as a result, we are maintaining our profitability objective for next year. Our conviction in the significant scale of the opportunity for our business remains strong. With that, I'll turn over to Ashley. Thank you, Will. Thanks everyone for joining us today. As Will mentioned, our revenue for the Q1 of fiscal 2024, ending April 30th, came in at $52.7 million, which represents 31% year-over-year growth. As of the end of Q1, recurring ACV, or annual contract value, was 93% of our book of business. Over 90% of our book of business consists of annual or multi-year contracts. Our average contract length continues to be approximately two years, weighted on an ACV basis. Net dollar retention rate, which we measure relative to the book of business at the beginning of each year, was 98%, and net dollar retention rate with win backs was 99%. It's important to understand that at this point in the year, our net dollar retention rate is reflective of only three months. If you look at our prior 2 years of net dollar retention rate, as detailed in our quarterly earnings investor presentation, our net dollar retention rate starts each fiscal year at 100% and then builds through the course of the year towards our final full year result. The slight decrease in NDRR for Q1 relative to the beginning of the year is primarily due to delays in renewing certain government contracts. For the full year, we're targeting an approximate 120% net dollar retention rate, consistent with the targets that we have shared for the business in the past. Turning to gross margin, we expanded our non-GAAP gross margin to 56% for the Q1 of fiscal 2024, compared to 45% in the prior year. This 11-point expansion of gross margins is driven by the growth of revenue, the efficiency of our agile aerospace approach, and our one-to-many data subscription business model. As a reminder, we include the depreciation and amortization of CapEx in our cost of goods sold, mirroring the practices of publicly traded SaaS businesses. Adjusted EBITDA loss was $19.1 million for the quarter. Capital expenditures, including capitalized software development, were $7.1 million for the quarter or approximately 13% of revenue. This is lower than we anticipated due to the timing of receiving materials. Turning to the balance sheet, we ended the quarter with $376 million of cash equivalents, and short-term investments, which we continue to believe provides us with sufficient capital to invest behind our growth-accelerating initiatives without needing to raise additional capital. We also continue to have no debt outstanding. At the end of Q1, our remaining performance obligations, or RPOs, were approximately $138 million, of which approximately 80% apply to the next 12 months and 99% to the next 2 years. As we've shared on prior calls, RPOs can fluctuate quarter to quarter as multi-year contracts come up for renewal. Please keep in mind that our reported RPOs exclude the value associated with the EOCL contract, as well as other contracts that include a termination for convenience clause, which is common in our federal contracts. While our Q1 results were solid, the lighter-than-expected bookings in the past couple of months that Will mentioned earlier have led us to update our outlook for the full year. We are lowering our assumptions for new and expansion business in fiscal 2024 and modeling longer sales cycles and smaller average deal sizes, consistent with what we've recently observed. I'll note that we signed two contracts in the last two months that were seven or eight figures in size, but that are not expected to drive significant incremental revenue until Q3 or Q4 this year because of the expected timing of data consumption and the associated revenue recognition. Some of the challenge around our updated revenue forecast is timing. We see a similar challenge as we look forward to Q2, as some of our customers with contracts that are up for renewal in Q2 and Q3 are slowing data consumption to stay within their annual contract allowance. We believe the adjustments we have made to our forecast in response to all of these factors address the headwinds we saw and position us appropriately for the remainder of the year. With the changes we have made, as of the end of Q1, approximately 80% of our revenue forecast for the year is already committed, and that's before factoring in additional renewals, new business, or revenue from the acquisition of Sinergise. Will already outlined how we're adjusting our expense plans and prioritizing our spend in light of our updated revenue outlook. We expect these adjustments to generate savings in the current year, but more importantly, we expect it to reduce our planned operating expense run rate at year-end by over $35 million to support our targeted path to profitability. I'd like to underscore our commitment to the objective of achieving adjusted EBITDA profitability by no later than the Q4 of fiscal 2025 or calendar year-end 2024. As we've said before, we have multiple levers to align our spend to growth rates, both on the CapEx and OpEx side of our business. We expect we can make these adjustments while continuing to maintain our competitive lead in the market. Turning to guidance, for the Q2 of fiscal 2024, we expect revenue of $53 million-$55 million, which represents growth of approximately 11% year-over-year at the midpoint. Please note that the year-over-year growth rate is adversely impacted by the revenue upside of approximately $5.5 million that we delivered in the Q2 of fiscal 2023, which was driven by elevated usage with a number of our consumption customers. The heightened usage rates last year create a challenging year-over-year comparison, especially as some customers have adjusted their usage rates down to stay within their annual budget envelope, as I mentioned previously. The year-over-year growth rate comparison is impacted by the conclusion of a large legacy contract in Q1, which we referenced on our last earnings call. We expect non-GAAP gross margin for Q2 of 48%-49%. The sequential decline in gross margin reflects the accelerated depreciation of two of our SkySat satellites, which we expect to lower and reenter the Earth's atmosphere later this year and mid-next year, earlier than initially estimated, which was caused by an unusual increase in solar activity that we and other LEO satellite operators have experienced in recent months. Our approach to Earth observation provides us with significant redundancy to our operations, such that we continue to have capacity to onboard new customers and are not concerned with our ability to serve existing customers with the SkySat fleet. Our adjusted EBITDA loss for the Q2 is expected to be between -$20 million and -$17 million. We are planning for capital expenditures of approximately $10 million-$14 million. For the full fiscal year, ending January 31st, 2024, we expect revenue to be between $225 million and $235 million, or growth of 18%-23% year-over-year, which includes approximately $7 million of revenue we expect from the Sinergise acquisition based on an assumed closure in mid-Q2. Our non-GAAP gross margin is expected to be between 52% and 54%, which is lower than prior guidance, both because of the lower revenue guidance and the approximately $5 million of additional depreciation expense. Adjusted EBITDA loss is expected to be between negative $67 million and negative $58 million. We expect CapEx to be approximately $45 million-$55 million or approximately 20%-23% of revenue. As shared on our prior call, CapEx for this year is driven primarily by investments in our Pelican program, which is on schedule to be ready in advance of the end of life of our SkySat fleet. Overall, we're pleased with how the program has been progressing and look forward to our first tech demo, currently scheduled for launch later this year. Finally, before we turn to Q&A, I'd like to highlight that we're proud to have published our inaugural ESG report. It is meant to outline our company mission and lay the groundwork for Planet's sustainability program, while highlighting some of the ways we are making progress toward a more sustainable and equitable world. It includes our second year of reporting carbon emissions data and our first SASB disclosure. This marks just the beginning of our ESG reporting journey, and we are excited to share our progress with all of you as we continue to grow and scale our operations and impact. You can find our ESG report on our website at planet.com/esg. Operator, that concludes our comments. We can now take questions. Certainly. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. Again, to ask a question, press star one. We kindly ask participants to limit themselves to two questions today due to the volume of attendees in queue. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question. We will pause here briefly as questions are registered. The first question is from the line of Ryan Koontz with Needham & Company. You may proceed. Thanks for the question. Trying to correlate kind of the, some of the change in mix in Q1 with the downtick in the outlook for rest of the year. It looked like North America was a little soft and commercial was quite soft in your fiscal Q1. Is it fair to kind of extrapolate that that's a source of weakness for the balance of the year? Well, I'd say, I mean, a lot of it is timing. Some of it is the legacy contract. There clearly are some challenges in the economic environment for the commercial customers, but it's, we're definitely seeing increased budget scrutiny and longer sales cycles on the government side as well, so it's not just that. Would you add anything, Ashley? No, I think that's right. If you're talking about year-over-year comparisons, it's important to remember we referenced the one larger contract that completed in Q1, and that was a North America contract. That's certainly gonna be one of the factors. Got it. Helpful. On the change in gross margin outlook, I didn't quite catch everything you said there about the SkySat decline. Was there an accelerated depreciation or something that's impacting gross margin beyond just, volume there on the outlook? Yeah, you got it exactly right. There are two satellites where we're now estimating a shorter useful life. The impact to COGS on this year is roughly $5 million, and that's a relatively recent development. It just started at the very tail end of Q1, but most of the impact's hitting, you know, Q2, the through about Q1 next year. If I may, just add a little bit of context here. What's going on is that the sun has a really abnormal amount of activity, and what that does is it heats up the top of the atmosphere of the Earth, adding more drag. Basically, all LEO satellite operators are facing this challenge, and this accelerated the end of life of these two satellites. That's really helpful. I'll pass the question to you. Thanks. Great. Thank you. Thank you, Mr. Koontz. The next question is from Trevor Walsh with JMP. You may proceed. Great. Thanks for taking my questions. Appreciate it. Will, maybe just to ping off your comments on that from that last question. Would that abnormal sun activity just potentially affect competitors a little bit more and more in earnest, since they might have a smaller fleet, and so they have less to kind of be able to depend on, kind of as a backfill, if you will? Or do you not see that necessarily kind of affecting them in that way? Well, absolutely. The most important thing about our fleet is the significant redundancy we have on our system. And that's both on the high-resolution fleet, the SkySat, and the Dove fleet that does the daily scan. We obviously... The other thing to bear in mind is our agile aerospace approach just enables us to flex to the demand much more swiftly. I mean, because if we build and design and build all of these things in-house, we can just flexibly launch more when we need more, and that also helps with this. I mean, the most core factor is the redundancy in the fleet. Great. Terrific. Then maybe, just to follow up around the consumption piece, either jump off for you or for Ashley. Do you get the sense as customers are maybe, trailing back or, curtailing their consumption rates a little bit to match the contracts, is that really a function of just what's happening with the macro and kind of budgetary concerns? Would there also be larger right-sizing of their, kind of consumption, just based on, you know, they've had a year or two to understand what their needs are, and they're just now right-sizing the contract regardless of macro? Is it really just attributable to them not wanting to kind of get ahead of their skis as far as, kind of, you know, just given the uncertainty in the more marked environment? Does that make sense? It does make sense. I'd say, you know, the good news is, as we think, as we look forward to, on the renewals front, actually, we continue to see a strong line of sight to a strong renewal rate this year. I said, you know, we're still targeting north of 120% NDRR. It's not that we're seeing contracts renewing necessarily at smaller amounts. The issue is, as I mentioned last year, we saw a pretty significant uptick in the pace of consumption, starting in Q2. We attributed that to we had rolled out a number of software improvements that frankly just made it easier to access the data. We'd cautioned at that time that we didn't know whether customers would renew early or increase the size of their contracts, because if they continued at that pace, they would use up their contract allowance early. What we're seeing now is, as we're getting to those Q2, Q3 renewal dates, we're actually seeing customers slow down because frankly, they just can't get the budget ahead of when it's when it's set at the renewal date. That's a little bit of what we're seeing that's impacting some of the Q2 compares in particular. Great. Thanks for taking the questions. Great. Thank you. Thank you, Mr. Walsh. The next question is from the line of Jason Gursky with Citigroup. You may proceed. Good afternoon, everybody. Can you just provide a little bit more color on what's going on with the government contracts? You suggested that things are not moving along as fast as you would like, either on new deals or renewals. You know, where are you seeing that behavior? Is it here in the United States, outside of the United States? Just a little bit more color on what's going on with the government markets would be helpful. Yeah, happy to do that. Yeah, first, you know, we have seen the softness on the commercial side before. This is a little bit new data points on the government piece. As is, by the way, the elongation on the commercial side. On the government piece, I think that we've seen some of these procurement cycles taking longer than we had expected. These are complex government processes. And to your sort of where does it divide up, I would say, you know, we've seen it both in small deals and larger deals, and I don't know of any particular geographic focus. Not aware of any distinction there. Does that answer your question? Yeah, I think so. You're not seeing it, you know, concentrated either inside or outside the United States, it's everywhere? No, no. You know, just to shed a tiny bit more light on that, just to, you know, one of the eight-figure deals that we had mentioned in our remarks, slipped, but now it's signed, and the revenue increase really ticks up, is expected to tick up later in the year, like Q3, and that was later than we had planned. This is just so it's timing, basically. Yeah, we saw this impacting a couple of deals. It's not specific to the U.S., where, you know, the deal was kind of expected to land right at the end of the quarter, kind of slipped into early Q2. Got awarded the business, that process of getting the ink on the paper is just taking a little longer. Seeing just some of the government bureaucracy ticking up, unclear whether this is, you know, just a point in time or whether there's something else going on where, you know, given the economic environment, governments also are getting more scrutiny around getting these procurements over the goal line. We're looking at it and trying to understand it. Right now we're, you know, making the assumption that deals are going to be slower so that, you know, we factor that into our revenue assumptions. It's kind of early days. Mm-hmm. Do you have the second question? Look, I know you've added a lot of yeah, I do. I know you've added a lot of headcount and CSM, you know, headcount, so sales headcount, CSM headcount. I'm just kind of curious, you know, how accurate you all have been in the past, in forecasting out this kind of activity? You know, given the growth that you've all seen, whether the accuracy is not as robust as it has been in the past? Just trying to get an understanding of whether this is truly a market thing or if this is, you know, a result of, you know, potentially some growing pains as you all are bringing in, onboarding a lot of new people, and you're all trying to figure out the right process to be able to get the visibility that you need to appropriately manage the business. I mean, I think that's a fair question. you know, we had a lot of activity going on in Q1. We had our Explore conference, which was phenomenal. We had our sales kickoff. We had two really phenomenal international conference at Munich Security and Davos. All of that led to, as Will referenced, really strong pipeline, one of, I think, our best ever as a company, and significantly above our historical averages. All of that was pointing to a lot of great activity going on. I think to your question is some of this now, you know, is a lot for the team to be processing. We have a lot of new people that we were onboarding, and so is some of that factoring into the delays in, you know, getting the deals closed? I think in general, the important thing is, one, just great signals from the market, so having the pipeline. Two, we remain very confident in our team's ability to close it. To your point, we wanna make sure that we're factoring in whether it's the macroeconomic environment or, to your point, you know, new people in forecasting. We wanna make sure that we're factoring in just some data points we saw coming out of Q1 into how we're thinking about the rest of the year, so that, you know, we don't run into this kind of situation in future quarters. Okay, great. Thank you. Thank you, Mr. Gursky. Our next question is from Mike Latimore with Northland. You may proceed. Great. Yeah, thanks very much. Just on the OpEx changes you're planning this year, can you just give a little more detail there, is it across the board? Then, I guess, in the midst of that, what is the thought on just sales headcount growth this year? Maybe I can talk to the former, and Ashley can talk a little bit to the latter. Overall, we're prioritizing to high ROI business areas, as we sort of mentioned in our remarks. On the go-to-market side, what that really means is that it's been a streamlining and focusing high ROI business areas in terms of geographies, vertical markets, higher ROI products. Moving some of the long tail, smaller deals to our partners and to our platform, hence the Sinergise acquisition. On the product side, I don't know if you saw our Planet Explore conference and what we announced there, but we really talked about we're focusing on the key products that we spoke about there, the Planetary Variables, Pelican, AI. You know, in, on other areas, we made a number of bets on the smaller side, some of which have clear near-term ROI, others a bit further off, and we'll be focusing more on the former and less on the latter, given the situation here. Ashley, do you want to take the second bet? Um. Any reps, I think you know? Oh, right. Yes. I think what's important is that, again, a lot of positive signals in terms of the market and the demand. As we'll reference, there are areas where we will continue to invest, and obviously having the feet on the street in those places where we have the pipeline and need to make sure we have the teams to go close it. Similarly, behind those products where we are feeling a lot of pull for the market still and want to make sure that we're putting appropriate wood behind those arrows. You know, part of this also is just making sure that we're being very focused in how we make these investments. We've done a lot of investing over the last 18 months. Now is the time to make sure that we're being efficient and focused on the path to profitability. Yeah. Got it. Just on the pipeline, it sounds like that was very strong in the quarter, and you referenced, I think, five eight-figure deals. Are there any commonalities among those deals in terms of, you know, new logos or expansions or commercial versus government? How did the sort of seven-figure pipeline do in the quarter? What was the last bit? How did. How did the seven figure- to. How was that in the quarter? Yeah. Well, firstly, we, I mean, I, we've never seen pipeline generation quite like this last quarter, and we really scrutinized and only had to put qualified deals into our pipe. To have those five eight-figure deals is just, we've never seen anything like it. Most of that is in the government space, but there is a healthy mix between civil government and defense and intelligence, so it's quite a variety of applications. What we're seeing drive this, as we hinted at on, a little bit on the call, prepared remarks, there's the sustainability regulations that are driving big deals, and then there's also AI, which is, it's really an accelerant and a catalyst. You know, we're seeing this pretty strong momentum of these seven and eight-figure deals, and you heard some of the wins that I spoke about. Yeah, summary, it off the charts, pipeline generation, which is why it's a level of mixed signals when we're talking about the reducing the revenue growth rate. Got it. Okay, thanks. Great, thank you. Thank you, Mr. Latimore. Our next question is from Jeff Van Rhee with Craig-Hallum. You may proceed. Great, thanks for taking my questions. First, just walk me through the sales, I guess, just the sales and usage environment and how it evolved, particularly when this weakness started to really manifest itself. Just a little more precision on when and what you saw. I'd say, you know, in general, we always expect back-end loading on a quarter for closing deals. We had the pipeline coming in. We had a lot of commit that we expected to convert. As we reached the final weeks of the quarter and things pushed into early Q2, it still felt like we were on track. As we'll reference, we had, you know, a really nice 8-figure deal close in May. We had a couple other wins that came over the goal line right in the final weeks or early in May. The signal remained relatively strong. There were, you know, as I mentioned, you know, one where we got the award, still working to get the ink on the paper. We'll reference the eight-figure deal where, because of budget constraints on the part of the customer, they actually won't uptick their usage until much later in the year, which from our revenue recognition perspective, even though we've got this multiyear committed dollar amount, when we actually start to record that revenue is gonna be later than what we anticipated. Those were some of the, you know, the factors that, you know, caused us to have to rerun the numbers as we were closing out the quarter. As we just looked at some of the metric averages coming out of the quarter, you know, historically, we've talked about, you know, sales cycles accelerating and average deal sizes improving and things of that nature. This is really the Q1 where as we ran those numbers, we saw the trend going the opposite direction. You know, we could treat that as a, as a blip, or we can make assumptions that that's a trend. We have a very strong commitment to getting this company to profitability. To ensure that we do that, we have to, you know, assume that these factors are going to continue so that we rightsize our expenses for that circumstance. Generally speaking, there's still a lot of really positive signals that we're seeing from the market and a lot of great activity going on with our sales team. We know we have to close the business, but, you know, we want to make sure that as we, as we think about what's going to close when, we take more conservative assumptions so that we can size the expenses accordingly. Maybe the only thing I would just add to that is that keep in mind that this is just very recent data and really only a data point of one in a sense. you know, we're creating new markets here. We're paying close attention to it and understanding it more over time. Yeah, as Ashley was also saying, we've got the demand and the pipeline here. It's up to us to convert it. Okay, my last question, just to read it back to you. It sounds like you're saying you didn't see any differences, really, with respect to civil DNI commercial, whether it was new business booked in the quarter, usage, pipeline. It sounds like you're kind of calling those all out as being on prior trends and not varying in any meaningful ways? No, I think I said something different, or at least how I heard you read it back sounded different to me. One, we saw, you know, when we look back on the quarter, that average deal sizes were down, whereas historically, we've seen them trend up. We saw sales cycles- Sorry, Ashley. No, I'm sorry. I definitely didn't phrase it well. Yeah. I guess the question was, civil DNI and commercial, specifically, the weakness. Obviously, you're taking everything down going forward. Are you taking down equally in terms of the outlook? Right ... in each of those, civil DNI, commercial, usage, and new business across the board? Got it. Uh. Yeah, I didn't phrase it well. Got it. That, yeah. Okay, good. Yeah, I'd say generally across the board, and in particular, like I said, some of the larger contracts where they were on that accelerated pace of usage over the last few quarters, we've been engaging with those customers around the renewal. There's a lot of that, for example, in government, where they just frankly, don't have the budget lined up until the quarter of the renewal. Those are some of the things that are factoring that we're factoring in. I don't think it's specific to any one sector. I think the surprise to us was, you know, historically, we've seen the government actually being strong in spite of the macro headwinds, whereas we, you know, we saw a lot of caution already on the commercial side. This impact of budget cycles for governments is a relatively new phenomenon. Again, I don't anticipate any challenges with the renewals. It's just, you know, because they've been on such a high usage rate, the timing of getting that renewal versus, you know, getting that new revenue in is working against us. Again, this is one data point, so it's not a trend yet. We need to wait and see and to really understand it. Still analyzing. Yeah. Okay. All right. Got it. Got it. Okay, thank you. Great. Thanks. Thank you, Mr. Genualdi. Our next question is from the line of Kristine Liwag with Morgan Stanley. You may proceed. Hey, good afternoon, guys. Maybe bridging the slower booking in the quarter that you mentioned and the smaller revenue conversion, can you bridge that versus a doubling of qualified pipeline? I mean, how similar or different are the customer profiles that's driving the near-term headwind versus the longer-term tailwind? Yeah, I mean, just to your general point, there's some mixed signals here. We did have a incredibly strong pipeline generation quarter, and we saw some slowness in bookings, especially in recent weeks. You know, sales elongating and so on. I don't think there's a distinction in the mix between the past and the pipeline and the revenue we're booking, so I don't think there's much distinction there. Again, Ashley mentioned this, we did spend a lot of our energies in Q1 on generating pipeline. It is true that we spent a lot on that, and obviously not satisfied with the bookings result, and it's our job to now spend the rest of the year converting that pipeline into revenue. To your question about sectors, I think the mixed signals actually span all the sectors. We saw some really strong pipeline, and strong interest from customers across commercial sectors like insurance, and agriculture. We referenced some of these in the call, and the energy space. There is a lot of really good activity going on there. I do think that there is heightened budget scrutiny, and when you're talking about a market-making activity, you're not necessarily just replacing another budget. You're actually, you know, as a commercial customer, you're having to make budget for something that's new, and so that makes for longer sales cycles, especially in this environment. The good news is, what we see is a lot of strong activity on that front, pointing to pipeline and demand. On the government side, as we'll reference, there's so many things going on right now that are tailwinds for our business, from peace and security, more obviously on the DNI side, but also a lot of the regulatory activity going on on the sustainability side of the business. Great. Thank you. Following up on the contracts where the dollar amount is smaller than you anticipated, can you share any insight if the customer's budget for that category of spend for your product is the same, meaning that they could be acquiring similar or complementary capabilities with your competitors, or is it that they're really completely cutting this category of spend, you know, resulting in a smaller booking? I'll just comment on the co- competitive piece. I mean, we're not seeing us lose any deals to competitors, basically. These are much more macroeconomic, budget-related issues and/or government, complexity of deals than it is anything to do with competition, mainly because our solution is completely unique, especially the daily scan, which drives a lot of these deals. Ashley, anything to add? I'd actually say it's quite the opposite from what you described in terms of not necessarily that they're downsizing because there's not demand for the broader data amounts, but rather they're pacing the consumption so that they can get the budget dollars in for the larger deals. I can think of a number of examples off the top of my head, where the customer has used the budget that they had available to get the contract started and to get going with our data, while they line up budget to have a larger consumption later in the year. Sometimes it takes time to line up the budget. Yes, that takes time, but I think that's indicative of the fact that they're actually trying to figure out how to get more budget dollars allocated our way, versus, you know, scaling it back. Great, thank you. If I could squeeze one more in? I mean, in AI, you know, you guys mentioned that you have a few different partners that you're working with. In the future, how do you think about sharing economics, how would that work? I mean, you have the data, but if they've got the processing power, how do you make sure that you're gonna keep your portion profitable, and you're gonna protect the data that you have? It's a great question. I mean, firstly, we're just so excited about what's going on in the field of AI here, right now. I mean, the power of being able to search the Planet is incredible, that's what's happening with the combination of our data and these new AI tools. It enhances and speeds up the ability to extract out value for everyone. You know, we've seen a few kinds of use case areas, like in defense and intelligence, searching for spy balloons or in disaster response and civil applications, like doing building damage assessment. You know, it's a wide variety of areas of this. To your specific question about it, I'd just point out, it's something I've mentioned a number of times, AI without data is not useful. You have to train it on data. Firstly, Planet has a massive stack of data. It's a treasure trove for these AI models. Secondly, we have the ongoing daily scan, which is how companies can or governments can continue to monitor things. That's all because of this unique daily scan, 2,400 images on our archive and then this daily scan. That is what's opening up all these new applications, and it's that is driving this interest in AI on top of satellite data. It's that that's completely unique and proprietary to Planet. It puts us in an unusual position, and a very powerful one, of where a lot of these top AI companies are coming to us because they know that the AI, without the datasets, is really not nearly valuable. Once they combine it with a dataset like us, that puts us in a powerful position to do these sort of licensing terms. So far, the terms have been pretty favorable to us because of that recognition, I'd say. Great. Thank you very much. Does that make sense? Hey, no worries. Yep. Yes, thanks. Thank you. Our next question is from Edison Yu with Deutsche Bank. You may proceed. Hey, thanks for taking the questions. Just one follow-up. I think you mentioned that you're going to maintain the EBITDA target. Can you just go over kind of how you plan to kind of offset the lower growth? Yes. As I mentioned, we've been looking at, you know, the expense growth plans and headcount growth plans that we had for the year, and obviously scaling those back and making sure that they're focused on the highest ROI areas. There are number of areas, as we've referenced multiple times, where we're seeing strong demand signals, so we don't want to back away from investments behind that. One, we can make sure that we're very focused on efficiency internally of our operations, and two, make sure that we're being very strategic and selective as to where we're making those, any incremental investments. By doing these assessments, we've already scaled back expense growth on the year, such that our exit run rate, you know, is north of $35 million, less than where we had expected to be. Understood. I just want to ask quickly about Sinergise. I know you mentioned that it's a pretty kind of nominally low, but wondering if you can give any insight to how fast it's growing. The, you know, obviously, we saw at the conference a lot of customers use it. Maybe the growth trajectory and an opportunity that brings forward. We see it as being a very valuable add-on to almost every one of our customer relationships. It is a front end that helps people to ease use of our data, especially on the small, long tail of small clients, as I mentioned, that helps automate a lot of that segment, which has, you know, been costly in a sense, but also the big deals as well. I mean, a number of the partnerships we're talking about in Europe, driven by the sustainability pieces, like sustainable agriculture regulation, demands countries track how they're doing on these sustainable ag practices and monitoring those and report on those. They have some great automated tools that sit on top of our data to in order to enable that. It's great. Overall, I'd also just comment that we're still on track to close in Q2 with that. We feel pretty happy about that. Very happy also with our other two acquisitions. We feel confident it's the right move. Great. Thank you. Thank you, Mr. Yu. Our next question is from the line of Greg Mesniaeff with WestPark. You may proceed. Yes, thank you for taking my question. I wanted to circle back to the OpEx right sizing that you've announced. Focusing more specifically on, you know, the SG&A line, what areas do you see most likely to be impacted? If you could just kind of give us some more granularity on that. Yeah, I think as Will referenced, as we're looking at how we're focusing our go-to-market activities, the larger customers have been an area of higher ROI for us and smaller customers where we can deploy more automation and have a much lighter touch model is obviously much more cost-effective on multiple fronts. Really, as we're thinking about our support model and leveraging our partner base, that enables us to, you know, reduce the amount of people internally that we're putting against supporting the longer tail of customers and really relying on partners as well as automation in our platform to address that side of the business. That's an example of how we're thinking about, you know, really focusing our go-to-market motion. Thank you for that. My follow-up is relating to your revised gross margin guidance for the year. You know, you mentioned the headwind of the $5 million in impact to cost of goods sold from the end of life of the 2 satellites. I was wondering if there's any offsets to that headwind from some tailwinds associated with presumably a more favorable product mix, you know, that's more heavily focused on software, relating to analytics and AI. Well, as you may remember, our data subscription model is such that our direct margins on our core products are already quite high, kind of in the mid-nineties as it is. Our primary expenses relate to our hosting costs, which are, you know, predictable, and then, you know, the depreciation of the satellites. There's, as we use more. What you're saying is this, I guess what you're saying is there's not much of a tailwind left there, given the high margin profile already you're seeing. I guess what I'd say is, from a gross margin perspective, revenue for us is a tailwind, because, you know, the direct margins are so high. As we increase our share of wallet with customers by selling more analytics, that is a tailwind, because, you know, that revenue is also very high gross margin. Thank you. Thank you, Mr. Mesniaeff. Our last question will be from the line of Josh Sullivan with The Benchmark Company. You may proceed. Good afternoon. Hey, Josh. Hi. Given where macro, you know, sales cycles that you guys are seeing, capital markets are currently, do you think we see a consolidation cycle in space, AI, and EO, and does Planet have an appetite to be that consolidator? Well, we've already talked about the fact that we think of Planet as a natural consolidator in the space in general. I'd say we're more focused on going up the value stack than the aerospace side of it. If I always be disciplined in thinking about the return on investment on that sort of move. Yeah, I mean, and data businesses in general, just stepping back and think about us, and, you know, we think of ourselves more as a data business than a satellite business or, and, as a data business, you know, they tend to be very powerful when they happen. They're more rare, but they have extremely high lock-in and high hard to displace when they come about. I think there is a natural situation for consolidation. Yeah, we think that we're good and in a position of strength to do that in time. Got it. Then just one question on the solar intensity impact of the two satellites. Yeah. Why wouldn't this have? Mm-hmm. a broader impact on the consolidation? Maybe what's the probability we see additional satellites needing accelerated depreciation? Has that solar activity decreased at this point to reduce the risk? Well, no, it hasn't changed. It's still high, it's still elevated. Were you asking whether it affects other fleets? I didn't quite understand. Yeah. Yeah, just understanding, you know, if the activity, the solar activity is still high, is there still a risk that we might. Yeah. See other satellites in the constellation impacted by this dynamic? Well, no. Now we've taken it into account, the difference that this has now made, so we can forecast that. Yeah, it is an unusual situation. Remember that our fleet is highly redundant, and one of the reasons that we are able to survive these sort of situations is we have a lot of redundancy in our fleet, and then also we continue to make operational improvements in that. We're not worried about being able to continue to provide to our customers. Yeah, we feel good about the ability to continue through this. Okay. Thank you for the time. Great. No worries. Thank you, Mr. Sullivan. That is all the time we have for the question and answer session. I will now turn the call back over to Will Marshall, Co-Founder and CEO, for any further remarks. Well, just to summarize, you know, we've said that we delivered pretty solid Q1 results and had our strongest pipeline generation quarter in the company's history. Bookings did come in a bit lighter than we expected in recent weeks, and so we're responding by changing our spending plans and prioritizing our investments around key customers and high ROI activities, and as a result, maintain our profitability guideline. Overall, I'd say our conviction remains high, and the scale of the opportunity is high, backed by the tailwinds that we've seen in sustainability, digital transformation, peace and security, and now as a further catalyst to AI. Thanks, all, for joining the call. That concludes today's call. Thank you for your participation. You may now disconnect your lines.