Planet Labs PBC 10-Q

Item 1. Financial Statements Planet Labs PBC Condensed Consolidated Balance Sheets (Unaudited) (In thousands, except share and par value amounts) October 31, 2023 January 31, 2023 Assets Current assets Cash and cash equivalents $ 101,547 $ 181,892 Restricted cash and cash equivalents, current 7,880 527 Short-term investments 213,347 226,868 Accounts receivable, net of allowance of $ 1,139 and $ 1,289 , respectively 45,145 38,952 Prepaid expenses and other current assets 19,616 27,416 Total current assets 387,535 475,655 Property and equipment, net 114,058 108,091 Capitalized internal-use software, net 14,050 11,417 Goodwill 135,701 112,748 Intangible assets, net 27,427 14,831 Restricted cash and cash equivalents, non-current 10,321 5,657 Operating lease right-of-use assets 22,091 20,403 Other non-current assets 2,337 3,921 Total assets $ 713,520 $ 752,723 Liabilities and Stockholders’ Equity Current liabilities Accounts payable $ 4,589 $ 6,900 Accrued and other current liabilities (1) 41,961 46,022 Deferred revenue (1) 67,228 51,900 Liability from early exercise of stock options 9,860 12,550 Operating lease liabilities, current 7,500 4,885 Total current liabilities 131,138 122,257 Deferred revenue (1) 7,763 2,882 Deferred hosting costs (1) 8,353 8,679 Public and private placement warrant liabilities 2,666 16,670 Operating lease liabilities, non-current 17,321 17,145 Contingent consideration 5,588 7,499 Other non-current liabilities 7,093 1,487 Total liabilities 179,922 176,619 Commitments and contingencies (Note 10) Stockholders’ equity Common stock, $ 0.0001 par value, 570,000,000 , 30,000,000 and 30,000,000 Class A, Class B and Class C shares authorized at October 31, 2023 and January 31, 2023, 264,375,121 and 250,625,975 Class A shares issued and outstanding at October 31, 2023 and January 31, 2023, respectively, 21,157,586 Class B shares issued and outstanding at October 31, 2023 and January 31, 2023, 0 Class C shares issued and outstanding at October 31, 2023 and January 31, 2023 (1) 28 27 Additional paid-in capital 1,583,531 1,513,102 Accumulated other comprehensive income (loss) ( 242 ) 2,271 Accumulated deficit ( 1,049,719 ) ( 939,296 ) Total stockholders’ equity 533,598 576,104 Total liabilities and stockholders’ equity $ 713,520 $ 752,723 (1) Balance includes related-party transactions entered into with Google, LLC (“Google”). See Note 12. See accompanying notes to unaudited condensed consolidated financial statements. 5 Table of Contents Planet Labs PBC Condensed Consolidated Statements of Operations (Unaudited) (In thousands, except share and per share amounts) Three Months Ended October 31, Nine Months Ended October 31, 2023 2022 2023 2022 Revenue (1) $ 55,380 $ 49,704 $ 161,844 $ 138,281 Cost of revenue (1) 29,350 24,728 81,375 73,333 Gross profit 26,030 24,976 80,469 64,948 Operating expenses Research and development (1) 33,002 27,598 87,929 79,085 Sales and marketing 20,774 19,383 66,209 57,721 General and administrative 20,112 20,627 62,161 61,128 Total operating expenses 73,888 67,608 216,299 197,934 Loss from operations ( 47,858 ) ( 42,632 ) ( 135,830 ) ( 132,986 ) Interest income 3,445 2,853 11,753 4,276 Change in fair value of warrant liabilities 6,833 ( 19 ) 14,004 5,369 Other income (expense), net ( 69 ) 1 894 123 Total other income (expense), net 10,209 2,835 26,651 9,768 Loss before provision for income taxes ( 37,649 ) ( 39,797 ) ( 109,179 ) ( 123,218 ) Provision for income taxes 355 439 1,244 907 Net loss $ ( 38,004 ) $ ( 40,236 ) $ ( 110,423 ) $ ( 124,125 ) Basic and diluted net loss per share attributable to common stockholders $ ( 0.13 ) $ ( 0.15 ) $ ( 0.40 ) $ ( 0.47 ) Basic and diluted weighted-average common shares outstanding used in computing net loss per share attributable to common stockholders 284,197,733 267,947,661 277,252,951 266,104,962 (1) Balance includes related-party transactions entered into with Google. See Note 12. See accompanying notes to unaudited condensed consolidated financial statements. 6 Table of Contents Planet Labs PBC Condensed Consolidated Statements of Comprehensive Loss (Unaudited) (In thousands) Three Months Ended October 31, Nine Months Ended October 31, 2023 2022 2023 2022 Net loss $ ( 38,004 ) $ ( 40,236 ) $ ( 110,423 ) $ ( 124,125 ) Other comprehensive income (loss), net of tax: Foreign currency translation adjustment ( 1,667 ) ( 235 ) ( 1,543 ) 82 Change in fair value of available-for-sale securities 89 ( 1,538 ) ( 970 ) ( 1,235 ) Other comprehensive income (loss), net of tax ( 1,578 ) ( 1,773 ) ( 2,513 ) ( 1,153 ) Comprehensive loss $ ( 39,582 ) $ ( 42,009 ) $ ( 112,936 ) $ ( 125,278 ) See accompanying notes to unaudited condensed consolidated financial statements. 7 Table of Contents Planet Labs PBC Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) (In thousands, except share amounts) Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ Equity Shares Amount Balances at January 31, 2022 262,175,273 $ 27 $ 1,423,151 $ 2,096 $ ( 777,029 ) $ 648,245 Cumulative effect of adoption of ASU 2016-13 — — — — ( 301 ) ( 301 ) Issuance of Class A common stock from the exercise of common stock options 3,524,182 — 6,203 — — 6,203 Issuance of Class A common stock upon vesting of restricted stock units 215,178 — — — — — Vesting of early exercised stock options 91,911 — 896 — — 896 Class A common stock withheld to satisfy employee tax withholding obligations ( 75,442 ) — ( 411 ) — — ( 411 ) Stock-based compensation — — 20,259 — — 20,259 Change in translation — — — 175 — 175 Net loss — — — — ( 44,360 ) ( 44,360 ) Balances at April 30, 2022 265,931,102 $ 27 $ 1,450,098 $ 2,271 $ ( 821,690 ) $ 630,706 Issuance of Class A common stock from the exercise of common stock options 605,690 — 1,455 — — 1,455 Issuance of Class A common stock upon vesting of restricted stock units 1,061,915 — — — — — Vesting of early exercised stock options 91,911 — 896 — — 896 Class A common stock withheld to satisfy employee tax withholding obligations ( 381,149 ) — ( 1,753 ) — — ( 1,753 ) Stock-based compensation — — 21,033 — — 21,033 Net unrealized gain (loss) on available-for-sale securities, net of taxes — — — 303 — 303 Other — — 390 — — 390 Change in translation — — — 142 — 142 Net loss — — — — ( 39,529 ) ( 39,529 ) Balances at July 31, 2022 267,309,469 $ 27 $ 1,472,119 $ 2,716 $ ( 861,219 ) $ 613,643 Issuance of Class A common stock from the exercise of common stock options 1,452,777 — 4,491 — — 4,491 Issuance of Class A common stock upon vesting of restricted stock units 817,320 — — — — — Vesting of early exercised stock options 91,911 — 896 — — 896 Class A common stock withheld to satisfy employee tax withholding obligations ( 298,535 ) — ( 2,164 ) — — ( 2,164 ) Stock-based compensation — — 19,810 — — 19,810 Net unrealized gain (loss) on available-for-sale securities, net of taxes — — — ( 1,538 ) — ( 1,538 ) Other — — ( 500 ) — — ( 500 ) Change in translation — — — ( 235 ) — ( 235 ) Net loss — — — — ( 40,236 ) ( 40,236 ) Balances at October 31, 2022 269,372,942 $ 27 $ 1,494,652 $ 943 $ ( 901,455 ) $ 594,167 See accompanying notes to unaudited condensed consolidated financial statements. 8 Table of Contents Planet Labs PBC Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) (In thousands, except share amounts) Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ Equity Shares Amount Balances at January 31, 2023 271,783,561 $ 27 $ 1,513,102 $ 2,271 $ ( 939,296 ) $ 576,104 Issuance of Class A common stock from the exercise of common stock options 1,018,385 — 3,295 — — 3,295 Issuance of Class A common stock upon vesting of restricted stock units 1,278,161 — — — — — Vesting of early exercised stock options 91,911 — 896 — — 896 Class A common stock withheld to satisfy employee tax withholding obligations ( 472,136 ) — ( 1,896 ) — — ( 1,896 ) Stock-based compensation — — 15,983 — — 15,983 Net unrealized gain (loss) on available-for-sale securities, net of taxes — — — ( 544 ) — ( 544 ) Change in translation — — — ( 45 ) — ( 45 ) Net loss — — — — ( 34,444 ) ( 34,444 ) Balances at April 30, 2023 273,699,882 $ 27 $ 1,531,380 $ 1,682 $ ( 973,740 ) $ 559,349 Issuance of Class A common stock from the exercise of common stock options 1,383,413 — 3,063 — — 3,063 Issuance of Class A common stock upon vesting of restricted stock units 2,597,964 — — — — — Vesting of early exercised stock options 91,910 — 896 — — 896 Class A common stock withheld to satisfy employee tax withholding obligations ( 827,964 ) — ( 2,857 ) — — ( 2,857 ) Stock-based compensation — — 17,438 — — 17,438 Net unrealized gain (loss) on available-for-sale securities, net of taxes — — — ( 515 ) — ( 515 ) Change in translation — — — 169 — 169 Net loss — — — — ( 37,975 ) ( 37,975 ) Balances at July 31, 2023 276,945,205 $ 27 $ 1,549,920 $ 1,336 $ ( 1,011,715 ) $ 539,568 Issuance of Class A common stock from the exercise of common stock options 226,505 — 412 — — 412 Issuance of Class A common stock upon vesting of restricted stock units 2,349,577 — — — — — Issuance of Class A common stock related to business combination 6,745,438 1 21,621 — — 21,622 Vesting of early exercised stock options 91,910 — 896 — — 896 Class A common stock withheld to satisfy employee tax withholding obligations ( 825,928 ) — ( 2,359 ) — — ( 2,359 ) Stock-based compensation — — 13,041 — — 13,041 Net unrealized gain (loss) on available-for-sale securities, net of taxes — — — 89 — 89 Change in translation — — — ( 1,667 ) — ( 1,667 ) Net loss — — — — ( 38,004 ) ( 38,004 ) Balances at October 31, 2023 285,532,707 $ 28 $ 1,583,531 $ ( 242 ) $ ( 1,049,719 ) $ 533,598 See accompanying notes to unaudited condensed consolidated financial statements. 9 Table of Contents Planet Labs PBC Condensed Consolidated Statements of Cash Flows (Unaudited) (In thousands) Nine Months Ended October 31, 2023 2022 Operating activities Net loss $ ( 110,423 ) $ ( 124,125 ) Adjustments to reconcile net loss to net cash used in operating activities Depreciation and amortization 36,033 33,997 Stock-based compensation, net of capitalized cost of $ 1,851 and $ 1,261 , respectively 44,611 59,841 Change in fair value of warrant liabilities ( 14,004 ) ( 5,369 ) Change in fair value of contingent consideration ( 923 ) — Other ( 3,538 ) 555 Changes in operating assets and liabilities Accounts receivable ( 3,872 ) 15,237 Prepaid expenses and other assets 9,483 ( 9,472 ) Accounts payable, accrued and other liabilities ( 20,706 ) ( 8,649 ) Deferred revenue 19,557 ( 19,382 ) Deferred hosting costs ( 92 ) ( 1,751 ) Net cash used in operating activities ( 43,874 ) ( 59,118 ) Investing activities Purchases of property and equipment ( 29,086 ) ( 9,008 ) Capitalized internal-use software ( 3,266 ) ( 1,737 ) Business acquisition ( 7,542 ) — Maturities of available-for-sale securities 142,903 13,000 Sales of available-for-sale securities 40,072 — Purchases of available-for-sale securities ( 166,169 ) ( 239,321 ) Other ( 944 ) ( 412 ) Net cash used in investing activities ( 24,032 ) ( 237,478 ) Financing activities Proceeds from the exercise of common stock options 6,770 10,909 Class A common stock withheld to satisfy employee tax withholding obligations ( 7,112 ) ( 4,328 ) Payment of transaction costs related to the Business Combination — ( 326 ) Other ( 15 ) 122 Net cash provided by (used in) financing activities ( 357 ) 6,377 Effect of exchange rate changes on cash and cash equivalents, and restricted cash and cash equivalents ( 65 ) ( 1,781 ) Net decrease in cash and cash equivalents, and restricted cash and cash equivalents ( 68,328 ) ( 292,000 ) Cash and cash equivalents, and restricted cash and cash equivalents at the beginning of the period 188,076 496,814 Cash and cash equivalents, and restricted cash and cash equivalents at the end of the period $ 119,748 $ 204,814 See accompanying notes to unaudited condensed consolidated financial statements. 10 Table of Contents Planet Labs PBC Notes to Unaudited Condensed Consolidated Financial Statements (1) Organization Planet Labs PBC (“Planet,” or the “Company”) was founded to design, construct, and launch constellations of satellites with the intent of providing high cadence geospatial data delivered to customers via an online platform. The Company’s mission is to use space to help life on Earth, by imaging the world every day and making global change visible, accessible, and actionable. The Company is headquartered in San Francisco, California, with operations throughout the United States ( “ U.S.”), Canada, Asia and Europe. On July 7, 2021, Planet Labs Inc. (“Former Planet”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) with dMY Technology Group, Inc. IV (“dMY IV”), a special purpose acquisition company (“SPAC”) incorporated in Delaware on December 15, 2020, Photon Merger Sub, Inc., a Delaware corporation and a direct wholly owned subsidiary of dMY IV (“First Merger Sub”), and Photon Merger Sub Two, LLC, a Delaware limited liability company and a direct wholly owned subsidiary of dMY IV (“Second Merger Sub”). Pursuant to the Merger Agreement, upon the favorable vote of dMY IV’s stockholders on December 3, 2021, on December 7, 2021, First Merger Sub merged with and into Former Planet (the “Surviving Corporation”), with Former Planet surviving the merger as a wholly owned subsidiary of dMY IV (the “First Merger”), and pursuant to Former Planet’s election immediately following the First Merger and as part of the same overall transaction as the First Merger, the Surviving Corporation merged with and into dMY IV, with dMY IV surviving the merger (the “Business Combination”). Following the completion of the Business Combination, dMY IV was renamed Planet Labs PBC. Former Planet was incorporated in the state of Delaware on December 28, 2010. Former Planet was originally incorporated as Cosmogia Inc., and the name was subsequently changed to Planet Labs Inc. on June 24, 2013. (2) Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying condensed consolidated financial statements are unaudited; however, in the opinion of management they include all normal and recurring adjustments necessary for a fair presentation of the Company’s unaudited condensed consolidated financial statements for the periods presented. Operating results for the three and nine months ended October 31, 2023 are not necessarily indicative of the results expected for the fiscal year ending January 31, 2024 or any other future period. Certain immaterial amounts from prior periods have been reclassified to conform to the current period presentation. The unaudited condensed consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and include the accounts of Planet Labs PBC and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. The Company’s fiscal year end is January 31. Certain notes or other information that are normally required by U.S. GAAP have been condensed or omitted if they substantially duplicate the disclosures contained in the Company’s annual audited consolidated financial statements. Accordingly, the unaudited condensed consolidated financial statements should be read in connection with the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2023 (the “2023 Form 10-K”). Liquidity Since its inception, the Company has incurred net losses and negative cash flows from operations. The Company expects to incur additional operating losses and negative cash flows from operations as it seeks to expand its business. As of October 31, 2023 and January 31, 2023, the Company had $ 101.5 million and $ 181.9 million of cash and cash equivalents, respectively. Additionally, as of October 31, 2023 and January 31, 2023, the Company had short-term investments of $ 213.3 million and $ 226.9 million, respectively, which are highly liquid in nature and available for current operations. 11 Table of Contents Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The significant estimates and assumptions that affect the Company’s unaudited condensed consolidated financial statements include, but are not limited to, the useful lives of property and equipment, capitalized internal-use software and intangible assets, allowances for credit losses for available for sale debt securities and accounts receivable, estimates related to revenue recognition, including the assessment of performance obligations within a contract and the determination of standalone selling price (“SSP”) for each performance obligation, assumptions used to measure stock-based compensation, the fair value of warrants, the fair value of assets acquired, and liabilities assumed from business combinations, the impairment of long-lived assets and goodwill, the recognition, measurement and valuation of current and deferred income taxes and uncertain tax positions, and contingencies. These estimates and assumptions are based on management’s best estimates and judgment. Management regularly evaluates its estimates and assumptions using historical experience and other factors; however, due to the inherent uncertainties in making estimates, actual results could differ from those estimates and such differences may be material to the unaudited condensed consolidated financial statements. Due to the current geopolitical events, including the war in Ukraine and the Israel-Hamas conflict, there is ongoing uncertainty and disruption in the global economy and financial markets. The Company is not aware of any specific event or circumstance that would require an update to its estimates or assumptions or a revision of the carrying value of its assets or liabilities. These estimates and assumptions may change in the future, as new events occur and additional information is obtained. Segments Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company has determined that it operates in one operating segment and one reportable segment, as the CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. See Note 3, Revenue , for revenue by geographic region. See Note 6, Balance Sheet Components , for long-lived assets by geographic region. Concentration of Credit Risk and Other Risks and Uncertainties Financial instruments that potentially subject the Company to a concentration of credit risk consist principally of cash, cash equivalents, short-term investments and accounts receivable. By their nature, all such financial instruments involve risks, including the credit risk of nonperformance by counterparties. The Company’s cash, cash equivalents and short-term investments are deposited with or held by financial institutions in the U.S., Canada, Germany, the Netherlands and Singapore. The Company generally does not require collateral to support the obligations of the counterparties and deposits at financial institutions may, at times, be in excess of federal or national insured limits or deposit-guarantee limits in each of the respective countries. The Company has not experienced material losses on its deposits. The maximum amount of loss at October 31, 2023 that the Company would incur if parties to cash, cash equivalents and short-term investments failed completely to perform according to the terms of the contracts is $ 313.0 million. Accounts receivable are typically unsecured and are derived from revenue earned from customers across various countries. One customer accounted for 10 % and 15 % of accounts receivable as of October 31, 2023 and January 31, 2023, respectively. For the three and nine months ended October 31, 2023, one customer accounted for 21 % and 22 % of revenue, respectively. For the three months ended October 31, 2022, one customer accounted for 23 % of revenue. For the nine months ended October 31, 2022, two customers accounted for 18 % and 10 % of revenue, respectively. The Company’s offerings depend on continued and new approvals from the Federal Communications Commission (“FCC”), National Oceanic and Atmospheric Administration (“NOAA”), and other U.S. and international regulatory agencies for the Company to continue its operations. There can be no assurance that the Company’s operations will continue to receive the necessary approvals or that such operations will be supported by the U.S. government or other governments. If the Company was denied such approvals, if such approvals were delayed, or if the U.S. government’s or other governments’ policies change, these events may have a material adverse impact on the Company’s financial position and results of operations. 12 Table of Contents The Company contracts with certain third-party service providers to launch satellites. Service providers who provide these services are limited. The inability of launch service providers to contract with the Company could materially impact future operating results. Significant Accounting Policies The Company’s significant accounting policies are included in Note 2 of its Consolidated Financial Statements included in the 2023 Form 10-K. Recently Issued Accounting Pronouncements In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements , to clarify or improve disclosure and presentation requirements of a variety of topics and align the requirements in the FASB accounting standard codification (ASC) with the SEC's regulations. The Company is currently evaluating the impact, if any, on its condensed consolidated financial statements and disclosures. (3) Revenue Deferred Revenue During the nine months ended October 31, 2023 and 2022, the Company recognized revenue of $ 45.7 million and $ 50.4 million, respectively, that had been included in deferred revenue as of January 31, 2023 and 2022, respectively. Remaining Performance Obligations The Company often enters into multi-year imagery licensing arrangements with its customers, whereby the Company generally invoices the amount for the first year of the contract at signing followed by subsequent annual invoices each year. Remaining performance obligations represent the amount of contracted future revenue that has not yet been recognized, which includes both deferred revenue and non-cancelable contracted revenue that will be invoiced and recognized in revenue in future periods. The Company’s remaining performance obligations were $ 152.9 million as of October 31, 2023, which consists of both deferred revenue of $ 75.0 million and non-cancelable contracted revenue that will be invoiced in future periods of $ 77.9 million. The Company expects to recognize approximately 82 % of the remaining performance obligation over the next 12 months, approximately 97 % of the remaining obligation over the next 24 months, and the remainder thereafter. Remaining performance obligations do not include unexercised contract options, firm orders where funding has not been appropriated and contracts which provide the customer with a right to terminate for convenience without incurring a substantive termination penalty. Disaggregation of Revenue The following table disaggregates revenue by major geographic region: Three Months Ended October 31, Nine Months Ended October 31, (in thousands) 2023 2022 2023 2022 United States $ 23,348 $ 27,191 $ 73,513 $ 71,672 Rest of world 32,032 22,513 88,331 66,609 Total revenue $ 55,380 $ 49,704 $ 161,844 $ 138,281 No single country other than the U.S. accounted for more than 10% of revenue for the three and nine months ended October 31, 2023 and 2022. Costs to Obtain and Fulfill a Contract Commissions paid to the Company’s direct sales force are considered incremental costs of obtaining a contract with a customer. Accordingly, commissions are capitalized when incurred and amortized to sales and marketing expense over the period of benefit from the underlying contracts. The period of benefit from the underlying contract is consistent with the timing of transfer to the performance obligations to which the capitalized costs relate, and is generally consistent with the contract term. 13 Table of Contents During the three and nine months ended October 31, 2023, the Company deferred $ 0.6 million and $ 1.1 million of commission expenditures to be amortized in future periods, respectively. The Company’s amortization of commission expenditures was $ 0.4 million and $ 1.7 million for the three and nine month periods ended October 31, 2023, respectively. During the three and nine months ended October 31, 2022, the Company deferred $ 0.2 million and $ 2.7 million of commission expenditures to be amortized in future periods, respectively. The Company’s amortization of commission expenditures was $ 0.5 million and $ 1.3 million for the three and nine month periods ended October 31, 2022, respectively. As of October 31, 2023 and January 31, 2023, deferred commissions consisted of the following: (in thousands) October 31, 2023 January 31, 2023 Deferred commission, current $ 2,528 $ 2,405 Deferred commission, non-current 1,472 2,206 Total deferred commission $ 4,000 $ 4,611 The current portion of deferred commissions are included in prepaid expenses and other current assets on the condensed consolidated balance sheets. The non-current portion of deferred commissions are included in other non-current assets on the condensed consolidated balance sheets. (4) Fair Value of Financial Assets and Liabilities Assets and liabilities recognized or disclosed at fair value in the financial statements are categorized based upon the level of judgment associated with the inputs used to measure their respective fair values. The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis for recognition or disclosure purposes as of October 31, 2023 and January 31, 2023 by level within the fair value hierarchy. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and considers factors specific to the asset or liability. October 31, 2023 (in thousands) Level 1 Level 2 Level 3 Assets Cash equivalents: Money market funds $ 33,434 $ — $ — Restricted cash: money market funds 17,653 — — Short-term investments: U.S. Treasury securities 46,075 $ — $ — Commercial paper — 10,968 $ — Corporate bonds — 143,326 $ — U.S. government agency securities — 11,913 $ — Certificates of deposit — 1,065 $ — Total assets $ 97,162 $ 167,272 $ — Liabilities Public Warrants $ 1,242 $ — $ — Private Placement Warrants — $ — 1,424 Contingent consideration for acquisitions — $ — 12,789 Total liabilities $ 1,242 $ — $ 14,213 14 Table of Contents January 31, 2023 (in thousands) Level 1 Level 2 Level 3 Assets Cash equivalents: Money market funds $ 72,382 $ — $ — Commercial paper — 999 — Restricted cash equivalents: money market funds 5,486 — — Short-term investments: U.S. Treasury securities 59,433 — — Commercial paper — 19,849 — Corporate bonds — 139,589 — U.S. government agency securities — 7,997 — Total assets $ 137,301 $ 168,434 $ — Liabilities Public Warrants $ 6,969 $ — $ — Private Placement Warrants — — 9,701 Contingent consideration for acquisitions — — 8,030 Total liabilities $ 6,969 $ — $ 17,731 The fair value of cash held in banks and accrued liabilities approximate the stated carrying value due to the short time to maturity and are excluded from the tables above. Money Market Funds The fair value of the Company’s money market funds is based on quoted active market prices for the funds and is determined using the market approach. There were no realized or unrealized gains or losses on money market funds for the three and nine months ended October 31, 2023 and 2022. Short-term Investments The fair value of the Company’s short-term investments classified within Level 2 are valued using third-party pricing services. The pricing services utilize industry standard valuation models. Inputs utilized include market pricing based on real-time trade data for the same or similar securities and other significant inputs derived from or corroborated by observable market data. Public and Private Placement Warrants The Public Warrants (as defined in Note 11 below) are classified within Level 1 as they are publicly traded and had an observable market price in an active market. The Private Placement Warrants (excluding the Private Placement Vesting Warrants) (as defined in Note 11 below) were valued based on a Black-Scholes option pricing model. Due to the market condition vesting requirements, the fair value of the Private Placement Vesting Warrants were valued using a model based on multiple stock price paths developed through the use of a Monte Carlo simulation that incorporates into the valuation the possibility that the market condition targets may not be satisfied. The Private Placement Warrants were collectively classified as a Level 3 measurement within the fair value hierarchy because these valuation models involve the use of unobservable inputs relating to the Company’s estimate of its expected stock volatility which was developed based on the historical volatility of a publicly traded set of peer companies. The expected volatility inputs utilized for the fair value measurements of the Private Placement Warrants as of October 31, 2023 and January 31, 2023 were 70.0 %. . Contingent Consideration for Acquisitions The Company has recorded contingent consideration liabilities in connection with its acquisition of Sinergise (see Note 5) and Salo Sciences. The Company measures the fair value of the contingent consideration liabilities based on significant inputs not observable in the market, which caused them to be classified as a Level 3 measurement within the fair value hierarchy. The fair value of the contingent consideration liability for the Salo Sciences technical milestone payments is determined based on the present value of the probability-weighted payments for each of the milestones. The significant unobservable inputs used in the fair value measurement are management’s estimate of the probability to achieve the technical milestone criteria and the discount rate. 15 Table of Contents The fair value of the contingent consideration liability for Salo Sciences customer contract earnout payments is determined using a Monte Carlo simulation. The fair value estimate involves a simulation of future customer contract cash collections during the four-year performance period, the probability of entering into contracts with the named customers and discounting the probability-weighed earnout payments to present value. The significant unobservable inputs used in the fair value measurement are management’s estimate of obtaining the customer contracts, including probabilities, timing and contract values, and management’s estimate of the discount rate. The fair value of the contingent consideration liability for the Sinergise customer consent escrow is determined based on the present value of the probability-weighted payments based on the likelihood of the customer consent being achieved. The significant unobservable input used in the fair value measurement is management’s estimate of the likelihood of the customer consent being achieved. Level 3 Disclosures The following is a rollforward of Level 3 liabilities measured at fair value for the three and nine months ended October 31, 2023 and 2022: (in thousands) Private Placement Warrants Technical Milestone Contingent Consideration* Customer Contract Earnout Contingent Consideration* Customer Consent Escrow Contingent Consideration* Fair value at end of year, January 31, 2022 $ 12,460 $ — $ — $ — Change in fair value ( 1,068 ) — — — Fair value at April 30, 2022 $ 11,392 $ — $ — $ — Change in fair value ( 801 ) — — — Fair value at July 31, 2022 $ 10,591 $ — $ — $ — Change in fair value ( 326 ) — — — Fair value at October 31, 2022 $ 10,265 $ — $ — $ — Fair value at end of year, January 31, 2023 $ 9,701 $ 4,433 $ 3,597 $ — Change in fair value ( 3,323 ) 5 ( 428 ) — Fair value at April 30, 2023 $ 6,378 $ 4,438 $ 3,169 $ — Change in fair value ( 1,364 ) 211 ( 315 ) Fair value at July 31, 2023 $ 5,014 $ 4,649 $ 2,854 $ — Additions — — — 5,842 Payments — — ( 160 ) — Change in fair value ( 3,590 ) 6 ( 478 ) 76 Fair value at October 31, 2023 $ 1,424 $ 4,655 $ 2,216 $ 5,918 * The current portion of the contingent consideration liabilities balances of $ 7.2 million and $ 0.5 million as of October 31, 2023 and January 31, 2023, respectively, are included within accrued and other current liabilities. Changes in fair value of the contingent consideration liability for technical milestone payments are included within research and development expenses. Changes in fair value of the contingent consideration liability for customer contract earnout payments are included within sales and marketing expenses. Changes in fair value of the contingent consideration liability for the Sinergise acquisition escrow payments are included within general and administrative expenses. Other The Company measures certain non-financial assets including property and equipment, and other intangible assets at fair value on a non-recurring basis in periods after initial measurement in circumstances when the fair value of such assets are impaired below their recorded cost. As of October 31, 2023 and January 31, 2023, there were no material non-financial assets recorded at fair value. 16 Table of Contents (5) Acquisition Sinergise On March 26, 2023, the Company entered into an asset purchase agreement with Holding Sinergise d.o.o., a company existing under the laws of Slovenia (“Sinergise”), and its subsidiaries and certain shareholders of Sinergise, to acquire the cloud-based geo-spatial analysis products, platforms and solutions business from Sinergise. On August 4, 2023, the Company completed the acquisition. The acquisition is expected to expand the Company’s data analysis platform and allow customers to extract insights from earth observation data more easily. The acquisition has been accounted for as a business combination in accordance with ASC 805, Business Combinations . The acquisition date fair value of the consideration transferred was approximately $ 40.0 million, and consisted of the following: (in thousands) Fair Value Cash $ 7,542 Class A common stock issued 21,622 Liabilities for cash consideration placed in escrow account 10,842 Total $ 40,006 The common stock issued consisted of 6,745,438 shares of the Company’s Class A common stock. The fair value of the Class A common stock was determined based on the closing market price on the date of the acquisition. Pursuant to the terms of the asset purchase agreement, the Company placed $ 5.0 million of cash consideration into an escrow account to secure potential indemnification obligations and any customary post-closing adjustments for working capital and indebtedness (the “Indemnity Escrow”). The amount held in the escrow account is to be released to Sinergise upon the two-year anniversary of the acquisition close date and is recorded within restricted cash and cash equivalents, non-current in the Company’s condensed consolidated balance sheets. The Company recorded a liability of $ 5.0 million for the Indemnity Escrow, which is recorded within other non-current liabilities in the Company’s condensed consolidated balance sheets. Pursuant to the terms of the asset purchase agreement, the Company placed an additional $ 7.5 million of cash consideration into an escrow account related to obtaining customer consent for a contract acquired in connection with the acquisition (the “Customer Consent Escrow”). The amount held in the escrow account is to be released to Sinergise upon the Company receiving evidence of the customer consent. If evidence of the customer consent is not received on or prior to the two year anniversary of the acquisition close date, the amount held in the Customer Consent Escrow is to be released to the Company. Additionally, the amount held in the Customer Consent Escrow is to be released to the Company if the customer contract is terminated or suspended on or prior to the two year anniversary of the acquisition close date. The cash held in the escrow account is recorded within restricted cash and cash equivalents, current in the Company’s condensed consolidated balance sheets. The Company determined that the customer consent contingency represents contingent consideration. The fair value of the contingent consideration liability as of the acquisition date was determined to be $ 5.8 million. Refer to Note 4 for information relating to the valuation of the Customer Consent Escrow contingent consideration. 17 Table of Contents The following table summarizes the preliminary fair value of the assets acquired and liabilities assumed as of the date of acquisition: (in thousands) Goodwill $ 23,747 Identifiable intangible assets acquired Developed technology 11,811 Customer relationships 2,208 Other 110 Accounts receivable 3,013 Other assets, current 652 Other assets, non-current 414 Total assets acquired $ 41,955 Deferred revenue, current ( 585 ) Accrued and other current liabilities ( 984 ) Other liabilities, current ( 213 ) Other liabilities, non-current ( 167 ) Total liabilities assumed $ ( 1,949 ) Net assets acquired $ 40,006 The fair value of the assets acquired and liabilities assumed are preliminary and may be adjusted as the Company obtains additional information, primarily related to adjustments for the true-up of acquired net working capital in accordance with the asset purchase agreement. The identifiable intangible assets were measured at fair value. The developed technology was valued using the royalty method under the income approach. The customer relationships were valued using the excess earnings method under the income approach. The developed technology was assigned an estimated useful life of 8 years and the customer relationships were assigned an estimated useful life of 9 years. The excess of purchase consideration over the fair value of other assets acquired and liabilities assumed was recorded as goodwill. The goodwill primarily represents the value expected from the synergies created through the operational enhancement benefits resulting from the integration of Sinergise into the Company and the combination of Sinergise’s products and solutions with the Company’s existing products. Approximately $ 0.7 million of the goodwill is deductible for tax purposes. The financial results of Sinergise are included in the condensed consolidated financial statements from the date of acquisition. Pro forma results of operations have not been presented as the effect of this acquisition was not material to the condensed consolidated financial statements. Acquisition-related costs associated with the transaction were $ 0.2 million and $ 2.1 million for the three and nine months ended October 31, 2023, respectively. The Company recognized immaterial costs for the three months ended October 31, 2022 and recognized costs of $ 0.6 million for the nine months ended October 31, 2022. These costs were recorded within selling, general and administrative expenses. 18 Table of Contents Certain employees of Sinergise, which became employees of the Company, were paid cash transaction bonuses totaling $ 2.3 million in connection with the closing of the acquisition. The transaction bonuses were accounted for as a transaction separate from the business combination. Accordingly, $ 2.3 million of the consideration paid by the Company was allocated to the transaction bonuses and was recorded within the Company’s condensed consolidated statements of operations as summarized in the table below: (in thousands) Three and Nine Months Ended October 31, 2023 Cost of revenue $ 267 Research and development 1,891 Sales and marketing 41 General and administrative 118 Total $ 2,317 (6) Balance Sheet Components Cash and Cash Equivalents, and Restricted Cash and Cash Equivalents Cash and cash equivalents include interest-bearing bank deposits, money market funds and other highly liquid investments with maturities of 90 days or less at the date of purchase. The Company had restricted cash and cash equivalents balances of $ 18.2 million and $ 6.2 million as of October 31, 2023 and January 31, 2023, respectively. The restricted cash and cash equivalents balances as of October 31, 2023 primarily consisted of $ 12.5 million of consideration placed in escrow in connection with the Sinergise acquisition and $ 4.0 million of collateral money market investments for the Company’s headquarters and other domestic office operating lease. The restricted cash and cash equivalents balances as of January 31, 2023 primarily consisted of $ 4.1 million of collateral money market investments for the Company’s headquarters and other domestic office operating leases and $ 1.8 million of performance guarantees required for the Company’s foreign sales activities. A reconciliation of the Company’s cash and cash equivalents and restricted cash and cash equivalents in the condensed consolidated balance sheets to total cash and cash equivalents, and restricted cash and cash equivalents in the condensed consolidated statements of cash flows as of October 31, 2023 and January 31, 2023 is as follows: (in thousands) October 31, 2023 January 31, 2023 Cash and cash equivalents $ 101,547 $ 181,892 Restricted cash and cash equivalents, current 7,880 527 Restricted cash and cash equivalents, non-current 10,321 5,657 Total cash, cash equivalents, and restricted cash and cash equivalents $ 119,748 $ 188,076 19 Table of Contents Short-term Investments Short-term investments consisted of the following as of October 31, 2023 and January 31, 2023: October 31, 2023 Gross Unrealized (in thousands) Cost or Amortized Cost Gains Losses Fair Value U.S Treasury securities $ 46,342 $ 2 $ ( 269 ) $ 46,075 Commercial paper 10,968 — — 10,968 Corporate bonds 143,827 73 ( 574 ) 143,326 U.S. government agency securities 11,953 — ( 40 ) 11,913 Certificates of deposit 1,065 — — 1,065 Total short-term investments $ 214,155 $ 75 $ ( 883 ) $ 213,347 January 31, 2023 Gross Unrealized (in thousands) Cost or Amortized Cost Gains Losses Fair Value U.S Treasury securities $ 59,255 $ 296 $ ( 118 ) $ 59,433 Commercial paper 19,744 105 — $ 19,849 Corporate bonds 139,644 34 ( 89 ) $ 139,589 U.S. government agency securities 8,063 — ( 66 ) 7,997 Total short-term investments $ 226,706 $ 435 $ ( 273 ) $ 226,868 The following table summarizes the contracted maturities of the Company’s short-term investments as of October 31, 2023 and January 31, 2023: October 31, 2023 January 31, 2023 (in thousands) Amortized Cost Fair Value Amortized Cost Fair Value Due in 1 year or less $ 143,299 $ 142,768 $ 124,068 $ 124,234 Due in 1-2 years 70,856 70,579 102,638 102,634 $ 214,155 $ 213,347 $ 226,706 $ 226,868 Property and Equipment, Net Property and equipment, net consists of the following: (in thousands) October 31, 2023 January 31, 2023 Satellites* $ 329,611 $ 307,720 Leasehold improvements 16,867 15,389 Ground stations and ground station equipment 19,053 15,113 Office furniture, equipment and fixtures 7,579 5,787 Computer equipment and purchased software 9,062 8,638 Total property and equipment, gross 382,172 352,647 Less: Accumulated depreciation ( 268,114 ) ( 244,556 ) Total property and equipment, net $ 114,058 $ 108,091 * Satellites include $ 36.1 million and $ 13.8 million of satellites in process and not placed into service as of October 31, 2023 and January 31, 2023, respectively. Property and equipment, net as of October 31, 2023 included $ 7.4 million of satellite manufacturing costs that were previously classified as prepaid expenses and other current assets as of January 31, 2023. 20 Table of Contents The Company’s long-lived assets by geographic region are as follows: (in thousands) October 31, 2023 January 31, 2023 United States $ 107,988 $ 103,366 Rest of world 6,070 4,725 Total property and equipment, net $ 114,058 $ 108,091 The Company concluded that satellites in service continue to be owned by the U.S. entity and accordingly are classified as U.S. assets in the table above. No single country other than the U.S. accounted for more than 10% of total property and equipment, net, as of October 31, 2023 and January 31, 2023. Total depreciation expense for the three and nine months ended October 31, 2023 was $ 11.9 million and $ 31.4 million, respectively, of which $ 11.1 million and $ 29.5 million, respectively, was depreciation expense specific to satellites. Total depreciation expense for the three and nine months ended October 31, 2022 was $ 9.4 million and $ 30.0 million, respectively, of which $ 9.0 million and $ 27.2 million, respectively, was depreciation expense specific to satellites. In April 2023 and September 2023, additional information specific to two high resolution satellites became available indicating that the useful lives of the two satellites will be less than originally estimated. The changes in estimated useful lives for these satellites were accounted for prospectively, resulting in an increase of depreciation expense of $ 3.3 million and $ 5.8 million, respectively, for the three and nine months ended October 31, 2023. The changes in estimates are expected to result in a $ 6.4 million increase in depreciation expense for the fiscal year ended January 31, 2024. Capitalized Internal-Use Software Development Costs Capitalized internal-use software costs, net of accumulated amortization consists of the following: (in thousands) October 31, 2023 January 31, 2023 Capitalized internal-use software $ 43,603 $ 39,535 Less: Accumulated amortization ( 29,553 ) ( 28,118 ) Capitalized internal-use software, net $ 14,050 $ 11,417 Amortization expense for capitalized internal-use software for the three and nine months ended October 31, 2023 was $ 0.5 million and $ 1.4 million, respectively. Amortization expense for capitalized internal-use software for the three and nine months ended October 31, 2022 was $ 0.7 million and $ 1.9 million, respectively. Goodwill and Intangible Assets Goodwill and Intangible assets consist of the following: October 31, 2023 January 31, 2023 (in thousands) Gross Carrying Amount Accumulated Amortization Foreign Currency Translation Net Carrying Amount Gross Carrying Amount Accumulated Amortization Foreign Currency Translation Net Carrying Amount Developed technology $ 30,429 $ ( 10,348 ) $ ( 402 ) $ 19,679 $ 18,619 $ ( 8,871 ) $ ( 8 ) $ 9,740 Image library 13,095 ( 11,688 ) 308 1,715 12,384 ( 11,004 ) 231 1,611 Customer relationships 7,143 ( 3,453 ) ( 66 ) 3,624 4,935 ( 2,788 ) 7 2,154 Trade names and other 6,090 ( 3,717 ) 36 2,409 4,551 ( 3,264 ) 39 1,326 Total intangible assets $ 56,757 $ ( 29,206 ) $ ( 124 ) $ 27,427 $ 40,489 $ ( 25,927 ) $ 269 $ 14,831 Goodwill $ 134,692 $ — $ 1,009 $ 135,701 $ 110,942 $ — $ 1,806 $ 112,748 Amortization expense for intangible assets for the three and nine months ended October 31, 2023 was $ 1.3 million and $ 3.3 million, respectively. Amortization expense for intangible assets for the three and nine months ended October 31, 2022 was $ 0.7 million and $ 2.1 million, respectively. 21 Table of Contents Estimated future amortization expense of intangible assets at October 31, 2023, is as follows: (in thousands) Remainder of Fiscal Year 2024 $ 1,450 2025 4,805 2026 4,324 2027 3,678 2028 3,454 Thereafter 9,716 Total estimated future amortization expense of intangible assets $ 27,427 The change in the carrying amount of goodwill for the nine months ended October 31, 2023 and 2022 was as follows: October 31, (in thousands) 2023 2022 Beginning of period $ 112,748 $ 103,219 Acquisition 23,747 — Currency translation adjustment ( 794 ) — End of period $ 135,701 $ 103,219 Accrued and Other Current Liabilities Accrued liabilities and other current liabilities consist of the following: (in thousands) October 31, 2023 January 31, 2023 Deferred R&D service liability (see Note 9) $ 12,021 $ 19,959 Payroll and related expenses 4,993 8,518 Deferred hosting costs 4,928 4,694 Withholding taxes and other taxes payable 2,743 2,272 Contingent consideration 7,201 531 Other accruals 10,075 10,048 Total accrued and other current liabilities $ 41,961 $ 46,022 (7) Restructuring In August 2023, the Company announced a plan to reduce its global headcount by approximately 10 % of the Company’s total number of employees prior to the reduction (the “headcount reduction”). This action was taken to increase the Company’s focus on its high priority growth opportunities and operational efficiency. As a result of the headcount reduction, in the third quarter of the fiscal year ending 2024, the Company recognized $ 7.3 million of costs for one-time employee termination benefits consisting of severance and other employee costs. The Company also recognized a $ 1.5 million stock-based compensation benefit primarily related to the reversal of previously recognized stock-based compensation expenses for unvested stock awards. 22 Table of Contents As a result of the above, the Company recognized a net restructuring charge of $ 5.8 million during the three and nine months ended October 31, 2023 within its condensed consolidated statements of operations as summarized in the following table: (in thousands) Severance and Other Employee Costs Stock-Based Compensation Total Cost of revenue $ 563 $ ( 62 ) $ 501 Research and development 3,297 ( 398 ) 2,899 Sales and marketing 1,943 ( 815 ) 1,128 General and administrative 1,538 ( 253 ) 1,285 Total restructuring charges $ 7,341 $ ( 1,528 ) $ 5,813 There were no restructuring charges recognized during the three and nine months ended October 31, 2022. The following table summarizes the Company’s liability recognized in connection with the headcount reduction, which is recorded within accrued and other current liabilities in the condensed consolidated balance sheets: (in thousands) Balance as of January 31, 2023 $ — Severance and other employee costs 7,341 Cash payments ( 7,104 ) Balance as of October 31, 2023 $ 237 The headcount reductions, including the remaining cash payments, are expected to be substantially complete by the end of the fiscal year ending January 31, 2024. (8) Leases The Company’s leasing activities primarily consist of real estate leases for its operations, including office space, and certain ground station service agreements that convey the right to control the use of specified equipment and facilities. The Company assesses whether each lease is an operating or finance lease at the lease commencement date. As of October 31, 2023, the Company had no finance leases. Operating lease costs were $ 2.1 million and $ 6.1 million for the three and nine months ended October 31, 2023, respectively. Operating lease costs were $ 1.8 million and $ 4.7 million for the three and nine months ended October 31, 2022, respectively. Variable lease expenses, short-term lease expenses and sublease income were immaterial for the three and nine months ended October 31, 2023 and 2022. Operating cash flows from operating leases were $ 2.3 million and $ 5.0 million for the three and nine months ended October 31, 2023, respectively. Operating cash flows from operating leases were $ 1.9 million and $ 5.9 million for the three and nine months ended October 31, 2022, respectively. Right of use assets obtained in exchange for operating lease liabilities were $ 0.3 million and $ 6.5 million for the three and nine months ended October 31, 2023, respectively. Right of use assets obtained in exchange for operating lease liabilities were $ 11.7 million for the three and nine months ended October 31, 2022. 23 Table of Contents Maturities of operating lease liabilities as of October 31, 2023 were as follows: (in thousands) Remainder of Fiscal Year 2024 $ 2,368 2025 9,095 2026 8,741 2027 5,604 2028 1,423 Thereafter 859 Total lease payments $ 28,090 Less: Imputed interest ( 3,268 ) Total lease liabilities $ 24,822 Weighted average remaining lease term (years) 3.3 Weighted average discount rate 8.0 % (9) Research and Development Arrangements Research and Development Services Agreement In December 2020, the Company entered into a development services agreement, whereby the Company agreed to provide the technical knowledge and services to design and develop certain prototype satellites and deliver and test early data collected (the “ R&D Services Agreement ”). The R&D Services Agreement, including subsequent amendments to such agreement, provides for funding of $ 45.8 million, to be paid to the Company as specified milestones are achieved over a three year period. The R&D Services Agreement is unrelated to the Company’s ordinary business activities. The Company has discretion in managing the activities under the R&D Services Agreement and retains all developed intellectual property. The Company has no obligation to repay any of the funds received regardless of the outcome of the development work; therefore, the arrangement is accounted for as funded research and development pursuant to ASC 730-20, Research and Development . As ASC 730-20 does not indicate the accounting model for research and development services, the Company determined the total transaction price is recognized over the agreement term as a reduction of research and development expenses based on a cost incurred method. During the three and nine months ended October 31, 2023, the Company recognized $ 6.8 million and $ 14.8 million of funding and incurred $ 7.6 million and $ 15.6 million of research and development expenses, respectively, in connection with the R&D Services Agreement. During the three and nine months ended October 31, 2022, the Company recognized $ 4.1 million and $ 10.7 million of funding and incurred $ 4.1 million and $ 10.7 million of research and development expenses, respectively. As of October 31, 2023 and January 31, 2023, the Company had received total funding of $ 45.8 million and $ 36.3 million, respectively, under the R&D Services Agreement. NASA Communication Services Project In connection with its Communication Services Project (“CSP”), the National Aeronautics and Space Administration (“NASA”) selected certain satellite communications providers that NASA will fund to develop and demonstrate near-Earth space communication services that may support future NASA missions using commercial technology. In June 2022 and August 2022, the Company entered into separate agreements with two of the satellite communications providers selected by NASA whereby the Company agreed to participate in the NASA CSP as a subcontractor. The agreements provide for the Company to receive aggregate funding of $ 40.5 million to be paid as milestones are completed. The Company determined that the agreements are in the scope of ASC 912-730, Contractors – Federal Government – Research and Development (“ASC 912-730”). In accordance with ASC 912-730, funding is recognized over the term of each agreement as a reduction of research and development expenses based on a cost incurred method. During the three and nine months ended October 31, 2023, the Company recognized $ 1.2 million and $ 9.2 million of funding, respectively, and incurred $ 1.2 million and $ 8.4 million of research and development expenses, respectively, in connection with the NASA CSP. During the three and nine months ended October 31, 2022, the Company recognized $ 1.2 million and $ 1.4 million of funding, respectively, and incurred $ 1.3 million and $ 1.6 million of research and development expenses, respectively, in connection with the NASA CSP. As of October 31, 2023 and January 31, 2023, the Company had received total funding of $ 12.5 million and $ 6.5 million, respectively, in connection with the NASA CSP. 24 Table of Contents (10) Commitments and Contingencies Launch Services The Company has purchase commitments for future satellite launch services to be performed by third parties subsequent to October 31, 2023. Future purchase commitments under noncancelable launch service contracts as of October 31, 2023 consisted of $ 0.2 million of total purchase commitments for the remainder of the fiscal year ended January 31, 2024. Other The Company has minimum purchase commitments for hosting services from Google through January 31, 2028 (see Note 12). Future minimum purchase commitments under the noncancelable hosting service agreement with Google as of October 31, 2023 are as follows: (in thousands) Remainder of Fiscal Year 2024 $ 3,034 2025 30,120 2026 31,190 2027 32,725 2028 33,427 Total purchase commitments $ 130,496 Contingencies The Company is not a party to any material legal proceedings and is not aware of any pending or threatened claims, individually or in the aggregate, that are expected to have a material adverse impact on its condensed consolidated financial statements as of each reporting period. From time to time however, the Company may have certain contingent liabilities that arise in the ordinary course of business activities including those arising from disputes and claims and events arising from revenue contracts entered into by the Company. The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. Indemnification The Company enters into standard indemnification arrangements in the ordinary course of business. Pursuant to these arrangements, the Company indemnifies, holds harmless, and agrees to reimburse the indemnified parties for losses suffered or incurred by the indemnified party, in connection with any trade secret, copyright, patent, or other intellectual property infringement claim by any third-party with respect to its technology. The term of these indemnification agreements is generally perpetual after the execution of the agreement. The Company has not incurred costs to defend lawsuits or settle claims related to these indemnification agreements. In the event that one or more of these matters were to result in a claim against the Company, an adverse outcome, including a judgment or settlement, may cause a material adverse effect on the Company’s future business, operating results or financial condition. It is not possible to determine the maximum potential amount under these contracts due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. The Company has entered into indemnification agreements with its directors and officers that may require the Company to indemnify them against liabilities that may arise by reason of their status or service as directors or officers, other than liabilities arising from willful misconduct of the individual. To date, we have not incurred any material costs, and have not accrued any liabilities in the consolidated financial statements as a result of these provisions. 25 Table of Contents (11) Warrants Public and Private Placement Warrants In connection with dMY IV’s initial public offering, which occurred on March 9, 2021, dMY IV issued 34,500,000 units, each unit consisting of one share of Class A common stock of dMY IV and one-fifth of one redeemable warrant, at a price of $ 10.00 per unit. Each whole warrant entitles the holder to purchase one share of Class A common stock at an exercise price of $ 11.50 per share, subject to adjustment (the “Public Warrants”). Simultaneously with the closing of its initial public offering, dMY IV completed the private sale of 5,933,333 warrants to dMY Sponsor IV, LLC (the “dMY Sponsor”) at a purchase price of $ 1.50 per warrant (the “Private Placement Warrants”). Each Private Placement Warrant is exercisable for one share of Class A common stock at $ 11.50 per share. Additionally, pursuant to a lock-up agreement entered into with the dMY Sponsor in connection with the Business Combination, 2,966,667 of the Private Placement Warrants are subject to vesting conditions (the “Private Placement Vesting Warrants”). The Private Placement Vesting Warrants vest in four equal tranches (i) when the closing price of Class A common stock equals or exceeds $ 15.00 , $ 17.00 , $ 19.00 and $ 21.00 , over any 20 trading days within any 30 days trading period prior to December 7, 2026 or (ii) when the Company consummates a change of control transaction prior to December 7, 2026 that entitles its stockholders to receive a per share consideration of at least $ 15.00 , $ 17.00 , $ 19.00 and $ 21.00 . Any right to Private Placement Vesting Warrants that remains unvested on the first business day after five years from the closing of the Business Combination will be forfeited without any further consideration. As of October 31, 2023 and January 31, 2023, there were 6,899,982 Public Warrants and 5,933,333 Private Placement Warrants, including 2,966,667 Private Placement Vesting Warrants, outstanding. Warrants to Purchase Class A Common Stock In addition to the Public and Private Placement Warrants, there were 1,065,594 warrants to purchase shares of Class A common stock with a weighted average exercise price of $ 9.384 which were outstanding and exercisable as of October 31, 2023 and January 31, 2023. As of October 31, 2023, the outstanding warrants have a weighted average remaining term of 6.4 years. (12) Related Party Transactions As of October 31, 2023 and January 31, 2023, Google held 31,942,641 shares of the Company’s Class A common stock, and, as such, owned greater than 10 % of outstanding shares of the Company’s Class A common stock. In April 2017, the Company and Google entered into a five year content license agreement pursuant to which the Company licensed content to Google. In April 2022, the agreement automatically renewed for a period of one year and in April 2023, the agreement expired. As of January 31, 2023, the deferred revenue balance associated with the content license agreement was $ 0.3 million. For the nine months ended October 31, 2023, the Company recognized revenue of $ 0.3 million related to the content license agreement. For the three and nine months ended October 31, 2022, the Company recognized revenue of $ 3.3 million and $ 9.7 million, respectively, related to the content license agreement. In July 2023, the Company and Google entered into a one year content license agreement pursuant to which the Company agreed to license content to Google and provide certain of its products and services in exchange for a $ 1.0 million fee. The agreement also provides for the Company to receive up to $ 2.0 million in value of Google cloud credits that the Company can apply against the cost of Google cloud services it utilizes to fulfill its obligations under the agreement. The Company determined that the Google cloud credits represent non-cash variable consideration which is included in the transaction price for the agreement, subject to the guidance on estimating variable consideration within ASC 606, Revenue from Contracts with Customers . The agreement does not include extension or renewal terms. The Company recognized immaterial revenue related to the content license agreement for the three months ended October 31, 2023 and recognized $ 1.0 million for the nine months ended October 31, 2023. 26 Table of Contents The Company purchases hosting and other services from Google, of which $ 13.3 million and $ 13.4 million is deferred as of October 31, 2023 and January 31, 2023, respectively. For the three and nine months ended October 31, 2023, the Company recorded hosting expense of $ 7.5 million and $ 21.6 million, respectively. For the three and nine months ended October 31, 2022, the Company recorded hosting expense of $ 6.0 million and $ 17.7 million, respectively. As of October 31, 2023 and January 31, 2023, the Company’s accounts payable and accrued liabilities balance included $ 2.7 million and $ 2.3 million related to hosting and other services provided by Google, respectively. On June 28, 2021, the Company amended the terms of its hosting agreement with Google. The amendment, among other things, increases the aggregate purchase commitments to $ 193.0 million. The amended agreement commenced on August 1, 2021 and extends through January 31, 2028. See Note 10 for future Google hosting purchase commitments, including the amended commitments, as of October 31, 2023. (13) Stock-based Compensation Prior to the Business Combination, the Company issued equity awards under the Planet Labs Inc. Amended and Restated 2011 Stock Incentive Plan (the “ Legacy Incentive Plan ”). In connection with the Business Combination, the Company adopted the Planet Labs PBC 2021 Incentive Award Plan (the “ Incentive Plan ”). No further awards will be granted under the Legacy Incentive Plan. Directors, employees and consultants are eligible to receive awards under the Incentive Plan; however, ISOs may only be granted to employees. The Company's equity incentive plans are described in Note 15, Stock-based Compensation , in the Notes to the Consolidated Financial Statements in the 2023 Form 10-K. Stock-Based Compensation The following table summarizes stock-based compensation expense recognized related to awards granted to employees and nonemployees, as follows: Three Months Ended October 31, Nine Months Ended October 31, (in thousands) 2023 2022 2023 2022 Cost of revenue $ 944 $ 1,317 $ 3,008 $ 3,992 Research and development 6,042 8,282 20,253 25,903 Sales and marketing 1,626 3,221 7,827 10,615 General and administrative 4,429 6,990 15,374 20,592 Total expense 13,041 19,810 46,462 61,102 Capitalized to internal-use software development costs and property and equipment ( 443 ) ( 372 ) ( 1,851 ) ( 1,261 ) Total stock-based compensation expense $ 12,598 $ 19,438 $ 44,611 $ 59,841 Stock Options A summary of stock option activity is as follows: Options Outstanding Number of Options Weighted Average Exercise Price Weighted Average Remaining Term (Years) Aggregate Intrinsic Value (in thousands) Balances at January 31, 2023 33,721,774 $ 5.08 6.3 Exercised ( 2,628,303 ) $ 2.58 Granted — $ — Forfeited ( 2,177,544 ) $ 6.40 Balances at October 31, 2023 28,915,927 $ 5.21 5.6 $ 1,230 Vested and exercisable at October 31, 2023 24,413,069 $ 4.61 5.2 $ 1,230 As of October 31, 2023, total unrecognized compensation cost related to stock options was $ 17.9 million, which is expected to be recognized over a period of 1.7 years . 27 Table of Contents Restricted Stock Units A summary of restricted stock unit (“RSU”) activity is as follows: Number of RSUs Weighted Average Grant Date Fair Value Balances at January 31, 2023 16,972,601 $ 5.90 Vested ( 6,122,563 ) $ 5.38 Granted 21,728,642 $ 3.87 Forfeited ( 4,469,305 ) $ 4.95 Balances at October 31, 2023 28,109,375 $ 4.59 During the nine months ended October 31, 2023, the Company granted 21,728,642 RSUs, which generally vest over four years , subject to the recipient’s continued service through each applicable vesting date. Stock-based compensation expense recognized for RSUs during the three and nine months ended October 31, 2023 was $ 8.6 million and $ 29.2 million, respectively. Stock-based compensation expense recognized for RSUs during the three and nine months ended October 31, 2022 was $ 8.5 million and $ 26.2 million, respectively. As of October 31, 2023, total unrecognized compensation cost related to RSUs was $ 108.1 million, which is expected to be recognized over a period of approximately 3.0 years. Performance Vesting Restricted Stock Units On April 24, 2023, the Company granted 265,825 performance vesting restricted stock units (“PSUs”) to certain members of the Company’s senior management. A portion of the PSUs are subject to vesting requirements related to the achievement of certain revenue and adjusted EBITDA targets for the first half of the fiscal year ended January 31, 2024 and the remaining portion is subject to vesting requirements related to the achievement of certain revenue and adjusted EBITDA targets for the entire fiscal year ended January 31, 2024. Vesting is also subject to continued service through the applicable vesting dates, and the actual number of PSUs that may vest ranges from 0 % to 125 % of the PSUs granted based on achievement of the targets. Stock-based compensation expense recognized for PSUs during the three and nine months ended October 31, 2023 was $ 0.3 million and $ 0.7 million, respectively. As of October 31, 2023, total unrecognized compensation cost related to PSUs was $ 0.2 million, which is expected to be recognized over a period of approximately 0.4 years. Early Exercises of Stock Options The Legacy Incentive Plan provided for the early exercise of stock options for certain individuals as determined by the Company’s board of directors. Shares of common stock issued upon early exercises of unvested options are not deemed, for accounting purposes, to be issued until those shares vest according to their respective vesting schedules and accordingly, the consideration received for early exercises is initially recorded as a liability and reclassified to common stock and additional paid-in capital as the underlying awards vest. As of October 31, 2023, the Company had a $ 9.9 million liability recorded for the early exercise of unvested stock options, and the related number of unvested shares subject to repurchase was 1,011,010 . Earn-out Shares Pursuant to the Merger Agreement, Former Planet equity award holders have the right to receive Earn-out Shares that are contingently issuable in shares of Class A common stock. The Earn-out Shares may be earned in four equal tranches (i) when the closing price of Class A common stock equals or exceeds $ 15.00 , $ 17.00 , $ 19.00 and $ 21.00 , over any 20 trading days within any 30 day trading period prior to December 7, 2026 or (ii) when the Company consummates a change of control transaction prior to December 7, 2026 that entitles its stockholders to receive a per share consideration of at least $ 15.00 , $ 17.00 , $ 19.00 and $ 21.00 . No Earn-out Shares vested during the three and nine months ended October 31, 2023. As of October 31, 2023, there were 3,664,653 Earn-out Shares outstanding relating to Former Planet equity award holders. During the three and nine months ended October 31, 2023, the Company recognized $ 0.4 million and $ 4.2 million of stock-based compensation expense related to the Earn-out Shares, respectively. During the three and nine months ended October 31, 2022, the Company recognized $ 6.3 million and $ 20.6 million of stock-based compensation expense related to the Earn-out Shares, respectively. As of October 31, 2023, there was no remaining unrecognized compensation cost related to the Earn-out Shares. 28 Table of Contents Other Stock-based Compensation In connection with the acquisition of VanderSat B.V. (“VanderSat”) on December 13, 2021, the Company issued 543,391 shares of Class A common stock to an employee and former owner of VanderSat which are accounted for as stock-based compensation because the shares are subject to forfeiture based on post-acquisition time-based service vesting. The shares vest in quarterly increments over two years commencing on December 13, 2021. During the three and nine months ended October 31, 2023, the Company recognized $ 0.6 million and $ 1.9 million of stock-based compensation expense related to these shares, respectively. During the three and nine months ended October 31, 2022, the Company recognized $ 0.6 million and $ 1.9 million of stock-based compensation expense related to these shares, respectively. As of October 31, 2023, unrecognized compensation cost related to these shares was $ 0.3 million. These costs are expected to be recognized over a period of approximately 0.2 years. (14) Income Taxes The Company recorded income tax expense of $ 0.4 million and $ 1.2 million for the three and nine months ended October 31, 2023. The Company recorded income tax expense of $ 0.4 million and $ 0.9 million for the three and nine months ended October 31, 2022. For the three and nine months ended October 31, 2023 and 2022, the income tax expense was primarily driven by the current tax on foreign earnings. The effective tax rates for the three and nine months ended October 31, 2023 and 2022 differed from the federal statutory tax rate primarily due to the valuation allowance on the majority of the Company’s U.S. and foreign deferred tax assets and foreign rate differences. The Company evaluates its tax positions on a quarterly basis and revises its estimates accordingly. Gross unrecognized tax benefits were $ 8.1 million and $ 6.9 million as of October 31, 2023 and January 31, 2023, respectively. The gross unrecognized tax benefits, if recognized, would not affect the effective tax rate due to the valuation allowance against the deferred tax assets. The Company determined that no accrual for interest and penalties was required as of October 31, 2023 and January 31, 2023 and no such expenses were incurred in the periods presented. The Company does not anticipate the total amounts of unrecognized tax benefits to significantly increase or decrease in the next twelve months. The Company files U.S. federal, various state and foreign income tax returns. The Company is not currently under audit by any taxing authorities. All tax years remain open to examination by taxing jurisdictions to which the Company is subject. (15) Net Loss Per Share Attributable to Common Stockholders The Company computes net loss per share of the Class A common stock and Class B common stock using the two-class method required for participating securities. Basic and diluted net loss per share are the same for each class of common stock because they are entitled to the same liquidation and dividend rights. The following table sets forth the computation of basic and diluted loss per Class A common stock and Class B common stock (amounts in thousands, except share and per share amounts): Three Months Ended October 31, Nine Months Ended October 31, 2023 2022 2023 2022 Numerator: Net loss attributable to common stockholders $ ( 38,004 ) $ ( 40,236 ) $ ( 110,423 ) $ ( 124,125 ) Denominator: Basic and diluted weighted-average common shares outstanding used in computing net loss per share attributable to common stockholders 284,197,733 267,947,661 277,252,951 266,104,962 Basic and diluted net loss per share attributable to common stockholders $ ( 0.13 ) $ ( 0.15 ) $ ( 0.40 ) $ ( 0.47 ) Basic and diluted net loss per share was the same for each period presented as the inclusion of all potential Class A common stock and Class B common stock outstanding would have been anti-dilutive. 29 Table of Contents The following table presents the potential common stock outstanding that was excluded from the computation of diluted net loss per share of common stock as of the periods presented because including them would have been antidilutive: As of October 31, 2023 2022 Warrants to purchase Class A common stock 1,065,594 1,065,594 Common stock options 28,915,927 36,046,089 Restricted Stock Units 28,109,375 16,373,800 Earn-out Shares 25,123,663 25,928,669 dMY Sponsor Earn-out Shares 862,500 862,500 Public Warrants 6,899,982 6,899,982 Private Placement Warrants 5,933,333 5,933,333 Early exercised common stock options, subject to future vesting 1,011,010 1,378,654 Shares issued in connection with acquisition, subject to future vesting 67,923 339,619 Total 97,989,307 94,828,240 30 Table of Contents