Planet Labs stock falls 15% after disappointing earnings

Planet Labs' stock faced a significant drop on Friday. Shares fell by 15% after the company announced disappointing earnings results for the fourth quarter of fiscal 2025. Analysts had expected a loss of $0.02 per share and $61.9 million in sales. However, Planet Labs reported a larger loss of $0.08 per share with sales of only $61.6 million. The company’s sales growth was just 5% compared to the same quarter last year. The situation worsens with the clarification that the projected loss was based on adjusted figures. When following standard accounting rules, the loss was actually $0.12 per share. A part of this loss came from changes in the value of warrant liabilities. For the entire fiscal year, Planet Labs reported an 11% increase in sales, totaling $244.4 million, but also an overall loss of $0.42 per share. Despite these negative results, there was some good news. The company's sales grew, and the gross profit margin improved to 57% for the year, reaching 62% in the fourth quarter. Additionally, Planet Labs won a subcontract on a $95 million deal with the California Air Resources Board. However, it did not disclose how much of that amount would actually benefit the company. Looking ahead, management warned that expected revenues for the first quarter of fiscal 2026 would be only $62 million, which is lower than analyst forecasts. Full-year revenue estimates for fiscal 2026 are between $260 million and $280 million, slightly below the expected $272 million. The lack of earnings guidance further raises concerns about the company's financial outlook. Given the consistent bad news, many experts suggest that Planet Labs may be a sell.