Planet Labs PBC (NYSE: PL) has disclosed a record revenue of $55.4 million for the third quarter of fiscal year 2024, marking an 11% increase from the previous year. The satellite imaging company also reported a non-GAAP gross margin of 51.5% and an adjusted EBITDA loss of $12 million, which was slightly better than their projected guidance. Growth was primarily fueled by the civil government and defense and intelligence sectors, with the company also citing a strong global pipeline of opportunities. Despite facing headwinds in the commercial market, Planet Labs is optimistic about future growth in this sector and remains committed to achieving adjusted EBITDA profitability by the fourth quarter of the next fiscal year.
Key Takeaways
- Record revenue of $55.4 million in Q3 FY2024, up 11% year-over-year.
- Non-GAAP gross margin at 51.5%; adjusted EBITDA loss of $12 million.
- Significant growth in civil government, defense, and intelligence markets.
- Launched 37 satellites and introduced new products including Forest Carbon.
- Anticipate Q4 FY2024 revenue between $56 million and $59 million.
- Full fiscal year revenue expected to be between $218 million and $221 million.
- Customer count at end-of-period stood at 976; net dollar retention rate at 104%.
Company Outlook
Planet Labs has positioned itself for future growth by focusing on large government contracts and enhancing sales execution. The company has identified the U.S. government sector as a key growth driver and is also working to expand its partner ecosystem in the commercial market. For the fourth quarter of fiscal 2024, revenue is projected to be between $56 million and $59 million, with an adjusted EBITDA loss forecasted between $12 million and $9 million. By the end of fiscal year 2024, revenue is expected to reach between $218 million and $221 million.
Bearish Highlights
The company's North American revenue has seen a decrease due to the discontinuation of a legacy contract. Additionally, the commercial market has been experiencing macroeconomic headwinds, and the average revenue per customer may have been impacted by the addition of smaller customers through the Sentinel Hub platform.
Bullish Highlights
Planet Labs reported strength in the civil government and defense and intelligence markets, with revenue growth in EMEA, Asia Pacific, and Latin America. The company's agile aerospace approach and ongoing initiatives, such as the early access program for the hyperspectral mission and partnerships with ViaSat (NASDAQ:VSAT) and Telesat, are expected to support future growth.
Misses
While the company surpassed its guidance for adjusted EBITDA loss, it still posted a $12 million loss for the quarter. The accelerated depreciation of satellites has also impacted the non-GAAP gross margin.
QA Highlights
Executives discussed the positive impact of recent sales changes, including stabilized metrics and shorter sales cycles. The validation phase for the Pelican satellite is ongoing, and decisions on fleet expansion will be made in the coming months. The company's involvement with Climate Trace for emissions measurement was also highlighted as a critical initiative.
In summary, Planet Labs is navigating through a period of strategic growth, leveraging government contracts and product innovation to offset challenges in the commercial sector. With disciplined spending and a clear path to profitability, the company is poised to capitalize on the increasing demand for security, sustainability, and digitalization solutions.
InvestingPro Insights
As Planet Labs PBC (NYSE: PL) demonstrates resilience amidst commercial market headwinds, real-time data from InvestingPro provides a deeper look into the company's financial health and market performance. With a market capitalization of $734.15 million, the company's valuation reflects its standing in the competitive satellite imaging landscape.
InvestingPro Tips highlight that Planet Labs holds more cash than debt on its balance sheet, which is a reassuring sign for investors concerned about the company's financial stability. Additionally, the firm's impressive gross profit margins, which stand at 51.87% for the last twelve months as of Q2 2024, underscore the company's ability to maintain profitability in its core operations despite its adjusted EBITDA loss.
However, it's not all smooth sailing for Planet Labs, as analysts have revised their earnings downwards for the upcoming period, signaling potential concerns about the company's future profitability. This caution is echoed by the stock's performance, with a significant price fall of 51.96% over the last year.
InvestingPro Data further reveals a revenue growth of 32.85% for the last twelve months as of Q2 2024, indicating a strong top-line expansion, which aligns with the company's reported revenue increase in the recent quarter. Despite this, the P/E ratio stands at -4.78, reflecting skepticism about the company's earnings prospects.
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