Company Performance - BlackSky Technology Inc. (BKSY) reported a 3Q25 GAAP EPS loss of -$0.44, missing estimates by $0.07 [1] - Revenue for the quarter was $19.6 million, down 13.1% year-over-year, and fell short of estimates by $9.03 million [1] - The company's backlog currently stands at $322.7 million [1]

Core Viewpoint - Klook, an online travel booking platform backed by SoftBank, has filed for an initial public offering (IPO) in the United States [1] Company Summary - Klook is an online travel booking platform that facilitates travel-related services and experiences [1] - The company is backed by SoftBank, indicating significant financial support and potential for growth [1] Industry Summary - The online travel booking industry is experiencing a resurgence as travel demand increases post-pandemic, making it an opportune time for companies like Klook to go public [1]

Core Insights - BlackSky Technology, Inc. reported revenue of $19.6 million, an adjusted EBITDA loss of $4.5 million, and an EPS of ($0.44), which fell short of both company and consensus estimates [1] - The decline in revenue from Imagery and Software Analytical Services to $15.8 million, an 8.6% year-over-year decrease, was attributed to reduced NRO EOCL tasking and uncertainties in the U.S. government budget [1] - Professional and Engineering Services revenue decreased to $3.8 million from $5.2 million in the previous quarter, primarily due to project timing and milestone-based revenue recognition [1] - Consolidated gross margins decreased to 65.3%, down from 70.5% in the same quarter last year [1] Financial Performance - The company’s revenue of $19.6 million was significantly below the expected $29.9 million and consensus of $28.6 million [1] - Adjusted EBITDA loss of ($4.5 million) contrasts with a profit of $0.7 million in the prior year, driven by lower EOCL revenues and overhead costs associated with LeoStella [1] - The backlog of contracts stands at $322.7 million, with new wins exceeding $60 million, approximately 91% of which are international [7] Future Outlook - The company maintains an optimistic outlook for Q4, expecting stronger performance [7] - The next Gen-3 satellite is at the launch site, with cash and short-term investments totaling $147.6 million, alongside $43.4 million in unbilled contract assets [7]

Revenue Generation and Growth - BlackSky's revenue is generated through subscription-based On-Demand and Assured product offerings, with a focus on national security and economic intelligence [128]. - BlackSky expects continued revenue growth year-over-year driven by new customer sales orders and increased demand from existing customers [133]. - Professional and engineering services revenue is expected to contribute significantly, primarily from contracts with defense and intelligence customers [134]. - The company targets U.S. and international defense and intelligence markets, with plans to expand services to various commercial sectors including energy, agriculture, and logistics [127]. Financial Performance - Total revenue for the three months ended September 30, 2025, was $19,618, a decrease of $2,931 or 13.0% compared to $22,549 in 2024 [140]. - Imagery & software analytical services revenue decreased by $1,494 or 8.6% for the three months ended September 30, 2025, compared to the same period in 2024 [140]. - Professional & engineering services revenue decreased by $1,437 or 27.3% for the three months ended September 30, 2025, compared to the same period in 2024 [142]. - Operating loss for the three months ended September 30, 2025, was $16,826, an increase of $3,596 or 27.2% compared to $13,230 in 2024 [140]. - Net loss for the three months ended September 30, 2025, was $15,340, an increase of $2,749 or 21.8% compared to $12,591 in 2024 [140]. Expenses and Costs - Selling, general and administrative expenses increased by $3,774 or 21.0% for the three months ended September 30, 2025, compared to $17,961 in 2024 [148]. - Research and development expenses decreased by $13 or 30.2% for the three months ended September 30, 2025, compared to the same period in 2024 [150]. - Total costs for the three months ended September 30, 2025, were $6,815, an increase of $165 or 2.5% compared to $6,650 in 2024 [144]. - Professional & engineering service costs increased by $4,049 or 40.5% for the nine months ended September 30, 2025, compared to the same period in 2024 [147]. Cash Flow and Liquidity - As of September 30, 2025, cash and cash equivalents totaled $28.8 million, up from $13.1 million as of December 31, 2024, while short-term investments increased to $117.7 million from $39.4 million [167]. - Current assets were $201.0 million, while current liabilities were $51.7 million, indicating sufficient cash and working capital for short-term liquidity needs [177]. - Net cash used in operating activities for the nine months ended September 30, 2025 was $19.0 million, an increase of $14.4 million compared to the same period in 2024 [182]. - Net cash used in investing activities increased to $110.4 million, primarily due to $120.5 million in purchases of short-term investments in government securities [185]. Investments and Future Plans - Upcoming satellite development capital expenditures will focus on expanding the high-frequency monitoring constellation with new multispectral satellites [179]. - The company anticipates ongoing investments in the BlackSky Spectra software platform to enhance product capabilities and operational systems [178]. Debt and Financing - The company issued $185.0 million principal amount of Convertible Notes in July 2025, with an interest rate of 8.25% per year, maturing on August 1, 2033 [169][170]. - The company has financed $18.8 million out of a $27.0 million vendor financing agreement for satellite launches, with an estimated repayment of $5.8 million in the next 12 months [172]. - The company received $185.0 million in proceeds from the issuance of Convertible Notes in July 2025, partially offset by debt repayments of $110.3 million [187]. Stock and Equity - The company issued and sold $42.5 million of newly issued shares as part of its at-the-market offering during the nine months ended September 30, 2025 [173]. - Equity issuances during the nine months ended September 30, 2025 generated $42.5 million in gross proceeds from the sale of 3.7 million shares under the ATM offering program [188]. Depreciation and Interest - Depreciation of satellites decreased by $4,281 thousand (52.1%) for the three months ended September 30, 2025, compared to the same period in 2024, primarily due to the full depreciation of several Gen-2 satellites [151]. - Depreciation expense from all other property and equipment increased by $960 thousand (34.7%) for the three months ended September 30, 2025, driven by investments in internal-use software and infrastructure [152]. - Interest income rose by $1,067 thousand (415.2%) for the three months ended September 30, 2025, due to higher short-term investment balances compared to the same period in 2024 [159]. - Interest expense increased by $895 thousand (28.5%) for the three months ended September 30, 2025, attributed to more debt outstanding despite lower interest rates [160]. Accumulated Deficit and Adjusted EBITDA - The company had an accumulated deficit of $725.6 million as of September 30, 2025 [167]. - Adjusted EBITDA for the three months ended September 30, 2025, was $(4,484) thousand, compared to $741 thousand in the same period of 2024 [166]. Valuation and Fair Value - The expected volatility of Legacy BlackSky and BlackSky Class A common stock was estimated based on the historical share price volatility of comparable companies due to a lack of observable volatility [203]. - The risk-free interest rate was extrapolated from the yield on actively traded, non-inflation indexed U.S. Treasury notes, reflecting the expected term of the underlying grants [204]. - Private Placement Warrants and Sponsor Shares are classified as long-term liabilities, recorded at fair value using Black-Scholes and Monte Carlo models, and re-measured at each reporting date [206]. - The fair value models require inputs such as the fair value of Class A common stock, risk-free interest rate, expected term, expected dividend yield, and expected volatility, which can materially affect the fair value estimates [207]. - Business combinations are accounted for using the acquisition method, where assets and liabilities are recorded at fair value upon control acquisition [208]. - Significant estimates in business combinations include determining enterprise value based on projected cash flows, which involve assumptions about revenue growth rates and operating margins [209]. - Measurement period adjustments for fair value of acquired assets and liabilities can be recorded up to one year from the acquisition date, impacting goodwill [210].

Core Viewpoint - BlackSky Technology reported worse-than-expected losses and missed revenue forecasts, leading to a 5.5% drop in stock price [1][8]. Financial Performance - BlackSky's losses amounted to $0.44 per share, exceeding analyst expectations of $0.35 per share, with revenue reported at $19.6 million, significantly below the forecast of $29 million [1][3]. - Year-over-year sales declined by 13%, and sales growth for the year to date is negative, indicating a troubling trend for a growth stock [3]. - Quarterly losses increased by 21%, and negative free cash flow has quadrupled to $19 million for the year [3]. Business Outlook - CEO Brian E. O'Toole highlighted strong international demand for space-based intelligence solutions, with $60 million in new contract awards and a $323 million contracted backlog [4]. - The book-to-bill ratio exceeded 3 for the quarter, suggesting potential improvement in sales growth in future quarters [5]. - Analysts predict that BlackSky may not achieve profitability until 2027, with positive free cash flow not expected before 2028 [6][8]. Investment Considerations - BlackSky Technology was not included in a list of the top 10 stocks recommended by analysts, indicating a lack of confidence in its immediate investment potential [7].

Financial Data and Key Metrics Changes - Total revenue for the first nine months of 2025 was $71.4 million, consistent with the prior year period [15] - Cash operating expenses for the first nine months of 2025 were $56.6 million, compared to $48 million in the prior year period, driven by $9 million of overhead expenses from the integration of LeoStella [16][18] - Adjusted EBITDA for the first nine months of 2025 was a loss of $7.9 million, compared to an adjusted EBITDA of $4.3 million in the prior year period [17] Business Line Data and Key Metrics Changes - Professional and engineering services revenue for the first nine months of 2025 grew to $20.8 million, a 9% increase over the same period in the prior year [16] - Revenues from international customers now represent about half of total revenues, driven by new contracts and expanded service agreements [9] - Over 90% of the backlog is related to international contracts for Gen-3 capabilities [9] Market Data and Key Metrics Changes - Strong international demand is outpacing near-term U.S. government business, with significant new contract awards primarily with international customers [6][9] - The company was awarded more than $60 million in new contracts, predominantly for the delivery of Gen-3 services [6] - The cash balance increased more than 50% from last year, bringing total liquidity to over $200 million [8][18] Company Strategy and Development Direction - The company is focused on leveraging a full technology stack that includes real-time software, advanced AI, and vertically integrated satellite production capabilities [5] - The EROS initiative is in the design phase, aimed at providing wide-area mapping and monitoring capabilities by 2028 [15] - The company is well-positioned to capitalize on the growing global market for space-based intelligence solutions [20] Management Comments on Operating Environment and Future Outlook - Management expects a strong finish to 2025 and significant growth visibility in 2026, anchored by a strong backlog of international contracts [20] - The company is seeing positive activity from Congress regarding budget restoration for the EOCL program, which could provide upside next year [29] - Management remains committed to achieving adjusted EBITDA growth and margin expansion despite recent challenges [17] Other Important Information - The next Gen-3 satellite is at the launch site, with expectations for deployment in the coming weeks [12] - The company has a strong track record of supporting non-traditional acquisition models and rapid deployment of technology for government programs [14] Q&A Session Summary Question: Update on Gen-3 deployment cadence - Management confirmed that the deployment is progressing, with the next satellite at the launch site and expected to be deployed soon, despite some delays due to a faulty component [21] Question: Factors affecting Q4 revenue range - The wide range reflects the timing of large deals in play, with strong Q4 performance expected based on existing contracts [22] Question: Progress of early access agreements for Gen-3 - The early access program is progressing well, with customers testing Gen-3 performance and transitioning to larger contracts [23] Question: Impact of EOCL contract reductions - The reductions are not a pause but adjustments reflecting potential budget changes, with expectations for restoration of funding [24] Question: Pipeline for dedicated Gen-3 capacity - Demand for dedicated capacity solutions is growing rapidly, with a significant pipeline for such arrangements [25] Question: Number of satellites in operation - The company has two Gen-3 and eleven Gen-2 satellites operational, with plans for regular Gen-3 launches into 2026 [27] Question: Professional engineering services revenue expectations - A similar rebound in professional engineering services revenue is expected in Q4, with revenue recognition from contracts in Indonesia and India as they progress [28] Question: International revenue contribution - International revenues are expected to continue growing, with a current balance of approximately 50/50 between international and domestic [37] Question: Attracting AI talent - The company has been successful in attracting AI talent and has built a proprietary capability that serves as a competitive advantage [38][39] Question: Average contract value for Gen-3 - The average contract value for Gen-3 is significantly higher than for Gen-2, with larger and multi-year arrangements being common [40]

Financial Performance - YTD Revenue is $71.4 million[31], with professional and engineering services revenue up 9% year-over-year[31] - YTD adjusted EBITDA loss is $7.9 million[38], but would have been a positive ~$5 million excluding impacts from EOCL and LeoStella[38] - Q3 cash balance increased 129% year-over-year to $147.6 million[42], bringing total liquidity to over $200 million[11,42] - Cash operating expenses were flat year-over-year, excluding LeoStella overhead expenses[34] Contracts and Growth - Won over $60 million in new contracts, primarily with international customers and for Gen-3 services[12] - Awarded a contract over $30 million to integrate Gen-3 tactical ISR services into a strategic defense customer's secure environment[12,16,19] - Won a seven-figure contract with the US government and expanded customers for Gen-3 early access[12,22] - AI & analytic solutions are gaining traction with YTD orders under NGA Luno at about $30 million[12,22] International Expansion - 50% of BlackSky's revenues are from international customers[13] - Over 90% of backlog is from international contracts for Gen-3 capabilities[13] Future Outlook - The company maintains its 2025 outlook with revenue between $105 million and $130 million, adjusted EBITDA between $0 million and $10 million, and capital expenditures between $60 million and $70 million[45]

Financial Performance - Total revenue for Q3 2025 was $19.6 million, reflecting a decrease from $22.5 million in Q3 2024[6] - Net loss for Q3 2025 was $15.3 million, compared to a net loss of $12.6 million in Q3 2024[9] - Adjusted EBITDA for Q3 2025 was a loss of $4.5 million, down from an adjusted EBITDA of $0.7 million in Q3 2024[10] - Net loss for the nine months ended September 30, 2025, was $69,392 thousand, compared to a net loss of $37,798 thousand for the same period in 2024, indicating an increase of 83.6%[28] - Adjusted EBITDA for the nine months ended September 30, 2025, was $(7,918) thousand, a decline from $4,262 thousand in the same period of 2024[30] Operating Expenses - Operating expenses for Q3 2025 were $29.6 million, slightly up from $29.1 million in Q3 2024[8] - Operating expenses for the nine months ended September 30, 2025, were $88,444 thousand, slightly down from $89,362 thousand in the same period of 2024[31] Cash Flow and Assets - Cash balance increased to $147.6 million as of September 30, 2025, including $65.9 million from a convertible note offering[11] - Cash and cash equivalents rose to $28,815 thousand as of September 30, 2025, compared to $13,056 thousand on December 31, 2024, reflecting a growth of 120.5%[27] - Total current assets reached $201,042 thousand as of September 30, 2025, significantly higher than $106,736 thousand at the end of 2024, marking an increase of 88.5%[27] - Cash flows from operating activities resulted in a net cash used of $18,992 thousand for the nine months ended September 30, 2025, compared to $4,567 thousand for the same period in 2024[28] - Cash flows from financing activities generated a net cash inflow of $144,942 thousand for the nine months ended September 30, 2025, compared to $55,901 thousand in 2024[28] Liabilities and Contractual Obligations - Total liabilities increased to $289,801 thousand as of September 30, 2025, from $160,157 thousand on December 31, 2024, representing an increase of 80.8%[27] - The company reported a significant increase in contract liabilities, with current contract liabilities rising to $21,662 thousand as of September 30, 2025, compared to $2,183 thousand at the end of 2024[27] Contracts and Future Outlook - The company has a backlog of $322.7 million, with approximately 91% from international contracts[5] - The company won over $60 million in new contract awards, driven by strong international demand for space-based intelligence solutions[3] - The next Gen-3 satellite is at the launch site, with an anticipated launch in the coming weeks[5] - The company is maintaining its full-year 2025 guidance for revenue, adjusted EBITDA, and capital expenditures[13] - Approximately $43.4 million in unbilled contract assets is expected to be billed and received over the next 12 months[11] Asset Growth - Total assets increased to $380,857 thousand as of September 30, 2025, up from $254,146 thousand on December 31, 2024, representing a growth of 49.7%[27]

Core Insights - BlackSky Technology Inc. (BKSY) is set to release its third-quarter 2025 results on November 6, before market open [1] - The company has a mixed record of earnings surprises, with only one beat out of the last four quarters and an average negative surprise of 10.7% [1] Q3 Expectations - The Zacks Consensus Estimate for BKSY's revenue is $29.5 million, reflecting a 30.9% increase from the same quarter last year [2] - Growth is expected to be driven by higher professional and engineering services, along with strong performance in the high-margin Imagery and Analytics business [2] Business Developments - The introduction of Gen-3 satellites, combined with the Spectra platform and AI capabilities, is anticipated to enhance contract wins and expand the customer base [3] - There is strong international demand for BlackSky's services, attributed to the validation of Gen-3 satellites [3] Financial Performance - The consensus estimate for loss per share is 37 cents, a reduction from a loss of 66 cents in the same quarter last year [4] - Cost control measures are expected to contribute to long-term margin improvement and help narrow quarterly losses [4] Earnings Prediction Model - Current analysis indicates that BKSY does not have a strong prediction for an earnings beat, with an Earnings ESP of 0.00% and a Zacks Rank of 3 (Hold) [5][6]

Core Viewpoint - BlackSky Technology has announced a significant defense contract worth over $30 million, yet the stock price has declined by 2.6%, raising questions about the market's reaction to the news [1][3]. Group 1: Contract Details - BlackSky has secured a multi-year contract exceeding $30 million to integrate Gen-3 high-cadence tactical ISR services for a strategic international defense customer [3]. - The duration of the contract is unspecified, making it challenging for investors to assess its impact on annual revenue [3]. - The term "expanded solution" suggests that this may be an extension of an existing contract rather than a new customer acquisition [4]. Group 2: Financial Performance and Valuation - BlackSky's current market valuation is approximately $710 million, with a price-to-sales ratio of 6.8, which is higher than the historical average of 4x for unprofitable space stocks [6]. - The company reported a loss of $86 million per year, and analysts predict it may not achieve profitability until 2027 [6]. - The high valuation relative to its financial performance raises concerns about the attractiveness of investing in BlackSky at this time [5][6]. Group 3: Investment Considerations - Despite the contract announcement, the lack of clarity regarding the customer and contract duration may lead to skepticism among investors [8]. - The stock is considered overpriced for an unprofitable space company, which may deter potential investors [8]. - Other investment opportunities are suggested to be more favorable compared to BlackSky Technology [9].