Why is Planet Labs' stock soaring?

Satellite imaging company Planet Labs saw its stock surge in extended trading on Thursday after delivering record financial results and forecasting stronger growth ahead, driven by rising demand and artificial intelligence integration.

Shares of the company jumped about 15% after the closing bell, adding to a remarkable rally that has seen the stock climb more than 500% over the past year.

Record revenue and first annual profit

Planet Labs reported quarterly revenue of $86.8 million for the period ending January, marking a 41% increase from a year earlier and surpassing analyst expectations of $78.2 million, according to FactSet data.

For the full fiscal year, revenue rose 26% to a record $307.7 million.

The company also achieved a key milestone by reporting its first annual profit since listing in 2021, with adjusted earnings before interest, taxes, depreciation, and amortisation of $15.5 million.

This compares with an adjusted loss of $10.6 million in the previous year.

Despite the positive operating performance, the company posted a net loss of $246.9 million for the year, largely due to a $161.4 million accounting-related revaluation tied to warrant liabilities as its stock price increased.

Excluding this impact, the net loss would have been significantly narrower at $85.5 million.

Strong backlog supports growth visibility

Planet Labs ended the year with a backlog of $900 million, up 79% from the previous year, providing strong revenue visibility.

The company had earlier disclosed that contracts with Sweden, Germany and Japan were collectively valued at over $500 million.

Looking ahead, Planet expects revenue of between $87 million and $91 million in the current quarter ending April, alongside a modest adjusted loss.

For the full year, it projected revenue in the range of $415 million to $440 million, with adjusted profit of up to $10 million.

Chief executive Will Marshall said the company’s growing backlog and pipeline position it well for sustained expansion, adding that artificial intelligence is expected to play a transformative role in accelerating growth.

AI partnerships and satellite expansion in focus

Planet Labs is increasingly leaning on AI and strategic partnerships to enhance its capabilities.

Earlier this week, it announced a collaboration with Nvidia to integrate graphics processing units into its next-generation Pelican satellites and Owl constellation.

The new satellites are expected to deliver higher-resolution imagery with significantly faster processing times, enabling applications such as disaster response, intelligence gathering and military operations.

The company has also partnered with Google on Project Suncatcher, which aims to test space-based data centres powered by solar energy, with prototype launches planned for early next year.

Planet Labs, which went public via a special-purpose acquisition company in 2021 at a valuation of $2.8 billion, is now valued at approximately $8.4 billion, reflecting growing investor confidence in the commercial space and geospatial intelligence sector.