BlackSky Technology Inc. (BKSY) will report its first-quarter 2025 results on May 8, before the bell.BKSY’s earnings surprise history has not been impressive. Its earnings lagged the Zacks Consensus Estimate in three of the trailing four quarters and beat once, with an average negative surprise of 12.9%.Factors to Note Ahead of BKSY’s Q1 ResultsFor the upcoming report, the Zacks Consensus Estimate for revenues is pegged at $27.5 million, implying a 13.6% year-over-year increase. This anticipated growth is l ...

Core Viewpoint - The recent sell-off in space stocks has created investment opportunities as many companies have become cheaper to invest in, despite the overall challenges in the space industry [1][3]. Investment Opportunities - The article highlights three of the cheapest space stocks that may offer upside potential: BlackSky, Redwire, and Spire Global [5]. BlackSky - BlackSky has a market capitalization of less than $270 million and a price-to-sales (P/S) ratio of 2.6, making it one of the cheapest space stocks [6]. - The company is currently unprofitable and is not expected to earn its first profit before 2027, with an annual negative free cash flow of approximately $56 million and only $52 million in cash reserves [7]. - BlackSky may need to raise additional capital through debt or stock sales, or potentially sell itself to a larger company [8]. Redwire - Redwire has a market capitalization of $863 million and a P/S ratio of 2.8, with three times the annual revenue of BlackSky [9]. - The company is also unprofitable, with cash reserves of less than $34 million, but it burned less than $24 million last year [10]. - Analysts suggest that Redwire could become free cash flow-positive as early as this year and achieve GAAP profitability by 2026, which would be a significant milestone for the company [11][12]. Spire Global - Spire Global has a market capitalization of $345 million and a P/S ratio of 3.1, which may change significantly in the near future [14]. - The company is negotiating to sell its maritime data business to Kpler, which could yield a cash windfall of $241 million, allowing it to pay off debts and fund operations for the next three years [15]. - Successfully closing this deal could serve as a near-term catalyst for Spire's stock price, potentially leading to significant gains [16].

Group 1: Market Context - Global markets are facing challenges such as trade wars, geopolitical tensions, and persistent inflation, creating opportunities for savvy investors to acquire high-quality companies at lower prices [1] - The convergence of artificial intelligence (AI), autonomous transportation, and space-based intelligence is reshaping industries and unlocking significant growth potential over the next 10 to 20 years [1] Group 2: Investment Opportunities - Many disruptive innovators are currently trading at significantly reduced valuations, presenting long-term investors with opportunities to build positions at attractive prices [2] - Three emerging tech stocks with high growth potential over the next decade are highlighted [2] Group 3: SoundHound AI - SoundHound AI has transitioned from a music-recognition app to a leading voice AI company, currently down 66% from its 52-week high [3] - The company’s speech-to-meaning technology efficiently processes spoken language, enabling real-time interpretation of complex conversations [3] - SoundHound's partnerships with automakers and its adoption in the restaurant industry position it well for future growth as voice interfaces become more prevalent [4] Group 4: Archer Aviation - Archer Aviation is developing electric vertical takeoff and landing (eVTOL) aircraft, currently down 40% from its 52-week high [5] - The "Midnight" aircraft features a 12-propeller design, capable of speeds up to 150 mph and a range of 100 miles, powered by six independent battery packs [5] - Archer's partnerships with Stellantis and major airlines, along with favorable regulatory changes, create a pathway for commercial operations in urban markets [6] - The company is transitioning from development to revenue-generating operations, with commercial flights expected to begin this year [7] Group 5: BlackSky Technology - BlackSky Technology operates a constellation of Earth-imaging satellites, currently down 61% from its 52-week high [8] - The company has deployed its first Gen-3 satellite, enhancing its imaging capabilities to 35-centimeter resolution, with AI algorithms for automatic identification of objects [8] - BlackSky's ability to deliver imagery within 90 minutes makes it valuable for defense and commercial applications, with existing government contracts [9] - The demand for intelligence assets is increasing due to global tensions, positioning BlackSky for significant growth in the expanding commercial satellite market [10] - BlackSky has a market cap of $244 million, targeting a projected $30 billion annual industry by 2033, indicating a substantial disconnect between current valuation and future potential [11]

BlackSky and Jumia could have more upside potential than the struggling AI underdog.BigBear.ai (BBAI 20.20%), a developer of artificial intelligence (AI) modules for edge networks, has seen its stock decline nearly 70% since it went public by merging with a special purpose acquisition company (SPAC) on Dec. 8, 2021. Like many other SPAC-backed start-ups, BigBear.ai set some ambitious growth targets but missed them by a mile.Prior to going public, BigBear.ai claimed it could grow its annual revenue from $182 ...

Customer Dependency and Revenue Risks - In fiscal years 2024 and 2023, three customers accounted for 88% of total revenue, indicating a high dependency on a small number of clients[70] - The company relies on a limited number of customers for a large portion of revenue, which poses a risk if any major customer is lost[70] - Existing customers' decisions to renew or expand contracts are critical for revenue stability[71] - The sales cycle for products and services is long and unpredictable, impacting revenue recognition timing[65] - The company may not be able to convert its backlog into revenue, as backlog is subject to large variations and may not accurately indicate future earnings[79] - U.S. government contracts included in backlog can be terminated at the government's convenience, potentially affecting revenue realization[80] Financial Performance and Profitability - The company has incurred significant losses each year since inception and cannot assure future profitability[57] - The company has an accumulated deficit of $656.2 million as of December 31, 2024, and has incurred significant losses each year since inception[94] - Revenue growth increased in 2023 and 2024, but there are no assurances that this growth will continue at current rates[61] - The company's results of operations have fluctuated significantly, making it difficult to predict future performance[62] - The company may not be able to offset increases in operating expenses with revenue growth, hindering future profitability[94] Competition and Market Dynamics - The company faces intense competition from larger competitors with greater resources, which may lead to price reductions and loss of market share[86] - The market for the company's products and services is still emerging and may not achieve expected growth, impacting revenue potential[85] - The company faces risks from competitors potentially developing superior technologies that could render its offerings obsolete, impacting contract procurement and growth[107] - Market acceptance of the company's high-resolution imagery products is crucial for revenue, influenced by quality, price, and competition[106] Operational and Technical Risks - The business is capital intensive, and financing future satellites may be challenging[63] - The company relies on third-party computing infrastructure, such as Amazon Web Services and Microsoft, which could adversely affect operations if disruptions occur[103] - The company has significant risks related to satellite launches and in-orbit operations, with potential for substantial impairment charges if insurance coverage is inadequate[108] - The complexity of the company's products may lead to defects or errors, resulting in increased costs and potential damage to customer relationships[114] - Satellites may experience malfunctions, which could reduce expected capacity and revenue generation[151] Regulatory and Compliance Challenges - Government contracts are subject to substantial rights and remedies favoring the government, including unilateral contract modifications and terminations for convenience[127] - The U.S. government can terminate contracts for default, potentially exposing the contractor to liability for additional costs incurred by the government[128] - Compliance with cybersecurity requirements is critical, as failure to meet these standards may delay or prevent contract awards[138] - The company is subject to extensive and evolving government regulations, and non-compliance could have a material adverse effect on business operations[192] - The company is subject to anti-bribery and anti-corruption laws, which have been enforced aggressively and could result in penalties if violated[211] Strategic and Growth Considerations - The company anticipates entering into joint ventures and strategic alliances, which may present significant risks and challenges that could adversely affect its business[225] - Future acquisitions may pose risks such as difficulties in assimilating operations and personnel, which could negatively impact the company's business and financial results[251] - The company acquired the remaining 50% of LeoStella LLC in November 2024, aiming to improve control over the Gen-3 satellite supply chain and production operations[249] - The anticipated benefits from the acquisition of LeoStella may take longer to realize or may not be fully realized, potentially affecting the company's financial condition[250] Economic and Market Conditions - The company is exposed to geopolitical and economic risks that may decrease demand for its products and services[252] - Adverse macroeconomic conditions and U.S. trade policy changes could materially affect the company's business[252] - Changes in credit ratings or macroeconomic conditions could increase borrowing costs and limit financing options, adversely affecting operational resources[191] - The overall financial condition and results of operations could be adversely affected if economic conditions worsen[254] Internal Control and Governance - The company must maintain effective internal controls over financial reporting to ensure investor confidence and avoid material misstatements in financial statements[122] - The company is classified as a smaller reporting company, which may limit the comparability of its financial performance with other public companies[234] - There are no current plans to pay cash dividends on Class A common stock for the foreseeable future, with future earnings intended for operations, expansion, and debt repayment[236]

Core Insights - BlackSky Technology, Inc. (NYSE: BKSY) reported revenue of $30.4 million, adjusted EBITDA of $7.4 million, and EPS of ($1.01), which fell short of consensus estimates of $38.7 million, $7.7 million, and ($0.43) respectively [1] - This marks the fifth consecutive quarter of positive adjusted EBITDA for the company [1] - The Imagery and Software Analytics segment generated revenue of $17.5 million, a decrease of $1.6 million from the prior year, attributed to an upfront delivery of approximately $2.0 million in images for a previous project [1] - The Professional and Engineering segment reported revenue of $12.9 million in Q4 2024, showing a sequential increase due to approximately $7.0 million in deliverables under the Indonesian contract [1] - Consolidated gross margins improved to 77.4%, up from 66.2% in Q3 2024 [1] - Adjusted EBITDA significantly improved to $11.6 million from $(1.0 million) posted last year [1] Future Outlook - BlackSky has successfully launched its first Gen-3 satellite, which began delivering imagery that exceeded customer expectations for initial image quality [6] - The company has been awarded several nine-figure multi-year contracts, with one spanning 7 years [6] - For FY25, BlackSky set its revenue guidance in the range of $125.0 million to $142.0 million, driven by substantial multi-year sales opportunities [6]

Financial Data and Key Metrics Changes - In 2024, the company generated total revenue of $102.1 million, with Imagery & Software Analytical Services revenue growing to $70.1 million, driven by demand from U.S. and international government customers [35][36] - Adjusted EBITDA for 2024 was $11.6 million, a significant improvement from a loss of $1 million in 2023, marking the first full year of positive adjusted EBITDA [43][44] - Cash operating expenses for 2024 were $64.9 million, a slight increase from $63.1 million in 2023, primarily due to the integration of LeoStella [38][39] Business Line Data and Key Metrics Changes - Imagery & Software Analytical Services revenue increased by nearly $5 million with minimal cost growth, demonstrating strong operating leverage [36][37] - Professional and engineering services revenue rose to $32 million, driven by support for strategic imagery and analytics customer programs [35] Market Data and Key Metrics Changes - The company secured a seven-year contract valued at over $100 million with a strategic international customer, reflecting the essential nature of its services for national and homeland security [21][22] - Contracts totaling approximately $20 million were won to support India's earth observation capabilities, marking entry into a growing market [24] Company Strategy and Development Direction - The company is focused on expanding its Gen-3 satellite constellation, with plans to launch five additional Gen-3 satellites in 2025 and a total of at least eight within the next 12 months [18][19] - The strategy includes aggressively pursuing new major customers while expanding contracts with existing customers to unlock new revenue growth [51][52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the performance of the Gen-3 satellite, which is expected to meet the needs of a rapidly evolving market, and forecasted total revenue growth of 30% in 2025 [32][48] - The company anticipates achieving a full year of adjusted EBITDA between $14 million and $22 million in 2025, supported by strong contract momentum and disciplined cost management [49] Other Important Information - The company ended 2024 with $53.8 million in cash and short-term investments, with expectations of receiving approximately $28 million in payments from major customer contracts over the next 12 months [46] - The acquisition of LeoStella allows the company to have full control over satellite manufacturing capabilities, which is crucial for the rapid deployment of the Gen-3 constellation [39][40] Q&A Session Summary Question: Implications of Gen-3 commissioning going live faster than expected - Management confirmed that the Gen-3 satellite began imaging operations within five days, with exceptional image quality exceeding customer expectations [57][58] Question: Acceleration in launch cadence and CapEx implications - Management clarified that the planned CapEx of $60 million to $70 million was part of the original strategy, with a slight acceleration due to the successful validation of the Gen-3 satellite [60][62] Question: Impact of LeoStella integration on margins - Management indicated that while there are near-term impacts from the integration, long-term efficiencies are expected to improve overall cost and economics [83][84] Question: Revenue mix and growth rates for 2025 - Management noted that growth in 2025 is expected to come primarily from existing contracts, with new customer ramp-up anticipated later in the year as Gen-3 capabilities come online [112][113] Question: Backlog and revenue recognition - Management stated that the backlog stands at approximately $390 million, with about $100 million expected to be realized in 2025 [157]

BlackSky Technology Inc. (NYSE:BKSY) Q4 2024 Earnings Conference Call March 6, 2025 8:30 AM ET Company Participants Aly Bonilla - Vice President-Investor Relations Brian O'Toole - Chief Executive Officer Henry Dubois - Chief Financial Officer Conference Call Participants Daniel Hibshman - Craig-Hallum Greg Burns - Sidoti & Company Josh Sullivan - The Benchmark Company Chris Quilty - Quilty Space Edison Yu - Deutsche Bank Jaeson Schmidt - Lake Street Capital Markets Timothy Horan - Oppenheimer Scott Buck - H ...

BlackSky Technology Inc. (BKSY) stock has performed impressively over the past six months. The stock has gained 49.8%, outperforming the industry's 45.3% rally and the 7.6% rise of the Zacks S&P 500 composite.Six Months' Price Performance Image Source: Zacks Investment Research BKSY’s performance has fallen short of its industry peers, AppLovin Corporation (APP) and Agora, Inc. (API) rallies of 253.4% and 186.3% for the same period, respectively.As of the last trading session, the stock closed at $13.2, 66. ...

BlackSky Technology Inc. (BKSY) came out with a quarterly loss of $0.39 per share versus the Zacks Consensus Estimate of a loss of $0.28. This compares to loss of $0.40 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -39.29%. A quarter ago, it was expected that this company would post a loss of $0.61 per share when it actually produced a loss of $0.66, delivering a surprise of -8.20%.Over the last four quarters, the company ha ...