HawkEye 360, Inc. Q2 FY2026 earnings call

Company Overview & Strategic Positioning

• Hawkeye 360 is a pioneering defense technology company specializing in radio frequency (RF) signals intelligence for the U.S. government and allied nations, delivering actionable intelligence to detect threats, monitor activity, and support operational decision-making across complex, contested environments.
• The company holds a differentiated end-to-end position combining satellite collection infrastructure, proprietary processing/geolocation technology, advanced analytics, a 7-year historical archive of over 1 billion RF observations, and mission delivery directly integrated into customer workflows, creating a compounding data advantage over competitors.
• The "collect-once-sell-many" business model generates high incremental margins, recurring revenue, and operating leverage, as the same collected data can serve multiple customers across geographies and mission requirements.

Strategic & Operational Milestones

• Completed the company's IPO during the quarter, marking a historic milestone for both Hawkeye 360 and the broader defense technology industry.
• Successfully commissioned Block 2 Cluster 14, reaching full operational capacity in the shortest commissioning period in company history; Cluster 14 is already delivering data to customers and expanding coverage in priority regions. Clusters 15 and 16 are in final testing for H2 2026 launch, which will increase revisit rates and customer capacity. The first Block 3 cluster is on track for launch within 6 months, and Block 4 satellite development has been initiated with an angle of arrival payload prototype demonstration planned for 2027 launch.
• Block 3 is an in-house design that materially increases collection capacity while radically reducing satellite capital costs. Block 4 development targets lower latency and support for new frequency bands.
• Partnered with Lockheed Martin during the Valiant Shield 2026 military exercise to demonstrate an integrated RF intelligence workflow, cutting data latency by over 50% compared to the 2025 Talisman Sabre exercise and achieving a track quality rating suitable for fire control systems integrated with the Aegis weapon system, demonstrating the company's expansion into time-sensitive tactical missions.
• Secured new contracts from the U.S. Space Rapid Capabilities Office, NASA, and NOAA, expanding into space domain awareness and civil sector applications of RF technology, which diversifies the customer base and expands the total addressable market while leveraging existing core infrastructure.
• Acquired ISA for its high-throughput real-time signal processing engine, which enables automatic identification of a broad range of emitters (improving processing speed and scale) and unlocks greater value from growing RF data volumes; integration of ISA technology into the Hawkeye platform is ongoing.

Customer & Commercial Highlights

• Record international revenue was driven by strong demand across priority regions (including the Middle East and Indo-Pacific), new sovereign customer onboarding, and expansion within existing customer markets such as European and Asian Ministries of Defense. International customer contracts are highly sticky, with a consistent land-and-expand model as customers expand from initial evaluations to broader product and mission coverage.
• The diversified customer base reduces concentration risk and exposure to U.S. government budget and procurement volatility compared to defense firms reliant on a single U.S. customer or program.

Hawkeye 360 reports two core customer segments: U.S. and International. Total Q2 2026 revenue was $49.8 million, an 87% year-over-year increase. U.S. revenue was $28.8 million, representing 57.8% of total Q2 revenue, with 63% year-over-year growth driven by a $14.4 million contribution from the acquisition of Innovative Signal Analysis (ISA); organic legacy U.S. revenue declined $3.2 million due to U.S. government shutdown and continuing resolution-driven contract delays. International revenue was a record $21 million, representing 42.2% of total Q2 revenue, with 134% organic year-over-year growth. On a company-wide organic basis (excluding the ISA acquisition impact), total revenue grew 33% year-over-year. Total backlog as of Q2 end was $292 million, up from $285 million at the end of Q1 2026, with $82 million of backlog scheduled to be recognized in H2 2026.

• Full year 2026 total revenue guidance is set at $215 to $220 million, with full year adjusted EBITDA guidance of $30 to $36 million.
• The adjusted EBITDA guidance range reflects the company's decision to pull forward spending on space infrastructure, signal processing, and analytics to accelerate its capability roadmap, deepen competitive advantage, and better position the company for long-term growth. It also reflects an ongoing mix shift within U.S. revenue toward higher volumes of ISA-related revenue.
• Q3 2026 adjusted EBITDA is expected to be similar to Q2 2026 levels, with a ramp to higher adjusted EBITDA in Q4 2026. Both Q3 and Q4 2026 revenue are expected to be higher than Q1 and Q2 levels.
• The company expects multiple significant contract award decisions across U.S. government and international customer groups before the end of 2026 and into 2027.
• The company will provide formal 2027 guidance early next year after closing out 2026 results.

• Legacy U.S. revenue faced headwinds in Q2 from the U.S. government shutdown and continuing resolutions, which caused contract delays.
• There is potential for future launch capacity scarcity beyond 2028, particularly if SpaceX reduces or eliminates Falcon 9 transporter/bandwagon missions, though the company has all required launches locked in through 2028 so this is not a near-term risk.
• International sales have inherently longer, more complex sales cycles, with contract negotiations often delayed by political approval requirements and unfamiliar procurement processes, which can slow the closing of new international deals.
• The company's ability to hit the upper end of 2026 adjusted EBITDA guidance is dependent on successfully converting its current sales pipeline into closed contracts, which introduces execution uncertainty.
• Space development programs regularly experience minor schedule delays, as seen with the minor pushout of Cluster 15's launch from July to H2 2026, which can impact near-term capacity expansion timelines.

Q: Given heightened geopolitical tension in the Middle East driving demand for maritime RF intelligence, could you address the size of incremental orders and the possibility of a 2X 2026 full year book-to-bill ratio? Also, how large is the expanded addressable market created by moving into tactical operational missions? / A: Hawkeye 360 has seen a significant, sustainable long-term uptick in demand for dark vessel tracking in the Straits of Hormuz and Arabian Gulf, with meaningful upcoming awards expected for the GCC region. Management confirmed the company has sufficient existing backlog to meet 2026 revenue goals, with $82 million of H2 2026 revenue already in backlog. The current total addressable market for RF signal collection, processing, and analysis is $25 billion, with $7-8 billion of that tied to space-based capabilities. As latency falls to a target of 10-minute revisit and 10-minute latency within 2-3 years, Hawkeye expects to address the entire $7-8 billion space-based market and expand into non-space domains.

Q: How do you expect the international revenue mix to trend long term, and will this mix shift impact long-term margins? / A: Management expects the long-term revenue mix to reach roughly 50% U.S. government and 50% international. International contracts have longer durations, command premium pricing, and are highly sticky, offsetting the downside of longer sales cycles. Long term, international engagements are expected to expand to three revenue streams: data purchases, dedicated sovereign capacity/clusters, and on-site support services, creating more diversified revenue per customer.

Q: What is the status of Cluster 15's launch, and what is your outlook for future launch provider availability? / A: Cluster 15 experienced a minor development delay and is now scheduled for launch in H2 2026. Hawkeye has all required launches fully locked in through 2028, so there is no near-term concern about launch capacity. There is open uncertainty about launch availability for 2029 and beyond, particularly with potential changes to SpaceX's Falcon 9 mission offerings, but this is a long-term issue more than two years out.

Q: Can you explain the accounting and capital expenditure treatment for dedicated sovereign customer systems? / A: Hawkeye already secured its first $100 million five-year dedicated sovereign capacity transaction announced in December 2024. For this transaction, the satellites remain Hawkeye 360-owned capital expenditure, with the customer purchasing dedicated capacity for all collections over their contracted term. Future sovereign asset transactions with different structural terms may have different accounting and capital expenditure treatment.