Planet Labs sees an increase in demand for data services powered by artificial intelligence

Artificial intelligence (AI) is supporting the computing and technology sector, but it is also helping many other sectors involved in collecting, acquiring and delivering data in real time. PBC by Planet Labs NYSE:PL, started by NASA scientists in 2010, operates a network of more than 200 satellites that provides round-the-clock planetary data for many industries. It is a leader in the Earth observation (EO) segment and considers itself the “Bloomberg Terminal” for Earth data.

The data is used for the weather, agriculture, energy, sustainability, insurance, finance, technology and defense industries. AI requires oceans of data to train models, and this insatiable demand for data has led to increased revenue for Planet Labs.

Earth observation as an industry

The EO segment is a growing industry and Planet Labs is emerging as a leader. It has the largest EO satellite network and the largest EO data archive. Tesla Inc. NASDAQ:TSLA Starlink, owned by the CEO, has a larger network, but is tailored for communications purposes rather than EO. Applications for EO continue to grow, including GPS, autonomous vehicle mapping, disaster emergency response, defense analytics, shipping route optimization, fisheries management, agricultural data, and environmental monitoring and conservation.

Revolutionary CubeSats

Planet Labs has launched over 550 miniaturized satellites called CubeSats. CubeSats are designed in multiples of units. One unit is 10 centimeters or 3.9 inches on each side. They are built for specific purposes in multiples of unit sizes ranging from one unit to six units or more. They carry a multitude of communications equipment, sensors and electronics specific to its mission. CubeSats are low-cost and provide a low-cost, streamlined way to make space more accessible.

Daily descending triangle

The PL daily candlestick chart illustrates a descending triangle pattern. The descending (falling) trend line was formed during the failed attempt to fill the gap at $2.93 on September 12, 2023. The stock fell to a flat low of $2.01, forming the lower trend line flat. Initially, PL attempted to break out of the descending trend line to peak at $2.67 on March 28, 2024, but fell back into the triangle by slipping below the descending trend line at $2.25 to test the trend line again flat bottom for $1.99. The daily relative strength index (RSI) has fallen below the 40 band. Pullback supports are at $1.99, $1.64, $1.41 and $1.16

Orbiting in the red

Planet Labs reported fiscal fourth-quarter 2024 losses of 11 cents per share, missing consensus estimates by 5 cents. Revenue grew 11.1% year-over-year to $58.85 million, slightly beating the consensus estimate of $58.19 million. Customer numbers increased 15% year-on-year to 1,018 customers. The government sector had high demand.

Tax revenue for the full fiscal year 2024 increased 15% year-over-year to $220.7 million. The annual recurring contract value (ACV) percentage was 93% for the fourth quarter. Planet Labs’ fourth-quarter gross margin was 55% and full-year gross margin was 51%, compared to 49% a year earlier. Planet Labs ended the year with $298.9 million in cash.

Key contracts in Q4 2024

The quarter hosted numerous major deals and contracts. Planet Lab has been awarded a seven-figure contract by Naval Information Warfare Center (NIWC) Pacific for ship tracking and tracking services over the Pacific Ocean. NIWC Pacific will integrate Planet Labs’ data and AI capabilities into its SeaVision platform to strengthen maritime domain awareness.

Carbon Mapper has signed an eight-figure, multi-year contract with Planet Labs to provide hyperspectral baseline imagery through 2030. The contract is an extension covering the period from 2026 to 2030 of its current contract.

Planet Labs and Google have partnered to provide PlanetScope satellite data on the Google Cloud Marketplace. This allows Google Cloud customers to use Planet data to analyze and derive insights at scale.

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Planet Labs released first-quarter fiscal 2025 guidance for revenues of $58 million to $61 million, representing year-over-year growth of 13%. Non-GAAP growth margins are expected to be between 50% and 52%. The adjusted EBITDA loss will range from $11 million to $9 million in the quarter, as expected capital expenditures will be between $14 million and $17 million.

CEO Insights

Will Marshall, CEO of Planet Labs, said: “Planet had a solid fourth quarter to close out the year. We saw strong demand in the government sector and a shift towards selling solutions alongside our data, enabled by revolution taking place in the field of artificial intelligence. We are prioritizing investments behind these trends to seize the opportunity.”

Marshall concluded, “Additionally, our next-generation satellite systems are taking flight. The Pelican technology demo satellite is performing well in orbit, and the first Tanager satellite is scheduled to launch later this year.”

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