BlackSky Technology Inc. Q1 FY2026 earnings call

• Brian O'Toole mentioned strong start to 2026 with up to $160 million in contract awards, Gen 3 capabilities fully operational delivering mission-critical intelligence. • Gen 3 continues to exceed expectations with 35 centimeter imaging performance, won over $60 million in new contract awards, and expected to grow the business by over 50% in 2026. • AI capabilities are operational, embedded in customer workflows, processing imagery and delivering actionable insights. • Gen 3 constellation: Successfully launched fourth satellite, on track to have at least eight Gen 3s on orbit this year. • Mission solutions: Sales pipeline growing due to Gen 3's on-orbit success and industry-leading performance. • Advanced technology programs: Announced major new contract with US Air Force Research Lab for advanced large aperture optical payload development.

Space-based intelligence and AI services: First quarter revenue was $20.8 million, with Gen 3 coming into commercial operations and a 14% quarter-over-quarter increase. Expect to grow over 50% this year, achieving a $100 million annual run rate. Gross margins around 80%.

• Revenue guidance increased from $120 million - $145 million to $130 million - $150 million, representing over 30% growth at midpoint. • Adjusted EBITDA guidance increased from $6 million - $18 million to $12 million - $24 million, with 13% adjusted EBITDA margin at midpoint. • Reaffirmed capital expenditure guidance of $50 million - $60 million.

Q: Brian, as it relates to the pipeline, can you talk to the quantity of pilots coming in the top of the funnel, how many have converted, etc.?

A: Jeff Benry from Craig Hallam. Brian said they secured next wave of customers in scale of a couple dozen, pilots start with six figure and move into seven and eight figure subscription contracts, pipeline looking good but hard to quantify timing.

Q: Any sense of mega deals?

A: Brian mentioned announced $30 million one-year subscription contract starting with six-figure pilot, seeing a lot of activity with major customers worldwide.

Q: Spectra and Analytics, new customer attach rates?

A: Jeff Benry. Brian said it's not just attachment rate, it's combination of dynamic monitoring, tasking, AI integration and short delivery timelines that's differentiated.

Q: Gen 3, influence on booking customers and revenue?

A: Brian said on track to get eight Gen 3s up this year, growth not limited by capacity.

Q: How Middle East conflicts impact growth?

A: Laura for Edison Yu. Brian said conflict amplifies need for long-term contracts for capacity, business not driven by singular events but amplifies importance of long-term contracts.

Q: AI roadmap?

A: Brian said AI is proprietary, purpose built for real time space-based intelligence, will continue to expand, incorporates third party technology but core is proprietary capabilities.

Q: Critical mass of Gen 3s for contract dollars?

A: Austin Muller from Canaccord Genuity. Brian said growth not dependent on rate of launching satellites, core capacity with Gen 2 and Gen 3 providing dynamic monitoring.

Q: Spectra's AI object classification vs peers?

A: Austin Muller. Brian said AI is operational today, validated by major defense and intelligence customers, models operational real time.

Q: EOCL revenue levels?

A: Greg Burns with Sedoti. Brian said assumption is current levels, multiple funding lines in fiscal year 26 budget being allocated, international now larger percentage of revenues.

Q: International pipeline and progression?

A: Billy on for Sheila Kayalu with Jefferies. Brian said growth from expanding with existing customers, adding new customers, pipeline growing, quality of Gen 3 demanding higher premium.

Q: Pipeline breakdown?

A: Chris Quilty with Quilty Space. Brian said proportionally growth in all three aspects: space-based intelligence and AI services, mission solutions, advanced technology programs.

Q: Competition for sovereign opportunities?

A: Scott Buck with Titan Partners. Brian said increasing competition but from companies without proven operational performance, Gen 3 has best-in-class performance.

Q: Pilot programs for Gen 3, use of analytics suite?

A: Preston Graham with StoneGate. Brian said customers start with basic operations like dynamic tasking, then add AI analytics as part of service.

Q: Supply chain constraints on Gen 3?

A: Preston Graham. Brian said on track, brought in Lea Stella to improve supply chain, ordered long-lead components for regular production cadence.