Why Planet Labs Stock Plunged 21% Today

Another day, another poor performance from Planet Labs (PL -21.98%). Last night, the space stock that operates the world’s largest constellation of Earth-observing satellites announced financial results for the second fiscal quarter of 2025 — and the news wasn’t great.

Planet Labs said it lost $0.06 per share in the quarter on sales of $61.1 million. And sure enough, those results were basically in line with what analysts predicted — $0.06 in losses on $61.8 million in sales. But investors are disappointed anyway, and Planet Labs shares are selling off 21% by 10:30 ET this morning.

Planet Labs Q2 earnings

Planet Labs’ T2 numbers weren’t horrible, exactly. Sales rose less than Wall Street wanted, but rose 14 percent year over year in the period ended July 31. The generally accepted accounting principles (GAAP) gross profit margin increased to 53% and the non-GAAP margin increased to 58%. The problem is that all of these numbers are far below what Planet Labs was promising when it tried to sell itself to investors as a special purpose acquisition company (SPAC) IPO: sales growth averaging 44% per year and non-GAAP gross margin . a gigantic 74%.

Simply put, Planet Labs doesn’t measure up almost which he originally promised in 2021.

Is Planet Labs Stock a Sell?

But they try. As CEO Will Marshall pointed out in the report, its shift to focus on defense and intelligence sales helped grow revenue in that part of the business by more than 30% year-over-year — still much less of 44%, but at least better than 14%.

Similarly, management is promising non-GAAP gross margin growth to at least 59% next quarter and perhaps as high as 61%. (Hey, it’s not 74%, but it’s progress.) And Planet Labs says revenue will continue to grow sequentially, to somewhere between $61 million and $64 million in fiscal Q3.

The problem is that analysts were hoping that Planet Labs could hit at least $64.2 million, which is just above the high end of the company’s sales guidance. And so, at the end of the day, investors look at the guidance and see no improvement, but rather Planet Labs simply missing the mark…again.

No wonder investors are feeling glum.