In a significant development for the satellite sector, Planet, a leader in satellite imagery and data analysis, has entered into a monumental $230 million contract to enhance its next-generation Pelican satellites. Announced on a Wednesday, this agreement signifies a pivotal moment for the company, which is now poised to further solidify its role within the satellite services arena. Such contracts are rare in the aerospace industry, making this announcement particularly compelling.
The CEO of Planet, Will Marshall, characterized this agreement as both a “momentum-building event” and the largest deal in the company’s history. The contract is specifically designated for a customer in the Asia-Pacific region, which Planet has chosen not to name immediately, although they have appeared as a trusted partner over the years. This strategic partnership not only enables the construction of Pelican satellites but also ensures five years of operational service that is tailored to the specified area of interest for the unnamed customer.
The design of this contract allows the customer dedicated access to the satellite data they need while Planet retains the rights to license that data for global use. This duality illustrates a growing trend in satellite operations where companies can maximize revenue streams while providing bespoke services to long-term partners. An essential component of the deal is the timeframe it encompasses: a couple of years for construction followed by five years of operational activity. This strategic timeline indicates a long-term vision for both entities involved.
Importantly, the contract does not alter Planet’s previous financial forecast for the fourth quarter of fiscal 2025; however, it anticipates positive contributions to its financial standing by fiscal 2026. The payments associated with this agreement will be accounted for over an extended period of about seven years, hinting at a steady influx of income that could positively influence Planet’s earnings in the coming years.
Planet’s ambitious expansion plan includes the deployment of up to 32 Pelican satellites, a significant upgrade from its existing SkySat fleet, which was acquired from Google in 2017. The newly launched Pelican-2 will feature state-of-the-art technology, including the Nvidia Jetson edge AI platform, signifying a shift towards advanced data processing capabilities among satellite offerings. As such, the new generation of satellites will not only enhance data accuracy and agility but would also enable the company to scale operations significantly faster than previously anticipated.
On the day of the announcement, shares of Planet surged by as much as 14% during trading, only to stabilize by the day’s end near $5.46 per share. This fluctuation underscores the volatile nature of the stock market, particularly for companies involved in emerging sectors like satellite technology. Following a period of decline exacerbated by missed revenue projections and operational cuts, the current year has seen a resurgence in Planet’s stock performance, doubling in value over the past 12 months.
This shift in stock activity reflects investor sentiment surrounding the potential impacts of such contracts in boosting the company’s revenue and market position. As Planet continues its innovations in satellite technology and serves a broader customer base, its fiscal outlook appears to be on an upward trajectory.
The Pelican contract also marks Planet’s official entry into the satellite services market, a sector poised for growth as demand for satellite imagery and data analysis rises. Marshall revealed that many of the customers who are entering into contracts with Planet are long-term relationships cultivated over years of successful collaboration, further reinforcing customer trust in Planet’s capabilities to deliver high-quality data and operational excellence.
Overall, Planet’s recent developments reflect a strategic consolidation of its resources and innovations towards enhancing satellite services. With the satellite services market ripe for exploration, the company is strategically positioned as it embarks on this new journey. The next few years will be critical for Planet as it transitions into this new era, navigating customer expectations and continuing to leverage its advancements in technology.