(SeaPRwire) – By: Oliver Hawthorne, a Principal Correspondent permanently stationed at an international technology review
The revenue surge looks impressive until you inspect the composition. Planet Labs booked $116.1 million in quarterly revenue, easily surpassing the Street estimate of $104.5 million, while adjusted EBITDA of $13.9 handily beat the $2.3 million consensus. On the surface this is a clean beat, yet the most telling shift is the near takeover of the business by defense and intelligence revenue, which rose to 70 percent of total sales from 57 percent a year ago, with dollar value nearly doubling to around $81 million.
Commercial revenue grew more than 15 percent, and civil government business increased more than 5 percent, showing that non-defense growth still exists but is dwarfed by the classified wave. Europe, the Middle East and Africa led the pack with revenue jumping more than 130 percent, indicating that regional defense priorities are accelerating procurement cycles. The company locked an $8 million contract with the National Geospatial-Intelligence Agency, secured a seven-figure European defense deal, and won a German government satellite-services tender stretching to 25 million euros over five years, all feeding the momentum. Backlog climbed 11 percent to $815 million, with remaining performance obligations up 9 percent to roughly $753 million, suggesting more than $400 million in future revenue is already spoken for.
Yet the guidance for the next quarter exposes a different calculus. Management projected Q3 revenue of $101 million to $105 million, falling below the $114 million analyst expectation, while Q3 EBITDA loss of about $3.5 million contrasts with Street hopes for positive $2.5 million. Some of the beat was achieved by pulling business forward from Q3, a move noted by Citi analyst John Godyn, which explains part of the shortfall without invalidating the underlying trend. Still, the year-on-year growth rate for combined Q2 and Q3 revenue remains robust at 42 percent, indicating that the pipeline is not yet empty.
The fiscal 2027 outlook shows Planet Labs raising the low end of revenue guidance to $430 million, keeping the high end at $441 million, while targeting the Rule of 40 through a blend of growth and adjusted EBITDA margin. Adjusted gross margin slipped slightly to 59 percent from 61 percent, reflecting investments in satellite services contracts and AI-enabled partner solutions that aim to sustain long-term positioning. With about $68 million in operating cash flow year to date and $21 million in free cash flow, the company generated $29 million in adjusted free cash flow while maintaining roughly $865 million in cash and short-term investments after raising around $120 million in an at-the-market offering. Even as shares jumped 11 percent in premarket trading before settling around $20.44, the long-term trajectory remains tied to defense demand, and the firm now holds more than $4 billion in satellite-services opportunities in its pipeline, a number that will define the next growth chapter.
Author bio: Oliver Hawthorne, a Principal Correspondent permanently stationed at an international technology review, dissects commercial strategy and market dynamics with a focus on how revenue composition shapes long-term valuation.