Planet Labs' Financial Analysis: Satellite and Mission Operations Expenditure
A deep dive into Planet Labs' financial statements reveals significant investments in satellite operations, with annual spending between $70-75 million on direct satellite operations.
Company Overview and Business Model
Planet Labs PBC, a leading Earth imaging company, has established a significant presence in the satellite industry with its constellation of miniature satellites. This report examines their financial statements to determine how much the company spends on satellite and mission operations.
Planet Labs designs and manufactures miniature satellites called "Doves" that continuously scan Earth to provide up-to-date imagery. The company also operates "RapidEye" and "SkySat" satellite constellations, with a growing focus on their next-generation "Pelican" satellites. With more than 200 satellites in orbit, Planet Labs aims to image the entirety of the Earth daily to monitor changes and pinpoint trends.
The company's goal is to provide frequent, high-quality Earth imagery to various customers, making planetary information more accessible. Their satellites gather data relevant to climate monitoring, crop yield prediction, urban planning, and disaster response. This extensive satellite network represents a significant operational investment for the company.
Recent Business Developments
In January 2025, Planet Labs secured a $230 million contract for its Pelican satellites, marking its largest deal to date. CEO Will Marshall described this as "both our biggest deal ever and it's a significant step for us into this satellite services business". The contract involves building Pelican satellites for a company in the Asia-Pacific region over a couple of years, followed by five years of operational services.
Financial Performance Analysis
Revenue and Profitability Trends
Planet Labs has shown consistent revenue growth over the past several years, with annual revenue reaching $244.4 million in fiscal year 2025, representing an 11% year-over-year increase. Despite this growth, the company continues to operate at a loss, with a net income of -$123.2 million in FY 2025.
The company's Q1 2025 performance fell short of analyst expectations, with revenue of $61.55 million (slightly below the forecasted $62.2 million) and earnings per share of -$0.08 (missing the anticipated -$0.03). Following this earnings report, Planet Labs' stock fell 9.67% in after-hours trading.
Cost Structure Analysis
To understand Planet Labs' expenditure on satellite operations, we need to examine the company's cost structure. While the financial statements don't explicitly itemize "satellite operations" costs, we can analyze relevant expense categories to make informed assessments.
Cost of Revenue
The Cost of Revenue line item likely encompasses the majority of Planet Labs' satellite operations expenses, as it represents the direct costs associated with providing their imaging services. These costs would include:
- Ground station operations
- Satellite maintenance and monitoring
- Data processing and distribution
- Technical personnel managing satellite operations
Planet Labs' Cost of Revenue (Past Five Fiscal Years)
- FY 2021: $87.4 million
- FY 2022: $83.0 million
- FY 2023: $97.2 million
- FY 2024: $107.7 million
- FY 2025: $104.6 million
The Cost of Revenue has generally increased over time, aligning with the company's expanding satellite constellation and service offerings. The slight decrease in FY 2025 may represent improving operational efficiencies in managing their satellite network.
Conclusion
Based on the available financial data, Planet Labs likely spends between $70-75 million annually on direct satellite operations as part of their Cost of Revenue. This represents approximately 30% of their annual revenue, which is substantial but not unusual for a company with a business model centered around satellite imagery and data services.
The company has demonstrated improving operational efficiency over time, with expanding gross margins and a recent reduction in Cost of Revenue despite growing service delivery. However, comprehensive profitability remains a challenge as the company continues to invest heavily in R&D and sales/marketing to grow its business.
The recent Pelican satellite contract and technology investments suggest Planet Labs is positioning itself for future growth and operational improvements, potentially leading to better cost efficiency in satellite operations over time. The integration of advanced technologies like Nvidia's AI platform indicates a strategic focus on enhancing satellite capabilities while potentially reducing long-term operational costs through improved automation and data processing efficiency.