Planet Labs PBC (PL) Q2 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call presents a mixed outlook. While there is strong growth in the Defense & Intelligence sector and promising partnerships, the guidance for Q2 and full-year shows expected losses and lower margins. The Q&A highlights strong demand and strategic partnerships but lacks detailed guidance, leading to uncertainty. The positive backlog growth and strategic initiatives are countered by the negative outlook on EBITDA and capital expenditures, resulting in a neutral sentiment.
Key Financial Performance
Revenue $73.4 million, representing approximately 20% year-over-year growth. The growth was driven by key wins with defense and intelligence customers, higher-than-expected usage by some government accounts, and progress against the JSAT contract.
Non-GAAP Gross Margin 61% in the quarter, up from 58% a year ago. The improvement was primarily driven by revenue outperformance, particularly from usage-based data subscription customers, which results in high-margin revenue.
Adjusted EBITDA Profit $6.4 million, marking the third sequential quarter of adjusted EBITDA profitability. This was better than expected due to revenue outperformance and disciplined operating expense management.
Free Cash Flow $54.3 million year-to-date, representing a free cash flow margin of approximately 39%. This marks the second consecutive quarter of positive free cash flow.
Backlog $736.1 million at the end of the quarter, representing a year-over-year increase of 245%. This provides excellent visibility to revenue over the next 12 to 24 months.
Defense and Intelligence Sector Revenue 41% year-over-year growth and 14% quarter-over-quarter growth. This was driven by strong performance in core data and solutions business and the satellite services contract with JSAT.
Civil Government Sector Revenue Down approximately 4% year-over-year, largely due to the expiration of the partnership with Norway's NICFI program.
Commercial Sector Revenue Grew approximately 6% year-over-year and 13% quarter-over-quarter, driven by strong execution in the agriculture and energy sectors.
Regional Revenue Growth Asia Pacific grew more than 50% year-over-year, EMEA grew more than 30%, North America was flat year-over-year, and Latin America was down slightly. The strength in Asia Pacific and EMEA was driven by defense and intelligence sector customers.
Net Dollar Retention Rate 107%, and 108% with win backs, reflecting strong customer retention and expansion.
Recurring ACV 98% of the end-of-period ACV book of business, showing a focus on subscription data contracts and solutions.
Remaining Performance Obligations (RPOs) $690 million, up approximately 516% year-over-year. Approximately 32% applies to the next 12 months and 57% to the next 24 months.
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Operating Highlights
Pelican and Tanager satellites: Launched nearly 200 satellites, including next-generation Pelican and Tanager satellites. Successfully contacted two high-resolution Pelican satellites launched recently, with multiple launches planned for next year.
AI-enabled solutions: Shifted data business towards selling AI-enabled solutions for speed and scale. Strong uptake in government markets.
Satellite services: Launched new satellite services offering, including a EUR 240 million multiyear collaboration with Germany and a contract with JSAT.
Defense and Intelligence sector: Revenue grew 41% year-over-year, driven by contracts with the U.S. Department of Defense, National Reconnaissance Office, and NATO.
Commercial sector: Revenue grew 6% year-over-year, with strong execution in agriculture and energy sectors. New contracts with Farmdar and Swiss Re.
Civil government sector: Revenue declined 4% year-over-year due to the expiration of the Norway NICFI partnership. However, new contracts with the U.K. Rural Payments Agency and Panamanian Ministry of Environment were signed.
Revenue growth: Generated $73.4 million in revenue, a 20% year-over-year growth. Backlog increased to $736.1 million, up 245% year-over-year.
Profitability: Achieved adjusted EBITDA profit of $6.4 million and positive free cash flow of $54.3 million year-to-date.
Regional performance: Revenue grew over 50% in Asia Pacific and 30% in EMEA, while North America was flat and Latin America slightly declined.
Focus on larger customers: Shifted direct sales focus to larger customer opportunities, resulting in fewer customers but higher average revenue per customer.
Investment in next-gen fleets: Increased capital expenditures for Pelican, Tanager, and SuperDove satellites to meet market demand.
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Risk or Challenges
Civil Government Revenue Decline: Revenue in the civil government sector decreased by approximately 4% year-over-year, primarily due to the expiration of the Norway NICFI partnership. This decline indicates potential challenges in maintaining or renewing government contracts.
North America Revenue Stagnation: Revenue in North America was roughly flat year-over-year, reflecting variability and timing of pilot contracts with the U.S. government. This stagnation could signal challenges in securing consistent growth in this key market.
Customer Count Decline: The end-of-period customer count decreased, attributed to a strategic shift to focus on larger customer opportunities. While this may increase average revenue per customer, it could also limit market reach and diversification.
Capital Expenditure Increase: Capital expenditures were at the upper end of guidance, driven by investments in satellite fleets. This reflects a growth investment cycle but could strain cash flow if not managed effectively.
Dependency on U.S. Government Contracts: A significant portion of revenue and backlog is tied to U.S. government contracts, which often include termination for convenience clauses. This dependency poses a risk of revenue volatility.
Geopolitical and Budgetary Risks: The evolving landscape of U.S. government budgets and geopolitical factors could impact future revenue, particularly in defense and intelligence sectors.
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Guidance & Outlook
Revenue Projections: For Q3, revenue is expected to be between $71 million and $74 million. For the full fiscal year 2026, revenue is projected to be between $281 million and $289 million.
Non-GAAP Gross Margin: Expected to be between 55% and 57% for both Q3 and the full fiscal year 2026.
Adjusted EBITDA: For Q3, adjusted EBITDA is expected to range from minus $4 million to breakeven. For fiscal 2026, the adjusted EBITDA loss is projected to be between minus $7 million to breakeven.
Capital Expenditures: For Q3, capital expenditures are planned to be approximately $18 million to $24 million. For fiscal 2026, capital expenditures are expected to be between $65 million and $75 million, reflecting investments in Pelican, Tanager, and SuperDove fleets.
Free Cash Flow: The company expects to be free cash flow positive on an annual basis for fiscal 2026, achieving this milestone over a year earlier than previously targeted.
Backlog and Revenue Visibility: Backlog is approximately $736 million, up 245% year-over-year, with 35% applicable to the next 12 months and 59% to the next 24 months. This provides good visibility for sustaining revenue growth into fiscal 2027.
Satellite Services Demand: Strong demand signals for satellite services driven by geopolitical factors and sovereign access to space. The pipeline for satellite services is maturing well.
Pelican Satellite Program: Four Pelican satellites are now in orbit, with multiple launches planned for the next year. The production line is fully ramped.
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Shareholder Return Plan
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Key Q&A
Q:How much of Germany and JSAT is within the backlog that's posted today, and what are the growth mechanics within the DoD?
A:The full amount of those contracts is included in the backlog and will be recognized over multiple years. Management highlighted strong partnerships and expansion in maritime domain awareness and PlanetScope solutions, with the U.S. Navy and Defense Innovation Unit leaning into monitoring capabilities.
Q:Can you provide a high-level concept of the working capital schedule related to international awards and free cash flow dynamics?
A:Satellite services contracts are positive from a working capital perspective, enabling fleet build-outs without funding from the balance sheet. The specifics vary quarter-to-quarter, with more weight in early years and later milestones transitioning to managed services.
Q:What is the update on the pipeline of services contracts and execution challenges?
A:Management sees strong demand and is working with long-term strategic partners. The pipeline is maturing well, with a second satellite services deal expected this year. These contracts are synergistic with the core business, enabling more satellites and capacity for other customers.
Q:How should we think about gross margins heading into the next fiscal year?
A:Gross margins will vary due to revenue mix. Satellite services contracts in the build phase are lower margin, but margins are expected to improve in later years. Upside in Q2 gross margin was driven by strong usage dynamics and high-margin data subscription revenue.
Q:What percentage of satellite capacities is included in contracts for Japan and Germany?
A:The Japan deal uses a tiny fraction of capacity, mainly in Asia, while the Germany deal focuses on Europe and leverages existing build plans for Pelicans. Both represent small fractions of overall capacity.
Q:What updates are there on Maritime Domain Awareness solutions?
A:The U.S. Navy expansion was highlighted, with sole-sourced contracts for scanning large areas like the South China Sea. Partnerships with NATO and others are progressing, and Maritime Domain Awareness is part of the Germany collaboration, including an 8-figure annual contract for data and solutions.
Q:What is driving the strong performance in the commercial sector, particularly energy and agriculture?
A:Energy, agriculture, and insurance sectors are driving growth. AI-enabled solutions are making insights extraction easier, and solutions developed for defense and intelligence are translatable to commercial sectors.
Q:What is the update on the Anthropic relationship and AI developments?
A:The partnership focuses on fine-tuning AI models with satellite imagery. Collaborations with Google and NVIDIA are also ongoing. Planet is uniquely positioned as a space and AI company, leveraging AI both in space and on the ground.
Q:What is the update on the Tanager fleet and its monetization?
A:The Tanager fleet has two solid revenue opportunities with Carbon Mapper and California. Management sees potential for government and commercial applications, with the fleet performing well in detecting methane emissions.
Q:What is the distribution of revenues from the backlog?
A:Backlog is recognized over multiple years, with a breakdown available in the 10-Q. Large satellite services contracts are key drivers, and solutions contracts typically refer to ACV metrics.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on the working capital schedule, free cash flow ladder, and exact gross margin expectations for the next fiscal year. Responses were general and lacked precise numerical data or timelines.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
ACV renewal
AI revolution
AI speed
Aerospace satellite
Agency UK
Agile Aerospace
CO plume
Chairman hello
Darién
Department Defense
New York
Stock Exchange
Swiss
Tanager satellite
York Stock
activity
application
architecture pilot
crop
date cash
disaster response
domain awareness
drought insurance
enforcement
highlight figure
indication warning
land
option
progress
resolution
service offering
solution satellite
space architecture
PL Transcript
Planet Labs PBC (PL) Q3 2026 Earnings Call Transcript
Positive12-11
The earnings call summary reveals strong demand for satellite services, a significant backlog, and positive financial metrics. Despite some uncertainties in project timelines, management's optimistic guidance and strategic partnerships, like with Google, suggest a positive outlook. The Q&A session highlighted confidence in meeting fiscal targets and scaling opportunities, further boosting sentiment. However, the lack of specific guidance on certain projects and potential sector pressures temper enthusiasm slightly. Overall, the sentiment leans positive, anticipating a modest stock price increase.
Planet Labs PBC (PL) Q2 2026 Earnings Call Transcript
Unknown9-8
The earnings call presents a mixed outlook. While there is strong growth in the Defense & Intelligence sector and promising partnerships, the guidance for Q2 and full-year shows expected losses and lower margins. The Q&A highlights strong demand and strategic partnerships but lacks detailed guidance, leading to uncertainty. The positive backlog growth and strategic initiatives are countered by the negative outlook on EBITDA and capital expenditures, resulting in a neutral sentiment.
Planet Labs PBC (PL) Q1 2026 Earnings Call Transcript
Positive6-5
The earnings call reveals positive financial performance with a 10% YoY revenue growth, improved gross margins, and positive free cash flow. The backlog and RPOs have significantly increased, indicating strong future revenue visibility. Despite economic uncertainties and customer concentration risks, the company is focusing on larger customers and has a strong partnership with Anthropic. The Q&A section shows optimism about growth and minimal disruption from tariffs. Overall, the company's strategic initiatives and financial health suggest a positive outlook, likely resulting in a stock price increase of 2% to 8%.
Planet Labs PBC (NYSE:PL) Q4 2025 Earnings Call Transcript
Positive3-22
The earnings call reveals strong financial performance with 11% YoY revenue growth and significant improvements in gross margin and EBITDA. The company's strategic plans, including AI partnerships and satellite service expansions, indicate promising future growth. Despite some concerns about CapEx and macroeconomic risks, the overall sentiment is positive, supported by a strong backlog and increasing RPOs. The market is likely to react positively to the first-ever adjusted EBITDA profitability and optimistic long-term outlook.
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