Breaking Down Planet Labs PBC (PL) Financial Health: Key Insights for Investors

You're looking at Planet Labs PBC, a company that just hit a major milestone but still faces a classic growth-stock conundrum: great progress versus a sky-high valuation. The direct takeaway is that their financial foundation is defintely getting stronger, but the stock price is pricing in a perfect future. For the fiscal year 2025, they delivered a record $244.4 million in revenue, an 11% jump year-over-year, and finally hit their goal of a positive Adjusted EBITDA in the fourth quarter, a $2.4 million profit that shows their operating leverage is starting to work. That's a huge psychological win for a company that posted a full-year GAAP net loss of ($123.2 million). Here's the quick math: they ended the year with $222.1 million in cash, plus a massive $230 million contract with JSAT, which gives them a clear runway. Still, some deep-dive Discounted Cash Flow (DCF) models are flagging the stock as potentially 4089.9% overvalued, so you need to understand what the market is missing, or what risks are being ignored, before you commit capital.

Revenue Analysis

You're looking for a clear picture of Planet Labs PBC (PL)'s revenue, and the headline is this: the company is successfully pivoting from a pure data provider to a solutions-focused satellite services firm, evidenced by a significant acceleration in contract value. For the full fiscal year 2025, which ended on January 31, 2025, Planet Labs PBC reported annual revenue of approximately $244.4 million, marking an 11% year-over-year growth.

That 11% growth for FY2025 is solid, but the near-term trend is what's defintely catching my eye. The company has shown a meaningful re-acceleration, with the second quarter of fiscal year 2026 (Q2 FY2026, ended July 31, 2025) revenue hitting a record $73.4 million, representing a 20% year-over-year increase. That jump shows their investments in next-generation satellites and AI-enabled solutions are starting to pay off.

Planet Labs PBC's revenue streams are primarily tied to two core offerings: Earth data subscriptions (PlanetScope and SkySat imagery) and, increasingly, high-value, multi-year Satellite Services contracts. The business model is heavily recurring, which is a major strength. For Q2 FY2026, the percent of recurring Annual Contract Value (ACV) stood at a very high 98%. That level of predictability de-risks the model significantly.

Here's the quick math on where the growth is coming from right now-it's government and defense spending. The company's new industry-aligned structure is driving strong segment performance, especially in defense and intelligence, which is a critical area for near-term opportunity.

• Defense & Intelligence: Revenue grew approximately 41% year-over-year in Q2 FY2026.
• Civil Government: This sector continues to be a core driver, seeing over 20% year-over-year growth in Q2 FY2025.
• Commercial: While facing some macroeconomic headwinds, the focus is shifting to AI-enabled insights for agriculture and insurance.

What this estimate hides is the massive future revenue visibility. The company's remaining performance obligations (RPOs)-which is contracted, unfulfilled revenue-surged an incredible 516% year-over-year in Q2 FY2026 to $690.1 million. This jump is largely due to pivotal, multi-year satellite services deals, like the €240 million contract with the German government and the $230 million agreement with SKY Perfect JSAT. These long-term, high-value contracts are the major change in their revenue mix, moving them up the value chain.

To be fair, the commercial sector still needs to accelerate to match the government's pace, but the overall backlog is a clear indicator of where the money is going. If you want to dive deeper into the valuation tools and strategic frameworks we use, check out our full report: Breaking Down Planet Labs PBC (PL) Financial Health: Key Insights for Investors.

Finance: Track the Q3 FY2026 revenue actuals against the $71 million to $74 million guidance to confirm the growth acceleration is holding.

Profitability Metrics

The direct takeaway for Planet Labs PBC (PL) is clear: while the company is not yet GAAP profitable, its margin trajectory shows significant operational improvement, moving it closer to a financial inflection point. For the full fiscal year 2025 (FY2025), Planet Labs PBC (PL) reported a GAAP net loss of ($123.2) million on $244.4 million in revenue, resulting in a net profit margin of approximately -50.4%. Still, the progress in gross margin and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) is what you should focus on.

The Gross Profit Margin is the strongest sign of Planet Labs PBC (PL)'s business health, measuring how efficiently it delivers its satellite data services before overhead. For FY2025, the GAAP Gross Margin reached 57%, a solid jump from 51% in the prior year. The Non-GAAP Gross Margin, which strips out stock-based compensation and depreciation, was even stronger at 60%. This places the company's core data service delivery firmly within the 55%-65% range typical of Professional Services firms, though it still trails the 75%-85% benchmark for pure Software-as-a-Service (SaaS) companies. It's a hybrid model, so that makes sense.

• Gross Margin: Improved from 51% to 57% (GAAP) in FY2025.
• Net Loss: Narrowed to ($123.2) million in FY2025 from ($140.5) million in FY2024.
• Adjusted EBITDA: Nearly achieved break-even, with a loss of only ($10.6) million for the full year.

The next hurdle is the operating and net profitability. For FY2025, the GAAP Operating Profit Margin was approximately -47.5% (a ($116) million operating loss). This negative margin is not defintely a surprise, as the company continues to invest heavily in its satellite fleet-the asset-heavy part of the business-and in Research & Development (R&D) for AI-enabled solutions. But, here's the quick math: the Adjusted EBITDA loss of ($10.6) million for the full year is a massive improvement from the ($55.3) million loss in FY2024. They even hit their first-ever quarter of Adjusted EBITDA profitability in Q4 FY2025, posting a $2.4 million profit.

Operational efficiency is what drove this margin expansion. Planet Labs PBC (PL) has been disciplined with its spending, which is exactly what you want to see from a growth company approaching maturity. In the fourth quarter of FY2025, they cut their cost of revenue by 11.5%, while simultaneously dropping R&D expenses by 19.1% and Sales and Marketing costs by 22%. This cost management, combined with securing large, multi-year government contracts-like the €240 million satellite services contract with the German government-is what provides the runway to eventual GAAP profitability. For a deeper look at who is backing this strategy, check out Exploring Planet Labs PBC (PL) Investor Profile: Who's Buying and Why?

Debt vs. Equity Structure

The short answer is Planet Labs PBC (PL) is a growth company that has chosen to finance its expansion almost exclusively through equity, not debt. This is a deliberate, low-leverage strategy that provides significant financial flexibility, but it's also why you see a higher share count.

As of the second quarter of fiscal year 2026 (ending July 2025), Planet Labs PBC's balance sheet shows a near-zero debt profile. While some accounting records may include minor capital lease obligations, the company's management has consistently stated they have no debt outstanding. This means they are not paying interest expense, which is a major advantage for a company still focused on achieving consistent profitability.

Here's the quick math on their leverage, or lack thereof:

• Total Stockholders' Equity (FY 2025 end): Approximately $441.29 million.
• Total Debt (Q2 FY2026): Effectively $0.0 million.

This capital structure is a huge differentiator in the capital-intensive space sector. They have a strong cash position, ending fiscal year 2025 with about $222.1 million in cash, cash equivalents, and short-term investments, which is being used to fund their ambitious satellite programs like the Pelican constellation.

Debt-to-Equity: A Minimal Ratio

Planet Labs PBC's Debt-to-Equity (D/E) ratio-a key measure of financial leverage-is negligible, hovering near 0.04 or even 0% in recent reporting periods. To be fair, a ratio this low is extremely rare for a company in a capital-intensive industry. You can see how this compares to the broader market in the table below.

The industry average for Aerospace & Defense sits around 0.38. Planet Labs PBC is defintely operating at a fraction of that leverage. This low D/E ratio signals a very low risk of default, but still, the trade-off is that growth is financed by issuing new stock, which can lead to shareholder dilution. They are choosing financial safety over the potential boost to earnings-per-share that debt can provide.

Balancing Funding: Equity Over Leverage

The company is balancing its funding by leaning heavily on equity-both from its initial public offering (IPO) and subsequent offerings-and increasingly, from its own operational cash flow. The strategy is clear: fund the build-out of the next-generation satellite fleet (Pelican and Tanager) and the expansion of their data platform without the burden of interest payments or the restrictive covenants that often come with significant debt. You can dive deeper into who is funding this growth by Exploring Planet Labs PBC (PL) Investor Profile: Who's Buying and Why?

What this estimate hides is the potential cost of capital. While debt is cheap right now, equity financing is often more expensive over the long term, but it's also less risky. Planet Labs PBC's approach is a classic growth-stock playbook: prioritize survival and flexibility now, and let future scale and profitability justify the current share count.

Next Step: Review the latest Q3 FY2026 cash flow statement to confirm the trajectory toward positive free cash flow, which will reduce their reliance on any external capital.

Liquidity and Solvency

You're looking at Planet Labs PBC (PL) to see if they can cover their near-term bills, and the quick answer is a definitive yes. Their liquidity position is strong, backed by a significant cash reserve and, crucially, a recent shift to positive operating cash flow.

This isn't a high-wire act; Planet Labs PBC (PL) has a solid financial cushion, which is exactly what you want to see in a growth company still investing heavily in its satellite fleet and AI solutions. You can defintely sleep better knowing they aren't scrambling for cash.

Assessing Planet Labs PBC (PL)'s Liquidity

The core of liquidity analysis rests on two ratios: the Current Ratio and the Quick Ratio (or acid-test ratio). These tell us how easily a company can convert its current assets-things due within a year-into cash to pay its current liabilities (short-term debts). For the 2025 fiscal year, which ended January 31, 2025, Planet Labs PBC (PL) showed excellent coverage, indicating a very low risk of short-term default.

Here's the quick math on their short-term health:

• Current Ratio (FY2025): 2.13
• Quick Ratio (FY2025): 1.96

A Current Ratio of 2.13 means Planet Labs PBC (PL) has $2.13 in current assets for every dollar of current liabilities. The Quick Ratio, which strips out inventory (since satellites aren't exactly quick-turn merchandise), is nearly as high at 1.96, which is a very strong indicator of immediate solvency. Most analysts like to see a ratio above 1.0, so this is well-covered.

Working Capital and Cash Reserves

The trend in working capital-current assets minus current liabilities-is also favorable, reflecting the strong ratios. The change in working capital for the full 2025 fiscal year was a positive $15.55 million, meaning more cash was freed up from operations than consumed. This is a sign of improving operational efficiency, even as the company expands its space systems capabilities.

Plus, the cash position is robust. Planet Labs PBC (PL) ended FY2025 with approximately $222.1 million in cash, cash equivalents, and short-term investments. This balance sheet strength is a major competitive advantage, especially since the company carries no significant debt, making its solvency profile exceptionally clean.

Cash Flow Statement Overview: The Turning Point

The real story isn't just the balance sheet, but the cash flow statement, which shows the company is finally turning a corner on cash burn. While historical net losses were large, the operational cash flow is now strong, which is a major shift. This is the difference between a company that used cash to grow and one that is starting to generate it.

Looking at the more recent figures, which are crucial for a forward-looking analysis, the trend is clear:

The jump to $85.1 million in net cash from operations and $54.3 million in positive free cash flow year-to-date in fiscal year 2026 is a critical milestone. This means the core business is funding its own growth and capital expenditures, a much healthier long-term picture than the previous year's negative cash flow. This shift is a powerful signal to the market about the company's long-term viability and ability to execute on its Mission Statement, Vision, & Core Values of Planet Labs PBC (PL).

Actionable Takeaway

The liquidity strength is not a concern; the next step is to monitor the sustainability of the positive cash flow. We need to see if the positive operating cash flow of $85.1 million continues to grow alongside the revenue guidance for FY2026, which is expected to be in the range of approximately $260 million to $280 million. For your decision-making, this means Planet Labs PBC (PL) has the financial flexibility to weather any near-term economic volatility and continue its capital-intensive satellite launches without needing to raise emergency capital.

Valuation Analysis

You're looking at Planet Labs PBC (PL) and wondering, honestly, is the stock priced right? The direct takeaway is that traditional metrics suggest it's expensive, but the market is clearly valuing its future growth and proprietary data, not just its current book value. The consensus from Wall Street analysts right now is a Moderate Buy, which tells you something important: the growth story is still compelling.

When you look at the core valuation multiples, you have to remember Planet Labs PBC is a growth company still investing heavily, so net income is negative. This makes the Price-to-Earnings (P/E) ratio meaningless; it's simply At Loss because the Trailing Twelve Months (TTM) Earnings Per Share (EPS) as of July 2025 was approximately ($0.300). You have to look at other tools.

Here's the quick math on the key valuation ratios for the fiscal year ending January 31, 2025:

• Price-to-Earnings (P/E): Not Applicable (At Loss)
• Price-to-Book (P/B): The P/B ratio for January 2025 was around 4.13x. This is a premium, showing investors are willing to pay over four times the company's book value (Total Equity was $441.29 million for FY2025).
• Enterprise Value-to-EBITDA (EV/EBITDA): This is a better measure for pre-profit companies. The TTM EV/EBITDA as of July 2025 was a highly negative -88.69x, reflecting the negative EBITDA of approximately ($41.6 million).

The high P/B ratio and negative EV/EBITDA defintely signal that this is a speculative growth play. You're buying into the Mission Statement, Vision, & Core Values of Planet Labs PBC (PL). and the future revenue, not current profitability.

The stock price trend over the last 12 months shows significant volatility, which is typical for the space and data sectors. The stock closed at $11.45 on November 18, 2025, but its 52-week range has been from a low of $2.79 to a high of $16.78. That's a huge swing, so you need to have a strong stomach for risk. The company does not currently pay a dividend, so the dividend yield and payout ratios are 0.00%.

Analyst sentiment is generally positive. The consensus rating is a Buy or Moderate Buy, with an average 12-month price target of approximately $13.71 based on a survey of 18 analysts. What this estimate hides is a wide range of predictions, from a low of $3.50 to a high of $20.00. That range tells you that even the experts aren't sure how to precisely value a company with this kind of disruptive potential. Your action here is to use the average target as a benchmark, but focus your research on their ability to execute on their FY2026 revenue guidance of $260 million to $280 million.

Risk Factors

You're looking at Planet Labs PBC (PL) and seeing record revenue, but the core question for any investor is: What could derail this growth? The biggest near-term risk is defintely the path to profitability, coupled with fierce industry competition. While the company is making smart moves, the financial reality is that they are still operating at a significant loss.

For the full fiscal year 2025, Planet Labs PBC reported a record revenue of $244.4 million, an 11% increase year-over-year. Still, the full-year net loss was a substantial $123.2 million. Here's the quick math: their operating margin is around -31.51% and the net margin is -34.46%. That means for every dollar of revenue, they are losing a third of a dollar. They did narrow the Adjusted EBITDA loss to ($10.6) million for FY 2025, which is a good operational sign, but the bottom line remains a challenge.

Operational and Financial Headwinds

The operational risks for Planet Labs PBC are tightly linked to their capital expenditure (CapEx) and growth strategy. They are planning to build and launch nearly 100 satellites in the next two years to double their capacity, which is a massive undertaking. This creates an execution risk-if those launches are delayed or if the satellites don't perform, it impacts their core data product and future revenue.

Also, the company's stock exhibits high volatility, with a beta of around 3.57, making it a high-risk, high-reward play. The market has high expectations, as evidenced by a Price-to-Sales (P/S) ratio of about 13.2x as of November 2025. If the company misses earnings per share (EPS) or revenue forecasts-as they did in Q1 2025 with an EPS of -$0.08-investor confidence can quickly erode, triggering sharp price drops and even legal risks from stockholder litigation.

• High valuation risk if growth slows.
• Execution risk on the 100-satellite launch plan.
• Reliance on large government contracts.

External Competition and Market Conditions

Planet Labs PBC operates in a competitive landscape, facing off against established players like Maxar and a host of emerging Synthetic Aperture Radar (SAR) startups. This competition puts pressure on pricing and limits market share, forcing continuous innovation. To be fair, the company has a strong competitive advantage with its daily Earth-observation data, but that edge requires constant investment.

A key external risk is the heavy dependence on strategic contracts, particularly with government entities. For example, the $230 million contract with JSAT and the €240 million German government deal are critical. While these provide revenue visibility, the risk of non-renewal or a shift in government priorities-which can happen fast-is a constant threat to their revenue backlog.

Mitigation Strategies and Clear Actions

The good news is that management is aware of these risks and is taking clear, measurable actions. They are driving financial discipline, which is evident in the Q4 2025 cost optimization: they cut the cost of revenue by 11.5%, R&D expenses by 19.1%, and sales and marketing by 22%. This is how you manage a high-growth, high-CapEx business.

Strategically, they are shifting their focus to AI-enabled solutions, which helps customers extract more value from the data, accelerating the delivery of insights. This move is designed to increase the stickiness of their product and justify premium pricing against competitors. Their strong balance sheet, with approximately $222.1 million in cash and equivalents, also provides a cushion to execute on the satellite build-out and weather short-term market volatility.

To dive deeper into the players backing this strategy, you should check out Exploring Planet Labs PBC (PL) Investor Profile: Who's Buying and Why?

Growth Opportunities

You're looking for a clear signal that Planet Labs PBC (PL) can convert its technological lead into sustained financial performance, and the near-term data defintely points to a significant lock-in of future revenue. The company's strategic shift to high-value, long-term government and defense contracts is translating directly into massive visibility for the next two fiscal years.

The most compelling evidence for future growth isn't just the latest quarter's sales, but the contracted revenue that is already in the bag. As of the end of Q2 FY26 (July 31, 2025), Planet Labs PBC's total Backlog surged to an impressive $736.1 million, representing a 245% year-over-year jump. Even more telling, Remaining Performance Obligations (RPOs)-the total value of signed contracts yet to be fulfilled-shot up 516% year-over-year to $690.1 million. That's a huge chunk of business already secured.

Here's the quick math on projections: management raised its full-year Fiscal Year 2026 revenue guidance to a range of $281 million to $289 million. This is a significant step up from the $244.35 million in annual revenue reported for Fiscal Year 2025. This growth is being driven by a few clear areas:

• Locking in long-term, high-value government deals.
• Expanding the higher-margin satellite services business.
• Aggressively leveraging Artificial Intelligence (AI) for new solutions.

Key Growth Drivers and Strategic Wins

The biggest driver is the defense and intelligence sector, where revenue accelerated by 41% year-over-year in Q2 FY26. This is fueled by major wins like the multi-year satellite services collaboration with the German government, valued at €240 million, and a landmark investment from NATO. These deals position Planet Labs PBC as a critical European security infrastructure provider, offering an alternative to building costly national satellite systems. Plus, the company continues to expand its contracts with the U.S. National Reconnaissance Office (NRO).

Product innovation is also creating new markets. The launch of the next-generation Pelican satellites, which offer higher resolution and faster tasking, and the Tanager-1 hyperspectral satellite, which captures a deeper, more detailed data set, are key. These hardware upgrades are paired with software-driven solutions like Maritime Domain Awareness and the new strategic alliance with Quantum Systems for AI-enabled 'Tip & Cue' intelligence solutions, specifically targeting the European defense market. This is how they turn raw data into actionable insights for customers like FarmDar in agriculture and SwissRe in drought insurance.

Competitive Edge and Financial Health

Planet Labs PBC maintains its competitive advantage through its massive, cost-effective constellation of Low Earth Orbit (LEO) satellites. This fleet enables daily, comprehensive coverage of the entire Earth, which is a significant differentiator from competitors who rely on less frequent, targeted captures. This daily capture builds a uniquely valuable historical record of change over time. Critically, the subscription-based model is incredibly sticky, with a recurring annual contract value percentage standing at a firm 98%. This provides a stable, predictable revenue base.

The company is also showing financial discipline, achieving a positive adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of $6.4 million in Q2 FY26 and generating positive free cash flow year-to-date of $54.3 million. This is a huge milestone, showing they are generating cash now, not just consuming it. To dive deeper into who is betting on this growth, you should read Exploring Planet Labs PBC (PL) Investor Profile: Who's Buying and Why?

Here is a snapshot of the financial trajectory:

What this estimate hides is the potential for deal-timing variability, which can push revenue recognition between quarters, but the overall trend is toward profitability and sustained growth backed by signed contracts. This is a company moving from a pure growth story to a financially disciplined market leader.

Finance: Track the conversion of the $736.1 million backlog into recognized revenue over the next four quarters and verify the full-year FY26 revenue against the $281 million to $289 million guidance.