Planet Labs Q2 FY2027: Record $116M Revenue Masked by Backlog Contraction and $120M ATM Equity Dilution

Planet Labs Q2 FY2027: Record $116M Revenue Masked by Backlog Contraction and $120M ATM Equity Dilution

Planet Labs PBC (PL) reported its financial results for the second quarter of fiscal year 2027 (ended July 31, 2026) on September 3, 2026. While the headline numbers showed stellar top-line growth and record operating cash flow, the underlying details reveal a sequential deceleration in bookings and unexpected equity dilution.

Record Revenue and Operating Leverage

Planet Labs delivered an impressive headline print, demonstrating the potential operating leverage of its satellite data-as-a-service model:

• Record Revenue: Q2 FY2027 revenue reached a record $116.1 million, representing 58.1% year-over-year growth and a substantial beat against analyst expectations of $-0.18 EPS (reporting GAAP EPS of $-0.03).
• Adjusted EBITDA: Non-GAAP Adjusted EBITDA profit rose to a record $13.9 million, up from $6.4 million in Q2 FY2026.
• Cash Flow Generation: The company generated $68.4 million in year-to-date operating cash flow, resulting in year-to-date adjusted free cash flow of $28.8 million.

The Underbelly: Backlog and RPO Contraction

Despite the record quarterly revenue, forward-looking indicators suggest that Planet Labs is depleting its contract pipeline faster than it can book new deals:

• Backlog Contraction: Planet Labs' backlog fell sequentially from $906.1 million in Q1 FY2027 to $814.9 million in Q2 FY2027—a sequential burn-off of over $91 million.
• RPO Contraction: Remaining Performance Obligations (RPOs) similarly declined from $816 million to $753.1 million sequentially.
• Soft Guidance: Management guided Q3 FY2027 revenue to $101–$105 million (an 11% sequential drop from Q2) and projected a return to an Adjusted EBITDA loss of ($6) to ($1) million, indicating that the Q2 beat was driven by uneven, non-recurring hardware deliveries or milestone recognitions.

Unexpected $120M ATM Equity Dilution

The most controversial development of the quarter was Planet's decision to aggressively tap its newly established $1.5 billion At-The-Market (ATM) equity program:

• Despite ending Q1 with over $731 million in cash and generating positive operating cash flow, Planet Labs raised $120 million through stock sales under its ATM program during Q2.
• The company sold approximately 3,782,460 Class A shares at an average net sale price of $31.95 per share after expenses.
• While this bolstered Planet's ending balance sheet to $865.4 million in cash, cash equivalents, and short-term investments, the unexpected dilution has weighed heavily on shareholder sentiment.
• Planet Labs shares have plunged 41.0% over the past three months, closing at $18.12 as of September 7, 2026—trading 64.7% below their 52-week high.¹