Planet Labs delivered its strongest quarterly revenue performance to date as demand for satellite-based intelligence accelerated across defense, government and commercial markets. The results highlight a broader shift in the space economy, where high-resolution Earth observation, sovereign satellite capabilities and artificial intelligence are increasingly being combined into strategic intelligence platforms.

Defense Demand Drives a 58% Revenue Surge

Planet Labs generated $116.1 million in Q2 FY27 revenue, a 58% increase from $73.4 million a year earlier and substantially above the approximately $104 million analyst estimate. The company said the increase was primarily driven by a $39.1 million increase in its defense and intelligence business, supported by large contract expansions with existing customers and satellite-hardware deliveries.

Defense and intelligence customers accounted for approximately 70% of quarterly revenue, according to market reporting, highlighting how government demand has become increasingly important to Planet’s financial profile. The company also pointed to a satellite handover to the Swedish Armed Forces and subsequent contract wins with the U.S. National Geospatial-Intelligence Agency and the German government.

The growing government component provides Planet with access to large, strategically important contracts, but it also introduces exposure to government procurement cycles, budgets and geopolitical priorities. For investors, the quality and duration of these contracts may therefore be as important as the headline revenue growth rate.

Operating Leverage Emerges as Revenue Scales

Planet’s financial performance also showed a significant improvement in operating leverage. Adjusted EBITDA increased to $13.9 million from $6.4 million a year earlier, while the company reported adjusted EBITDA profitability for the quarter despite continued investment in satellites and AI capabilities.

Non-GAAP gross margin was approximately 59%, compared with 61% a year earlier, reflecting a shift in revenue mix and the costs associated with satellite services. GAAP net loss narrowed to $9.4 million from $22.6 million in the prior-year quarter. Year-to-date adjusted free cash flow reached $28.8 million, while cash, cash equivalents and short-term investments increased to approximately $865.4 million.

Planet also ended the quarter with approximately $814.9 million of backlog and $753.1 million in remaining performance obligations. About half of the backlog is expected to be recognized over the next 12 months, providing a meaningful degree of revenue visibility as the company expands its satellite-services business.

AI and Sovereign Satellites Expand the Strategic Opportunity

Planet’s longer-term strategy increasingly combines its satellite constellation with AI-powered analytics. The company has progressed its Planet AI Application toward an open beta, allowing customers to derive more automated insights from Earth-observation data rather than relying solely on raw imagery.

At the same time, Planet continues to expand its satellite infrastructure. It successfully launched the Pelican-11 technical demonstration satellite and has been deploying additional high-resolution satellites designed to increase the company’s ability to provide rapid, detailed observations. This combination of satellite capacity and AI processing is particularly relevant to governments seeking sovereign intelligence capabilities and commercial customers requiring near-real-time information.

For FY27, Planet expects revenue of $430 million to $441 million, non-GAAP gross margin of 55% to 57% and adjusted EBITDA of $3 million to $10 million. Third-quarter revenue is expected at $101 million to $105 million, with capital expenditures of $30 million to $37 million. The lower expected EBITDA in the third quarter reflects continued investment in next-generation satellites, AI-enabled solutions and manufacturing capacity.

Going forward, the key question is whether Planet can convert its rapidly expanding government pipeline into durable recurring revenue while maintaining improving margins. Investors will be watching defense contract wins, backlog conversion, AI application adoption, satellite deployment schedules and free-cash-flow generation. The company’s ability to scale its constellation and AI capabilities without allowing capital intensity to overwhelm operating leverage will be critical as the commercial and strategic space markets continue to expand.