Investors cheered record revenue in the latest quarterly results from Planet Labs (PL), a satellite imagery company, but a closer reveals the results weren’t as good as advertised. The company beat sales estimates by $2.5 million. Further scrutiny reveals almost all of the beat came as a result of an out of period correction.

Instead of a footnote calling attention to the adjustment on the Income Statement, Planet Labs inserted a new sentence in its “Basis of Presentation” section that quantified the unexplained adjustment:

“Revenue for the three months ended October 31, 2022 includes an out of period adjustment of $2.1 million.”

Without the adjustment, Plant Labs grew sales 50.5%, approximately 620 bps slower than headlines suggest.