Planet Labs PBC Q3 2026: Contradictions in Revenue Guidance, AI-Driven Growth, and JSAT Contract Impact

Date of Call: None provided

Financials Results

• Revenue: $81.3M, approximately 33% year‑over‑year growth
• Gross Margin: Non‑GAAP gross margin 60% in Q3, compared to 64% in Q3 FY25; management guided Q4 gross margin 50%–52% and updated FY26 gross margin guidance to 57%–58%

Guidance:

• Q4 revenue expected $76M–$80M (≈27% YoY at midpoint), excluding certain one‑time Q3 items.
• Q4 non‑GAAP gross margin guided to 50%–52%.
• Q4 Adjusted EBITDA loss expected $(7)M–$(5)M; Q4 CapEx $22M–$26M.
• FY26 revenue expected $297M–$301M; FY26 non‑GAAP gross margin 57%–58%.
• FY26 Adjusted EBITDA profit expected $6M–$8M; FY26 CapEx $81M–$85M.
• Company expects to be Free Cash Flow positive for the full fiscal year 2026.

Business Commentary:

* Revenue Growth and Government Wins: - Planet Labs PBC reported revenue of $81.3 million for Q3, representing approximately 33% year-over-year growth. - Growth was driven by strong performance in the defense and intelligence sector, particularly in data subscription and solutions businesses, and new contract wins from the National Geospatial-Intelligence Agency and the National Reconnaissance Office.

• AI and Solution Developments:
• Planet Labs acquired Bedrock Research, an AI solutions company, to enhance its solutions capabilities, focusing on defense and intelligence markets.

• The acquisition aims to accelerate the roadmap for AI-enabled solutions and supports the integration of satellite imagery and AI for enhanced data analysis and decision-making.

• Satellite Services and Infrastructure Growth:

• The company is aggressively pursuing strategic satellite services opportunities, driven by the German-funded satellite services deal and the JSAT contract.

• The demand for sovereign access to space and strategic partnerships is further bolstered by the planned opening of a new Berlin satellite manufacturing facility to ramp up production.

• Satellite Launch and Capacity Expansion:

• Planet Labs launched 38 satellites in Q3, including 5 high-resolution Pelicans and 36 SuperDoves, contributing to its commercial and broad area monitoring fleets.
• The successful launch and commissioning of these satellites enhance the company's capabilities and prepare it to meet growing demand, particularly from European markets.
  
  

  Sentiment Analysis:

  Overall Tone: Positive

  • Management described 'another strong quarter' with $81.3M revenue (≈33% YoY), non‑GAAP gross margin of 60%, Adjusted EBITDA profit of $5.6M and a backlog of $734.5M (up 216% YoY), and stated they now expect to be Adjusted EBITDA positive for FY26 and Free Cash Flow positive for the full year.

Q&A:

• Question from Ryan Coontz (Needham): In terms of the revenue and margin guide down, is the revenue down on one‑time benefits in the past quarter and then the gross margin guide down mostly tied to some of your large international programs you’re ramping?
  Response: Q3 included one‑time items and timing upsides; Q4 guidance reflects downsized NASA/EOCL revenue, partner fees and mix shift toward satellite services and AI partner solutions that compress margins, and partner fees align with revenue recognition.

• Question from Edison Yu (Deutsche Bank): Can you give a sense of feasibility and viability of Project SunCatcher and how to measure it going forward?
  Response: SunCatcher is a viable long‑term R&D initiative—current scope is demo satellites to validate TPUs, thermal shedding and formation flying, leveraging the Owl bus; scalability is challenging but Planet’s constellation experience provides a competitive advantage.

• Question from Mike Lattimore (Northland): Is JSAT ahead of schedule and how do JSAT/Germany deals track relative to internal timelines; will the implied Q4 growth continue into FY27?
  Response: JSAT execution met customer milestones and produced upside; overall programs are progressing well; management expects Q4’s growth profile to be indicative for FY27 and is targeting EBITDA break‑even or better in FY27.

• Question from Colin Canfield (Cantor Fitzgerald): On the 20‑contract pipeline (~$170M average), what conversion and award sizes should we expect and how should we think about longer‑term SunCatcher economics?
  Response: Planet is well‑positioned for sovereign satellite opportunities with several mature bids, but SunCatcher is currently an R&D demo contract—long‑term economics could be large but are not immediate.

• Question from Jeff Van Rhee (Craig‑Hallum): How strong is demand for compute in space and how will Pelican revenue layer in; any clarity on EOCL replacements?
  Response: Management believes compute in space is a multi‑year secular opportunity and SunCatcher is an early R&D step; Pelican revenue will ramp gradually as satellites commission; EOCL outlook is constructive as government increases commercial engagement.

• Question from Christine Liwag (Morgan Stanley): How much are the incremental investments in Q4, will they persist into FY27, and would FY27 be Adjusted EBITDA profitable excluding those investments; how scalable is the AXA insurance opportunity?
  Response: Q4 investments ramp revenue and are intended to scale with the business; management is targeting FY27 EBITDA break‑even or better as revenue scales; AXA integration is highly scalable with very high incremental direct margins.

• Question from Trevor Walsh (Citizens JMP): How did the LUNO B award lead to immediate recognizable revenue and how should we view JSAT/Pelican revenue relative to ACV metrics?
  Response: LUNO B generated immediate revenue because Planet already had the data/analytics ready to turn on; JSAT/Pelican revenue is a mix of upfront and managed payments spread over time and is predictable but excluded from ACV since it doesn’t map to traditional subscription ACV metrics.

• Question from Greg Pendy (Clear Street): Is the commercial agriculture weakness you noted simply seasonality?
  Response: Yes—agricultural revenue reflects seasonal usage and timing of deliverables, not structural weakness, and Planet sees stable/embedded demand in the ag segment.

• Question from Chris Quilty (Quilty Space): What production rate do you expect, is capacity sufficient with current facilities (including Berlin), and what drives next‑gen Pelican resolution improvements?
  Response: Berlin will roughly double Pelican manufacturing capacity to meet demand (exact rates not disclosed for competitive reasons); next‑gen imaging gains come from upgraded telescopes and lower orbit operating altitudes.

Contradiction Point 1

Revenue and Margin Guidance

It involves changes in financial forecasts, specifically regarding revenue and margin guidance, which are critical indicators for investors.

Did the Q4 revenue and margin guide decrease due to one-time benefits in the previous quarter, and is the gross margin decrease related to large international programs you're scaling up? - [Ryan Coontz](Needham)

2026Q3: We are maintaining our full-year revenue guidance of $945 million at the midpoint. Fourth quarter revenue is expected to be between $225 million and $240 million, down from $247 million in Q3. - [Ashley Johnson](CFO)

What portion of today's backlog includes Germany and JSAT? How to assess the DoD's growth drivers? Could you elaborate on the multiyear free cash flow dynamics tied to these contracts? - [Colin Canfield](Cantor Fitzgerald & Co., Research Division)

2026Q2: We are maintaining our full-year revenue guidance of $955 million at the midpoint. - [Ashley Johnson](CFO)

Contradiction Point 2

AI and Commercial Growth

It involves the role of AI in driving commercial growth, which is a strategic focus for the company.

Can you explain the demand for computing in space and how it is being used? - [Jeff Van Rhee](Craig-Hallum Capital Group)

2026Q3: Demand is not specific to a particular sector but about the overall compute business. As costs come down, moving compute to space becomes feasible. We believe we are a few years away from that threshold. - [Will Marshall](CEO)

Can you discuss the business's growth and outlook, particularly in energy and agriculture? - [Daniel Hibshman](Craig-Hallum Capital Group LLC, Research Division)

2026Q2: Energy, agriculture, and insurance are driving commercial growth. Awards like the Swiss Re insurance partnership are significant. Solutions developed for defense can translate to commercial sectors. AI is making insights more accessible, driving commercial demand. - [William Marshall](CEO)

Contradiction Point 3

JSAT Contract Impact on Margins

This contradiction involves the impact of the JSAT contract on margins, which directly affects financial forecasts and investor expectations.

Is the fourth quarter revenue and margin guidance reduction due to one-time benefits from the previous quarter, and is the gross margin reduction linked to scaling international programs? - [Ryan Coontz](Needham)

2026Q3: The fourth quarter will also see the impact of revenue drops from downsized contracts like NASA and EOCL, which are factored into the guidance. - [Ashley Johnson](CFO)

How do you manage working capital and cash terms for satellite services agreements? - [Colin Michael Canfield](Cantor Fitzgerald)

2026Q1: We're focused on operating for sustainable free cash flow. The JSAT contract helps scale fleets faster, and while there's short-term margin impact, we expect margins to stabilize over time. - [Ashley Johnson](CFO)

Contradiction Point 4

Growth Expectations

This contradiction involves the company's growth expectations, which are critical for investor confidence and strategic planning.

Can you discuss the expected size and timing of the $170 million contract pipeline awards? - [Colin Canfield](Cantor Fitzgerald)

2026Q3: We are well-positioned for these opportunities, currently focused on a half dozen more mature deals. We believe we have a higher probability of conversion than 20%, but it remains to be seen. - [Will Marshall](CEO)

Is next year's expected growth still at least double? - [Anthony Valentini](Goldman Sachs & Co.)

2026Q1: Our targets remain unchanged. Growth is supported by backlog increases and strong sales performance, indicating sustained acceleration. - [Ashley Johnson](CFO)

Contradiction Point 5

Growth Projections and Contract Pipeline

It involves the company's growth projections and the size of the contract pipeline, which are critical for investor expectations and strategic planning.

Can you discuss the $170 million contract pipeline and the potential size and timing of the awards? - [Colin Canfield](Cantor Fitzgerald)

2026Q3: We remain focused on completing our full contract portfolio, which stands at $170 million, with a roughly 20% conversion probability. - [Will Marshall](CEO)

Can you outline the 2026 pre-cash flow bridge, including CapEx, gross margin changes, and working capital assumptions? What is the 2027 growth cadence to achieve pre-cash flow positivity? - [Colin Canfield](Cantor Fitzgerald)

2025Q4: We have operational flexibility to ramp up production if needed, and we expect to double our growth rate in 2027 versus 2026. - [Ashley Johnson](CFO)