Why Planet Labs Is a Great Buy This Year

Core Insights - Planet Labs has signed a significant nine-figure multiyear deal with the Swedish Armed Forces, highlighting the importance of real-time Earth data for various applications including defense and climate monitoring [1][3] - The company's stock has seen substantial growth, increasing by 28% year-to-date and 468% over the past year, driven by strong quarterly earnings and the recent military contract [2][4] Financial Performance - In the third quarter of fiscal 2026, Planet Labs reported record revenue of $81 million, with a backlog of $734 million, reflecting a year-over-year growth of 216% [4] - The company has over 80% of its contracts as multiyear agreements, indicating a stable revenue growth trajectory for the coming years [4][6] - Planet Labs is improving its financials by slowing cash burn and achieving positive adjusted EBITDA, with potential for GAAP profitability in the near to intermediate term [7] Market Position and Strategy - Planet Labs operates on a subscription model, providing clients with access to satellite data, and has secured three major satellite services contracts in the past year [3] - The company’s strengths include multiyear government contracts and the ability to deliver real-time Earth imagery, along with AI-driven insights that are machine-learning-ready [6] Risks and Challenges - Geopolitical instability can both drive demand for satellite data and pose risks, as seen with negative stock responses during heightened tensions among allies [5] - The high costs associated with building, launching, and maintaining satellites present a financial risk, particularly if key contracts do not materialize [8] - The sales cycle for acquiring new enterprise-level customers is slow and challenging, which could impact future revenue growth [8]