BlackSky Technology (BKSY) - 2025 Q2 - Quarterly Results

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** |