Planet Labs PBC announced a 20% year-over-year revenue increase in its Q2 2026 earnings, signaling strong demand for its Earth observation data and analytics.

Opening

Planet Labs PBC (PL), a prominent provider of Earth observation data and analytics, reported robust financial results for its second fiscal quarter of 2026, which concluded on July 31, 2025. The company announced a 20% year-over-year increase in revenue, reaching a record $73.4 million, surpassing prior guidance and indicating continued strength in demand for its satellite-derived insights.

The Event in Detail

Planet Labs' Q2 FY2026 revenue of $73.4 million represents a significant advance from the $61.1 million reported in the same period last fiscal year, marking a 20.1% year-over-year climb. This figure also exceeded the company's own guidance range of $65 million to $67 million. Beyond top-line growth, the company achieved its third consecutive quarter of positive adjusted EBITDA, reporting a profit of $6.4 million compared to a $4.4 million loss in Q2 FY2025. Furthermore, Planet Labs recorded its second consecutive quarter of positive free cash flow, reaching $46.3 million.

Key drivers for this performance include strong demand from government and security-sensitive sectors, which saw approximately 41% year-over-year growth. The company highlighted several pivotal multi-year contracts, including a €240 million (approximately $260 million) satellite services agreement with the German government, with revenue recognition anticipated to commence in 2026. Other significant agreements were secured with NATO, the U.S. Department of Defense, and commercial partners like SwissRe.

Critically, the company's backlog, representing contracted business not yet recognized as revenue, surged 245% year-over-year to $736.1 million, providing substantial future revenue visibility.

Analysis of Market Reaction

Following the earnings announcement, Planet Labs stock (PL) experienced a notable positive reaction, surging 18.07% in premarket trading. This investor optimism reflects the company's ability to exceed revenue expectations, achieve consistent adjusted EBITDA profitability, and generate positive free cash flow. The improved financial mechanics, particularly the shift to profitability metrics, appear to have resonated positively with the market, signaling a more sustainable business model.

Broader Context & Implications

Planet Labs operates the world's largest constellation of Earth observation satellites, positioning it as a key player in providing daily imagery and analytics to a diverse customer base, including governments, insurers, and agricultural businesses. The company's strategic emphasis on expanding its recurring revenue base through a scalable subscription model and securing long-term contracts underpins its growth trajectory within the competitive satellite intelligence sector. The substantial increase in backlog underscores a robust pipeline of future business and the increasing importance of satellite data and AI-driven insights across various sectors.

The company's non-GAAP gross margin improved to 61% in Q2 FY2026, up from 58% in the prior year, primarily driven by revenue outperformance from high-margin usage-based data subscription customers. While a GAAP net loss of ($22.6) million persisted, the positive adjusted EBITDA and free cash flow indicate material progress toward long-term profitability and operational efficiency.

"Our second quarter results demonstrate incredibly strong momentum across our business, with record revenue and substantial growth in our backlog," said Will Marshall, Planet's Co-Founder, Chief Executive Officer and Chairperson. "The increased demand for our unique Earth intelligence, highlighted by pivotal contracts... underscores the critical role Planet plays in addressing global challenges and supporting peace and security."

Ashley Johnson, Planet's President and Chief Financial Officer, added, "We delivered record revenue, our third quarter of adjusted EBITDA profitability, and our second quarter of positive free cash flow."

Looking Ahead

For the third quarter of fiscal year 2026, ending October 31, 2025, Planet Labs anticipates revenue to be in the range of approximately $71 million to $74 million. The company projects non-GAAP gross margin to be between 55% and 56%, with an adjusted EBITDA loss ranging from approximately ($4) million to $0. For the full fiscal year 2026, Planet Labs expects revenue to range from $281 million to $289 million, with an adjusted EBITDA loss of approximately ($7) million to $0. These projections highlight the company's expectation for continued revenue growth and a pathway towards sustained profitability. Investors will closely monitor the execution of these forecasts and the continued expansion of Planet Labs' market footprint in the evolving Earth observation sector.