BlackSky Technology Reports Mixed Quarterly Results Amid Strategic International Expansion

BlackSky Technology, Inc. reported third-quarter revenue of $19.6 million with adjusted EBITDA of negative $4.5 million and earnings per share of negative $0.44. These results fell below analyst expectations across key metrics, with revenue significantly trailing the consensus estimate of $28.6 million. The company's imagery and software analytical services revenue decreased to $15.8 million, representing an 8.6% year-over-year decline primarily attributed to reduced tasking from the National Reconnaissance Office's EnhancedView Contract and broader U.S. government budget uncertainties affecting near-term imagery orders.

Professional and engineering services revenue also declined to $3.8 million from $5.2 million in the second quarter of 2024, largely due to project timing and milestone-based revenue recognition patterns. The company's consolidated gross margins fell to 65.3% from 70.5% in the previous quarter, reflecting the challenging revenue environment. Despite these near-term headwinds, BlackSky demonstrated significant strategic progress by securing over $60 million in new contracts during the quarter, growing its total backlog to $322.7 million. Notably, approximately 91% of this backlog originates from international customers, signaling a strategic pivot toward global markets.

The company's contract wins included a multi-year agreement valued at over $30 million with a strategic international defense customer for Generation 3 tactical intelligence, surveillance, and reconnaissance services. Additional significant awards included a new multimillion-dollar Generation 3 imagery contract with a U.S. customer, a seven-figure Luno A delivery order for artificial intelligence-enabled change detection capabilities, and a space domain awareness expansion with HEO. These contracts reinforce BlackSky's growing role as a trusted intelligence partner in global defense and intelligence markets. Early access agreements for Generation 3 services continued to expand across international defense and intelligence customers, indicating strong market interest in the company's next-generation capabilities.

BlackSky remains on track to launch its third Generation 3 satellite by year-end, maintaining a steady deployment cadence toward a fully operational commercial constellation. The company expects to have a 12-satellite constellation operational by the end of 2025. Management highlighted rising demand for Generation 3 services, including high-cadence tasking and AI-enabled analytics as customers integrate these capabilities into secure, sovereign environments. The company maintained its full-year 2025 guidance, projecting revenue between $105 million and $130 million, adjusted EBITDA ranging from breakeven to $10 million, and capital expenditures of $60 million to $70 million. Management anticipates a stronger fourth quarter supported by international demand, Generation 3 availability, and backlog conversion.

Financially, BlackSky reported cash, restricted cash, and short-term investments totaling $147.6 million at quarter-end, reflecting net proceeds from an upsized convertible note offering and warrant exercises. The company reported $43.4 million of unbilled contract assets, with $36.0 million expected to be billed and collected over the next twelve months. Capital expenditures were $15.0 million for the quarter and $33.9 million year-to-date. Management cited total liquidity exceeding $200 million when including unbilled receivables and remaining vendor financing. Stonegate Capital Partners maintained its valuation analysis using discounted cash flow and enterprise value to EBITDA comparable analyses, resulting in valuation ranges of $24.60 to $30.40 and $23.26 to $28.18 respectively.