Planet CEO on $2.8B SPAC deal, outlook
Yahoo Finance’s Brian Sozzi, Myles Udland, and Julie Hyman speak with Planet CEO and Co-founder Will Marshall about the company $2.8B SPAC deal, and outlook for the satellite imagery & data space.
Video Transcript
MYLES UDLAND: All right, welcome back to Yahoo Finance Live on this Friday morning. Well, the hot SPAC market continues to roll on. Earlier this week, Planet Labs announcing that it will go public in a SPAC transaction with DMY Technology Group for will value Planet Labs at about $2.8 billion.
And Planet CEO and co-founder Will Marshall joins us now to discuss the deal. Well, let's just start with kind of the proposition that you guys have because I think we're all quite interested in just what the product is and who the end user is. So you say in the release here, the data set you have is a scan of Earth-- of the whole Earth. That's the whole thing. Tell us a little bit about the process of gathering this and who your customers are.
WILL MARSHALL: Well, thanks for having us. Yeah, so Planet is a data company. We have a fleet of 200 satellites that image the entire Earth's landmass once per day. It's a [INAUDIBLE] scanner for the Earth. And that imagery powers decisions for companies, so as they see change across the planet. Let me give you a few examples. In agriculture, we scan all the agricultural farms around the world every day. And farmers use it to improve their crop yield. Like, it'll tell them where's-- where needs fertilizer, where it needs to be harvested. Precision agriculture, it improves agriculture yields by 20% to 40%.
Data is used to update maps that you see online. So Google Maps, for example, use our data and self-heating maps to keep them up to date. And governments use it for things like disaster response, so after floods and fires and earthquakes. Our data is used to help the responders. So it's real-time information that helps people make smarter decisions.
I think one way to think about it is a bit like a Bloomberg Terminal, but for Earth data. Bloomberg Terminal serves up financial data, and then people make smart decisions on that. We serve up Earth data into a wide variety of vertical markets like ag mapping, finance, forestry, et cetera. And then people embed it into their workflows, and they make smart decisions. And just like a Bloomberg Terminal, it's high growth, high margins, and it's really sticky. So our customers really like using it. And it's a brand new and unique data set.
BRIAN SOZZI: Well, about 69% of your business comes from agriculture, civil, and defense. Who is not using this product you're going after?
WILL MARSHALL: Well, a lot of people could use it, but aren't using it yet. For example, in insurance, people could use it to check insurance claims without having to send people out, especially where we're getting moving to less remote and more remote first culture. Finance companies could use it to better markets. We can tell if crop output from all the world's soy fields every day or the ships into and out of all the world's top ports, et cetera, et cetera.
But right now, Planet is working on software that enables those kinds of uses. So right now, we're going to the big ag companies, mapping companies, governments that can get value out of our data today. And this money that we are getting through going public is going to enable us to invest in software to make it usable to more people, not just the big countries and big companies.
JULIE HYMAN: Will, it's Julie here. Operating satellites, one would imagine, is expensive. Maintaining them-- expensive. Crunching all of this data and making sense of it-- expensive. So talk to me about cost of business and your margins and profitability track.
WILL MARSHALL: Thanks very much. Yeah, I mean, this is-- it is-- we do put satellites up. We do have to buy rockets and so on. But you'll be surprised to learn that the capital expenses are less than 10% of our overall budget this year. We have miniaturized the satellites, made them much more efficient. Therefore, that brings down the launch costs. We have super efficient partnerships on cloud compute to bring those costs down. And so actually, the capital expenditures are very low.
And what's also important for profitability is that we sell our data feeds on this Bloomberg-like Terminal for Earth data. We sell those data feeds to multiple users. Selling a data feed to the second users, of course, the incremental cost is very, very low. So our margins are actually very high. Last year, on our Planet scope business, which is the daily scan, 73% of our revenue comes with that satellite fleet. The profit margins were 66%, including depreciation and amortization of all the satellites. So fully loaded.
And so, it really looks like a software business at this point, a data business. And that's based on a revolution that's happening on the satellite side that has massively reduced the cost that we have pioneered called agile aerospace. And so yes, high margins, high growth.
MYLES UDLAND: All right, Will Marshall, CEO, co-founder at Planet Labs. Will, appreciate the time this morning. Really interesting company, and hopefully we'll be in touch as you guys continue your journey towards the public markets.
