BlackSky Technology Inc. Q2 FY2025 earnings call

• Won a multiyear contract with the National Geospatial Intelligence Agency (NGA) under the Luno A program valued at up to $24 million.
• Saw significant demand and signed early access agreements with multiple international defense sector customers for Gen-3 services.
• Launched second Gen-3 satellite, which began delivering very high-resolution imagery within 12 hours of launch.
• On track to have six Gen-3 satellites on orbit by the end of 2025, with the next one in final testing phase.
• Successfully raised $185 million in an upsized convertible note offering, strengthening balance sheet and liquidity.
• Awarded a 4-year delivery order for facility operational monitoring under the Luno A program with NGA valued at up to $24 million.
• Investing in the Arrow Constellation for wide area mapping and global change monitoring, aiming to address emerging market opportunities starting as early as 2027.

Total revenue for the first half of 2025 was $51.7 million, an increase of $2.6 million or 5.2% over the same period in the prior year. The main driver of revenue growth was higher professional and engineering services. Revenues from the high-margin Imagery and Analytics business increased in the second quarter due to greater imagery orders and subscription growth. Adjusted imagery and analytics cost of sales for the first half of 2025 was $7.2 million, up only $400,000 compared to the same period in the prior year. Adjusted EBITDA for the first half of 2025 was a loss of $3.4 million compared to an adjusted EBITDA of $3.5 million in the prior year period, primarily due to higher SG&A expenses from LeoStella.

• Full year 2025 revenue guidance between $105 million and $130 million, and adjusted EBITDA between breakeven to $10 million.
• Maintained capital expenditures guidance of $60 million to $70 million.
• Completed a $185 million 8-year convertible note offering, using proceeds to repay higher interest debt and strengthen balance sheet and liquidity.

• Near-term uncertainty from the U.S. government's fiscal year 2026 budget, including an anticipated continuing resolution that could slow the awards of new and expansion government contracts.

Q: Can you give us a sense of when you turn on the third-generation satellites for general availability, what that kind of looks like in terms of what's it mean for the revenue trends and volume trends?

A: Yes, Tim, thanks for the question. The way to think about it as we get to commercial availability in Q4, we'll begin to incrementally start ramping revenues, both from existing contracts that we already have in backlog and then new agreements that we're signing over the course of the summer. And so, you'll see -- starting to see that incremental revenue over time as we deploy the constellation. I should also note that the contracts we're winning also include a combination of Gen-2 and Gen-3 services. So, it's the integrated constellation that is continuing to see strong demand and is part of the overall revenue growth trend.

Q: Looking at that backlog number you gave, Brian, not looking for specifics, but at a high level, can you give us a sense of how much of that relates to Gen-3 capacity?

A: I would say -- Jason, thanks for the question. I think there's a significant portion of that backlog is related to Gen-3 imagery and analytics and related satellite solutions and some of those larger contracts that we announced prior.

Q: On the early access programs for Gen-3, maybe you could explain to us a little bit better what those look like. We've had multiple of those announced. How does an early access program compare or differ from a full-scale contract?

A: Yes. Thanks, Daniel. The way to think about early access is it's typically a smaller contract to just access the imagery. It does not typically come with a full-service level agreement like we would provide under commercial operations. So, it gives customers early access to assess the imagery and the experience of accessing that imagery through our Spectra platform. Those typically transition into longer multiyear contracts. And also keep in mind, we only have a couple of satellites up right now. And so, as Henry had mentioned, when we get to 4 to 6, that starts to give us meaningful revisiting capacity around a commercial offering. So that ramps up as well.