Planet Labs' 3Q Beat, Big Tech Partnerships Wins Analyst Conviction

Needham analyst Ryan Koontz maintained a Buy on Planet Labs PL with a $9 price target.
PL delivered a solid F3Q23 with revenue and Adjusted EBITDA well ahead of consensus, driven by robust demand in government and strength in commercial, albeit with some elevated scrutiny on spending with specific customers.
Total revenue of $49.7 million increased 57% Y/Y and was 5% above consensus.
Non-GAAP gross margin expanded 1,860bps Y/Y to 54%, well ahead of the high-end guidance, highlighting PL's ability to monetize its global data set with minimal incremental costs.
Adjusted EBITDA of ($12 million) beat the ($21 million) consensus.
End of Period customer count increased by 16% Y/Y as PL prioritized larger accounts with meaningful future expansion opportunities.
NDRR was strong at 123%, including the headwind from renewal with a sizeable international government customer signed shortly after quarter-end.
New Partners include Amazon.com Inc AMZN Amazon Web Services, and Accenture Plc ACN, while PL expanded its work with Microsoft Corp MSFT.
Koontz believes PL is on track to become the industry leader in earth observation data as its new analytics products simplify and speed consumption for the broader market.
Price Action: PL shares traded lower by 2.78% at $5.05 on the last check Thursday.

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