EPS of $-0.07 increased by 47.3% from previous year
Gross margin of 61.2%
Net income of -20.08M
""During the third quarter, we generated a record $61.3 in revenue, representing 11% year-on-year growth. Non-GAAP gross margin for the quarter increased to a record 64%, up from 52% a year ago and 58% last quarter. Adjusted EBITDA loss for Q3 narrowed to approximately $242,000..."" - Will Marshall
Planet Labs PBC (PL) QQ3 2025 Results — Record ACV, AI-driven pipeline, and near-term profitability trajectory amid government-led growth
Executive Summary
Planet Labs reported Q3 fiscal 2025 revenue of $61.3 million, up 11% year over year, with a record non-GAAP gross margin of 64% and an adjusted EBITDA loss of approximately $0.24 million. Management framed the quarter as a turning point toward profitability, highlighted by the strongest ACV bookings in company history and a robust government-led pipeline. Key developments include NASA CSDA awards (~$20 million over one year, with revenue timing impacted by procurement processes) and a third DoD pilot, both reinforcing a long-cycle but high-visibility growth trajectory driven by AI-enabled geospatial datasets and next-generation fleets (Tanager hyperspectral and Pelican high-resolution platforms).
Management signaled ongoing margin optimization from cloud infrastructure upgrades, with expectations for continued but moderating gross-margin improvements into the next quarters. The company is accelerating the deployment of next-generation datasets and capacity (Tanager, Pelican) while expanding strategic partnerships (Laconic Forest Carbon, Global Fishing Watch) to broaden addressable markets. Notably, the balance sheet remains highly liquid (roughly $242 million in cash, no debt) with a sizable RPO of $146 million and backlog of $232 million, supporting near-term growth investments and cashflow breakeven ambitions without capital raises. The guidance for Q4 2025 implies revenue between $61–63 million, gross margin of 63–65%, and returning to EBITDA profitability ($0–$2 million), underscoring a deliberate transition plan to profitability as large contracts ramp and onboarding efficiencies improve.
Overall, the QQ3 2025 results reflect a mature inflection point: stronger unit economics, expanding ACV with higher-value contracts, and an evolving dataset stack (PlanetScope ARPS, Forest Carbon Monitoring, Tanager, Pelican) that positions Planet to capitalize on AI-enabled analytics across government and select commercial verticals. The key caveats remain execution timing for large multi-year deals, onboarding ramp for new customers, and the inherent lags in government procurement cycles. Investors should weigh the upside of a broadened data fabric and international government traction against the persistent macro and contract-formation lead times that characterize Earth-observation businesses.
Key Performance Indicators
Revenue
61.27M
QoQ: 0.28% | YoY:10.63%
Gross Profit
37.52M
61.24% margin
QoQ: 12.01% | YoY:44.13%
Operating Income
-22.61M
QoQ: 42.88% | YoY:52.76%
Net Income
-20.08M
QoQ: 48.07% | YoY:47.16%
EPS
-0.07
QoQ: 47.31% | YoY:47.31%
Revenue Trend
Margin Analysis
Key Insights
Revenue: $61.3 million in Q3 2025, up 11% YoY; QoQ growth roughly flat to modestly positive at Q2/Q3 levels as per guidance expectations.
Gross margin: Non-GAAP gross margin of 64% in Q3 2025, up from 52% YoY and 58% in the prior quarter, aided by cloud infrastructure optimizations. Management expects 63–65% in Q4 2025.
EBITDA: Adjusted EBITDA loss of approximately $0.24 million in Q3, marking the sixth consecutive quarter of improvement and positioning for EBITDA profitability in Q4.
Operating metrics: End-of-period customers 1,015; Recurring ACV comprised 97% of end-period ACV; over 90% of end-period ACV is in annual or multi-year contracts; average contract length ~2 years (ACV basis).
Unit economics: Net dollar retention (NDR) 104% (winbacks 105%), with NASA-related timing impact of about 8.5 percentage points. RPO stands at $146 million, up 30% QoQ, with ~82% of RPOs in the next 12 months and ~98% in the next 24 months. Backlog is about $232 million, with ~70% in the next 12 months and ~91% in the next two years. Note: RPO/backlog exclude the $20 million NASA order received on November 25, 2024.
Financial Highlights
Revenue and profitability metrics:
- Revenue: $61.3 million in Q3 2025, up 11% YoY; QoQ growth roughly flat to modestly positive at Q2/Q3 levels as per guidance expectations.
- Gross margin: Non-GAAP gross margin of 64% in Q3 2025, up from 52% YoY and 58% in the prior quarter, aided by cloud infrastructure optimizations. Management expects 63–65% in Q4 2025.
- EBITDA: Adjusted EBITDA loss of approximately $0.24 million in Q3, marking the sixth consecutive quarter of improvement and positioning for EBITDA profitability in Q4.
- Operating metrics: End-of-period customers 1,015; Recurring ACV comprised 97% of end-period ACV; over 90% of end-period ACV is in annual or multi-year contracts; average contract length ~2 years (ACV basis).
- Unit economics: Net dollar retention (NDR) 104% (winbacks 105%), with NASA-related timing impact of about 8.5 percentage points. RPO stands at $146 million, up 30% QoQ, with ~82% of RPOs in the next 12 months and ~98% in the next 24 months. Backlog is about $232 million, with ~70% in the next 12 months and ~91% in the next two years. Note: RPO/backlog exclude the $20 million NASA order received on November 25, 2024.
- Cash and liquidity: Approximately $242 million in cash, cash equivalents and short-term investments; no debt outstanding; net cash position of approximately $-116 million (net debt negative) as per reported cash flow metrics, reflecting a strong liquidity stance for growth investments.
- Capex and free cash flow: Q3 capex including software $8.9 million; free cash flow was negative by $5.05 million; projected capex for Q4 is $8–$11 million to support Pelican/Tanager launches and platform maintenance.
Notes: The NASA CSDA award (~$20 million over one year) and the DoD pilots represent meaningful six- to seven-figure annualized opportunities that are expected to contribute to revenue ramp in the coming quarters. Additionally, management highlighted largest-ever ACV bookings in Q3, underscoring a shift toward higher-value, longer-duration contracts. The quarterly metrics are corroborated by the earnings transcript details (e.g., “record $61.3 in revenue” and “largest ever quarter of ACV bookings”).
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
61.27M
10.63%
0.28%
Gross Profit
37.52M
44.13%
12.01%
Operating Income
-22.61M
52.76%
42.88%
Net Income
-20.08M
47.16%
48.07%
EPS
-0.07
47.31%
47.31%
Key Financial Ratios
currentRatio
2.34
grossProfitMargin
61.2%
operatingProfitMargin
-36.9%
netProfitMargin
-32.8%
returnOnAssets
-3.18%
returnOnEquity
-4.32%
debtEquityRatio
0.05
operatingCashFlowPerShare
$0.01
freeCashFlowPerShare
$-0.02
priceToBookRatio
1.4
priceEarningsRatio
-8.07
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Key insights from management comments, organized by theme:
- Growth strategy and government traction:
- Will Marshall: “During the third quarter, we… secured multiple large contracts with government customers globally, advanced our next-generation datasets towards commercialization, and enhanced the Planet Insights Platform with new capabilities.”
- Management highlighted NASA CSDA award (~$20 million over one year) and a third DoD pilot, with expectations to ramp into operational contracts; emphasis on global and regional monitoring services and expanding datasets such as Tanager Hyperspectral and Pelican.
- Will Marshall: “Q3 represented our largest ever quarter of ACV bookings.”
- Product and data strategy:
- ARPS (Analytics-Ready PlanetScope) launched in Q3 for time-series AI modeling; AI-powered Forest Carbon Monitoring introduced at UN Climate Week; Tanager-1 hyperspectral satellite in orbit aiding Carbon Mapper with methane/CO2 plume detections.
- Pelican-2 shipped to Vandenberg for January launch; Pelican platform upgrades include NVIDIA Jetson edge compute and satellite-to-satellite links for faster tasking; emphasis on faster time-to-insight and AI-on-board capabilities.
- Commercial and go-to-market dynamics:
- Ashley Johnson notes best-quarter ACV bookings and rising average deal sizes across sectors; focus on higher-value use cases (precision agriculture, forestry, maritime domain awareness).
- DoD and international defense wins illustrate increasing demand for AI-enabled analytics and end-to-end data products rather than just raw imagery.
- Guidance and outlook:
- Ashley Johnson: “guidance for Q4… revenue between $61 million and $63 million… non-GAAP gross margin 63–65%… adjusted EBITDA profit for Q4 to be between zero and $2 million.” This frames profitability inflection in the near term as large contracts ramp.
"During the third quarter, we generated a record $61.3 in revenue, representing 11% year-on-year growth. Non-GAAP gross margin for the quarter increased to a record 64%, up from 52% a year ago and 58% last quarter. Adjusted EBITDA loss for Q3 narrowed to approximately $242,000..."
— Will Marshall
"Q3 represented our largest ever quarter of ACV bookings."
— Will Marshall
Forward Guidance
Outlook and assessment:
- Near-term revenue trajectory: Q4 2025 revenue guidance of $61–$63 million aligns with Q3 levels, reflecting continued ramp for large customers and the operating-model transition. Management expects tailwinds from higher-value contracted work and a gradual shift of digital-agriculture accounts to longer-term internal-use contracts, which should improve stickiness and gross margins over time.
- Profitability trajectory: Non-GAAP gross margin guided at 63–65% for Q4; Adjusted EBITDA to be between $0 and $2 million, suggesting the company is on track to profitability in the near term and is targeting EBITDA profitability next quarter. The profitability path depends on the pace of large contract onboarding and the realization of utilization across new datasets (Tanager, Pelican).
- Growth roadmap and datasets: The company’s roadmap includes Tanager hyperspectral data, Pelican high-resolution capabilities, and Forest Carbon Monitoring, all of which are positioned to expand addressable markets (defense, energy, government R&D, and commercial sectors). Near-term catalysts include APAC/EMEA growth, the expansion of DoD pilots, NASA CSDA throughput, and new data products monetization.
- Key risk factors and monitoring: Execution risk in converting pilots to long-term operational contracts; onboarding and ramp time for large customers; procurement delays (e.g., NASA renewals) that can affect quarterly revenue recognition; capex timing for fleet deployment that can influence free cash flow and near-term profitability; macro conditions and government budget cycles impacting timing of bookings.
- Investment thesis takeaway: Planet has established a defensible cash-rich balance sheet, a growing backlog and RPO, and a platform that increasingly supports AI-enabled decision-making. The combination of large government contracts, upcoming hyperspectral and edge AI datasets, and a reorganized, customer-centric operating model provides a compelling long-term growth thesis with a near-term profitability inflection on the horizon.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
PL Focus
61.24%
-36.90%
-4.32%
-8.07%
RKLB
26.70%
-49.50%
-12.40%
-23.31%
RDW
17.50%
-18.20%
-1.71%
-5.45%
MNTS
38.30%
-70.96%
1.44%
-3.46%
BKSY
70.50%
-58.70%
-11.40%
-1.80%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
With a liquidity-rich balance sheet, a strengthening ACV backlog, and a clear pivot toward higher-value, AI-enabled datasets, Planet is well-positioned to grow through government programs and select commercial segments. The QQ3 2025 results demonstrate margin improvement and a path to EBITDA profitability in Q4 2025, supported by record ACV bookings and significant pipeline. Key monitoring metrics include the speed of onboarding for NASA/DoD contracts, the ramp of Tanager and Pelican data products into paid revenue, and the sustainability of increased ARPU through AI-enabled analytics. Valuation remains elevated on revenue multiples given the growth trajectory; however, the company’s defensible cash position, minimal near-term debt, and strategic dataset roadmap justify a constructive stance for investors focused on long-term Earth observation data analytics and AI-enabled intelligence platforms. Risks to monitor include procurement timing, contract ramp variability, and execution delays in fleet commissioning. Overall, the investment thesis centers on Planet as a scalable platform for AI-driven geospatial insights with substantial government tailwinds and an expanding dataset portfolio.
Key Investment Factors
Growth Potential
A. AI-enabled analytics drive: DoD and other government programs increasingly require AI-powered capabilities and continuous daily-scan datasets, enhancing platform stickiness and expansion opportunities. B. Next-gen data programs: Tanager hyperspectral and Pelican high-resolution fleets complement PlanetScope; expected to unlock multi-year, high-ACV contracts across government and enterprise segments. C. Global government demand: NASA CSDA and DLR agreements demonstrate credible access to hundreds of potential users and regions; projected expansion into >100 countries with broad access to datasets through large government programs.
Profitability Risk
A. Revenue visibility risk due to government procurement cycles and onboarding delays for large contracts (NASA timing impacted Q3 revenue). B. Execution risk in scaling ACV bookings into sustained profitability; reliance on a subset of large deals could create earnings volatility. C. Technology and product development risk related to field performance of Tanager and Pelican and the integration with partner ecosystems. D. Competitive landscape for advanced EO data and analytics; potential delays in new dataset monetization.
Financial Position
A. Strong liquidity with ~$242 million in cash and equivalents and no debt; net cash position supported by a conservative balance sheet. B. Backlog and RPO momentum provide revenue visibility (RPO ~$146M, backlog ~$232M, many within the next 12–24 months). C. Moderate near-term profitability concern due to ongoing capex and transition costs; however, guidance indicates EBITDA profitability in Q4 2025 and a path to cash-flow breakeven without new financing.
SWOT Analysis
Strengths
Record gross margin of 64% and 11% revenue growth in Q3 2025 indicate improving unit economics.
Strong government traction with NASA CSDA and multiple DoD pilots signaling a robust, high-visibility pipeline.
Large cash balance (~$242M) and no debt provide substantial financial flexibility for fleet and dataset investments.
High customer concentration toward larger, multi-year contracts with 97% recurring ACV and ~2-year average contract length.
Strategic data platform expansion (Tanager, Pelican, ARPS) supporting AI-driven analytics and broader market reach.
Weaknesses
Net income remains negative; profitability hinges on ramping large contracts and optimizing onboarding.
Revenue recognition remains sensitive to government procurement timing (e.g., NASA renewal timing caused Q3 deltas).
Capital expenditure intensity (Pelican/Tanager launches) introduces near-term cash burn and capex variability.
Dependence on government and large enterprise deals may cause revenue volatility if project timing shifts.
Opportunities
Expansion of DoD and international defense contracts leveraging AI-enabled Earth observation data.
New datasets (Tanager hyperspectral, Pelican high-resolution) enabling higher ARPU and longer-duration ACVs.
Laconic Forest Carbon partnership and Global Fishing Watch expansion broaden addressable markets in sustainability and governance.
DLR and CSDA-like programs provide scalable access to government and academia across numerous regions.
Threats
Procurement delays or policy shifts in the U.S. and abroad could delay bookings and onboarding.
Competition in EO analytics and tasking platforms could pressure pricing and market share over time.
Macro funding cycles and defense budgets may affect order cadence and project ramp rates.