Planet Labs PBC (NYSE:PL) stock climbed on Thursday as investors cheered the strengthening demand for its satellite imagery and data platform.
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The move reflects growing confidence in the company’s role at the center of next-generation Earth observation and geospatial intelligence.
The satellite and data imagery company reported earnings after the market closed on Wednesday.
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The company brought in $81.25 million in revenue, beating market expectations of $71.99 million.
For the second time this year, Planet Labs’ adjusted earnings per share was breakeven, ahead of market expectations.
Analyst’s Take
Needham analyst Ryan Koontz reiterated the Buy rating on the stock, raising the price forecast from $16 to $22.
Analyst Koontz said the company’s strong balance sheet supports plans for positive free cash flow in fiscal 2026 and fiscal 2027. He noted the firm also aims to accelerate its next-generation Pelican and Owl constellations.
Koontz said execution has been impressive and positions the company to reach the Rule of 30 in fiscal 2027 and the Rule of 40 in fiscal 2028.
Segment Performance and Financial Metrics
Koontz said the Defense and Intelligence segment drove the upside with 72% growth. Civil government sales rose slightly as international strength balanced a weaker Norway contract. Commercial revenue declined due to softer agricultural demand.
He added that the gross margin of 60.3% topped guidance on stronger revenue and usage-based subscriptions.
Adjusted EBITDA exceeded expectations and remained positive for a fourth straight quarter. Koontz said free cash flow stayed positive despite elevated capital spending.
Koontz highlighted KPIs showing a net dollar retention rate of 109%, the highest since fiscal 2023.
Backlog, Contracts, and Strategic Wins
Total remaining performance obligations climbed sharply, supported by recent wins in Japan and Germany. Total backlog also expanded meaningfully and held steady sequentially.
He said new awards included programs with the U.S. Navy, NATO, and NASA. Koontz noted these gains offset budget-driven renewals at lower rates.
Planet Labs expects revenue in the fourth quarter to come in between $76 million and $80 million, versus estimates of $73.88 million.
Outlook
The company also raised its full-year revenue guidance from a range of $281 million to $289 million to a new range of $297 million to $301 million, versus estimates of $284.11 million.
Overall, the analyst said Planet Labs remains a leader in next-generation Earth observation technology.
Koontz noted the company operates a roughly 200-satellite fleet that images 350 million square kilometers each day. This output equals nearly twice Earth’s landmass.
The analyst described the firm’s business as a data subscription model supported by proprietary space infrastructure.
Koontz expects improving fundamentals through fiscal 2025 and fiscal 2026. Tighter cost controls should lift profitability across that period.
PL Price Action: Planet Labs shares were up 33.00% at $17.20 at the time of publication on Thursday. The stock is trading at a new 52-week high, according to Benzinga Pro data.
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