BlackSky Reports Third Quarter 2023 Results

Note: Effective January 1, 2022, the Company reorganized its classification on the consolidated statements of operations and comprehensive loss to better align the Company’s broad portfolio. As a result, the prior period amounts presented to reflect the impact of the reorganization have been recast.

BLACKSKY TECHNOLOGY INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands, except par value)	September 30, 2023			December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	32,138		$	34,181
Restricted cash		1,835			2,835
Short-term investments		17,543			37,982
Accounts receivable, net of allowance of $19 and $0, respectively		2,714			3,112
Amounts receivable from equity method investees		1,146			—
Prepaid expenses and other current assets		5,375			4,713
Contract assets		9,944			5,706
Total current assets		70,695			88,529
Property and equipment - net		74,555			71,584
Operating lease right of use assets - net		1,760			3,586
Goodwill		9,393			9,393
Investment in equity method investees		6,197			5,285
Intangible assets - net		1,497			1,918
Satellite procurement work in process		45,409			50,954
Other assets		3,288			2,841
Total assets	$	212,794		$	234,090
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable and accrued liabilities	$	10,520		$	14,368
Amounts payable to equity method investees		—			3,728
Contract liabilities - current		6,621			6,783
Other current liabilities		1,527			2,048
Total current liabilities		18,668			26,927
Long-term contract liabilities		96			109
Operating lease liabilities		3,320			3,132
Derivative liabilities		15,383			5,113
Long-term debt - net of current portion		79,474			76,219
Other liabilities		3,718			716
Total liabilities		120,659			112,216
Stockholders’ equity:
Class A common stock, $0.0001 par value-authorized, 300,000 shares; issued, 142,946 and 121,938 shares; outstanding, 140,543 shares and 119,508 shares as of September 30, 2023 and December 31, 2022, respectively.		14			12
Additional paid-in capital		687,303			666,973
Accumulated deficit		(595,182	)		(545,111	)
Total stockholders’ equity		92,135			121,874
Total liabilities and stockholders’ equity	$	212,794		$	234,090

BLACKSKY TECHNOLOGY INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

(in thousands)	Nine Months Ended September 30,
		2023			2022
Cash flows from operating activities:
Net loss	$	(50,071	)	$	(59,367	)
Gain from discontinued operations, net of income taxes		—			707
Loss from continuing operations		(50,071	)		(60,074	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense		32,735			26,166
Operating lease right of use assets amortization		753			1,197
Bad debt expense		39			13
Stock-based compensation expense		7,725			16,389
Amortization of debt discount and issuance costs		249			1,549
Income on equity method investment		(913	)		(694	)
Loss on disposal of property and equipment		127			—
Gain on derivatives		(7,445	)		(10,629	)
Interest income		(551	)		(373	)
Other, net		—			106
Changes in operating assets and liabilities:
Accounts receivable		359			(2,485	)
Contract assets - current and long-term		(5,271	)		(4,237	)
Prepaid expenses and other current assets		(13	)		657
Other assets		1,144			(1,335	)
Accounts payable and accrued liabilities		834			692
Other current liabilities		(640	)		(1,727	)
Contract liabilities - current and long-term		(175	)		(2,774	)
Other liabilities		5,316			(1,872	)
Net cash used in operating activities		(15,798	)		(39,431	)
Cash flows from investing activities:
Purchase of property and equipment		(12,296	)		(8,905	)
Satellite procurement work in process		(23,603	)		(25,421	)
Purchases of short-term investments		(29,167	)		(50,343	)
Proceeds from maturities of short-term investments		50,110			—
Proceeds from sale of property and equipment		22			—
Proceeds from equity method investment		—			546
Net cash used in investing activities		(14,934	)		(84,123	)
Cash flows from financing activities:
Proceeds from equity issuances, net of equity issuance costs		30,868			—
Proceeds from options exercised		9			37
Payments of transaction costs for debt modification		(1,311	)		—
Payments of transaction costs related to derivative liabilities		(905	)		—
Withholding tax payments on vesting of restricted stock units		(972	)		(4,551	)
Net cash provided by (used in) financing activities		27,689			(4,514	)
Net decrease in cash, cash equivalents, and restricted cash		(3,043	)		(128,068	)
Cash, cash equivalents, and restricted cash – beginning of year		37,016			168,104
Cash, cash equivalents, and restricted cash – end of period	$	33,973		$	40,036

BLACKSKY TECHNOLOGY INC. RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA (unaudited) (in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
		2023			2022			2023			2022
Net income (loss)	$	675		$	(13,093	)	$	(50,071	)	$	(59,367	)
Interest income		(519	)		(486	)		(1,602	)		(664	)
Interest expense		2,532			1,226			6,627			3,756
Income tax expense		138			—			260			—
Depreciation and amortization		11,304			9,598			32,735			26,166
Stock-based compensation expense		2,402			3,163			7,725			16,389
Gain on derivatives		(17,012	)		(7,135	)		(7,445	)		(10,629	)
Gain from discontinued operations, net of income taxes		—			(707	)		—			(707	)
(Income) loss on equity method investment		(328	)		776			(913	)		(694	)
Forgiveness of non-trade receivables		—			31			—			106
Transaction costs associated with debt and equity financings		—			—			1,738			—
Severance		363			56			562			761
Investment loss on short-term investments		—			—			55			—
Adjusted EBITDA	$	(445	)	$	(6,571	)	$	(10,329	)	$	(24,883	)

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