Planet Labs, the Earth observation specialist, released financial results on Thursday that exceeded market expectations, driven by robust demand for its satellite imagery and data services. The company posted a significant revenue increase for both the quarter and the full fiscal year, while also outlining ambitious growth targets and a strategic push into artificial intelligence.
Financial Performance Exceeds Expectations
For the fourth quarter ended in early 2026, Planet Labs generated $86.8 million in revenue, representing a 41% year-over-year surge. This performance notably outpaced analyst projections, which had anticipated growth of approximately 27.5%. For the entire fiscal year 2026, total sales reached $307.7 million, marking a 26% increase from the prior year. This marks a positive turnaround for the company, which had faced challenges in meeting revenue targets in previous periods.
A key indicator of future revenue, remaining performance obligations (RPO), soared by 106% to $852.4 million. The company's total backlog, which includes contracts with a higher degree of uncertainty, increased by 79% to $900.4 million. Planet Labs concluded the fiscal year with a strong liquidity position, holding $640.1 million in cash, cash equivalents, and short-term investments.
Path to Profitability and Forward Guidance
President and CFO Ashley Johnson noted that fiscal 2026 was the company's first full year of achieving profitability on both an adjusted EBITDA and free cash flow basis. Free cash flow for the year was positive $52.9 million, a substantial improvement from a loss in the preceding year.
Looking ahead, management provided guidance for fiscal 2027, projecting revenue in the range of $415 million to $440 million. For the upcoming first quarter, sales are expected to land between $87 million and $91 million. The adjusted EBITDA outlook is more conservative, forecasted between break-even and $10 million, as the company continues to invest heavily in growth. Capital expenditures are planned to be $80 million to $95 million for the year.
Strategic AI Partnership with Nvidia
A central theme of the earnings announcement was the company's accelerated focus on AI. Just prior to reporting results, Planet Labs unveiled an expanded collaboration with chipmaker Nvidia. The partnership aims to migrate the company's image-processing workflows to Nvidia's GPU platforms, dramatically accelerating the speed at which raw satellite data is converted into actionable analytics.
"AI could be transformative this year," stated Planet Labs CEO Will Marshall. Nvidia CEO Jensen Huang added, "intelligence must live wherever data is generated," underscoring the strategic importance of processing data in orbit. This move places Planet Labs within a growing competitive field, as Nvidia has also named other space-sector clients, including Axiom Space and Kepler Communications, utilizing its computing platforms.
Market Context and Risks
The demand for geospatial intelligence has intensified, particularly for monitoring conflict zones. Recently, Planet Labs adjusted access to certain imagery in the Middle East to enhance operational security for allied forces. Analysts note that AI is democratizing advanced geospatial analysis, a field traditionally dominated by military experts.
Despite the strong top-line results, some challenges persist. The company's fourth-quarter gross margin contracted to 54%, down from 62% a year ago. Under standard accounting rules, the net loss widened to $152.5 million, which included a non-cash revaluation loss of approximately $122.6 million related to warrant liabilities. The company also cautioned that not all backlog is guaranteed revenue, as some government contracts include early termination clauses.
The current guidance suggests that revenue growth will outpace profit expansion in the near term. The critical question for investors is whether the company's substantial investments in AI and satellite infrastructure will ultimately lead to improved margins, rather than merely driving higher sales.