What Happened?

Shares of earth imaging satellite company Planet Labs (NYSE: PL) jumped 35.6% in the morning session after the company reported strong second-quarter results that beat Wall Street expectations and raised its full-year financial guidance. 

For the quarter, Planet posted revenue of $73.4 million, up 20.1% year-over-year, and an adjusted loss of $0.03 per share, both of which topped analysts' forecasts. The company also demonstrated a significant improvement in profitability, with adjusted EBITDA coming in at $6.41 million, crushing estimates of a $3.50 million loss. Furthermore, Planet Labs generated $46.29 million in free cash flow, a stark reversal from a $22.98 million burn in the same period last year. Buoyed by this strong performance, the company lifted its full-year revenue guidance to a midpoint of $285 million, up from its previous forecast of $272.5 million.

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What Is The Market Telling Us

Planet Labs’s shares are extremely volatile and have had 57 moves greater than 5% over the last year. But moves this big are rare even for Planet Labs and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 6 days ago when the stock dropped 8.6% on the news that the major indices continued to retreat (Nasdaq -1.5%, S&P 500 -1.2%) amid profit-taking and renewed concerns about tariffs. 

Investors reacted to a federal court ruling that most of President Trump's global tariffs were illegal, raising uncertainty over trade policy and the fiscal impact of potential refunds. Rising Treasury yields added to the pressure, with the 10-year climbing above 4.2% and the 30-year nearing 5%, intensifying worries about stretched equity valuations. September's historically weak track record for stocks further dampened sentiment, leaving traders cautious ahead of the jobs report later in the week and the Federal Reserve's upcoming rate decision.

Planet Labs is up 124% since the beginning of the year, and at $8.90 per share, has set a new 52-week high. Investors who bought $1,000 worth of Planet Labs’s shares at the IPO in April 2021 would now be looking at an investment worth $898.74.

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