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Key Points
- Planet Labs shares delivered one of the most impressive performances of 2025, rising nearly 400%.
- The company's latest earnings report added more fuel to the fire as sales, earnings, and guidance came in well above expectations.
- Planet Labs is generating impressive results, and management believes AI could unlock even more growth.
- Special Report: Gold Shock Coming?
Investors just can’t seem to get enough of satellite and geo-spatial imaging stock Planet Labs PBC (NYSE: PL). In 2025, this name delivered an astonishing return of 388% as the firm’s revenue growth exploded upward.
This momentum has continued in 2026, with shares up more than 30% around mid-March. To top it all off, Planet Labs rose by almost 9% during the regular session on March 19, prior to its earnings release. Following its report, the stock gained significantly, over 25%.
Given the meteoric rise in this industrial stock, is there still potential ahead? Diving into the company’s business model and its latest financials can help investors assess the answer to this question.
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Planet Labs: Improving Decision Making with Earth Imaging
Despite sounding complicated initially, Planet Lab’s business is fairly simple. The company operates the world’s largest fleet of earth-imaging satellites. These satellites take pictures of the Earth’s surface on a daily basis. The company sells these images to customers, along with its analytics software, generating recurring subscription revenue.
Planet Labs offers value by enabling its customers to understand changes on Earth’s surface, thereby enhancing their decision-making. In its fiscal year 2026 (FY2026), 59% of revenue came from Defense and Intelligence customers. (Note that Planet Labs' fiscal reporting period is several quarters ahead of the calendar year period.)
Planet Lab’s imaging allows these government customers to keep tabs on what their adversaries are doing.
Importantly, the company’s customers are both governmental and commercial. In FY2026, 23% of revenue came from civil government customers, and 18% came from commercial customers.
Commercial customers may include those in industries like agriculture, insurance, energy, forestry, and finance. For example, financial firms specializing in commodity trading can use Earth images to understand how well the harvesting season for certain crops is progressing. Poor harvests lead to decreased supply, putting upward pressure on prices. By using Planet Labs, these firms can gain this insight before others, giving them an advantage.
As launching and maintaining satellites is an expensive venture, Planet Labs needs to scale its customer base significantly to generate profits. This is why the company’s “one-to-many” model is central to its strategy. Planet allows all its basic customers to access its set of images. This provides more scalable economics than legacy competitors who sell each image to an exclusive customer. More expensive tiers allow customers to target specific regions they care about with higher-resolution images. Even more expensive tiers allow customers to exclusively reserve images when a satellite passes over an area of interest.
Planet Labs Posts Big Beats, Crushes Guidance Expectations
In its latest quarter, Planet Labs posted revenue of $86.8 million, an increase of 41% year over year (YOY). This significantly beat estimates near $78.2 million, which called for growth of 27%. The company also posted adjusted earnings per share (EPS) of 0 cents. This was an improvement from a 2-cent loss one year ago and better than the 4-cent loss analysts expected.
In FY2027, Planet Labs is forecasting midpoint revenue of $427.5 million, or a growth rate of approximately 39%. This would represent a significant acceleration versus the company’s FY2026 full-year growth rate of 26%. This guidance smashed estimates of $380 million.
Notably, for the first time, Planet Labs generated positive full-year adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) and free cash flow (FCF). Adjusted EBITDA was $15.5 million, and FCF was $52.9 million.
However, looking into FY2027, the company is forecasting a decline in adjusted EBITDA, providing guidance of between $0 million and $10 million. It also expects FCF to be positive, but didn’t provide any more detailed guidance.
Still, Planet Labs is more focused on growth than improving profitability in the near term. The company's $900 million backlog, an increase of 77% YOY, is nearly three times the revenue of $307.7 million it generated in FY2026. Serving this backlog requires the company to invest. For example, the firm expects to double its satellite manufacturing capacity in FY2027.
Furthermore, the company expects to deliver just 37% of its backlog over the next 12 months. This shows the longer-term nature of the backlog, making near-term profitability declines less of a concern.
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PL Eyes AI-Driven Demand Unlock in Civil and Commercial Markets
Following Planet Lab's spike, the company’s market capitalization sits over $10 billion. This gives the stock a very high forward price-to-sales ratio of approximately 23x to 26x. Planet Labs is clearly seeing a huge amount of momentum in its business, but its valuation also prices in a huge amount of growth for years.
It’s not like such growth is impossible, but it's difficult to predict with certainty. Notably, management believes that improvements in AI will unlock more demand in the civil and commercial markets in FY2027. Revenue from these markets was flat or declined in FY2026, with Defense and Intelligence driving growth. However, the company believes that they will actually be larger markets long-term than Defense and Intelligence.
Ultimately, investors cannot necessarily use Planet Labs' financials to justify its valuation. Investing in this name requires a certain amount of faith in its story and the product it offers.
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