Planet Labs (NYSE:PL) shares initially jumped 17% premarket Wednesday after the satellite imagery firm announced a multi-year, $230 million contract, its largest to date, with a long-standing Asia-Pacific commercial partner.
However, shares have since declined, trading down 4.05% at $5.239 as of 10:53 AM ET. Under the deal, Planet will build and deploy a new Pelican high-resolution satellite constellation, providing satellite capacity and operational services to its partner. The company also plans to use the expanded fleet to serve its global government and commercial customers.
Planet expects to recognize the $230 million in revenue over approximately seven years, covering both the satellite build and operational service period. This marks the company's third major space systems partnership in four years. The agreement is expected to be cash flow accretive by FY 2026, with a strengthened balance sheet heading into FY 2027 and beyond.
Despite the long-term optimism, investors appear to be reassessing the stock's near-term performance in real-time trading.
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