Company Receives New Awards Valued up to $780 Million
YTD Revenue Growth of 22%; Company Reaffirms Full Year 2024 Guidance
First Gen-3 Satellite Completing Final Pre-Ship Testing
HERNDON, Va. — (BUSINESS WIRE) — November 7, 2024 — BlackSky Technology Inc. (“BlackSky” or the “Company”) (NYSE: BKSY) announced results for the third quarter ended September 30, 2024.
Third Quarter Financial Highlights:
- Revenue of $22.5 million, up 6% from the prior year quarter
- Imagery & software analytical services revenue grew 13% over the prior year quarter
- Imagery & software analytical services cost of sales(1), as a percent of revenue, improved to 21% from 23% in the prior year quarter
“We delivered a strong quarter of multi-year contract bookings valued up to $780 million, continuing to demonstrate growing demand for our high-frequency monitoring and AI-enabled analytic services,” said Brian E. O’Toole, BlackSky CEO. “We successfully raised over $45 million, which has strengthened our balance sheet and provides the capital, which we believe will fully fund our baseline Gen-3 constellation plan. We are excited to be in the final phases of pre-ship testing of our first Gen-3 satellite as we ready for launch. Looking ahead, we expect to start a regular deployment cadence of Gen-3 satellites in 2025, which will start to unlock our next phase of growth delivering transformative space-based intelligence solutions to customers around the world.”
Recent Highlights
- Won a multi-year contract valued up to $290 million with the National Geospatial-Intelligence Agency to monitor global economic activity and military capability
- Awarded a multi-year contract with NASA valued up to $476 million to deliver time-diverse, rapid-revisit satellite imagery to support Earth and applied science research
- Signed a six-million-dollar contract expansion with an existing international defense sector customer to extend access to BlackSky’s Gen-2 satellite imagery services
- Expanded product offering to provide non-Earth imaging services and captured multiple seven-figure contracts in support of growing space domain awareness missions worldwide
- Awarded a U.S. Navy research contract to explore applications for advanced optical intersatellite link terminals to provide real-time access to imagery during time-sensitive military operations worldwide
- Successfully raised over $45 million which is expected to fully fund the Company’s baseline Gen-3 constellation
- First Gen-3 satellite in final testing phase and expected to ship to launch site in the next few weeks with a launch window anticipated to open three to four weeks after shipment
- BlackSky wins 2024 Novaspace, formerly Euroconsult, Leading Earth Observation Business Award at World Space Business Week in Paris, an event that recognizes companies shaping the future of the global space sector
(1) |
Cost of sales is defined as imagery and software analytical services costs and professional and engineering services cost, less depreciation and amortization expense. |
Financial Results
Revenues
Total revenue for the third quarter of 2024 was $22.5 million, up $1.3 million, or 6%, from the third quarter of 2023. Imagery and software analytical services revenue was $17.3 million in the third quarter of 2024, up 13% over the prior year period, primarily driven by incremental customer orders for BlackSky’s imagery services. Professional and engineering services revenue was $5.3 million in the third quarter of 2024, compared to $6.0 million in the prior year period. Professional and engineering services contracts are milestone-based contracts that may have quarter-over-quarter revenue variability, in contrast to the imagery and software analytical services, which are typically recurring subscription-based revenues.
Cost of Sales(1)
Total cost of sales as a percentage of revenue improved to 29% for the third quarter of 2024, compared to 32% in the third quarter of 2023. Imagery and software analytical service costs as a percentage of revenue improved to 21% in the third quarter of 2024, compared to 23% in the third quarter of 2023, primarily driven by greater volumes of revenue that inherently have a low fixed-cost structure as a percentage of revenue.
Operating Expenses
Operating expenses for the third quarter of 2024 were $29.1 million, which included $2.4 million of non-cash stock-based compensation expense and $11.1 million in depreciation and amortization expenses. Operating expenses for the third quarter of 2023 were $29.0 million, which included $2.3 million in non-cash stock-based compensation expense and $11.3 million in depreciation and amortization expenses. Excluding the non-cash stock-based compensation and depreciation and amortization expenses from both years, cash operating expenses(2) for the third quarter of 2024 were $15.6 million, flat compared to cash operating expenses of $15.4 million for the third quarter of 2023.
(1) |
Cost of sales is defined as imagery and software analytical services costs and professional and engineering services cost, less depreciation and amortization expense. |
||
(2) |
Non-GAAP financial measure. See “Non-GAAP Financial Measures” below and reconciliation table at the end of this press release. |
Net Loss/Income
Net loss for the third quarter of 2024 was $12.6 million, compared to a net income of $0.7 million in the third quarter of 2023. The year-over-year decrease of $13.3 million was primarily driven by fluctuations in the Company’s equity warrants and other equity instruments that are measured at fair value and driven by the Company’s common stock price, which resulted in changes in the gain on derivatives.
Adjusted EBITDA(2)
Adjusted EBITDA for the third quarter of 2024 was $0.7 million, compared to an adjusted EBITDA loss of $0.4 million in the third quarter of 2023. The $1.1 million year-over-year improvement was primarily driven by strong operating leverage achieved through higher revenues and improved gross margins.
Balance Sheet & Capital Expenditures
As of September 30, 2024, cash and cash equivalents, restricted cash, and short-term investments totaled $64.4 million. This balance includes net equity proceeds of approximately $44.6 million raised in the quarter, less a $10.0 million debt repayment on the commercial bank line, which remains available to the Company should it choose to draw on it. In addition, the Company anticipates receiving approximately $26.7 million in payments over the next 12 months as interim milestones on a few major customer contracts are met and expected to be billed, further enhancing the Company’s liquidity. Capital expenditures for the third quarter of 2024 were $13.1 million, bringing the year-to-date total capital expenditures to $40.7 million.
2024 Outlook
BlackSky is starting to ramp up revenues from recent contract awards and continues to work on a number of sizable new and expansion contracts which have some degree of uncertainty surrounding the timing of close and start of revenue recognition. As such, the Company maintains its outlook for full year 2024 revenue of between $102 million and $118 million, and full year 2024 adjusted EBITDA of between $8 million and $16 million. In addition, the Company maintains its expectations for full year 2024 capital expenditures of between $55 million and $65 million, primarily driven by investments in its Gen-3 satellites.
