Earth imaging satellite company Planet Labs (NYSE: PL) reported Q3 CY2025 results exceeding the market’s revenue expectations, with sales up 32.6% year on year to $81.25 million. On top of that, next quarter’s revenue guidance ($78 million at the midpoint) was surprisingly good and 6.3% above what analysts were expecting. Its non-GAAP loss of $0 per share was significantly above analysts’ consensus estimates.

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“We delivered a strong third quarter, marked by continued momentum in the business, accelerated revenue growth, and excellent progress on our profitability goals. We’re seeing strong traction with our AI-enabled global monitoring solutions, demonstrated by our recent award under the NGA’s Luno B program and expansion with NATO. We’re announcing our acquisition of Bedrock Research, an AI-enabled solutions company, to accelerate our roadmap in support of this demand,” said Will Marshall, Planet’s Co-Founder, Chief Executive Officer and Chairperson.

Company Overview

Pioneering the concept of "agile aerospace" with hundreds of small but powerful satellites, Planet Labs (NYSE: PL) operates the world's largest fleet of Earth observation satellites, capturing daily images of our planet to provide insights on deforestation, agriculture, and climate change.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years.

With $282.5 million in revenue over the past 12 months, Planet Labs is a small player in the business services space, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and numerous distribution channels. On the bright side, it can grow faster because it has more room to expand.

As you can see below, Planet Labs’s 23.1% annualized revenue growth over the last five years was incredible. This is a great starting point for our analysis because it shows Planet Labs’s demand was higher than many business services companies.

We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. Planet Labs’s annualized revenue growth of 14.7% over the last two years is below its five-year trend, but we still think the results suggest healthy demand.

This quarter, Planet Labs reported wonderful year-on-year revenue growth of 32.6%, and its $81.25 million of revenue exceeded Wall Street’s estimates by 12.7%. Company management is currently guiding for a 26.7% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 15.6% over the next 12 months, similar to its two-year rate. This projection is eye-popping and suggests the market is baking in success for its products and services.

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Operating Margin

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

Planet Labs’s high expenses have contributed to an average operating margin of negative 64.4% over the last five years. Unprofitable business services companies require extra attention because they could get caught swimming naked when the tide goes out.

On the plus side, Planet Labs’s operating margin rose by 45.7 percentage points over the last five years, as its sales growth gave it operating leverage. Still, it will take much more for the company to reach long-term profitability.

In Q3, Planet Labs generated a negative 22.6% operating margin.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Although Planet Labs’s full-year earnings are still negative, it reduced its losses and improved its EPS by 36.2% annually over the last two years.

In Q3, Planet Labs reported adjusted EPS of $0, up from negative $0.02 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Planet Labs to improve its earnings losses. Analysts forecast its full-year EPS of negative $0.11 will advance to negative $0.09.

Key Takeaways from Planet Labs’s Q3 Results

It was good to see Planet Labs beat analysts’ EPS expectations this quarter. We were also excited its revenue outperformed Wall Street’s estimates by a wide margin. Looking ahead, guidance was above expectations across the board. Zooming out, we think this quarter was very strong. The stock traded up 17.8% to $15.32 immediately following the results.

Indeed, Planet Labs had a rock-solid quarterly earnings result, but is this stock a good investment here? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.