Planet Labs PBC (NYSE:PL) Q1 2024 Earnings Call Transcript

Page 5 of 10

And so, those were some of the factors that caused us to have to read from the numbers as we were closing out the quarter, and then as we just looked at some of the metric averages coming out of the quarter, historically, we’ve talked about sales cycles accelerating and average deal sizes are improving and things of that nature. And this is really the first quarter whereas we ran those numbers we saw that trend going the opposite direction. And so, we could treat that as the blip, where we can make assumptions that that’s a trend. We have a very strong commitment to getting this company to profitability and to ensure that we did that, we have to assume that these factors are going to continue. So, that we rightsize our expenses for that circumstance.

But 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 we want to make sure that as we think about what’s going to close, when we take more conservative assumptions so that we can size the expenses accordingly.

Will Marshall: Maybe the only thing I’d just add to that is that keep in mind that this is just very recent data and really only data point of one in a sense. So — and we are creating new markets here, but we are paying close attention to it and understanding it more over time. But as soon as I was just saying, we’ve got the demand and the pipeline here, it’s up to us to convert it.

Jeff Van Rhee: Okay. And then 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 D&I 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?

Ashley Fieglein Johnson: No. I think I’ve said something different or at least how I heard you read it back on a different to me. So, one we saw and 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…

Jeff Van Rhee: Sorry. Ashley, no. I’m sorry, I definitely didn’t — I didn’t phrase it well. I was just, I guess the question was Civil D&I and commercial specifically the weakness, obviously, you’re taking everything down going forward. Are you taking down equally in terms of the outlook in each of those Civil D&I and commercial usage and new business across the Board, Yeah, didn’t phrase it well.

Ashley Fieglein Johnson: Got it. Yes. 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 and that is — 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. And so those are some of the things that are factoring — that we’re factoring in. And I don’t think it’s specific to any one sector. I think the surprise to us was historically we’ve seen the government actually being strong in spite of the macro headwinds, whereas we saw a lot of caution already on the commercial side, this impact of budget cycles for governments is a relatively new phenomenon.

Page 5 of 10