BlackSky Technology Inc. Q1 FY2025 earnings call

• New Gen three satellite is performing exceptionally well, completed formal tests and delivering evaluation imagery. - Awarded over $130 million in new contracts and renewal agreements, backlog grew 50% year-over-year to $366 million. - Delivered 22% year-over-year revenue growth. - Second Gen three satellite on track to launch in Q2, with eight Gen three satellites on orbit by early 2026. - AI-derived information from Gen three imagery is generating excitement, with ability to extract actionable insights in real-time. - Software-first strategy leveraging Spectra platform provides competitive advantage.

Total revenue for the first quarter of 2025 was $29.5 million, an increase of 22% over the prior year quarter. Adjusted imagery and analytics cost of sales for the first quarter was $3.8 million. Adjusted EBITDA for the first quarter was a loss of $600,000 compared to an adjusted EBITDA of $1.4 million in the prior year quarter. The company ended the first quarter with $77 million of cash, restricted cash, and short-term investments, with total liquidity position over $136 million.

• Maintaining full-year 2025 guidance: revenue between $125 and $142 million. - Adjusted EBITDA between $14 million and $22 million. - Capital expenditures between $60 million to $70 million.

• Geopolitical and economic uncertainties may impact timing of contract awards and budget allocations, affecting business.

Q: How are geopolitics and macro uncertainty impacting discussions with international customers?

A: Continued strong demand worldwide, pipeline growing, strong interest in space-based intelligence solutions despite geopolitical dynamics.

Q: How many customers are interested in AI, and role of Spectra?

A: Customers recognizing need for AI to keep up with data volume and speed, Spectra seen as growth driver.

Q: Timeline to recognize backlog and proportion from new vs existing customers?

A: Near term revenue from existing programs, backlog includes large international deal and new customers.

Q: Expectation on professional services revenue in Q2?

A: First quarter had catch-up from certain programs, Q2 may see step back.

Q: Scope of sovereign interest increase?

A: Growing interest and acceleration of programs worldwide, including India and Indonesia.

Q: Criticality of edge compute, optical interlinks?

A: Onboard computing and optical cross-links are in roadmap for improving latency.

Q: Image quality expectations, launch pace, AI licensing?

A: Image quality exceeding expectations, on track for launch cadence, AI capabilities may be licensed but core focus is core business.

Q: Next phase of growth?

A: Growth tied to Gen three imagery and analytics revenue, unlocking backlog with capacity online.

Q: Evolution of full ownership of Leo Stella?

A: Strategic acquisition for optimizing production, investing in next-generation technologies.

Q: R&D vs CapEx for Gen three?

A: Primarily R&D for platform improvement, some CapEx for facilities.

Q: Specific sectors interested in AI?

A: Strong demand from defense and intelligence sectors, commercial sectors also showing interest.