BlackSky Reports Third Quarter 2022 Results

Q3 Revenue up 113% Compared to Prior Year Quarter

Imagery and Software Analytical Services Revenue Grew to 89% of Total Revenue

Company Affirms Upper End of Full Year 2022 Revenue Guidance

HERNDON, Va. — (BUSINESS WIRE) — November 8, 2022 — BlackSky Technology Inc. (“BlackSky” or the “Company”) (NYSE: BKSY) announced results for the third quarter ended September 30, 2022.

Third Quarter Financial Highlights:

Revenue of $16.9 million, up 113% from the prior year period
Imagery & software analytical services revenue grew 130% over the prior year's quarter and to 89% of total revenues
Net loss of $13.0 million
Adjusted EBITDA⁽¹⁾ loss of $6.5 million
Cash balance⁽²⁾at the end of September 2022 was $90.7 million
Capital expenditures of $8.8 million

⁽¹⁾ Non-GAAP financial measure. See “Non-GAAP Financial Measures” below and reconciliation table at the end of this release.

⁽²⁾ Cash balance includes cash and cash equivalents, restricted cash, and short-term investments.

“I’m pleased that Q3 was another strong quarter as we continued strong execution across all aspects of our business, building on the momentum from the first half of the year,” said Brian E. O’Toole, BlackSky CEO. “Third quarter revenue grew 113% year-over-year to $16.9 million, another quarterly revenue record driven by a full quarter of subscription imagery revenue under the EOCL contract with the National Reconnaissance Office. International revenues more than doubled over last year as we continue to benefit from investments in expanding our international sales team and strong global demand. With our expanding customer base, strong pipeline, and growing contracted backlog, we are looking forward to a strong finish to 2022 and carrying this momentum into 2023. Given our trajectory, we anticipate full year 2022 revenues to come in at the upper end of our guidance range.”

Recent Business Accomplishments

Successfully ramped up and achieved daily delivery rates of advanced imaging subscription services under the Electro Optical Commercial Layer (EOCL) contract with the National Reconnaissance Office (NRO), valued at up to $1 billion over the next 10 years
Won a $10 million, one-year follow-on subscription contract with an international ministry of defense customer in Asia to provide on-demand, high-frequency imagery services on a take or pay basis
Received multiple task order awards in the third quarter under our Economic Indicator Monitoring contract with the National Geospatial-Intelligence Agency (NGA), resulting in $14 million in total orders received within the first year of the five-year, $30 million contract
First order for $1.7 million in imagery services under the Commercial Smallsat Data Acquisition (CSDA) program with the National Aeronautics and Space Administration (NASA)
Recipient of the Pioneer in Space Business Award from Euroconsult, a leading global space and satellite consulting and market intelligence firm, recognizing BlackSky’s innovative contributions to the space industry

Financial Results

Revenues

Total revenue for the third quarter of 2022 was $16.9 million, up $9.0 million, or 113% from the third quarter of 2021. Imagery and software analytical services revenue was $15.0 million, up 130% over the prior year period primarily driven by increased demand from new and existing U.S. and international government customers. The mix of revenue from imagery and software analytical services grew to approximately 89% of total revenues. Engineering and systems integration revenue contributed $1.9 million in the third quarter of 2022.

Cost of Sales

Cost of sales as a percent of revenue was 46% for the third quarter of 2022, compared to 159% in the third quarter of 2021. For imagery and software analytical services, cost of sales as a percent of revenue was 35% in the third quarter of 2022, compared to 111% in the third quarter of 2021. The year-over-year improvement was primarily driven by greater volumes of imagery and analytical services revenue that inherently have a low fixed-cost structure as a percent of revenue and a decrease in stock-based compensation expense. Cost of sales excludes depreciation and amortization.

Operating Expenses

Operating expenses for the third quarter of 2022 were $28.5 million, which included $2.9 million of non-cash stock-based compensation expense, compared to operating expenses of $44.2 million in the third quarter of 2021, which included $25.6 million in non-cash stock-based compensation expense. Excluding stock-based compensation expense in both years, operating expenses increased to $25.6 million in the third quarter of 2022 from $18.6 million in the prior year quarter. The increase was primarily due to higher depreciation expense from additional satellites placed into orbit in the fourth quarter of 2021 and second quarter of 2022, as well as public company operating costs.

Operating Loss

Operating loss for the third quarter of 2022 was $19.4 million, compared to an operating loss of $48.9 million in the third quarter of 2021. The year-over-year improvement in operating loss was primarily due to a decrease in stock-based compensation expense and higher gross profit driven by increased imagery and software analytical services revenue, partially offset by higher depreciation expense.

Adjusted EBITDA ⁽¹⁾

Adjusted EBITDA loss for the third quarter of 2022 was $6.5 million, compared to an adjusted EBITDA loss of $16.3 million in the prior year period. The $9.8 million year-over-year improvement was primarily due to significant operating leverage achieved by increased revenue growth significantly exceeding incremental costs.

⁽¹⁾ Non-GAAP financial measure. See “Non-GAAP Financial Measures” below and reconciliation table at the end of this release.

Balance Sheet & Capital Expenditures

As of September 30, 2022, cash and cash equivalents, restricted cash, and short-term investments totaled $90.7 million. Capital expenditures for the third quarter of 2022 were $8.8 million and totaled $34.3 million for the nine months in 2022.

2022 Outlook

The Company is seeing strong global demand for its high-resolution imagery, dynamic monitoring, and AI-driven analytic solutions. As a result, the Company expects its full year 2022 revenue to achieve the upper end of the guidance range previously provided of between $62 million and $66 million. The Company continues to expect capital expenditures for the full year 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 prior 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 13733375. The audio replay will be available from approximately 12:30 PM ET on November 8, 2022, through November 22, 2022.

About BlackSky Technology Inc.

BlackSky is a leading provider of real-time geospatial intelligence. BlackSky delivers on-demand, high frequency imagery, monitoring and analytics of the most critical and strategic locations, economic assets and events in the world.

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