Revenue up 105% Compared to Prior Year Quarter
Imagery and Software Analytical Services Revenue Grew to 88% of Total Revenue
Won Several Large Multi-Year Contracts with a Total Value up to $1.27 Billion
Company Raises Full Year 2022 Revenue Outlook

HERNDON, Va. — (BUSINESS WIRE) — August 10, 2022 — BlackSky Technology Inc. (“BlackSky” or the “Company”) (NYSE: BKSY), announced results for the second quarter ended June 30, 2022.

Second Quarter Financial Highlights:

• Revenue of $15.1 million, up 105% from the prior year period
• Imagery & software analytical services revenue improves 161% over the prior year's quarter and to 88% of total revenues
• Net loss of $26.3 million
• Adjusted EBITDA ⁽¹⁾ loss of $8.8 million
• Cash balance ⁽²⁾ at the end of June 2022 was $111.2 million
• Capital expenditures of $12.1 million

“Second quarter revenue hit an all-time high for the Company, more than doubling over the prior year period driven by strong customer engagement and demand for BlackSky’s dynamic hourly monitoring and on-demand satellite tasking capabilities,” said Brian E. O’Toole, BlackSky CEO. “In the second quarter, we won the Electro Optical Commercial Layer (EOCL) award with the National Reconnaissance Office with a total value up to $1.021 billion over the next 10 years. This win validates BlackSky’s technology and our ability to deliver vital information at scale, in support of the U.S. government’s real-time critical mission needs. We also won additional contracts with other government agencies totaling approximately an additional quarter billion dollars to provide space-based dynamic monitoring and analytic insights using our Company’s proprietary and proven Spectra AI software platform. And most recently, we entered into a major partnership with Esri, the industrial leader in geospatial intelligence software, to provide their global users for the first time, with on-demand satellite tasking services with imagery delivered directly into Esri’s ArcGIS Online platform. Now more than ever, our world needs real-time information, and BlackSky is the partner of choice to deliver it using the Company’s first-of-its-kind platform. With strong second quarter results and a growing sales pipeline, we look forward to continuing the momentum into the second half of 2022 and setting the stage for the Company’s next phase of growth.”

Financial Results

Revenues

Total revenue for the second quarter of 2022 was $15.1 million, up $7.7 million or 105% from the second quarter of 2021. Imagery and software analytical services revenue was $13.4 million, a 161% growth over the prior year period primarily driven by accelerated demand from the U.S. and international governments. The mix of revenue from imagery and software analytical services grew to approximately 88% of total revenues. Engineering and systems integration revenue contributed $1.8 million in the second quarter of 2022.

Cost of Revenue

Cost of sales as a percent of revenue was approximately 65% for the second quarter of 2022 compared to approximately 87% in the second quarter of 2021. This improvement was primarily driven by greater volumes of imagery and analytical services revenue which comprises of low fixed cost structure as a percent of revenue.

Operating Expenses

Operating expenses for the second quarter of 2022 were $27.0 million, which included $2.6 million of non-cash stock-based compensation expense, compared to operating expenses of $30.8 million in the second quarter of 2021, which included an $18.4 million satellite impairment loss and $0.3 million in non-cash stock-based compensation expense. Excluding the prior year’s impairment loss and stock-based compensation expense in both years, operating expenses increased from $12.1 million to $24.4 million year-over-year on a comparable basis. The increase was primarily due to higher depreciation expense from additional satellites placed into orbit in 2021, investments in sales, software, and engineering hires, and public company operating costs.

Operating Loss

Operating loss for the second quarter of 2022 was $21.7 million compared to an operating loss of $29.8 million in the second quarter of 2021. The year-over-year improvement in operating loss was primarily due to the one-time satellite impairment loss recognized in the prior year period and increased imagery and analytical services revenue in the second quarter of 2022, partially offset by higher operating expenses as stated above.

Adjusted EBITDA ⁽¹⁾

Adjusted EBITDA loss for the second quarter of 2022 was $8.8 million compared to an adjusted EBITDA loss of $7.6 million in the prior year period. The $1.2 million year-over-year decline was primarily due to increased revenue growth offset by investments in sales, software, and engineering hires and public company operating costs.

Balance Sheet & Capital Expenditures

As of June 30, 2022, cash and cash equivalents, restricting cash, and short-term investments totaled $111.2 million. Capital expenditures for the second quarter of 2022 were $12.1 million.

Recent Business Accomplishments

• Awarded the Electro Optical Commercial Layer (EOCL) contract with the National Reconnaissance Office (NRO), valued at up to $1.021 billion over the next 10 years, to provide advanced imaging services utilizing the Company’s current and future satellite constellation
• Won a five-year Indefinite Delivery Indefinite Quantity agreement with the Joint Artificial Intelligence Center (JAIC) to create and optimize data sets for the U.S. Department of Defense with a total value of $241 million
• Entered into a major partnership with Esri, the industry leader in geospatial intelligence software, to provide the first dynamic, on-demand satellite tasking services to Esri’s global ArcGIS Online customer base and over 350,000 organizations
• Won a $4.4 million contract with the Intelligence Advanced Research Projects Activity (IARPA) to support the second phase of the multi-year program for space-based dynamic monitoring

Other Updates

As previously announced on June 15, 2022, the Company promoted Henry Dubois to Chief Financial Officer. Mr. Dubois joined BlackSky as Chief Development Officer in August 2021 after having served as an advisor to the Company’s board since 2018. Mr. Dubois brings over 30 years of financial experience, including serving as an executive at two geospatial and commercial remote sensing companies.

2022 Outlook

Customer utilization and demand for BlackSky’s unique dynamic monitoring, on-demand satellite tasking, and analytic insights continue to be strong. Increased market demand, combined with several large multi-year contracts recently awarded to BlackSky, sets the stage for a robust second half of the year.

As a result of these opportunities, the Company has raised its full-year revenue expectations to between $62 and $66 million, representing an 88% year-over-year growth using the mid-point of the range. The Company continues to expect capital expenditures for the entire year of 2022 to be between $52 million and $56 million.

Investment Community Conference Call

BlackSky will host a conference call and webcast for the investment community this morning at 8:30 AM ET. Senior management will review the results, discuss BlackSky’s business, and answer questions. To access the live webcast or the archived webcast following completion of the call, please visit the Company’s investor relations website at http://ir.blacksky.com and then select “News & Events” for the link to the webcast. A presentation accompanying the webcast can also be found on the investor relations website. To access the conference call, participants should dial 1-877-589-7299 (domestic) or 1-201-689-8778 (international) at least ten minutes before the start of the call. To listen to a replay of the conference call, please dial 1-877-660-6853 or 1-201-612-7415 using access code 13731814. The audio replay will be available from approximately 12:30 PM ET on August 10, 2022, through August 24, 2022.