Planet Labs PBCPL

Planet Labs PBC Income Taxes Disclosure

10-KFiled Mar 26, 20254 min read
Income Taxes
The components of the loss before income taxes are as follows:
 
Year Ended January 31,
(in thousands)202520242023
Domestic$(123,996)$(146,582)$(163,575)
Foreign3,2606,8882,456
Total loss before income taxes$(120,736)$(139,694)$(161,119)

The provision for (benefit from) income taxes consists of the following:
 
Year Ended January 31,
(in thousands)202520242023
Current 
Federal$— $— $— 
State543645
Foreign2,3086311,258
Total current tax provision2,3626671,303
Deferred
Federal(642)57(583)
State71577(90)
Foreign2514217
Total deferred tax benefit98148(456)
Income tax provision$2,460 $815 $847 
A reconciliation between the U.S. federal statutory income tax and the Company’s effective tax rates as a percentage of loss before income taxes is as follows:
 
Year Ended January 31,
 202520242023
Provision computed at federal statutory rate21.0 %21.0 %21.0 %
States taxes, net of federal benefit3.1 %3.9 %3.7 %
Foreign rate differential(2.2)%0.1 %(0.4)%
Revaluation gain/loss(3.2)%2.1 %0.9 %
Stock-based compensation
(4.2)%(4.7)%(0.8)%
Tax credits4.9 %4.3 %2.8 %
Change in valuation allowance(21.0)%(26.3)%(27.3)%
Other(0.4)%(1.0)%(0.4)%
Effective tax rate(2.0)%(0.6)%(0.5)%
The components of the Company’s deferred tax assets and liabilities are as follows:
 
January 31,
(in thousands)202520242023
Deferred tax assets 
Net operating loss carryforwards$142,757 $138,968 $124,823 
Tax Credit carryforwards38,10732,54025,710
Stock-based compensation18,20718,98417,683
Capitalized research expenses67,04848,52724,152
Property and Equipment19,21411,75910,086
Excess interest expense1,5423,7768,742
Operating lease liability4,7245,5255,274
Other5,6796,5805,614
Total deferred tax assets297,278266,659222,084
Valuation allowance(284,882)(254,929)(211,813)
Total deferred tax assets12,39611,73010,271
Deferred tax liabilities
Operating lease right-of-use assets(4,253)(4,886)(4,863)
Intangible assets(8,546)(7,150)(5,566)
Total deferred tax liabilities(12,799)(12,036)(10,429)
Net deferred tax assets (liabilities)$(403)$(306)$(158)
As of January 31, 2025, the Company had a net deferred tax liability of $0.4 million. The Company had deferred tax assets of $297.3 million and $266.7 million before valuation allowances as of January 31, 2025 and 2024, respectively. The Company assesses the realizability of its deferred tax assets and establishes a valuation allowance if it is more-likely-than-not that some or all of its deferred tax assets will not be realized. The Company evaluates all available positive and negative evidence such as past operating results, future reversals of existing deferred tax liabilities, projected future taxable income, as well as prudent and feasible tax-planning strategies. Management believes that it is more likely than not that the majority of U.S. and foreign deferred tax assets will not be realized. Accordingly, the Company has recorded a valuation allowance against its deferred tax assets in these jurisdictions.
The net change in the total valuation allowance is as follows:
 
Year Ended January 31,
(in thousands)202520242023
Valuation allowance, beginning of year$254,929 $211,813 $166,081 
Change in valuation allowance29,95343,11645,732
Valuation allowance, end of year$284,882 $254,929 $211,813 
The Company considers the undistributed earnings of its foreign subsidiaries permanently reinvested in foreign operations and has not provided for U.S. income taxes on such earnings. As of January 31, 2025, the Company’s unremitted earnings from its foreign subsidiaries were $27.9 million and the corresponding unrecognized deferred U.S. income tax liability is not material.
The Company is subject to income taxes in the United States and various foreign jurisdictions. As of January 31, 2025, the Company had approximately $564.9 million of federal net operating loss (“NOL”) carryforward, of which $259.2 million will expire at various dates through 2038 and $305.7 million has an indefinite carryforward. Additionally, the Company had state and foreign NOL carryforwards of $364.2 million and $3.2 million, respectively. The state and foreign NOL carryforwards might be available to offset future taxable income, which will expire in varying amounts beginning in 2025. An insignificant amount of NOL and credits carryforwards may be subject to annual limitations under Internal Revenue Code Section 382.
As of January 31, 2025, the Company had approximately $31.9 million of federal and $19.1 million of California research and development credit carryforwards available to reduce future taxable liability. The federal credit carryforwards will expire beginning in 2032 and California credits can be carried forward indefinitely.
The Company’s unrecognized tax benefits are as follows:
 
Year Ended January 31,
(in thousands)202520242023
Beginning of year$8,717 $6,900 $5,688 
Additions based on tax positions related to the current year1,4901,6161212
Additions for tax positions of prior years
— 201 — 
End of year$10,207 $8,717 $6,900 
As of January 31, 2025, the Company’s estimated gross unrecognized tax benefits were $10.2 million, none of which, if recognized, would affect the effective tax rate. The Company’s policy is to include interest and penalties related to unrecognized tax benefits within the provision for taxes. The Company determined that no accrual for interest and penalties was required as of January 31, 2025 and 2024 and no such expenses were incurred in the years 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.
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Historical Timeline

Fiscal YearFiled
2025Mar 26, 2025Showing above
2024Mar 29, 2024

About Income Taxes Disclosures

The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.

Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.

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