Planet Labs (PL) Stock Rallies 11% After Strong Q2 Earnings Driven by Defense Demand
Key Takeaways
- •Planet Labs posted Q2 revenue of $116.1 million, up 58% year over year and beating the roughly $104.5 million consensus, with adjusted EBITDA of $13.9 million and non-GAAP EPS of 2 cents versus an expected 2-cent loss.
- •Defense and intelligence revenue grew more than 90% year over year to roughly $81 million, now accounting for 70% of total revenue, up from 57% a year earlier.
- •The company guided Q3 revenue to $101-$105 million, below the $114 million analyst estimate, with analysts attributing part of the gap to revenue pulled forward from Q3, including earlier recognition tied to Sweden's first sovereign satellite.
- •Planet Labs raised the low end of its fiscal 2027 revenue outlook to $430 million from $425 million, keeping the high end at $441 million, and is targeting the Rule of 40 for the fiscal year.
- •Backlog rose 11% year over year to $815 million, and the company ended the quarter with about $865 million in cash and short-term investments after raising roughly $120 million via an at-the-market offering.
Planet Labs posted Q2 revenue of $116.1 million, up 58% year over year and comfortably beating Wall Street's $104.5 million estimate. Adjusted EBITDA reached $13.9 million, well above the $2.3 million consensus. Non-GAAP earnings per share came in at 2 cents, against a consensus estimate of a 2-cent loss — a clean beat across the board.
PLANET LABS $PL Q2'27 EARNINGS HIGHLIGHTS
🔹 Revenue: $116.1M (Est. $104M) 🟢; +58% YoY 🔹 Adj. EPS: $0.02 (Est. -$0.02) 🟢 🔹 Adj. EBITDA: $13.9M (Est. $1.6M) 🟢; +117% YoY 🔹 Non-GAAP Gross Margin: 59%; -200 bps YoY
FY27 Guide: 🔹 Revenue: $430M-$441M (Est. $436M) 🟡 🔹… pic.twitter.com/KwkrE7KylZ
— Wall St Engine (@wallstengine) September 3, 2026 (https://x.com/wallstengine/status/2095604844149268779?ref_src=twsrc%5Etfw)
Planet Labs operates one of the world's largest fleets of Earth-observation satellites, imaging the planet daily and selling that data and analytics to governments and businesses. That scale of persistent monitoring has become increasingly valuable as defense and intelligence agencies worldwide expand their use of commercial satellite imagery.
Defense Leads Growth
Defense and intelligence revenue surged more than 90% year over year, lifting the segment to 70% of total revenue, up from 57% a year ago. In dollar terms, defense revenue nearly doubled to around $81 million.
Commercial revenue grew more than 15%, while civil government revenue increased more than 5%. Geographically, Europe, the Middle East and Africa led the way, with revenue jumping more than 130%. The EMEA surge reflects growing European government investment in space-based capabilities, including sovereign satellite programs.
The company secured an $8 million contract with the National Geospatial-Intelligence Agency for its Global Monitoring Service, along with a seven-figure European defense deal and a German government satellite-services tender worth up to 25 million euros over five years.
Backlog rose 11% year over year to $815 million, and remaining performance obligations climbed 9% to around $753 million. Based on backlog alone, Planet Labs expects to recognize more than $400 million in revenue over the next four quarters.
Q3 Guidance Disappoints
The company guided Q3 revenue of $101 million to $105 million, below the $114 million analyst estimate. Management also expects a Q3 EBITDA loss of roughly $3.5 million, while Wall Street was projecting positive EBITDA of $2.5 million.
Citi analyst John Godyn flagged that some of the Q2 beat came from business pulled forward from Q3, which explains part of the guidance shortfall. He still described the investment thesis as "intact." Needham analyst Ryan Koontz noted Q2 revenue benefited from earlier-than-expected recognition tied to Sweden's first sovereign satellite. Combined Q2 actual and Q3 estimated revenue growth remained at 42% year over year.
The timing dynamics analysts cited highlight a recurring challenge for satellite-services companies, where revenue recognition on multi-year contracts can shift between quarters without changing the underlying business trajectory.
Full-Year Outlook
Planet Labs raised the low end of its fiscal 2027 revenue outlook to $430 million from $425 million, keeping the high end at $441 million. Analysts currently expect $435.67 million. The company is targeting the Rule of 40 in fiscal 2027, based on revenue growth plus adjusted EBITDA margin.
Adjusted gross margin dipped slightly to 59% from 61% a year ago, due to investments in satellite services contracts and AI-enabled partner solutions.
Year to date, the company generated about $68 million in operating cash flow. Free cash flow totaled $21 million, with adjusted free cash flow reaching $29 million.
Planet Labs ended the quarter with roughly $865 million in cash and short-term investments, and raised around $120 million through its at-the-market offering at an average net price of $31.95 per share. The company has identified more than $4 billion in satellite-services opportunities in its pipeline.
Stock Reaction
PL stock was up around 11% in premarket trading Friday at $20.44, after dropping more than 8% on Thursday ahead of results. By time of publication Friday, shares were down about 1.25% at $18.12. The stock has risen more than 180% over the past 12 months.
Source: CoinCentral
