Financial Performance - BlackSky's first half (1H) revenue for 2025 reached $51.7 million, a 5.2% increase compared to the same period in the prior year[27] - Adjusted imagery and analytics cost of sales for 1H 2025 was $7.2 million, a slight increase of $0.4 million from the prior year period[32] - The company reported an 81% imagery & analytics gross margin in Q2, reflecting healthy economics from recurring imagery and analytics services[32] - Adjusted EBITDA loss for 1H 2025 was $3.4 million, which would have been $2.2 million excluding LeoStella[35] Liquidity and Capital - BlackSky successfully raised $185 million in an upsized convertible note offering, strengthening the balance sheet and increasing liquidity[9, 38] - The company's Q2 2025 cash balance was $94.9 million, a 124% increase year-over-year[41] - Liquidity improved to over $227 million, including net cash raised in July from the convertible debt offering and warrant exercise payments[41] Business Highlights - BlackSky was awarded a facility monitoring delivery order valued at up to $24 million with the NGA Luno A program[9, 10, 11] - The company signed early access agreements for Gen-3 services with multiple international customers[9, 12] - BlackSky launched its second Gen-3 satellite, which began delivering very high resolution (VHR) imagery within 12 hours after launch[9] - The company remains on track to launch 6 Gen-3 satellites this year and have 8 Gen-3 satellites on orbit by early 2026[19] Outlook - BlackSky's full year 2025 guidance includes revenue between $105 million and $130 million, and adjusted EBITDA between $0 million and $10 million[44]

```markdown [Overview of Second Quarter 2025 Results](index=1&type=section&id=BLACKSKY%20REPORTS%20SECOND%20QUARTER%202025%20RESULTS) [Key Highlights](index=1&type=section&id=Second%20Quarter%20Financial%20Highlights) BlackSky reported mixed financial results for Q2 2025, with Imagery & Software services revenue growing to $18.0 million and an improved cost of sales at 19% of revenue. The company strengthened its financial position with a cash balance of $94.9 million and a successful $185 million convertible note offering. Operationally, the company launched its second Gen-3 satellite, secured significant contracts, and is on track to launch six Gen-3 satellites in 2025 Key Financial Metrics | Financial Metric | Value | | :--- | :--- | | Imagery & Software Revenue | $18.0 million | | Imagery & Software Cost of Sales | 19% of revenue | | Backlog | $356 million | | Cash Balance (as of June 30, 2025) | $94.9 million | | Pro Forma Cash (incl. recent transactions) | > $170.0 million | - Operational achievements include the successful launch and commissioning of the second Gen-3 satellite, which delivered imagery within 12 hours. The company is on track to launch a total of six Gen-3 satellites this year[2](index=2&type=chunk)[4](index=4&type=chunk) - Key business developments include a facility monitoring order up to **$24 million** from the NGA, a new multimillion-dollar international customer contract, and multiple early access agreements for Gen-3 services[4](index=4&type=chunk) - The company completed an upsized **$185 million** convertible note offering in July, using the proceeds to pay off existing debt and strengthen its balance sheet[4](index=4&type=chunk)[12](index=12&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) CEO Brian E. O'Toole highlighted the successful launch and exceptional performance of the second Gen-3 satellite, which is already providing very-high resolution imagery to customers via early access agreements. He confirmed the plan to launch six Gen-3 satellites in 2025 and noted that the recent $185 million capital raise strengthens the company's balance sheet and validates its long-term business potential - The second Gen-3 satellite is performing exceptionally well and, combined with the first, is now providing very-high resolution imagery and AI-driven analytics to customers[2](index=2&type=chunk) - The company remains on track to launch six Gen-3 satellites in 2025, with general commercial availability expected in the fourth quarter[2](index=2&type=chunk) - A successful capital raise of **$185 million** has strengthened the balance sheet, increased liquidity, and is seen as a validation of the company's long-term potential[2](index=2&type=chunk) [Financial Performance](index=3&type=section&id=Financial%20Performance) [Financial Results (Q2 2025)](index=3&type=section&id=Financial%20Results) In Q2 2025, total revenue decreased to $22.2 million from $24.9 million year-over-year, primarily due to lower professional and engineering services revenue. The company reported a net loss of $41.2 million, a significant increase from a $9.4 million loss in Q2 2024, largely driven by a $24.4 million loss on derivatives. Adjusted EBITDA was a loss of $2.8 million, compared to a $2.1 million profit in the prior-year quarter Q2 2025 Financial Performance | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $22.2M | $24.9M | -10.8% | | Imagery & Software Revenue | $18.0M | $17.5M | +2.9% | | Professional & Engineering Revenue | $4.2M | $7.5M | -44.0% | | Net Loss | ($41.2M) | ($9.4M) | Increased Loss | | Adjusted EBITDA | ($2.8M) | $2.1M | Decreased | - The decline in total revenue was primarily due to a **$3.3 million** decrease in professional and engineering services revenue, attributed to the timing of revenue recognition on long-term, milestone-based contracts[5](index=5&type=chunk) - The year-over-year increase in net loss was mainly caused by a **$24.4 million** loss on derivatives in Q2 2025, compared to a **$5.3 million** gain in Q2 2024[8](index=8&type=chunk) - Cash operating expenses increased by **$3.1 million** year-over-year to **$19.4 million**, primarily due to overhead expenses previously capitalized as satellite assets before the acquisition of LeoStella operations[7](index=7&type=chunk) [Balance Sheet & Capital Expenditures](index=4&type=section&id=Balance%20Sheet%20%26%20Capital%20Expenditures) As of June 30, 2025, BlackSky held $94.9 million in cash and equivalents, bolstered by $35.8 million in net proceeds from an at-the-market equity program. Capital expenditures for the quarter were $10.0 million. Subsequent to the quarter's end, the company raised $185.0 million through a convertible note offering, which was used to pay off existing debt - Cash, cash equivalents, restricted cash, and short-term investments totaled **$94.9 million** as of June 30, 2025[11](index=11&type=chunk) - Capital expenditures for Q2 2025 amounted to **$10.0 million**[11](index=11&type=chunk) - Post-quarter, the company completed a **$185.0 million** offering of an **8.25%** convertible note due 2033, using a portion of the proceeds to pay off its senior secured note and commercial bank line[12](index=12&type=chunk) [2025 Outlook](index=4&type=section&id=2025%20Outlook) The company has adjusted its full-year 2025 outlook due to near-term volatility from the U.S. government budget process and the timing of some international contracts. Revenue guidance is now set between $105 million and $130 million, with Adjusted EBITDA expected to be between break-even and $10 million. The capital expenditure forecast remains unchanged 2025 Full-Year Guidance | 2025 Full-Year Guidance | Range | | :--- | :--- | | Revenue | $105M - $130M | | Adjusted EBITDA | $0M - $10M | | Capital Expenditures | $60M - $70M (Unchanged) | - The guidance adjustment is attributed to near-term volatility from the U.S. government budget process and timing related to some international contracts[13](index=13&type=chunk) [Financial Statements and Reconciliations](index=7&type=section&id=Financial%20Statements%20and%20Reconciliations) [Condensed Consolidated Statements of Operations](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS%20AND%20COMPREHENSIVE%20LOSS) This section provides the unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2025, and 2024, detailing revenues, costs, operating loss, and net loss Condensed Consolidated Statements of Operations | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Total revenue** | **$22,199** | **$24,938** | | Total costs and expenses | $36,139 | $36,659 | | Operating loss | ($13,940) | ($11,721) | | (Loss) gain on derivatives | ($24,435) | $5,273 | | **Net loss** | **($41,239)** | **($9,397)** | | Net loss per share | ($1.27) | ($0.52) | [Condensed Consolidated Balance Sheets](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) This section presents the company's unaudited condensed consolidated balance sheets as of June 30, 2025, and December 31, 2024, outlining assets, liabilities, and stockholders' equity Condensed Consolidated Balance Sheets | (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | **$138,796** | **$106,736** | | **Total assets** | **$310,798** | **$254,146** | | Total current liabilities | $37,400 | $26,022 | | **Total liabilities** | **$224,238** | **$160,157** | | **Total stockholders' equity** | **$86,560** | **$93,989** | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) This section details the unaudited condensed consolidated statements of cash flows for the six months ended June 30, 2025, and 2024, showing cash flows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $19,965 | ($5,602) | | Net cash used in investing activities | ($49,821) | ($23,048) | | Net cash provided by financing activities | $39,186 | $21,865 | | **Net increase (decrease) in cash** | **$9,330** | **($6,785)** | | **Cash, cash equivalents, and restricted cash – end of period** | **$23,708** | **$26,649** | [Reconciliation of Net Loss to Adjusted EBITDA](index=10&type=section&id=RECONCILIATION%20OF%20NET%20LOSS%20TO%20ADJUSTED%20EBITDA) This table provides a reconciliation of the GAAP measure Net Loss to the non-GAAP measure Adjusted EBITDA for the three and six months ended June 30, 2025, and 2024 Reconciliation of Net Loss to Adjusted EBITDA | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net loss | ($41,239) | ($9,397) | | Adjustments (Interest, Taxes, D&A, etc.) | $38,422 | $7,252 | | **Adjusted EBITDA** | **($2,817)** | **$2,145** | [Reconciliation of Operating Expenses to Cash Operating Expenses](index=11&type=section&id=RECONCILIATION%20OF%20OPERATING%20EXPENSES%20TO%20CASH%20OPERATING%20EXPENSES) This table reconciles the GAAP measure Operating Expenses to the non-GAAP measure Cash Operating Expenses for the three and six months ended June 30, 2025, and 2024 Reconciliation of Operating Expenses to Cash Operating Expenses | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Operating expenses | $29,892 | $29,777 | | Stock-based compensation | ($3,288) | ($2,222) | | Depreciation and amortization | ($7,208) | ($11,277) | | **Cash operating expenses** | **$19,396** | **$16,278** | ```

Group 1 - BlackSky (BKSY) is gaining attention in the defense sector, but coverage on the company remains limited [1] - The stock has shown significant movement in the past month, indicating potential momentum [1] Group 2 - The author has extensive experience in the technology market, focusing on risk mitigation during various economic events [1]

Group 1: BlackSky Technology Inc. (BKSY) - BlackSky Technology Inc. shares increased by 8.9% to close at $28.29, with a significant trading volume indicating strong investor interest [1] - The stock has experienced a remarkable 104.3% gain over the past four weeks, driven by optimism in global defense spending [1] - The consensus EPS estimate for the upcoming quarterly report is a loss of $0.40 per share, reflecting a year-over-year change of +16.7%, while revenues are expected to reach $27.92 million, up 11.9% from the previous year [2] Group 2: Earnings and Stock Performance - The consensus EPS estimate for BlackSky Technology has remained unchanged over the last 30 days, suggesting that the stock's price movement may not sustain without earnings estimate revisions [3] - The stock currently holds a Zacks Rank of 3 (Hold), indicating a neutral outlook [3] - BlackSky Technology is part of the Zacks Technology Services industry, which includes Allot Communications, another company in the same sector that has seen a decline of 5.5% in its last trading session [3] Group 3: Allot Communications - Allot Communications' consensus EPS estimate has decreased by 50% over the past month to $0, representing a year-over-year change of +100% [4] - Allot Communications also holds a Zacks Rank of 3 (Hold), similar to BlackSky Technology [4]

Core Viewpoint - BlackSky Technology's recent stock decline is attributed to its announcement of a convertible debt offering, which investors initially reacted negatively to, despite potential long-term benefits [3][4]. Group 1: Stock Performance - BlackSky's stock experienced a significant increase following a positive analyst prediction, rising from under $22 to over $28 [1]. - Following the announcement of the debt offering, BlackSky's stock fell by 20% within a single day [3]. Group 2: Debt Offering Details - BlackSky announced a convertible debt issuance of $125 million, with potential demand increasing the total to $143.8 million, later raised to $160 million, and possibly $185 million [3]. - The company plans to allocate $113.3 million of the raised funds to refinance existing debt, with the remainder for general corporate purposes [3]. Group 3: Interest Rates and Share Dilution Concerns - The new debt carries an interest rate of 8.25%, which is an improvement compared to the previous rate of approximately 11.5% [5]. - Concerns about share dilution arise from the debt's conversion to equity, which will only occur if the stock price reaches nearly $37, requiring a 60% increase from current levels [5]. Group 4: Market Reaction Analysis - The market's negative reaction to the debt offering may be an overreaction, as the new terms are more favorable than the previous debt [5]. - The potential for stock price appreciation could benefit investors if the company successfully executes its plans [5].

Group 1 - BlackSky Technology, Inc. announced plans to offer $125 million principal amount of convertible senior notes due 2033, leading to a drop in its shares during extended trading [1] - The company plans to grant initial purchasers an option to buy up to an additional $18.75 million principal amount of the notes [1] - Approximately $103.1 million of the proceeds will be used to repay and terminate its secured term loan facility, while about $10.2 million will be used for its secured revolving credit facility [2] Group 2 - Following the announcement, BlackSky Technology stock experienced a significant decline of 222.23%, trading at $23 in Thursday's extended trading [3]

Group 1: BlackSky Technology - BlackSky Technology Inc. has seen a 21% increase in share price due to a $24 million contract with the National Geospatial-Intelligence Agency, which is part of a larger potential business opportunity [4][6] - The company is expanding its satellite project to enhance its high-frequency monitoring capabilities, with initial launches expected in 2027 [5] - BlackSky's subscription-based geospatial intelligence service has a backlog exceeding $350 million and year-over-year sales growth over 20%, although it continues to face quarterly losses [6] Group 2: Core Scientific - Core Scientific Inc. shares surged approximately 49% following renewed acquisition talks with AI hyperscaler CoreWeave, which previously made an unsolicited offer of $5.75 per share in 2024 [7][8] - The company's market capitalization has surpassed $5 billion, indicating strong investor interest and potential for a premium acquisition offer [8] - Core Scientific has established multiple agreements with CoreWeave, enhancing its infrastructure capabilities despite the previous failed acquisition attempt [9] Group 3: Ambarella - Ambarella Inc. experienced a rally amid speculation of a potential sale, although this remains unconfirmed [11] - The company's Edge AI system-on-a-chip solutions are gaining traction in the market, which could support its recovery following a challenging 2024 [12] - Analysts have a consensus rating of eight Buys and four Holds for Ambarella, with a price target suggesting a 28% upside potential [12]

Core Insights - The commercialization of space and national security needs are driving demand for space technology stocks like Rocket Lab Corp. (RKLB) and BlackSky Technology (BKSY) [1][3] - RKLB and BKSY represent distinct yet complementary aspects of the space economy, with RKLB focusing on launch services and BKSY on geospatial intelligence [2] Group 1: Rocket Lab (RKLB) - Recent achievements include the successful launch of its 67th Electron rocket, with a target of over 20 launches in 2025 and a 100% mission success rate year to date [5][10] - Financial stability is indicated by cash and cash equivalents of $428 million, with current debt at $20 million and long-term debt at $419 million, suggesting a moderate solvency position [6] - Challenges include high operating expenses due to investments in innovations, which may offset revenue gains and lead to losses [7][8] Group 2: BlackSky Technology (BKSY) - Recent achievements include securing a $24 million contract from the National Geospatial-Intelligence Agency and signing agreements with international defense customers for real-time monitoring capabilities [9][10] - Financial stability is shown with cash and cash equivalents of $77 million, current debt of $4 million, and long-term debt of $112 million, indicating a solid solvency position [12] - Challenges include intense competition in the satellite imaging sector and high operating expenses leading to a loss of $12.8 million despite a 22% revenue growth year over year [13][14] Group 3: Comparative Analysis - RKLB has seen a stock price increase of 652.9% over the past year, while BKSY has increased by 158.9% in three months [10][20] - BKSY's valuation is more attractive with a forward sales ratio of 4.32X compared to RKLB's 22.96X [20] - Both companies have negative Return on Equity (ROE), indicating inefficiencies in generating profits from their equity base [24] Group 4: Investment Outlook - RKLB is positioned as the more financially sound stock for long-term investors due to consistent launch cadence and low leverage [26] - BKSY's higher leverage and delayed path to profitability diminish its near-term investment appeal [26][27] - Both companies currently hold a Zacks Rank 3 (Hold), reflecting a balanced risk-reward scenario for investors [27]

Core Viewpoint - BlackSky Technology's recent $24 million contract with the National Geospatial-Intelligence Agency (NGA) is a significant development, but it is unlikely to make the company profitable in the near term [1][6]. Group 1: Contract Details - The NGA awarded BlackSky a four-year contract for global monitoring of military and economic facilities, which includes AI-enabled object and pattern-of-life change detection [4]. - This contract is part of a larger umbrella agreement and is expected to provide an additional $6 million per year, with potential for growth as more delivery orders are issued [5]. Group 2: Stock Performance and Analyst Insights - Following the contract announcement, BlackSky's stock surged by 18.9%, and Canaccord Genuity analyst Austin Moeller raised the price target from $14 to $20 per share [2][3]. - Despite the positive stock movement, BlackSky's revenues have only increased by less than 10%, and the company continues to incur losses of approximately $54 million annually [6]. - Analysts do not anticipate BlackSky will achieve profitability before 2028, suggesting that the current stock price may still be too high [6][7].

Core Insights - BlackSky Technology's stock is experiencing significant gains, with a 15.3% increase noted in recent trading sessions, driven by positive developments in its satellite initiatives and geopolitical dynamics [1][2][3] Company Developments - The company announced a major initiative to expand its satellite network with the introduction of Aros satellites, which will utilize multispectral, large-area collection technologies and are expected to launch in 2027 [2] - The new satellite project is aimed at enhancing country-scale digital mapping and navigation guidance capabilities, indicating a strategic focus on next-generation defense technologies [2][3] Geopolitical Context - Recent military actions, including U.S. bombings of Iranian nuclear facilities and Iran's missile strikes on U.S. bases in Iraq and Qatar, have created a favorable environment for BlackSky, as the company may secure expanded contracts with the U.S. Department of Defense [3][4] - The measured nature of Iran's retaliation is interpreted as a potential de-escalation of tensions, which could contribute to geopolitical stability and a strong demand outlook for BlackSky's technology [4][5]