Planet Labs Hits Profitability Milestone Driven by 50% Defense Revenue Surge

Planet Labs (PL) has reached a critical inflection point in the Earth observation (EO) market, reporting its first-ever full year of adjusted EBITDA and positive free cash flow for fiscal 2026. This transition from a high-growth, cash-burning startup to a self-sustaining enterprise marks a significant milestone for the Space-as-a-Service (SaaS) sector. The company's fourth-quarter revenue reached $86.8 million, a 41% year-over-year increase, bringing total annual revenue to $307.7 million. This performance was underpinned by a decisive shift in market focus, as the company increasingly leans into the defense and intelligence (D&I) sector to offset stagnation in its commercial and civil government business lines.

The primary engine of this growth is the defense and intelligence segment, which surged by more than 50% year over year. In an era of heightened geopolitical instability, the demand for persistent, high-resolution satellite imagery has moved from a luxury to a strategic necessity for global security agencies. Planet’s ability to provide daily global scans has made it an indispensable partner for defense departments, a trend reflected in the company's massive $900 million backlog. This backlog, which grew 79% over the previous year, provides a high degree of revenue visibility, with 67% of the total expected to be realized within the next 24 months. The growth in Remaining Performance Obligations (RPOs) to $852.4 million—a 106% increase—further underscores the long-term nature of these high-value government commitments.

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The company's fourth-quarter revenue reached $86.8 million, a 41% year-over-year increase, bringing total annual revenue to $307.7 million.

Strategically, CEO Will Marshall and CFO Ashley Johnson have overseen a deliberate pruning of the company’s customer base. While the total customer count dropped to 897, this was framed as a transition toward higher-value, large-scale contracts and a shift to self-serve automation for smaller commercial clients. This move is reflected in the Net Dollar Retention (NDR) rate of 116%, which rises to 118% when accounting for winbacks. By focusing on the 'big fish' in the defense sector, Planet is improving its operational efficiency, even as it navigates a slight compression in gross margins. Non-GAAP gross margin for the fourth quarter fell to 57% from 65% a year prior, a dip attributed to heavy investments in satellite services and a shift in the contract mix toward hardware-heavy defense agreements.