On 4 June 2025 Planet reported Q1 FY 2026 revenue of $66.3 million, up 10% year over year, and, crucially, $8 million in free cash flow versus an $8.4 million burn a year ago.
GAAP EPS improved to ‑$0.04, while non‑GAAP broke even. That single line item flipped every discounted‑cash‑flow model on its head because if Planet can keep the coffers filling, the perpetual “show‑me” discount on its shares shrinks fast.
Free cash flow wasn’t the only milestone. Backlog exploded 140% to $527 million and remaining performance obligations hit $452 million, roughly 8x the company’s current quarterly run rate.
Backlog is contractual, not aspirational, so the Street now has line‑of‑sight on Planet’s top line two‑plus years out.
A $230 Million Satellite‑as‑a‑Service Deal Nobody’s Modeling
Most investors still think of Planet as a data subscription business but in January management signed a $230 million seven‑year contract to build and operate satellites for an Asia‑Pacific ally, its largest deal ever and its first real foray into “satellite‑as‑a‑service”.
Spread over seven years that’s an incremental $33 million a year, already half a fiscal quarter’s revenue, arriving with margins higher than its legacy imagery business because the customer funds the hardware.
Government Demand Is Eclipsing Commercial Headwinds
Defense and intelligence revenue grew by more than 20% year over year in Q1, and management disclosed that contracts worth $100 k+ now comprise 82% of ACV. The commercial side (ag‑tech, insurance, ESG) remains lumpy, but governments are suddenly Planet’s biggest sales force.
Case in point, the European Space Agency Copernicus mission, which is a multi‑year agreement makes Planet one of only a handful of commercial providers feeding data into Europe’s flagship earth‑observation program.
NASA CSDA mushrooming opened PlanetScope imagery to 280,000 federal researchers, an overlooked funnel for future paid upgrades.
With President‑elect Trump II signaling heavier use of commercial space assets, analysts like Wedbush’s Dan Ives bumped price targets to $7 the morning earnings dropped.
AI Products That Monetize Pixels, Not Just Pictures
Investors obsess over Planet’s 200‑satellite “Dove” constellation but miss the bigger lever, which is turning imagery into answers.
In September Planet launched its Forest Carbon Monitoring platform, delivering 3‑meter global forest carbon measurements every quarter, a dataset bespoke for regulators enforcing the EU’s 2026 Carbon Border Adjustment Mechanism.
The product targets compliance budgets, not discretionary SaaS line items, and can be upsold to the 919‑strong customer base at near‑100% gross margins.
Retention You’d Expect From A DoD
Prime SaaS investors live by net‑dollar‑retention, and Planet’s came in at 103%, higher than Snowflake’s last print, despite pruning smaller customers.
Management also disclosed that 97% of ACV is recurring, and the average contract term is about two years, shorter than a defense prime but long enough to smooth renewals.
Dilution and the Insider “Tell” Yes, share count creeped 4% higher year over year to roughly 303 million. But a nugget buried in SEC filings shows CFO Ashley Johnson acquired 94,500 shares in March, while selling only enough to cover taxes). Insiders rarely buy after a triple‑digit run unless they see further upside.
Valuation Is Cheap Or A Value Trap?
At $5.40 Planet’s enterprise value is ~$1.5 billion after backing out $226 million in net cash.
Against midpoint FY 2026 revenue guidance of $272 million that’s a 5.5× forward EV/Sales multiple, or roughly half of Maxar’s 12× take‑private valuation and below Snowflake’s 16× SaaS premium.
If Planet merely sustains its new profitability and grows revenue 25%‑plus, not unrealistic given management’s hinted at “meaningful acceleration”, the multiple can expand while earnings kick in.
3 Scenarios For 2028 And Implied Share Prices
| Scenario | FY 2028 Revenue | FCF Margin | EV/FCF | Implied EV | Implied Price* |
|---|---|---|---|---|---|
| Bear – Lumpy Gov’t Only | $400 M | 10% | 15× | $600 M | $2.00 |
| Base – Backlog Converts, AI Upsell | $600 M | 18% | 18× | $1.9 B | $6.50 |
| Bull – Satellite‑as‑a‑Service Scales | $800 M | 22% | 20× | $3.5 B | $12‑16 |
*assumes 300 M diluted shares by FY 2028. (base case equates to roughly a 20% CAGR from today’s price.)
Key Risk Is The Market Still Prices In Contract Churn
Two‑year terms mean a single failed renewal spree could knock double‑digit points off growth.
Launch bottlenecks are another point of worry given that Rocket Lab carries most of Planet’s upcoming Pelican launches so any slip pushes revenue recognition right.
Dilution needs to be eyed carefully too because stock‑based comp ran $24 million last quarter; if profitability stalls, management may revert to aggressive issuance.
Radar‑first rivals like Capella can image through clouds while Planet still relies on optical for most data.
Where Will The Stock Go?
Planet just executed the “show‑me” quarter skeptics said was impossible: free cash flow + positive EBITDA + order backlog crossing half a billion dollars.
If management strings together two more similar prints, PL graduates from speculative satellite story to bona fide infrastructure play whose imagery underpins climate regulation, food‑security models, and defense intelligence. In that case the base‑case $6.50 target looks pedestrian.
Conversely, if the company misses Q2 guidance or burns cash while expanding Pelican, shares are likely to revisit the high‑twos.
That binary profile explains why short interest still hovers near 11 million shares, but it also sets up an old‑fashioned squeeze if execution holds.
Now What?
Planet is no longer the scrappy startup selling pretty space photos. It’s morphing into a cash‑generating data utility with government‑grade stickiness and a hidden second business building satellites for allies who can’t. Today’s valuation prices none of that optionality.
For investors comfortable with execution and dilution risk, the stock offers an unusually asymmetric bet of limited downside thanks to net cash and backlog, and triple‑digit upside if management simply does what it just proved it can do again.
Just remember that space is hard, and so is timing the market. But when a company images the entire Earth every day, sometimes the best view is from five hundred kilometers up.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.
