We’re either completely alone in the universe or we’re not. Either outcome is equally terrifying, so it’s best not to think about that stuff too much and stay focused on stonks. Planet Earth is our only home, and understanding it through imagery is now possible thanks to geospatial intelligence vendors like the aptly named Planet Labs (PL).
Why We Invested in Planet Labs
Our thesis was simply this. Most NewSpace themes are low margin capital intensive ventures that don’t offer software-like gross margins. Planet Labs was an exception to that rule with their “capital light” geospatial intelligence business that’s a cut above the other pure play publicly traded geospatial intelligence companies out there. We invest in leaders, and Planet Labs leads in terms of revenues and market cap when compared to other pure play geospatial intelligence stocks.
Then the problems started. First we noticed it in the proprietary metric Planet introduced called “winbacks.” This was supposed to measure customers whose contracts lapsed, then salespeople chased them down to resubscribe. If Planet’s solution is so valuable, then people should be proactively renewing their contracts instead of having to be chased. In their recent earnings call, the company cites seasonality as an explanation for “gaps between when a contract expires and when the customer focuses on the renewal.” Fair enough, so we can look at net retention rate (NRR), something that has been volatile and ended this year at a dismal 101% (partially explained by contractions of certai
