Iâll have to come back to this when I have time. Whatâs interesting is whether adjusted EBITDA is moving in a better direction and what the impact of the layoffs was on the results. Mostly, Iâm interested in the long-term scenarios: can Planet definitely turn cash flows positive? And of course, the business model needs to be assessedâhow revenue scales up in relation to the âphysicalâ growth of the business, i.e., the use of collected data. Planet is certainly a company for a fundamentalist; valuation is low, yet itâs still in the startup phase. So, Iâve given myself some homework above, Iâll be back 
And a follow-up to the previous one, now that thereâs a company at an all-time low, I really should outline some sort of strategy for adding in increments, but thereâs time to think about thatâŠ
Iâve gathered some thoughts here from the Q2 investor call. Planet is still in its early stages, and the company cannot promise investors a steady revenue growth curve. The company has repeatedly stated its commitment to turning operations / adjusted EBITDA / cash flow positive by the end of 2024. And if that happens, the company wonât need external funding; the current cash balance is $367 million. Looking at a worst-case scenario, if the company runs into trouble, it could be acquired or the company might start diluting the share base. I donât see such a scenario as likely, at least within a one-year period; there is cash. If you invest in the company, you are siding with management; they say the sales pipeline is long with big deals (7-figure, even 8-figure deals). I am indeed siding with management; I want to experience this journey. The company is currently growing moderately, but there could be setbacks in the future if deal closures are delayed. In the big picture, the company has a strong tailwind because climate change, crises, etc., increase the demand for Planetâs services. Of course, that isnât certain either, but I personally think that Planet is running a business that is unique in its own way, and no one can predict the moment of breakthrough and exponential revenue growth for such a business. And since valuing the company is difficult, itâs best to focus on a few things:
- Reaching positive cash flow by 2025. i.e., not going bankrupt
- The business makes common sense to us
- A more detailed analysis of revenue; I donât know if the company has even disclosed how revenue is generated from different customers, whether itâs tied to data usage or fixed contracts⊠maybe this will become clearer later, but it isnât yet
- If you side with management, itâs worth diversifying your investments for the aforementioned reasons
NASA JPL instruments are being installed on Planetâs satellites, with a launch scheduled for 2024. These types of projects are world-leading efforts in climate change research, backed by NASA and the California Institute of Technology (Caltech). To Wall Street, such announcements are just noise, as no one can calculate discounted cash flows from them to the present day. However, Planet isnât doing this for free; this will also be a contributing factor in some upcoming quarterly result. If you look at this through an investorâs lens, the fundamentals have advanced another notch, yet Wall Street hasnât reacted to the news at all. If you believe in Planet over the long term, significant cash flows havenât been âbaked intoâ the current share price yet.
Itâs rare to see a company where even the bullshit EBITDA is negative 
On top of that, massive Capex costs and dependency on the US federal budget make it hard to see why this would be an attractive investment.
Well, we all have our own investor lenses through which we look
Satellites are pesky contraptions in that they have a rather short lifespan. Planet will therefore have to continue investing large sums into launching new satellites, even though the additional demand brought by the war in Ukraine will presumably disappear in the coming years. The current business is burning cash at an unsustainable rate, and shares are being printed at a frantic pace.
At the current growth rate, the company will never become profitable; instead, revenue would need to multiply to cover expenses. I, for one, donât see a path to profitability unless some wildly popular new application is invented 
It is possible that the climate crisis and disaster management will increase the value of Planetâs data, both in short-term disaster management and in longer-term food security issues. We are already seeing breadbaskets shifting locations on the globe. It will take a while before Planetâs historical and current data can be processed through AI software to support decision-making in food security and disaster management. Therefore, it is possible that the cash runs out too early. Or then again, maybe it wonât. The future will tell.
NASA has extended its Blanket Purchase Agreement with Planet under the Commercial SmallSat Data Acquisition (CSDA) Program with multiple orders totaling $18.5 million in funding through 2024.
Eli NASA ostaa Planetin Dataa 18,5 miljoonan edestÀ 2024. Iso kauppa Planetille, lÀhentelee 10% vuosiliikevaihdosta.
NASA Extends CSDA Agreement with Planet - Planet Labs PBC
New fleet to the sky in November 
Somewhere in the depths of the internet, Iâm participating in a discussion about Planet. The question there is: what is happening with Planet right now?
Iâve thought about it once more, and Iâll put my latest thoughts in full here, in the original English version. My point is that the market currently doesnât believe the company will turn things around toward positive cash flow, and thatâs why the stock is scraping the bottom. But here, we look at the facts and follow the turnaround quarter by quarter.
It looks like they are executing quite well on what they have promised. Their fleets are collecting data from Earth every moment. Their database is unique. Everything on the engineering side looks at least reasonably good.
But the difficult side of Planet is the economics. Planet hasnât been able to show investors how they are going to convert their great concept into recurring cash flows. Currently generated revenue consists of some big contracts which are quite short-term, e.g. 2 years etc. But Planet canât tell clearly enough how the fleet and the huge database are converted into customer value. An investor can find only the basics from the income statements.
This week Planet had its investor day. I understand the market reaction. I havenât done my homework well enough, but I have a feeling that the market is disappointed because Planet has decreased revenue estimates all the time during this year. And the investor day didnât give anything new about Planetâs economics, anything new about their business model. The stock is too risky for investors.
A few words on the potential. Planetâs dataset is unique; it is huge, increasing all the time, and you can find data many years back. This is totally new for most people. We donât have any experience with that. Of course, scientists know the value of the dataset. All this is something new, something unknown for most of the people steering governments, leading corporations, banks, insurance companies, rescue groups etc.
Planet needs a little bit more time for our ecosystem to be able to use the dataset properly. To clarify use cases. To find the flywheel, and then get the flywheel rolling. Market is now saying to the management of Planet like this: âYou are still promising to get adjusted EBITDA positive (or positive cash flow) at the end of 2024, but we donât trust you.â
Tailwind for Planet is obvious. Different crises caused by nature or mankind itself increase the demand to understand the situation on Earth. Planet has very clear mission statements: âUsing Space to Help Life on Earthâ or âMake global change visible, accessible and actionableâ.
Roughly a month until the Q3 results are out. Personally, I hope that Planet continues to improve its profitability, i.e., inching adjusted EBITDA closer to the line. My gut feeling is that new deals have come in reasonably well this year. Revenue growth might be close to zero. But significant layoffs were made this year, 10% if I recall correctly, and thatâs why we now need to monitor the development of profitability. Because in Planetâs case, we all hope that the company does not go bankrupt and that we will see a situation where AI algorithms around the world process the companyâs continuously updated data repository for the benefit of humanityâs key issues, e.g., agriculture, nature, and disaster management.
So, the task for the upcoming quarters is to turn cash flow positive. Letâs monitor that. The companyâs situation is fundamentally good, as the cash balance of the practically debt-free company was 367 million at the end of June, and the cash decreased by 10 million from the previous quarter. The net income is misleading, of course, because stock-based compensation (SBC) drags the company heavily into the red. And @Pohjolan_Eka recently and rightly pointed out the printing of sharesâit happened at a rate of 6% over the past year.
Planetâs book value was $1.9/share at the end of June. So we are close to that at the current price of $2.25. The company is currently shorted at only 4% of the share capital, which is quite low. Shorters probably see that the companyâs cash still provides a buffer for losses.
This was just a reflection that if/when the company survives the next few yearsâand there are realistic chances for thatâPlanet could become a more widely appreciated and higher market cap high-tech and data company.
And this launch was successful. A total of 37 new âeyesâ in the sky.
Good stuff. All projects are progressing as planned. We can congratulate Planet on the successful deployment into space! In practice, this (too) will bring more of that famous revenue in the near future, I reckon.
It took a while to find the time to read the investor call. Here are the highlights. According to Will Marshall, Planet has a genuine goal to reach positive adjusted EBITDA in a yearâs time, in Q4. In practice, positive adjusted EBITDA means turning the cash flow positive. Currently, they have over 300 million in cash and are burning 60 million per year, so letâs believe Marshallâs statement that current operations will not require a share issue before the business turns profitable.
Planet is still a mix of a science and a business-driven company. I say this because Planetâs big breakthrough is still a couple of years away. The big thing is when AI (LLM models) can process Planetâs diverse data. LLM models enable queries to be made against the data. Currently, the data is mainly analyzed by public sector agenciesâthose with geospatial expertise. Through LLM models, direct queries can be made for customer needs; the private sector wants that.
This year, growth was driven by the public sector; notably, growth in Europe and Asia was 70% in Q3, while the Americas were at -11% because one project did not continue in Q1. According to management, the public sector continues to perform well.
And we have the patience to wait for the private sector to wake up, assisted by AI.
Pelican is Planetâs newest âfleetâ in the sky. A successful test launch was recently conducted, and Pelican is doing well up there. I asked AI for a comparison between the current fleet and Pelican, and here is what the comparison looks like:
Pelican and SkySats are two different types of Earth-imaging satellites operated by Planet Labs. Here are some of the main differences between them:
Pelican is a new line of satellites that is expected to begin launching in 2022, while SkySats have been in orbit since 20131.
Pelican will consist of up to 32 satellites, while SkySats have 21 satellites in the constellation21.
Pelican will offer higher resolution images at up to 30 cm, while SkySats have a resolution of 50 cm21.
Pelican will provide higher daily revisits, with up to 30 captures per day, while SkySats have a maximum of 10 revisits per day2.
Pelican will leverage third-party communications satellites to reduce the latency between tasking and receiving data, while SkySats rely on Planetâs own ground stations3.
Pelican is designed, built and manufactured by Planet, while SkySats were manufactured by Maxar Technologies31.
Planet is constantly developing its software platform so that customers/users can spend more of their time solving actual real-world global issues instead of IT grunt work.
This latest news report is an example of a solution that improves data usability and speeds up availability.
https://investors.planet.com/news/news-details/2023/Planet-Adds-Planetary-Variables-Products-to-Sentinel-Hub-to-Enable-Greater-Usability-of-its-Earth-Observation-Data/default.aspx
Then a bit about the market â Planetâs market cap is 700 million, and they have 300 million in cash. The market is valuing the entire satellite fleet, the companyâs expertise, and the unique data set accumulated over 10 years at 400 million. Well, times will surely change for Planet once the data is made flexibly available to companies through LLM models.
Iâve been browsing the discussion forums, and Planet is taking quite a beating from the investors writing there. However, the level of discussion is pretty low. Everyone is rehashing the same stories: inefficient marketing, the CEO talks more than he delivers, etc. etc.
Planet has nominated Susan Wojcicki, who served as the CEO of YouTube for nearly 10 years, to its board. Planet is still a young company and has been science-led up to this point, but it clearly wants to develop its business capabilities. The company doesnât just rely on its CEO. There is strong expertise on the board, and Susan is a top candidate for the 2024 board. Things take time at Planet, too.