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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________  to _______________.
Commission file number 001-40166
Planet Labs PBC
(Exact name of registrant as specified in its charter)
Delaware
85-4299396
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
645 Harrison Street, Floor 4, San Francisco, California
 94107
(Address of principal executive offices)
(Zip Code)
(415) 829-3313
Registrant's telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A common stock, par value $0.0001 per sharePLNew York Stock Exchange
Warrants to purchase Class A common stock, at an exercise price of $11.50 per sharePL WSNew York Stock Exchange
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes  ☒    No  ☐ 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  ☒   No  ☐ 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer
Accelerated filer
Non-accelerated filer  
Smaller reporting company
Emerging growth company
                
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No  

The registrant had 264,502,208 outstanding shares of Class A common stock, and 21,157,586 shares of Class B common stock, as of September 1, 2023.

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TABLE OF CONTENTS
Page
Item 1.
8
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
3


Unless the context otherwise requires, the “Company”, “Planet”, “we,” “our,” “us” and similar terms refer
to Planet Labs PBC, a Delaware public benefit corporation (f/k/a dMY Technology Group, Inc. IV, a Delaware
corporation), and its consolidated subsidiaries.

Cautionary Note Regarding Forward Looking Information

This Quarterly Report on Form 10-Q for the quarter ended July 31, 2023 (the “Form 10-Q” or “this report”) includes statements that express Planet’s opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, “forward-looking statements.” Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “seek,” “may,” “will,” “could,” “can,” “should,” “would,” “believes,” “predicts,” “potential,” “strategy,” “opportunity,” “aim,” “continue,” and similar expressions or the negative thereof, or discussions of strategy, plans, objectives, intentions, estimates, forecasts, outlook, assumptions, or goals, are intended to identify such forward-looking statements. Forward-looking statements appear in a number of places throughout this report and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the markets in which Planet operates. Forward-looking statements contained in this report include statements about:
    
our future financial performance, including expectations regarding our revenue, cost of revenue, operating expenses, capital expenditures, cash flows and our ability to achieve profitability;
our ability to attract and retain customers, including our ability to renew existing contracts and expand our relationships with existing customers;
our expectations regarding the value of our offerings to our customers over time;
our expectations regarding market growth, including our ability to grow in existing markets and expand into new markets;
our ability to continue to improve our data and offer software and analytic solutions to improve the value of our data;
our ability to continue to invest in our sales and marketing, software platform development, machine learning and analytic tools as well as our applications and new satellite technologies;
our relationships with third-party partners, vendors and solution providers;
our ability to manage risks and challenges associated with our financial conditions and results of operations;
our expectations regarding the future impact of seasonality on our business;
our management of future growth and business operations, as well as the expected results of our workforce reduction;
our expectations regarding the realization of our U.S. and foreign deferred tax assets;
our ability to maintain, protect and enhance our intellectual property; and
the increased expenses associated with being a public company.

The foregoing list may not contain all of the forward-looking statements made in this Form 10-Q. Such forward-looking statements are based on available current market material and our current expectations, beliefs and forecasts concerning future events and their potential effects on Planet. The outcome of the events described in these forward-looking statements is subject to known and unknown risks, uncertainties, and other factors, including those described in the “Risk Factors” section of our most recent Annual Report on Form 10-K, this Form 10-Q, as well as the other documents filed by us from time to time with the U.S. Securities and Exchange Commission (“SEC”). We operate in a rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Form 10-Q. We cannot assure you that the results, events, and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements.

The forward-looking statements contained in this Form 10-Q are based on information available to us at the time of filing of this Form 10-Q and relate only to events as of the date on which the statements are made. We undertake no
4

obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Part I. - Financial Information
Item 1. Financial Statements
Planet Labs PBC
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands, except share and par value amounts)
 
July 31, 2023January 31, 2023
Assets 
Current assets 
Cash and cash equivalents$118,808 $181,892 
Short-term investments248,979226,868
Accounts receivable, net of allowance of $786 and $1,289, respectively
40,34938,952
Prepaid expenses and other current assets19,72527,943
Total current assets427,861475,655
Property and equipment, net120,193108,091
Capitalized internal-use software, net12,99211,417
Goodwill112,750112,748
Intangible assets, net14,86714,831
Restricted cash and cash equivalents, non-current5,7075,657
Operating lease right-of-use assets23,48520,403
Other non-current assets2,5623,921
Total assets$720,417 $752,723 
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable$3,825 $6,900 
Accrued and other current liabilities (1)
37,84146,022
Deferred revenue (1)
56,57551,900
Liability from early exercise of stock options10,75712,550
Operating lease liabilities, current7,2614,885
Total current liabilities116,259122,257
Deferred revenue (1)
18,1862,882
Deferred hosting costs (1)
9,6058,679
Public and private placement warrant liabilities9,49916,670
Operating lease liabilities, non-current19,13917,145
Contingent consideration5,9267,499
Other non-current liabilities2,2351,487
Total liabilities180,849176,619
Commitments and contingencies (Note 8)
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 July 31, 2023 and January 31, 2023, 255,787,619 and 250,625,975 Class A shares issued and outstanding at July 31, 2023 and January 31, 2023, respectively, 21,157,586 Class B shares issued and outstanding at July 31, 2023 and January 31, 2023, 0 Class C shares issued and outstanding at July 31, 2023 and January 31, 2023 (1)
2727
Additional paid-in capital1,549,9201,513,102
Accumulated other comprehensive income1,3362,271
Accumulated deficit(1,011,715)(939,296)
Total stockholders’ equity539,568576,104
Total liabilities and stockholders’ equity$720,417 $752,723 
(1)Balance includes related-party transactions entered into with Google, LLC (“Google”). See Note 10.
See accompanying notes to unaudited condensed consolidated financial statements.
5


Planet Labs PBC
Condensed Consolidated Statements of Operations (Unaudited)
(In thousands, except share and per share amounts)
 Three Months Ended July 31,Six Months Ended July 31,
2023202220232022
Revenue (1)
$53,761 $48,450 $106,464 $88,577 
Cost of revenue (1)
27,469 24,977 52,025 48,605 
Gross profit26,292 23,473 54,439 39,972 
Operating expenses
Research and development (1)
26,741 26,737 54,927 51,487 
Sales and marketing22,310 19,483 45,435 38,338 
General and administrative20,521 19,893 42,049 40,501 
Total operating expenses69,572 66,113 142,411130,326 
Loss from operations(43,280)(42,640)(87,972)(90,354)
Interest income3,802 1,311 8,308 1,423 
Change in fair value of warrant liabilities1,226 2,112 7,171 5,388 
Other income (expense), net859 (158)963 122 
Total other income (expense), net5,887 3,265 16,442 6,933 
Loss before provision for income taxes(37,393)(39,375)(71,530)(83,421)
Provision for income taxes582 154 889 468 
Net loss$(37,975)$(39,529)$(72,419)$(83,889)
Basic and diluted net loss per share attributable to common stockholders$(0.14)$(0.15)$(0.26)$(0.32)
Basic and diluted weighted-average common shares outstanding used in computing net loss per share attributable to common stockholders275,053,198266,212,489273,723,006265,168,341
                        
(1)Balance includes related-party transactions entered into with Google. See Note 10.
See accompanying notes to unaudited condensed consolidated financial statements.
6


Planet Labs PBC
Condensed Consolidated Statements of Comprehensive Loss (Unaudited)
(In thousands)
 Three Months Ended July 31,Six Months Ended July 31,
2023202220232022
Net loss$(37,975)$(39,529)$(72,419)$(83,889)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment169 142 124 317 
Change in fair value of available-for-sale securities(515)303 (1,059)303 
Other comprehensive income (loss), net of tax(346)445 (935)620 
Comprehensive loss$(38,321)$(39,084)$(73,354)$(83,269)

See accompanying notes to unaudited condensed consolidated financial statements.
7

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
 
Accumulated
Deficit
 
Total
Stockholders’
Equity
 Shares Amount
Balances at January 31, 2022262,175,273$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 options3,524,1826,2036,203
Issuance of Class A common stock upon vesting of restricted stock units215,178
Vesting of early exercised stock options91,911896896
Class A common stock withheld to satisfy employee tax withholding obligations(75,442)(411)(411)
Stock-based compensation20,25920,259
Change in translation175175
Net loss(44,360)(44,360)
Balances at April 30, 2022265,931,102$27 $1,450,098 $2,271 $(821,690)$630,706 
Issuance of Class A common stock from the exercise of common stock options605,6901,4551,455
Issuance of Class A common stock upon vesting of restricted stock units1,061,915
Vesting of early exercised stock options91,911896896
Class A common stock withheld to satisfy employee tax withholding obligations(381,149)(1,753)(1,753)
Stock-based compensation21,03321,033
Net unrealized gain on available-for-sale securities, net of taxes303303
Other390390
Change in translation142142
Net loss(39,529)(39,529)
Balances at July 31, 2022267,309,469$27 $1,472,119 $2,716 $(861,219)$613,643 
 Common Stock Additional
Paid-in
Capital
 Accumulated
Other
Comprehensive
Income
 
Accumulated
Deficit
 
Total
Stockholders’
Equity
 Shares Amount
Balances at January 31, 2023271,783,561$27 $1,513,102 $2,271 $(939,296)$576,104 
Issuance of Class A common stock from the exercise of common stock options1,018,3853,2953,295
Issuance of Class A common stock upon vesting of restricted stock units1,278,161
Vesting of early exercised stock options91,911896896
Class A common stock withheld to satisfy employee tax withholding obligations(472,136)(1,896)(1,896)
Stock-based compensation15,98315,983
Net unrealized 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, 2023273,699,882$27 $1,531,380 $1,682 $(973,740)$559,349 
Issuance of Class A common stock from the exercise of common stock options1,383,4133,0633,063
Issuance of Class A common stock upon vesting of restricted stock units2,597,964
Vesting of early exercised stock options91,910896896
Class A common stock withheld to satisfy employee tax withholding obligations(827,964)(2,857)(2,857)
Stock-based compensation17,43817,438
Net unrealized loss on available-for-sale securities, net of taxes(515)(515)
Change in translation169169
Net loss(37,975)(37,975)
Balances at July 31, 2023276,945,205$27 $1,549,920 $1,336 $(1,011,715)$539,568 

See accompanying notes to unaudited condensed consolidated financial statements.
8

Planet Labs PBC
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
 Six Months Ended July 31,
2023 2022
Operating activities 
Net loss$(72,419)$(83,889)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization22,408 23,213 
Stock-based compensation, net of capitalized cost of $1,408 and $889, respectively
32,013 40,403 
Change in fair value of warrant liabilities(7,171)(5,388)
Change in fair value of contingent consideration(527) 
Other(2,747)485 
Changes in operating assets and liabilities
Accounts receivable(1,588)18,595 
Prepaid expenses and other assets5,152 (4,432)
Accounts payable, accrued and other liabilities(17,164)(1,866)
Deferred revenue19,957 (15,165)
Deferred hosting costs1,082 (760)
Net cash used in operating activities(21,004)(28,804)
Investing activities
Purchases of property and equipment(21,709)(6,509)
Capitalized internal-use software(1,998)(1,271)
Maturities of available-for-sale securities106,762  
Sales of available-for-sale securities990  
Purchases of available-for-sale securities(127,703)(195,113)
Other(644)(293)
Net cash used in investing activities(44,302)(203,186)
Financing activities
Proceeds from the exercise of common stock options6,358 6,418 
Class A common stock withheld to satisfy employee tax withholding obligations(4,753)(2,164)
Payment of transaction costs related to the Business Combination (326)
Other(15)122 
Net cash provided by financing activities1,590 4,050 
Effect of exchange rate changes on cash and cash equivalents, and restricted cash and cash equivalents155 (1,118)
Net decrease in cash and cash equivalents, and restricted cash and cash equivalents
(63,561)(229,058)
Cash and cash equivalents, and restricted cash and cash equivalents at the beginning of the period188,076 496,814 
Cash and cash equivalents, and restricted cash and cash equivalents at the end of the period$124,515 $267,756 


See accompanying notes to unaudited condensed consolidated financial statements.


9

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 six months ended July 31, 2023 are not necessarily indicative of the results expected for the fiscal year ending January 31, 2024 or any other future period.
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 July 31, 2023 and January 31, 2023, the Company had $118.8 million and $181.9 million of cash and cash equivalents, respectively. Additionally, as of July 31, 2023 and January 31, 2023, the Company had short-term investments of $249.0 million and $226.9 million, respectively, which are highly liquid in nature and available for current operations.
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
10

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 COVID-19 Coronavirus pandemic (“COVID-19” or “COVID-19 pandemic”), and current events involving Russia and Ukraine, 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 5, 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 July 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 $365.9 million.
Accounts receivable are typically unsecured and are derived from revenue earned from customers across various countries. One customer accounted for 11% and 15% of accounts receivable as of July 31, 2023 and January 31, 2023, respectively.
For the three and six months ended July 31, 2023, one customer accounted for 23% and 22% of revenue, respectively. For the three months ended July 31, 2022, one customer accounted for 19% of revenue. For the six months ended July 31, 2022, two customers accounted for 15% 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.
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.
11


(3)Revenue
Deferred Revenue
During the six months ended July 31, 2023 and 2022, the Company recognized revenue of $38.5 million and $37.9 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 $153.9 million as of July 31, 2023, which consists of both deferred revenue of $74.8 million and non-cancelable contracted revenue that will be invoiced in future periods of $79.1 million. The Company expects to recognize approximately 74% of the remaining performance obligation over the next 12 months, approximately 96% 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 July 31,Six Months Ended July 31,
(in thousands)2023202220232022
United States$27,038 $25,729 $50,165 $44,481 
Rest of World26,72322,72156,29944,096
Total revenue$53,761 $48,450 $106,464 $88,577 
No single country in the Rest of World accounted for more than 10% of revenue for the three and six months ended July 31, 2023 and July 31, 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.
During the three and six months ended July 31, 2023, the Company deferred $0.4 million and $0.6 million of commission expenditures to be amortized in future periods, respectively. The Company’s amortization of commission expenditures was $0.7 million and $1.3 million for the three and six month periods ended July 31, 2023, respectively.
During the three and six months ended July 31, 2022, 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 $1.5 million and $1.8 million for the three and six month periods ended July 31, 2022, respectively.
As of July 31, 2023 and January 31, 2023, deferred commissions consisted of the following:
(in thousands)July 31, 2023January 31, 2023
Deferred commission, current$2,122 $2,405 
Deferred commission, non-current1,7472,206
Total deferred commission$3,869 $4,611 
12

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 July 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.
 July 31, 2023
(in thousands)Level 1 Level 2 Level 3
Assets
Cash equivalents:
Money market funds$40,348 $ $ 
Commercial paper 995  
Restricted cash: money market funds5,533   
Short-term investments:
U.S. Treasury securities64,008 $ $ 
Commercial paper$ 12,868 $ 
Corporate bonds$ 159,094 $ 
U.S. government agency securities$ 13,009 $ 
Total assets$109,889 $185,966 $ 
Liabilities
Public Warrants$4,485 $ $ 
Private Placement Warrants$ $ 5,014 
Contingent consideration for acquisition of business$ $ 7,503 
Total liabilities$4,485 $ $12,517 
 January 31, 2023
(in thousands)Level 1Level 2Level 3
Assets
Cash equivalents:
Money market funds72,382
Commercial paper999
Restricted cash equivalents: money market funds5,486
Short-term investments:
U.S. Treasury securities59,433
Commercial paper19,849
Corporate bonds139,589
U.S. government agency securities7,997
Total assets$137,301 $168,434 $ 
Liabilities
Public Warrants6,969
Private Placement Warrants9,701
Contingent consideration for acquisition of business  8,030 
Total liabilities$6,969 $ $17,731 
13

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 six months ended July 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 9 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 9 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 July 31, 2023 and January 31, 2023 were 70.0% and 70.0%, respectively.
Contingent Consideration for Acquisition of Business
The Company recorded contingent consideration liabilities in connection with its acquisition of Salo Sciences, Inc. on January 3, 2023 (see Note 6 of the Company’s Consolidated Financial Statements included in the 2023 Form 10-K). 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 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.
The fair value of the contingent consideration liability for 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.
14

Level 3 Disclosures
The following is a rollforward of Level 3 liabilities measured at fair value for the three and six months ended July 31, 2023 and 2022:
(in thousands)Private Placement WarrantsTechnical Milestone Contingent Consideration*Customer Contract Earnout 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 $ $ 
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 
* The current portion of the contingent consideration liabilities balances of $1.6 million and $0.5 million as of July 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.
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 July 31, 2023 and January 31, 2023, there were no material non-financial assets recorded at fair value.


(5)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 $5.7 million and $6.2 million as of July 31, 2023 and January 31, 2023, respectively. The restricted cash and cash equivalents balances as of July 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 $1.6 million of performance guarantees required for the Company’s foreign sales activities. 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 July 31, 2023 and January 31, 2023 is as follows:
15

 
(in thousands)July 31, 2023January 31, 2023
Cash and cash equivalents$118,808 $181,892 
Restricted cash and cash equivalents, current 527
Restricted cash and cash equivalents, non-current5,707 5,657
Total cash, cash equivalents, and restricted cash and cash equivalents$124,515 $188,076 
The current restricted cash and cash equivalents balances as of January 31, 2023 are included in prepaid expenses and other current assets.
Short-term Investments
Short-term investments consisted of the following as of July 31, 2023 and January 31, 2023:
July 31, 2023
Gross Unrealized
(in thousands)Cost or Amortized CostGainsLossesFair Value
U.S Treasury securities$64,339 $5 $(336)$64,008 
Commercial paper12,868   12,868 
Corporate bonds159,599 80 (585)159,094 
U.S. government agency securities13,070  (61)13,009 
Total short-term investments$249,876 $85 $(982)$248,979 
January 31, 2023
Gross Unrealized
(in thousands)Cost or Amortized CostGainsLossesFair Value
U.S Treasury securities$59,255 $296 $(118)$59,433 
Commercial paper19,744 105  $19,849 
Corporate bonds139,644 34 (89)$139,589 
U.S. government agency securities8,063  (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 July 31, 2023 and January 31, 2023:
July 31, 2023January 31, 2023
(in thousands)Amortized CostFair ValueAmortized CostFair Value
Due in 1 year or less$147,878 $147,343 $124,068 $124,234 
Due in 1-2 years101,998 101,636 102,638 102,634 
$249,876 $248,979 $226,706 $226,868 
16

Property and Equipment, Net
Property and equipment, net consists of the following:
(in thousands)July 31, 2023January 31, 2023
Satellites*$328,955 $307,720 
Leasehold improvements16,780 15,389 
Ground stations and ground station equipment17,491 15,113 
Office furniture, equipment and fixtures7,542 5,787 
Computer equipment and purchased software9,100 8,638 
Total property and equipment, gross379,868 352,647 
Less: Accumulated depreciation(259,675)(244,556)
Total property and equipment, net$120,193 $108,091 
*
Satellites include $32.1 million and $13.8 million of satellites in process and not placed into service as of July 31, 2023 and January 31, 2023, respectively.

The Company’s long-lived assets by geographic region are as follows:
(in thousands)July 31, 2023January 31, 2023
United States$114,969 $103,366 
Rest of World5,2244,725
Total property and equipment, net$120,193 $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 July 31, 2023 and January 31, 2023.
Total depreciation expense for the three and six months ended July 31, 2023 was $10.8 million and $19.5 million, respectively, of which $10.2 million and $18.4 million, respectively, was depreciation expense specific to satellites. Total depreciation expense for the three and six months ended July 31, 2022 was $10.2 million and $20.5 million, respectively, of which $9.1 million and $18.2 million, respectively, was depreciation expense specific to satellites.
In April 2023, additional information specific to two high resolution satellites became available which indicated the useful lives of the two satellites will be less than originally estimated. The change in estimated useful lives for these satellites was accounted for prospectively beginning in April 2023 which resulted in an increase of depreciation expense of $2.1 million and $2.5 million, respectively, for the three and six months ended July 31, 2023. The change in estimate is expected to result in a $5.0 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)July 31, 2023January 31, 2023
Capitalized internal-use software$42,071 $39,535 
Less: Accumulated amortization(29,079)(28,118)
Capitalized internal-use software, net$12,992 $11,417 
Amortization expense for capitalized internal-use software for the three and six months ended July 31, 2023 was $0.5 million and $0.9 million, respectively. Amortization expense for capitalized internal-use software for the three and six months ended July 31, 2022 was $0.7 million and $1.3 million, respectively.
17

Goodwill and Intangible Assets
Goodwill and Intangible assets consist of the following:
 July 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$18,618 $(9,617)$(8)$8,993 $18,619 $(8,871)$(8)$9,740 
Image library13,025(11,538)1751,66212,384(11,004)2311,611
Customer relationships4,935(3,192)81,7514,935(2,788)72,154
Trade names and other5,979(3,557)392,4614,551(3,264)391,326
Total intangible assets$42,557 $(27,904)$214 $14,867 $40,489 $(25,927)$269 $14,831 
Goodwill$110,944 $— $1,806 $112,750 $110,942 $— $1,806 $112,748 
Amortization expense for intangible assets for the three and six months ended July 31, 2023 was $0.9 million and $2.0 million, respectively. Amortization expense for intangible assets for the three and six months ended July 31, 2022 was $0.7 million and $1.4 million, respectively.
Estimated future amortization expense of intangible assets at July 31, 2023, is as follows:
(in thousands) 
Remainder of Fiscal Year 2024$1,753 
20252,884
20262,515
20272,023
20281,908
Thereafter3,784
Total estimated future amortization expense of intangible assets
$14,867 
Accrued and Other Current Liabilities
Accrued liabilities and other current liabilities consist of the following:

(in thousands)July 31, 2023January 31, 2023
Deferred R&D service liability (see Note 7)$9,855 $19,959 
Payroll and related expenses6,064 8,518 
Deferred hosting costs4,850 4,694 
Withholding taxes and other taxes payable2,298 2,272 
Other accruals14,774 10,579 
Total accrued and other current liabilities$37,841 $46,022 

(6)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 July 31, 2023, the Company had no finance leases.
Operating lease costs were $2.1 million and $4.0 million for the three and six months ended July 31, 2023, respectively. Operating lease costs were $1.4 million and $2.9 million for the three and six months ended July 31, 2022, respectively. Variable lease expenses, short-term lease expenses and sublease income were immaterial for the three and six months ended July 31, 2023 and 2022.
Operating cash flows from operating leases were $1.7 million and $2.7 million for the three and six months ended July 31, 2023, respectively. Operating cash flows from operating leases were $2.0 million and $4.0 million for the three and six months ended July 31, 2022, respectively.
18

Right of use assets obtained in exchange for operating lease liabilities were $1.3 million and $6.2 million for the three and six months ended July 31, 2023, respectively. There were no right of use assets obtained in exchange for operating lease liabilities for the three and six months ended July 31, 2022.
Maturities of operating lease liabilities as of July 31, 2023 were as follows:
(in thousands)
Remainder of Fiscal Year 2024$4,531
20258,986
20268,746
20275,606
20281,421
Thereafter857
Total lease payments$30,147
Less: Imputed interest(3,747)
Total lease liabilities$26,400
Weighted average remaining lease term (years)3.6
Weighted average discount rate8.0 %

(7)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 six months ended July 31, 2023, the Company recognized $3.9 million and $8.0 million of funding and incurred $3.9 million and $8.0 million of research and development expenses, respectively, in connection with the R&D Services Agreement. During the three and six months ended July 31, 2022, the Company recognized $3.9 million and $6.6 million of funding and incurred $3.9 million and $6.6 million of research and development expenses, respectively. As of July 31, 2023 and January 31, 2023, the Company had received total funding of $36.9 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 six months ended July 31, 2023, the Company recognized $4.9 million and $8.0 million of funding, respectively, and incurred $3.3 million and $7.2 million of research and development expenses, respectively, in connection with the NASA CSP. The funding recognized and research and development expenses incurred were immaterial for the three and six months ended July 31, 2022. As of July 31, 2023 and January 31,
19

2023, the Company had received total funding of $12.5 million and $6.5 million, respectively, in connection with the NASA CSP.
In July 2023, projected costs related to certain of our research and development arrangements were revised down as a result of operational decisions. This change in estimate resulted in a $2.2 million cumulative increase of funding recognized for certain of our research and development arrangements for the three months ended July 31, 2023.

(8)Commitments and Contingencies
Launch Services
The Company has purchase commitments for future satellite launch services to be performed by third- parties subsequent to July 31, 2023. Future purchase commitments under noncancelable launch service contracts as of July 31, 2023 are as follows:
(in thousands)
Remainder of Fiscal Year 2024$245 
2025
202650
Total purchase commitments$295 

Other
The Company has minimum purchase commitments for hosting services from Google through January 31, 2028 (see Note 10). Future minimum purchase commitments under the noncancelable hosting service agreement with Google as of July 31, 2023 are as follows:
(in thousands) 
Remainder of Fiscal Year 2024$11,644 
202530,120 
202631,190 
202732,725 
202833,427 
Total purchase commitments$139,106 
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.
20

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.

(9)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 July 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 July 31, 2023 and January 31, 2023. As of July 31, 2023, the outstanding warrants have a weighted average remaining term of 6.7 years.

(10)Related Party Transactions
As of July 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 three months ended July 31, 2023, the Company did not recognize any revenue related to the content license agreement, and recognized revenue of $0.3 million for the six months ended July 31, 2023. For the three and six months ended July 31, 2022, the Company recognized revenue of $3.4 million and $6.4 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. For the three and six months ended July 31, 2023, the Company recognized revenue of $1.0 million related to the content license agreement.
21

The Company purchases hosting and other services from Google, of which $14.5 million and $13.4 million is deferred as of July 31, 2023 and January 31, 2023, respectively. For the three and six months ended July 31, 2023, the Company recorded hosting expense of $7.7 million and $14.1 million, respectively. For the three and six months ended July 31, 2022, the Company recorded hosting expense of $6.2 million and $11.6 million, respectively. As of July 31, 2023 and January 31, 2023, the Company’s accounts payable and accrued liabilities balance included $5.5 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 8 for future Google hosting purchase commitments, including the amended commitments, as of July 31, 2023.

(11)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 July 31,Six Months Ended July 31,
(in thousands)2023202220232022
Cost of revenue$1,147 $1,357 $2,064 $2,676 
Research and development7,626 8,955 14,211 17,621 
Sales and marketing3,121 3,757 6,201 7,394 
General and administrative5,544 6,964 10,945 13,601 
Total expense17,438 21,033 33,421 41,292 
Capitalized to internal-use software development costs and property and equipment(781)(452)(1,408)(889)
Total stock-based compensation expense$16,657 $20,581 $32,013 $40,403 
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(2,401,798)$2.65 
Granted $ 
Forfeited(1,340,876)$7.21 
Balances at July 31, 2023
29,979,100$5.18 6.0$6,904 
Vested and exercisable at July 31, 2023
24,378,637$4.51 5.6$6,904 
As of July 31, 2023, total unrecognized compensation cost related to stock options was $21.7 million, which is expected to be recognized over a period of 1.8 years.
22

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(3,876,125)$5.48 
Granted18,357,985$4.00 
Forfeited(1,400,245)$5.02 
Balances at July 31, 2023
30,054,216$4.83 
During the six months ended July 31, 2023, the Company granted 18,357,985 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 six months ended July 31, 2023 was $11.3 million and $20.6 million, respectively. Stock-based compensation expense recognized for RSUs during the three and six months ended July 31, 2022 was $9.2 million and $17.7 million, respectively. As of July 31, 2023, total unrecognized compensation cost related to RSUs was $121.2 million, which is expected to be recognized over a period of approximately 3.1 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 six months ended July 31, 2023 was $0.4 million. As of July 31, 2023, total unrecognized compensation cost related to PSUs was $0.6 million, which is expected to be recognized over a period of approximately 0.7 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 July 31, 2023, the Company had a $10.8 million liability recorded for the early exercise of unvested stock options, and the related number of unvested shares subject to repurchase was 1,102,920.
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 six months ended July 31, 2023. As of July 31, 2023, there were 3,927,270 Earn-out Shares outstanding relating to Former Planet equity award holders.
During the three and six months ended July 31, 2023, the Company recognized $1.6 million and $3.9 million of stock-based compensation expense related to the Earn-out Shares, respectively. During the three and six months ended July 31, 2022, the Company recognized $7.1 million and $14.3 million of stock-based compensation expense related to the Earn-out Shares, respectively. As of July 31, 2023, total unrecognized compensation cost related to the Earn-out Shares was $0.8 million. These costs are expected to be recognized over a period of approximately 0.3 years.
23

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 six months ended July 31, 2023, the Company recognized $0.6 million and $1.3 million of stock-based compensation expense related to these shares, respectively. During the three and six months ended July 31, 2022, the Company recognized $0.6 million and $1.3 million of stock-based compensation expense related to these shares, respectively. As of July 31, 2023, unrecognized compensation cost related to these shares was $1.0 million. These costs are expected to be recognized over a period of approximately 0.4 years.

(12) Income Taxes
The Company recorded income tax expense of $0.6 million and $0.9 million for the three and six months ended July 31, 2023. The Company recorded income tax expense of $0.2 million and $0.5 million for the three and six months ended July 31, 2022. For the three and six months ended July 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 six months ended July 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 $7.5 million and $6.9 million as of July 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 July 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.

(13)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 July 31,Six Months Ended July 31,
 2023202220232022
Numerator:
Net loss attributable to common stockholders$(37,975)$(39,529)$(72,419)$(83,889)
Denominator:
Basic and diluted weighted-average common shares outstanding used in computing net loss per share attributable to common stockholders275,053,198266,212,489273,723,006265,168,341
       Basic and diluted net loss per share attributable to common stockholders$