TLDR
- Planet Labs (PL) stock surged over 35% after Q2 revenue jumped 20% year-over-year to $73.4 million, beating analyst estimates of $66.15 million
- The company reported an adjusted loss of $0.03 per share, better than the expected $0.04 loss
- Planet Labs generated $46.3 million in free cash flow for Q2 and $54.3 million in the first half of fiscal 2026
- Management highlighted strong adoption of AI-enabled solutions across government, agriculture, and energy sectors
- The stock has gained over 119% year-to-date and over 362% in the past 12 months
Planet Labs stock launched into orbit Monday morning, climbing over 35% after the satellite imaging company delivered better-than-expected second-quarter results. The Earth observation specialist beat revenue forecasts and posted narrower losses than analysts predicted.
The company reported Q2 revenue of $73.4 million, a 20% increase from the same period last year. Wall Street had expected revenue of $66.15 million, making this a solid beat for the space technology firm.
Planet Labs also surprised investors with its adjusted loss per share of $0.03. Analysts had penciled in a larger loss of $0.04 per share for the quarter.
The earnings beat came alongside strong operational metrics. Gross profit margin expanded by 5 percentage points to 58% in the second quarter.
Planet Labs generated $46.3 million in free cash flow during Q2. For the first half of fiscal 2026, the company produced $54.3 million in free cash flow.
The company held $181 million in cash and equivalents as of July 31. This gives Planet Labs a strong balance sheet to fund future growth initiatives.
Strong Demand for AI-Powered Solutions
CEO William Marshall pointed to the company’s position in the AI revolution during the earnings call. He said Planet Labs is well-positioned to capitalize on AI opportunities while building a profitable business.
President and CFO Ashley Whitfield Johnson highlighted growing adoption of AI-enabled offerings. Government agencies, agriculture companies, and energy firms are increasingly using these solutions.
The company has secured several major contracts that helped drive the record revenue. These include deals with the German government, NATO, and the U.S. Department of Defense.
Planet Labs has shifted focus toward defense applications from its earlier environmental work. This pivot appears to be paying off with stronger revenue growth.
The defense contracts represent a more stable revenue stream for the satellite company. Government customers typically sign longer-term agreements than commercial clients.
Cash Flow Turns Positive
Planet Labs reached a key milestone by generating positive free cash flow. The company had previously targeted this goal for 2024, so it’s running slightly behind schedule.
At the current pace, Planet Labs could generate over $100 million in free cash flow for the full fiscal year. This would represent a major achievement for the growing company.
The stock trades at a market cap of around $2 billion after Monday’s gains. If Planet Labs hits $100 million in annual free cash flow, the stock would trade at 20 times that metric.
Retail investor sentiment on Stocktwits shifted to “extremely bullish” from “bullish” territory. Message volume also jumped to “extremely high” levels as traders discussed the earnings results.
The stock has been on a tear this year, gaining over 119% year-to-date. Over the past 12 months, Planet Labs shares have climbed more than 362%.
Planet Labs generated operating cash flow of $67.7 million in the second quarter while maintaining its focus on profitable growth.
