Planet Labs (PL) surged more than 40% after delivering a stronger-than-expected fiscal second-quarter report and lifting its full-year revenue guidance.
The Earth imaging company, which operates over 150 satellites, posted revenue of $73.4 million, up 20% from a year ago and well ahead of Wall Street’s expectations. Losses narrowed to 7 cents per share on a GAAP basis, versus 13 cents a year earlier, and adjusted EBITDA swung to a $6.4 million profit from a loss last year.
Importantly for investors, Planet Labs reported its second consecutive quarter of positive free cash flow, generating $54.3 million year-to-date. Management now sees fiscal 2026 revenue landing between $281 million and $289 million, up from its prior $265 million to $280 million range.
Defense and Intelligence Demand Drives Backlog
The quarter was powered by a surge in demand from defense and intelligence customers. Revenue in that segment climbed 41% year-over-year, while civil government sales dipped slightly and commercial revenue rose modestly. New deals included a €240 million multi-year contract with the German government, expanded collaboration with NATO and the U.S. Navy, and continued partnerships with the U.S. Department of Defense and the National Reconnaissance Office.
Those contracts helped backlog swell to $736 million, a 245% jump from a year earlier. Remaining performance obligations soared more than 500% to $690 million, providing clear visibility into future growth. Roughly one-third of that pipeline is expected to convert into revenue over the next 12 months.
CEO Will Marshall highlighted the strategic importance of these partnerships, noting that Planet’s imaging technology “underscores the critical role [the company] plays in addressing global challenges and supporting peace and security.”
The quarter was powered by a surge in demand from defense and intelligence customers. Revenue in that segment climbed 41% year-over-year, while civil government sales dipped slightly and commercial revenue rose modestly. New deals included a €240 million multi-year contract with the German government, expanded collaboration with NATO and the U.S. Navy, and continued partnerships with the U.S. Department of Defense and the National Reconnaissance Office.
Those contracts helped backlog swell to $736 million, a 245% jump from a year earlier. Remaining performance obligations soared more than 500% to $690 million, providing clear visibility into future growth. Roughly one-third of that pipeline is expected to convert into revenue over the next 12 months.
CEO Will Marshall highlighted the strategic importance of these partnerships, noting that Planet’s imaging technology “underscores the critical role [the company] plays in addressing global challenges and supporting peace and security.”
Profitability and Growth Momentum
While Planet Labs remains unprofitable on a GAAP basis, the company is showing tangible progress toward financial sustainability. Gross margin improved to 58% from 53% a year earlier, with non-GAAP gross margin reaching 61%. Operating margin, though still negative at 24.5%, marked a sharp improvement from nearly 65% in the red last year.
Cash reserves also strengthened, ending the quarter at $271.5 million, up $45 million sequentially. The company expects to remain free-cash-flow positive for the year, a milestone that came more than a year earlier than management’s original target.
Shares of Planet Labs traded as high as $9.22, their strongest level since late 2021, and are now up more than 120% year-to-date. That puts its market capitalization near $2 billion, with investors increasingly viewing the company as a critical player in the growing satellite data and AI-driven intelligence markets.
Conclusion
Planet Labs’ latest results delivered a powerful combination of record revenue, accelerating defense demand, and a stronger balance sheet. With its backlog surging and key government partnerships secured, the company has visibility into multi-year growth. While profitability remains a work in progress, positive free cash flow and expanding margins suggest Planet is turning a corner. For investors willing to embrace volatility, the company’s role at the intersection of aerospace, defense, and AI-driven analytics makes it a name to watch closely.
Planet Labs’ latest results delivered a powerful combination of record revenue, accelerating defense demand, and a stronger balance sheet. With its backlog surging and key government partnerships secured, the company has visibility into multi-year growth. While profitability remains a work in progress, positive free cash flow and expanding margins suggest Planet is turning a corner. For investors willing to embrace volatility, the company’s role at the intersection of aerospace, defense, and AI-driven analytics makes it a name to watch closely.