Planet Labs (NYSE: PL) stock jumped 10% to $20.10 in early Friday trading after the Earth-observation company delivered a record second-quarter revenue beat.
The reversal is striking because PL shares had fallen 8% to $18.35 on Thursday ahead of the earnings report, extending a pre-announcement selloff.
Planet Labs stock had gained 185% over the prior year through Thursday’s close, meaning the pre-earnings dip emerged from a substantial running gain.
The company reported record Q2 FY2027 revenue of $116.1 million, up 58% year over year and well above the $104.22 million consensus estimate analysts had projected.
Planet Labs also delivered adjusted earnings of $0.02 per share against an expected loss of $0.02 per share, marking its fifth consecutive EPS beat.
The company cleared the Rule of 40, which combines revenue growth and adjusted EBITDA margin, for a fourth consecutive quarter, reinforcing its improving financial profile.
Defense and intelligence revenue grew more than 90% year over year, while EMEA revenue rose over 130%, reflecting the accelerating ramp of sovereign satellite-services contracts globally.
Non-GAAP gross margin came in at 59% and adjusted EBITDA reached $13.9 million, more than double the figure reported in the prior-year period.
New contract wins included an $8 million award from the National Geospatial-Intelligence Agency for a Global Monitoring Service and a German government tender worth up to 25 million euros over five years.
Planet Labs also announced a national program with the Rwanda Space Agency, and its recurring annual contract value represented 98% of the end-of-period book of business.
The first Pelican satellite was handed over to the Swedish Armed Forces during the quarter, though that event shifted revenue recognition into Q2 rather than Q3.
That timing shift is central to the softer forward guidance, with Planet Labs projecting Q3 revenue of $101 million to $105 million against a $114.49 million consensus expectation.
Planet Labs raised the lower end of its fiscal 2027 revenue outlook to a range of $430 million to $441 million and forecast adjusted EBITDA profit of $3 million to $10 million for the full year.
CEO Will Marshall addressed the sovereign pipeline directly, stating, “I’ve never seen it as big as it is now,” with the total exceeding $4 billion and more than $1 billion classified as near-term.
Sovereign, dedicated-capacity contracts tend to be longer-dated and margin-attached, which gives the Rule of 40 result added weight when considered alongside the pipeline commentary.
The risk, however, is that a pipeline must convert into signed backlog before it becomes recognized revenue, and Planet Labs’ conversion rate on larger sovereign deals is still being established.
Sector peers are trading with mixed signals heading into the session, with Rocket Lab (NASDAQ: RKLB) having reported Q2 2026 revenue of $234.07 million and a backlog of around $2.36 billion.
AST SpaceMobile (NASDAQ: ASTS) posted $31.52 million in Q2 2026 revenue with a $1.3 billion backlog and reaffirmed 2026 revenue guidance of $150 million to $200 million as it builds out its Bluebird constellation.
The Procure Space ETF (NASDAQ: UFO), which counts Planet Labs among its largest disclosed equity holdings, offers a diversified proxy for how the broader space sector is trading around the report.
The critical follow-through question is whether backlog conversion in the back half of fiscal 2027 validates the raised full-year midpoint and keeps Planet Labs inside its adjusted EBITDA profit range.
