Planet Labs PBC (NYSE: PL) turned heads, and not just because of a headline beat. Revenue of $116.1 million jumped 58% year-over-year, clearing the $104.5 million consensus by a comfortable $11.6 million. Non-GAAP diluted EPS landed at $0.02, beating an expected loss of ($0.02) and improving on a prior-year loss of ($0.07). Adjusted EBITDA more than doubled to $13.9 million from $6.4 million a year ago.
The headline numbers show accelerating scale. The real signal, however, is what drove the beat and what guidance implies for the back half of the fiscal year.
Revenue growth was broad-based. Management cited strong execution across both its core imagery subscription business and the newer satellite services segment. Recurring annual contract value held steady at 98%, reinforcing Planet's subscription-heavy, predictable model. Gross margin was 57% on a GAAP basis and 59% non-GAAP, down from 58% and 61% a year ago. That 200bps non-GAAP compression is worth watching: it suggests the mix shift toward satellite services, which have different cost profiles than pure data subscriptions, is hitting the margin structure. The company guided Q3 non-GAAP gross margin to 56%-58%, implying more modest compression before the full-year target of 55%-57%.
Operating leverage is a more encouraging story. Total operating expenses grew 31% year-over-year to $79.1 million, but revenue grew nearly twice as fast. This narrowed the GAAP operating loss to $13.5 million from $18.0 million a year ago. On a non-GAAP basis, the company swung to an operating profit of $4.1 million from a ($3.3 million) loss. That inflection powers the Rule of 40 achievement, which Planet defines as the sum of revenue growth and adjusted EBITDA margin. With 58% growth and roughly 12% adjusted EBITDA margin, the company cleared the 40% threshold for the fourth straight quarter.
Cash and liquidity became a separate story. Planet ended the quarter with $865.4 million in cash, cash equivalents, and short-term investments, up 219% year-over-year. The jump came largely from $120 million raised through at-the-market stock sales at an average net price of $31.95 per share. Combined with $107.8 million in warrant exercise proceeds, this gives Planet a war chest that looks oversized relative to its current operating scale. The cash pile represents roughly 14 of enterprise value against a $6.1 billion market cap. Management called the balance sheet strength "strategic flexibility" for growth initiatives, but the ATM issuance near all-time highs also looks like opportunistic capital raising.
Contract wins add conviction to the growth narrative. An $8 million award from the National Geospatial-Intelligence Agency for Planet's Global Monitoring Service, a German government tender worth up to €25 million over five years, and a seven-figure European defense deal all point to deepening government demand. The NGA award is particularly notable: it signals Planet's technology is moving beyond experimental use into operational deployment within the U.S. intelligence community. The Rwanda Space Agency contract, Planet's first national program in Africa, suggests the company's addressable market is expanding geographically as well.
The guidance is where the story gets more nuanced. For Q3, Planet expects revenue of $101 million to $105 million. At the midpoint, that's a sequential decline from Q2's $116.1 million. This isn't unusual for a business with lumpy government contract timing, but it does mean the company is guiding to roughly 43% year-over-year growth at the midpoint—a deceleration from Q2's 58%. Full-year revenue guidance of $430 million to $441 million implies H2 revenue of roughly $220 million to $231 million, or about 32% growth over the prior-year second half. That's still strong, but the deceleration is real. Full-year adjusted EBITDA guidance of $3 million to $10 million suggests profitability will be back-end loaded, with Q3 likely showing a loss before a strong Q4.
What to watch next: the pace of satellite services revenue recognition and the margin trajectory as the Pelican and Tanager programs scale. Planet launched the Pelican-11 tech demo in July and has shipped Tanager-2 and 18 SuperDoves for an upcoming SpaceX mission. Each launch adds imaging capacity, but also depreciation and operating costs. The company's capital expenditure guidance of $100 million to $115 million for the full year implies a step-up in H2, which will pressure free cash flow. Year-to-date adjusted free cash flow was $28.8 million, but that included $7.5 million in litigation settlement payments. The underlying cash generation is real, but the capex ramp will test whether the operating leverage story holds as the asset base grows.