Planet Labs Pbc ((PL)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Planet Labs PBC’s recent earnings call painted a picture of robust financial health and strategic advancements. The company reported significant growth in revenue and backlog, underscoring its strong performance in the defense and intelligence sectors. Despite facing challenges in the civil government sector and stagnant revenue in North America, the overall sentiment was positive, buoyed by profitability milestones and technological progress.
Revenue Growth and Profitability
Planet Labs reported an impressive $73.4 million in revenue, marking a 20% increase year-over-year. This growth was complemented by the company’s third consecutive quarter of adjusted EBITDA profitability, achieving $6.4 million, and a free cash flow margin of approximately 39%.
Significant Backlog Increase
The company’s backlog surged to $736.1 million, a remarkable 245% increase year-over-year. This substantial backlog provides excellent visibility into future revenue streams, ensuring a stable financial outlook.
Strong Performance in Defense and Intelligence Sector
Revenue from the Defense and Intelligence sector grew by approximately 41% year-over-year. This was driven by notable contract expansions, including a significant option by the Defense Innovation Unit and an expanded contract with the U.S. National Reconnaissance Office.
Positive Free Cash Flow Milestone
Planet Labs achieved positive free cash flow ahead of schedule, strengthening its financial position with $271.5 million in cash and short-term investments. This milestone enhances the company’s ability to invest in future growth initiatives.
Satellite Launches and Technological Advancements
The company successfully launched two high-resolution Pelican satellites and celebrated the one-year anniversary of Tanager 1. These achievements highlight Planet Labs’ ongoing advancements in satellite technology, reinforcing its position as a leader in the field.
Decline in Civil Government Revenue
Revenue from the civil government sector declined by approximately 4% year-over-year. This decrease was primarily due to the expiration of a partnership with Norway’s NICFI, impacting the sector’s overall performance.
Flat Revenue in North America
North American revenue remained roughly flat year-on-year, reflecting the variability and timing of pilot contracts with the U.S. government. This stagnation highlights the challenges in achieving consistent growth in this region.
Forward-Looking Guidance
Looking ahead, Planet Labs provided significant guidance, forecasting revenue between $71 million and $74 million for Q3 2026, with a non-GAAP gross margin between 55% and 57%. The full-year fiscal 2026 revenue is expected to range from $281 million to $289 million. The company anticipates achieving free cash flow positivity for the year, driven by robust demand in defense, intelligence, and commercial sectors, and plans strategic growth initiatives, including an Investor Day in October 2025.
In summary, Planet Labs PBC’s earnings call reflects a company on a strong upward trajectory, with significant growth in key sectors and promising future guidance. Despite some challenges, the overall sentiment remains positive, underscoring the company’s strategic advancements and financial health.