0001193125-25-314295
SEC filingRevenue growth of 33% QoQ driven by Defense & Intelligence, offset by warrant liability fair value change and increased satellite build costs.
For the three months ended October 31, 2025, Planet Labs PBC reported revenue of $81.3 million, a 33% increase compared to $61.3 million in the same period last year. The growth was primarily driven by a $12.1 million contribution from new customer acquisitions and a $7.9 million increase from existing customer contracts, with the Defense and Intelligence vertical being the primary catalyst. Gross profit rose 24% to $46.6 million, but gross margin contracted to 57% from 61% in the prior year, reflecting a 46% increase in cost of revenue. The cost increase was largely due to a $4.9 million rise in solution partner and subcontractor costs and a $3.6 million increase in employee-related costs tied to satellite services contract performance obligations.
Operating expenses grew 8% to $64.9 million, driven by increases in research and development (up 8%) and sales and marketing (up 12%). R&D expense rose due to a $3.2 million decrease in funding recognized for research arrangements and a $0.9 million increase in spacecraft hardware costs, partially offset by a $1.9 million decrease in launch provider costs. Sales and marketing increased primarily from a $1.8 million rise in employee-related costs. General and administrative expenses increased modestly by 4% to $18.8 million.
Loss from operations improved to $18.3 million from $22.6 million in the prior year, a 19% improvement. However, net loss widened significantly to $59.2 million from $20.1 million, driven by a $43.5 million unfavorable change in the fair value of warrant liabilities (compared to a $0.2 million gain in the prior year). Adjusted EBITDA turned positive at $5.6 million, compared to a loss of $0.2 million in Q3 FY25, reflecting the underlying operational improvement.
The MD&A does not provide a formal segment breakdown, but it clearly identifies the Defense and Intelligence vertical as the primary driver of both revenue growth and the improvement in Net Dollar Retention Rate (109% for the nine months ended October 31, 2025, up from 104%). The company's strategy of focusing on larger customers is reflected in the decline in EoP Customer Count to 910 from 1,015, while Percent of Recurring ACV remained stable at 97%. The two large commercial satellite services agreements signed in 2025 (a $230 million agreement with SKY Perfect JSAT and a €240 million agreement funded by the German government) are expected to significantly contribute to future revenue and backlog, which grew to $734.5 million as of October 31, 2025.
Management expects capital expenditures and working capital requirements to continue increasing as they invest in next-generation Pelican high-resolution satellites and medium-resolution satellites. The company anticipates further economies of scale on satellite and infrastructure costs as subscription revenue grows. The shift towards integrated downstream solutions and the innovative satellite services model are expected to align offerings with market demand and enhance value capture. No specific forward guidance on revenue or margins was provided in this MD&A section.
Operating cash flow (CFO) of $113.7 million for the nine months ended October 31, 2025 represents a significant turnaround from $(8.1) million in the prior-year period, despite a net loss of $(94.4) million (versus $(88.0) million). The improvement was driven by large non-cash adjustments: stock-based compensation ($39.5M), depreciation and amortization ($31.6M), and a $38.8M change in fair value of warrant liabilities. A massive $96.6M increase in deferred revenue was the primary working capital tailwind, while accounts payable and accrued liabilities declined by $10.3M.
Capital expenditures (capex) totaled $58.5 million, comprising $55.1M in property and equipment and $3.4M in capitalized software, up from $36.8M in the prior period. This reflects continued investment in satellite infrastructure. Free cash flow (not explicitly stated) would be CFO minus capex, or approximately $55.2 million, but the filing does not report it directly.
Financing activities generated $388.1 million, dominated by $448.8 million in net proceeds from convertible notes, offset by $39.6 million in capped call purchases and $28.3 million in tax withholding payments for equity awards. No share repurchases or dividends were reported.
Anomalies: The $96.6M deferred revenue surge is a notable working capital swing, likely tied to multi-year customer contracts. The $38.8M warrant liability fair value change is a non-cash item that significantly distorts net income but does not affect cash generation.