BlackSky Reports Fourth Quarter and Full Year 2023 Results

Record Q4 and Full Year Revenue, up 83% and 45% Over Prior Year Respectively
Won Over $265 Million in New Multi-Year Contracts and Renewal Agreements in 2023
Quarterly Net Loss of $3.8 million with Positive Adjusted EBITDA of $9.3 million in Q4

HERNDON, Va. — (BUSINESS WIRE) — February 28, 2024 — BlackSky Technology Inc. (“BlackSky” or the “Company”) (NYSE: BKSY) announced results for the fourth quarter and full year ended December 31, 2023.

Fourth Quarter Financial Highlights:

  • Revenue of $35.5 million, up 83% from the prior year quarter
  • Imagery & software analytical services revenue grew 18% over the prior year quarter
  • Cost of sales, as a percent of revenue, related to imagery & software analytical services improved to 17% from 24% in the prior year quarter

Full Year Financial Highlights:

  • Revenue of $94.5 million, up 45% from the prior year
  • Imagery & software analytical services revenue grew 38% over the prior year
  • Cost of sales, as a percent of revenue, related to imagery & software analytical services improved to 21% from 31% in the prior year

“2023 was an exceptional year for BlackSky; we delivered record revenues, our total bookings exceeded a quarter billion dollars, and we achieved positive Adjusted EBITDA of over 9 million dollars in Q4,” said Brian E. O’Toole, BlackSky CEO. “Our success is the result of increasing global demand for our space-based intelligence solutions, strong operating leverage, and disciplined execution. The demand for our capabilities is exemplified by recent landmark contract wins supporting the Indonesian Ministry of Defense and expansion of a number of U.S. government contracts. These wins are anchored by our industry leading AI and software-first approach, which is redefining the way customers adopt space-based intelligence. The strong execution in 2023 sets us on a path toward long-term profitable growth and we look forward to carrying this momentum into 2024 and beyond.”

Recent Highlights

  • Won approximately $50 million in multi-year contracts to accelerate sovereign space capabilities for the Indonesian Ministry of Defense, leveraging Gen-3 capabilities and an immediate subscription for imagery
  • Awarded a multi-million dollar expansion contract with the Intelligence Advanced Research Projects Activity (IARPA) to deliver AI-based broad area search capability
  • Signed a multi-million dollar contract in support of the Department of Defense to provide dynamic monitoring services leveraging AI for identifying moving targets and pattern-of-life changes
  • Received nearly a million dollars in orders supporting the National Geospatial-Intelligence Agency’s (NGA) Economic Indicator Monitoring (EIM) program
  • Renewed an agreement with an existing international government agency to continue providing BlackSky’s high resolution imagery and AI-driven analytics
  • Secured a six-figure contract with a new international government to provide high-frequency imagery
  • Ended December 31, 2023 with approximately $262 million in backlog
  • Entered into a property lease for office space located in Herndon, VA to further streamline operating expenses

Financial Results

Revenues

Total revenue for the fourth quarter of 2023 was $35.5 million, up $16.1 million, or 83%, from the fourth quarter of 2022. Imagery and software analytical services revenue was $19.0 million in the fourth quarter of 2023, up 18% over the prior year period, primarily driven by increased demand from new and existing U.S. and international government customers. Professional and engineering services revenue was $16.5 million in the fourth quarter of 2023, up 407% over the prior year period. The significant year-over-year increase was related to progress to date on the capabilities to be delivered under the new Indonesian contract, awarded in the fourth quarter. Professional and engineering services contracts are milestone-based contracts that may have quarter-over-quarter revenue variability, in contrast to the imagery and software analytical services, which are typically recurring subscription-based revenues.

For the full year 2023, total revenue was $94.5 million, up $29.1 million, or 45%, from 2022. Imagery and software analytical services revenue was $65.4 million, up $18.0 million, or 38% over the prior year.

Cost of Sales(1)

Cost of sales as a percent of revenue improved to 34% for the fourth quarter of 2023, compared to 38% in the fourth quarter of 2022. Imagery and software analytical service costs as a percent of revenue improved to 17% in the fourth quarter of 2023, compared to 24% in the fourth quarter of 2022. The year-over-year improvement in imagery and software analytical service costs was primarily driven by greater volumes of revenue that inherently have a low fixed-cost structure as a percent of revenue.

For the full year 2023, cost of sales as a percent of revenue improved to 36%, compared to 55% in 2022. Imagery and software analytical services cost of sales, as a percent of revenue, improved to 21%, compared to 31% in the prior year.

Operating Expenses

Operating expenses for the fourth quarter of 2023 were $28.2 million, which included $3.0 million of non-cash stock-based compensation expense and $10.7 million in depreciation and amortization expenses. Operating expenses for the fourth quarter of 2022 were $30.4 million, which included $3.3 million in non-cash stock-based compensation expense and $9.5 million in depreciation and amortization expenses. Excluding the non-cash stock-based compensation and depreciation and amortization expenses from both years, cash operating expenses for the fourth quarter of 2023 were $14.5 million compared to cash operating expenses of $17.6 million for the fourth quarter of 2022. The year-over-year decrease of $3.1 million, or 18%, was primarily driven by reductions in general corporate costs, which more than offset investments in our go-to-market initiatives.

For the full year 2023, operating expenses were $116.7 million, which included $10.1 million of non-cash stock-based compensation expense and $43.4 million in depreciation and amortization expenses. For the full year 2022, operating expenses were $116.1 million, which included $18.1 million in non-cash stock-based compensation expense and $35.7 million in depreciation and amortization expenses. Excluding the non-cash stock-based compensation and depreciation and amortization expenses from both years, cash operating expenses in 2023 were $63.2 million, essentially in-line with cash operating expenses of $62.3 million in 2022.

Net Loss(2)

Net loss for the fourth quarter of 2023 was $3.8 million, compared to a net loss of $14.8 million in the fourth quarter of 2022.

For the full year 2023, net loss was $53.9 million, compared to a net loss of $74.2 million in 2022.

(1) Cost of sales is defined as imagery and software analytical services costs and professional and engineering services cost, less depreciation and amortization expense.

(2) This represents our current estimate of net loss for the period ended December 31, 2023, which is subject to the completion of our financial closing procedures and adjustments that may result from the completion of the audit of our consolidated financial statements. As a result, this net loss estimate may differ from the actual net loss reported in our consolidated financial statements when they are completed and publicly disclosed in our Annual Report on Form 10-K.

Adjusted EBITDA(3)

Adjusted EBITDA for the fourth quarter of 2023 was $9.3 million, compared to an Adjusted EBITDA loss of $4.6 million in the fourth quarter of 2022. The $13.9 million year-over-year improvement was primarily driven by strong operating leverage achieved through higher revenues, improvement in gross margins, and reductions in operating expenses.

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