Planet Labs vs. Rocket Lab: The Infrastructure Bet in the 2026 Space S-Curve

The trajectory for Earth observation has fundamentally shifted. When the industry entered its commercial phase a decade ago, the promise was clear: a wave of satellite constellations would flood the market, and a new era of data-driven decision-making would be powered by agriculture, insurance, finance, and energy. Market reports then projected the global EO market would hit almost $10 billion by 2026. That decade of growth has been quietly deferred. The same reports now expect that same milestone by 2035.

The reason is structural. Commercial adoption has plateaued, while sovereign infrastructure has become the dominant growth engine. Government and defense still represent approximately 75% of the EO market, a proportion that has barely budged since 2017. The industry spent years accumulating pilots and bespoke projects, but few have productized into repeatable, scalable revenue streams. The satellites work, open data is available, and cloud platforms have lowered the barrier to entry. Yet most commercial EO companies remain stuck in a cycle of custom work, unable to break through to mass adoption.

This is not a temporary slowdown. It is a paradigm shift. The center of gravity has moved decisively toward defense and geopolitics. In 2025, we saw Earth observation used as a diplomatic tool for the first time, when the US suspended Ukraine's access to government-purchased commercial imagery. That was a preview. In 2026, expect to see Earth observation used more routinely as a geopolitical lever, whether through access restrictions, export controls, or shuttering of commercial providers. EO is no longer just a tool for observation; it has become a lever of power.

This dynamic is reshaping investment. The market is cooling on pure software and analytics, while hardware-heavy infrastructure-build, launch, downlink-is where the momentum lies. In 2025, venture funding for the sector surged, but the mix told the story: the momentum sat firmly with hardware-heavy infrastructure. This is the infrastructure layer for the next paradigm. Companies building sovereign capabilities, whether for national defense or strategic alliances, are now the ones capturing capital and shaping the industry's future. The commercial S-curve has stalled; the sovereign infrastructure layer is the new exponential growth path.

Planet Labs: The Data Infrastructure Play

Planet Labs is attempting to build the foundational data layer for the new sovereign infrastructure paradigm. Its strategy is clear: become the predictable, scalable provider of space-based data that governments and strategic allies need, even as commercial adoption stalls. The company's recent financials show it is hitting key inflection points on that path.

The business is scaling with discipline. Full-year revenue reached $244.4 million, growing 11% year-over-year. More importantly, the company achieved a landmark milestone in its fourth quarter: adjusted EBITDA turned positive, marking the first time in its history. This transition from loss to profitability is the critical signal that its operational model is gaining traction. The underlying economics are improving too, with the full-year non-GAAP gross margin expanding to 60%, up from 54% the prior year.

The most compelling evidence of future demand is the backlog. It surged 115% quarter-over-quarter to approximately $498.5 million. This is not just a sign of sales success; it is a forward-looking contract book that provides visibility and reduces the volatility of a pure-play commercial model. The company also reported a net dollar retention rate of 106%, indicating existing customers are not only staying but spending more. This stickiness is essential for building a reliable infrastructure business.

Planet's strategic positioning hinges on its ability to deliver this data reliably as launch alternatives become constrained. The company is in a peak investment cycle, with capital expenditures of $49.6 million for the full year, or about 20% of revenue. This spending is funding the launch of new satellites like the Pelican and Tanager spacecraft, which are designed to expand its operational capabilities and capacity. The recent $230 million commercial agreement with JSAT is a major validation, providing a significant cash infusion to fund this expansion while also securing a key partner for data distribution.

Yet, the path is not without friction. The company still carries a full-year adjusted EBITDA loss of $10.6 million, and guidance for the upcoming quarter suggests potential variability in expenses. Commercial headwinds persist, with agriculture revenue down more than 10% year-over-year. This underscores the tension between its commercial customer base and the sovereign demand driving its backlog. Planet's success in 2026 will depend on its ability to monetize its new satellite capacity, particularly through partnerships like the one with Anthropic, and to convert that massive backlog into consistent, high-margin revenue as geopolitical demand for its data becomes routine.

Rocket Lab: The Launch and Systems Momentum

Rocket Lab is riding the wave of a launch infrastructure boom, with its recent financials showing the explosive growth characteristic of a company in the steep part of the S-curve. The company posted a record quarterly revenue of $155 million, a figure that represents a staggering 48% year-over-year growth. This acceleration is not just a revenue pop; it is the direct result of a sector-wide surge in activity. The record 186 orbital launches in 2022 signaled a new era of launch frequency, and Rocket Lab is capturing a significant share of that momentum. Its growth is concentrated squarely in the launch and systems layer, a segment that is now the primary engine for the entire space economy.

The financial profile confirms this is a high-performance infrastructure play. The company achieved a record gross margin in the quarter, a key indicator of operational leverage as it scales. This is the same 60% non-GAAP gross margin it reported for the full year, demonstrating that the growth is not coming at the expense of profitability. The company is building the fundamental rails for the next wave of satellite deployments, including mega-constellations, and its business model is maturing to match.

The sustainability of this acceleration, however, hinges on the durability of that launch demand. The sector's growth has been powered by a backlog of satellites waiting for rides to orbit. Rocket Lab's success depends on that pipeline remaining full, which in turn depends on continued investment from both commercial and sovereign customers. The company's own guidance for the upcoming fiscal year-projecting revenue between $260 million and $280 million-suggests management sees this momentum continuing, but with a slower pace than the recent quarter's 48% surge.

The bottom line is that Rocket Lab is a pure-play infrastructure bet on the launch S-curve. It is not facing the commercial adoption headwinds that plague data providers like Planet Labs. Instead, it is benefiting from the exponential increase in launch demand, a trend that is likely to persist as more satellites are deployed. For investors, the question is whether this launch infrastructure layer can sustain its current growth rate or if it will eventually face the same kind of saturation that has stalled the commercial EO market. The evidence so far points to a strong, accelerating run.

Catalysts, Risks, and the Infrastructure Bet

The investment case for both Planet Labs and Rocket Lab hinges on a single, accelerating trend: the integration of space into national security and sovereign infrastructure. The primary catalyst for both is the sustained defense budget and the strategic imperative to build resilient, sovereign space capabilities. This is no longer a future scenario; it is the operating environment. As one industry observer noted, the Space Race 2.0 narrative wasn't a metaphor this year, it was the operating environment, driving government budgets and defense pull-through. In 2026, expect this trend to intensify, creating a durable, exponential demand for the infrastructure layers each company provides.

For Planet Labs, the catalyst is clear: its data platform must become the trusted, scalable source for sovereign decision-making. The company's massive backlog and strategic partnerships are the first steps. The real test is monetization. Can it convert its new satellite capacity, like the Pelican and Tanager spacecraft, into high-margin, repeatable contracts with governments and strategic allies? The $230 million JSAT deal is a validation, but the company must demonstrate it can productize its data offerings beyond custom projects. The risk here is execution: commercial headwinds persist, and the company must navigate the tension between its existing customer base and the new sovereign demand.

For Rocket Lab, the catalyst is the continued saturation of the launch market. Its record growth is a direct result of a backlog of satellites waiting for rides. The company's investment in its Neutron rocket and expanded launch cadence is designed to capture this demand. The risk, however, is the very success of the infrastructure build-out. As more launch providers enter the market and capacity expands, the potential for launch market saturation looms. This could pressure margins for pure-play launch providers, forcing a shift from high-growth to high-competition dynamics. The company's guidance for a slower growth pace in the coming year may be an early signal of this transition.

The deeper investment question is which infrastructure layer offers more durable exponential growth in this defense-dominated paradigm. Rocket Lab is building the fundamental rails for satellite deployment-a necessary but potentially commoditizing layer. Planet Labs is building the data platform that will run on those rails. In a sovereign infrastructure model, the value may increasingly reside in the data and its integration into command and control systems, not just the launch itself. The market's funding shift in 2025, where the momentum sat firmly with hardware-heavy infrastructure, suggests investors see the entire stack as critical. Yet the most durable growth will likely flow to the company that can best monetize its data as a strategic asset, not just a commodity. The bet in 2026 is on who builds the more essential, less replaceable layer in the new space economy.