Another day brings yet another disappointing performance from Planet Labs, which saw a significant drop of 24.60%. The space company, known for operating the world’s largest fleet of Earth observation satellites, released its financial results for the fiscal second quarter of 2025 last night, and the news was far from encouraging.
Planet Labs reported a loss of $0.06 per share for the quarter, with revenues of $61.1 million. These figures were largely in line with analyst expectations, which had projected a $0.06 loss on $61.8 million in sales. Nonetheless, investors were dissatisfied and began selling off Planet Labs stock, resulting in a 21% decline by 10:30 a.m. ET today.
Planet Labs’ Q2 Earnings
While Planet Labs’ Q2 results weren’t catastrophic, they did fall short of Wall Street’s hopes. Sales increased by 14% year-over-year for the period ending July 31, which wasn’t sufficient. The gross profit margin, as per generally accepted accounting principles (GAAP), rose to 53%, while the non-GAAP margin reached 58%. The issue is that these figures are significantly below what Planet Labs had promised when it initially marketed itself as a special purpose acquisition company (SPAC) IPO: an average sales growth of 44% per year and a non-GAAP gross margin of an impressive 74%.
In essence, Planet Labs is failing to meet the lofty expectations it set for itself back in 2021.
Is Planet Labs Stock a Sell?
Nonetheless, the company is making efforts to improve. CEO Will Marshall highlighted in the report that their strategic pivot to focus on defense and intelligence sales resulted in over a 30% year-over-year revenue increase in that sector—still a far cry from the anticipated 44%, but better than the overall 14%.
Moreover, the management is forecasting non-GAAP gross margin growth to reach at least 59% next quarter, potentially climbing to 61%. While it’s not the 74% originally promised, it does signify progress. Furthermore, Planet Labs anticipates sequential revenue growth, projecting figures between $61 million and $64 million for fiscal Q3.
The challenge remains that analysts were expecting Planet Labs to achieve at least $64.2 million, surpassing even the higher end of the company’s sales guidance. Therefore, in the final assessment, investors perceive the guidance as yet another missed forecast instead of an improvement.
It’s no surprise that investor sentiment is bleak.
