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Planet Labs’s (NYSE:PL) Q1: Strong Sales, Stock Jumps 14.7%

By: StockStory

June 04, 2025 at 16:20 PM EDT

PL Cover Image

Earth imaging satellite company Planet Labs (NYSE: PL) reported Q1 CY2025 results topping the market’s revenue expectations, with sales up 9.6% year on year to $66.27 million. Guidance for next quarter’s revenue was better than expected at $66 million at the midpoint, 0.7% above analysts’ estimates. Its non-GAAP loss of $0 per share was significantly above analysts’ consensus estimates.

Is now the time to buy Planet Labs? Find out by accessing our full research report, it’s free.

Planet Labs (PL) Q1 CY2025 Highlights:

Revenue: $66.27 million vs analyst estimates of $62.23 million (9.6% year-on-year growth, 6.5% beat)
Adjusted EPS: $0 vs analyst estimates of -$0.03 (significant beat)
Adjusted EBITDA: $1.20 million vs analyst estimates of -$3.03 million (1.8% margin, significant beat)
The company slightly lifted its revenue guidance for the full year to $272.5 million at the midpoint from $270 million
EBITDA guidance for the full year is -$9.5 million at the midpoint, below analyst estimates of -$9.31 million
Operating Margin: -34.4%, up from -57.2% in the same quarter last year
Free Cash Flow was $8.00 million, up from -$14.24 million in the same quarter last year
Backlog: $527 million at quarter end
Market Capitalization: $1.17 billion

“We had an excellent first quarter, exceeding our expectations, demonstrating solid validation of our strategic direction and great execution,” said Will Marshall, Planet’s Co-Founder, Chief Executive Officer and Chairperson.

Company Overview

Pioneering the concept of "agile aerospace" with hundreds of small but powerful satellites, Planet Labs (NYSE: PL) operates the world's largest fleet of Earth observation satellites, capturing daily images of our planet to provide insights on deforestation, agriculture, and climate change.

Sales Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.

With $250.2 million in revenue over the past 12 months, Planet Labs is a small player in the business services space, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and numerous distribution channels. On the bright side, it can grow faster because it has more room to expand.

As you can see below, Planet Labs’s 21.3% annualized revenue growth over the last five years was incredible. This is a great starting point for our analysis because it shows Planet Labs’s demand was higher than many business services companies.

We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. Planet Labs’s annualized revenue growth of 10.8% over the last two years is below its five-year trend, but we still think the results suggest healthy demand. Planet Labs Year-On-Year Revenue Growth

This quarter, Planet Labs reported year-on-year revenue growth of 9.6%, and its $66.27 million of revenue exceeded Wall Street’s estimates by 6.5%. Company management is currently guiding for a 8% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 14.1% over the next 12 months, an improvement versus the last two years. This projection is commendable and implies its newer products and services will fuel better top-line performance.

Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) stock benefiting from the rise of AI. Click here to access our free report one of our favorites growth stories.

Operating Margin

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

Planet Labs’s high expenses have contributed to an average operating margin of negative 72.5% over the last five years. Unprofitable business services companies require extra attention because they could get caught swimming naked when the tide goes out.

On the plus side, Planet Labs’s operating margin rose by 32.1 percentage points over the last five years, as its sales growth gave it operating leverage. Still, it will take much more for the company to reach long-term profitability.

Planet Labs Trailing 12-Month Operating Margin (GAAP)

Planet Labs’s operating margin was negative 34.4% this quarter.

Earnings Per Share

We track the change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Although Planet Labs’s full-year earnings are still negative, it reduced its losses and improved its EPS by 41.5% annually over the last three years. The next few quarters will be critical for assessing its long-term profitability. We hope to see an inflection point soon.

Planet Labs Trailing 12-Month EPS (Non-GAAP)

In Q1, Planet Labs reported EPS at $0, up from negative $0.05 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street is optimistic. Analysts forecast Planet Labs’s full-year EPS of negative $0.16 will reach break even.

Key Takeaways from Planet Labs’s Q1 Results

We were impressed by how significantly Planet Labs blew past analysts’ revenue, EPS, and EBITDA expectations this quarter. We were also excited it lifted its full-year revenue guidance. Zooming out, we think this quarter featured some important positives. The stock traded up 14% to $4.57 immediately following the results.

Planet Labs had an encouraging quarter, but one earnings result doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.

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