Achieves Record Q4 and Full Year Revenue, up 79% and 61% Respectively

Successfully Launches Six Satellites Within 20-Day Period

Company Provides Full Year 2022 Outlook

HERNDON, Va. — (BUSINESS WIRE) — February 22, 2022 — BlackSky Technology Inc. (“BlackSky” or the “Company”) (NYSE: BKSY), a leading provider of real-time geospatial intelligence and global monitoring, today announced its results for the fourth quarter and full year ended December 31, 2021.

Fourth Quarter Financial Highlights:

• Revenue of $11.5 million, up 79% from prior year period
• Operating loss of $31.9 million (includes pre-merger stock-based compensation of $12.8M and public company transaction costs of $4.4M)
• Adjusted EBITDA ⁽¹⁾ loss of $14.4 million
• Cash balance at the end of December 2021 was $168.1 million
• Capital expenditures of $14.4 million

Full Year 2021 Financial Highlights:

• Revenue of $34.1 million, up 61% from prior year
• Operating loss of $120.1 million (includes pre-merger stock-based compensation of $41.3M, satellite impairment costs of $18.4M, and public company transaction costs of $5.8M)
• Adjusted EBITDA ⁽¹⁾ loss of $44.4 million
• Capital expenditures of $63.9 million

“We’re pleased that our fourth quarter revenue improved significantly over the prior year period driven by increased customer demand for our platform,” said Brian E. O’Toole, Chief Executive Officer. “In the fourth quarter, we won multiple U.S. and international government contracts, established new commercial agreements with global 2000 companies, and expanded our global reseller network. We dramatically improved the revisit rate of our high-resolution satellite constellation after launching six additional satellites, bringing the current constellation to 12 satellites as of year-end, which we believe is more than sufficient capacity to achieve our company’s objectives for the foreseeable future. We also welcomed Amy Minnick onboard as our Chief Commercial Officer, who is leading the build out of our commercial business across a number of vertical markets. We achieved many milestones in 2021 and as we turn our focus to 2022, we believe BlackSky is well positioned to expand its customer base, capture incremental market share, and build a strong foundation for the years ahead.”

Financial Results

Revenues

Total revenue for the fourth quarter of 2021 was $11.5 million, up $5.1 million or 79% from the fourth quarter of 2020. Imagery and software analytical services revenue was $7.4 million driven by new and extended government contracts and represented approximately two-thirds of total revenues. Also contributing to the increase in total revenues was higher engineering and systems integration revenue of $4.1 million.

For the full year 2021, total revenue was $34.1 million, up $13.0 million or 61% from 2020. The year-over-year increase was primarily attributable to several new government contract awards.

Operating Expenses

Operating expenses for the fourth quarter of 2021 were $33.2 million, which included $12.1 million of non-cash stock-based compensation expense related to specific pre-merger equity awards to key employees as part of the business combination, and $4.4 million of public company transaction costs. Excluding these non-recurring items, operating expenses in the fourth quarter of 2021 were $16.7 million compared to $11.0 million in the same period in 2020. The year-over-year increase was primarily due to investments in sales, software, and engineering hires, recurring public company operating costs including director’s and officer’s insurance, and higher depreciation expense.

For the full year 2021, operating expenses were $119.5 million, which included $38.4 million of non-cash stock-based compensation expense related to specific pre-merger equity awards to key employees as part of the business combination, $18.4 million of satellite impairment charges taken in the second quarter, and $5.8 million of public company transaction costs. Excluding these non-recurring items, operating expenses in 2021 were $56.9 million compared to $38.7 million in the prior year. The year-over-year increase was primarily due to investments in sales, software, and engineering hires, recurring public company operating costs including director’s and officer’s insurance, and higher depreciation expense.

Operating Loss

Operating loss for the fourth quarter of 2021 was $31.9 million compared to an operating loss of $8.7 million in the fourth quarter of 2020. The year-over-year increase in operating loss was primarily due to higher non-recurring operating expenses, investments in sales, software, and engineering hires, recurring public company operating costs, and higher depreciation expense.

For the full year 2021, operating loss was $120.1 million compared to an operating loss of $41.4 million. The increase in operating loss over the prior year was primarily due to higher non-recurring operating expenses, investments in sales, software, and engineering hires, recurring public company operating costs, and higher depreciation expense.

Adjusted EBITDA ⁽¹⁾

Adjusted EBITDA loss for the fourth quarter of 2021 was $14.4 million compared to an adjusted EBITDA loss of $5.1 million in the prior year period. The year-over-year decline was primarily due to investments in sales, software, and engineering hires, and public company costs. On a sequential basis, adjusted EBITDA improved from the $16.3 million loss in the third quarter of 2021.

For the full year 2021, adjusted EBITDA loss was $44.4 million compared to a loss of $29.2 million in 2020 primarily due to the Company’s investments made in sales, software, and engineering hires, as well as elevated compliance expenses associated with operating as a publicly traded company.

Balance Sheet & Capital Expenditures

As of December 31, 2021, cash and cash equivalents totaled $168.1 million. Capital expenditures for the fourth quarter of 2021 were $14.4 million and for the full year 2021 totaled $63.9 million.

2021 Business Highlights

Throughout 2021, BlackSky achieved many significant milestones including:

• Successfully closed the business combination transaction becoming a new public company listed on the New York Stock Exchange
• Doubled the number of high-resolution imaging satellites in orbit, improving the imaging performance to an optimal peak rate of 15 revisits per day, while placing the new satellites into customer-ready production within 48 hours of launch
• Awarded both multi-year contract agreements and extensions including:
  • National Geospatial-Intelligence Agency (NGA) – to provide artificial intelligence enabled economic monitoring
  • National Reconnaissance Office (NRO) – to provide high-revisit imagery through an expanded existing agreement
  • Intelligence Advanced Research Projects Activity (IARPA) – to support the monitoring of global large-scale construction projects
  • National Aeronautics and Space Administration (NASA) – to provide satellite imagery in support of the agency’s Earth observation research
  • Ministry of Defense (MOD) – to provide value added imagery products and services to several large international MODs
• Added significant capabilities to our SaaS platform, enhanced our customer-facing analytics, and improved AI-driven insights
• Established new commercial agreements with global 2000 companies
• Signed a partnership agreement with Palantir Technologies Inc. to make available BlackSky’s satellite imagery and analytics through integration with Palantir’s enterprise platform
• Strengthened BlackSky’s leadership team by adding four new strategic members to its Board of Directors and five seasoned executives to its management
• Increased global reseller network expanding the Company’s footprint to the U.K, Australia, Mexico, Central America, and Southeast Asia to name a few locations

2022 Outlook

Customer demand for BlackSky’s geospatial intelligence and analytic platform continues to increase in both government and commercial markets. With increased customer demand anticipated throughout the year, the Company expects full year 2022 revenue to be between $58 million and $62 million, a 76% increase over 2021 at the mid-point of this range. In addition, the Company anticipates launching an additional four satellites in the first half of 2022, two of which will replace the first satellites launched years ago as these assets reach the end of their design life, bringing the total to 14 operating satellites. The Company expects capital expenditures for the full year 2022 to be between $52 million and $56 million, a decrease compared to 2021 spend as the Company believes the capacity from the 14-satellite constellation will be more than sufficient to support increased customer demand. With prudent cost management and lower capital expenditures, the Company believes its cash position will remain strong with sufficient liquidity for the foreseeable future.