BlackSky Reports Third Quarter 2024 Results
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BlackSky Reports Third Quarter 2024 Results

Company Receives New Awards Valued up to $780 Million

YTD Revenue Growth of 22%; Company Reaffirms Full Year 2024 Guidance

First Gen-3 Satellite Completing Final Pre-Ship Testing

HERNDON, Va. — (BUSINESS WIRE) — November 7, 2024 — BlackSky Technology Inc. (“BlackSky” or the “Company”) (NYSE: BKSY) announced results for the third quarter ended September 30, 2024.

Third Quarter Financial Highlights:

“We delivered a strong quarter of multi-year contract bookings valued up to $780 million, continuing to demonstrate growing demand for our high-frequency monitoring and AI-enabled analytic services,” said Brian E. O’Toole, BlackSky CEO. “We successfully raised over $45 million, which has strengthened our balance sheet and provides the capital, which we believe will fully fund our baseline Gen-3 constellation plan. We are excited to be in the final phases of pre-ship testing of our first Gen-3 satellite as we ready for launch. Looking ahead, we expect to start a regular deployment cadence of Gen-3 satellites in 2025, which will start to unlock our next phase of growth delivering transformative space-based intelligence solutions to customers around the world.”

Recent Highlights

(1)

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

Financial Results

Revenues

Total revenue for the third quarter of 2024 was $22.5 million, up $1.3 million, or 6%, from the third quarter of 2023. Imagery and software analytical services revenue was $17.3 million in the third quarter of 2024, up 13% over the prior year period, primarily driven by incremental customer orders for BlackSky’s imagery services. Professional and engineering services revenue was $5.3 million in the third quarter of 2024, compared to $6.0 million in the prior year period. 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.

Cost of Sales(1)

Total cost of sales as a percentage of revenue improved to 29% for the third quarter of 2024, compared to 32% in the third quarter of 2023. Imagery and software analytical service costs as a percentage of revenue improved to 21% in the third quarter of 2024, compared to 23% in the third quarter of 2023, primarily driven by greater volumes of revenue that inherently have a low fixed-cost structure as a percentage of revenue.

Operating Expenses

Operating expenses for the third quarter of 2024 were $29.1 million, which included $2.4 million of non-cash stock-based compensation expense and $11.1 million in depreciation and amortization expenses. Operating expenses for the third quarter of 2023 were $29.0 million, which included $2.3 million in non-cash stock-based compensation expense and $11.3 million in depreciation and amortization expenses. Excluding the non-cash stock-based compensation and depreciation and amortization expenses from both years, cash operating expenses(2) for the third quarter of 2024 were $15.6 million, flat compared to cash operating expenses of $15.4 million for the third quarter of 2023.

(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)

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

Net Loss/Income

Net loss for the third quarter of 2024 was $12.6 million, compared to a net income of $0.7 million in the third quarter of 2023. The year-over-year decrease of $13.3 million was primarily driven by fluctuations in the Company’s equity warrants and other equity instruments that are measured at fair value and driven by the Company’s common stock price, which resulted in changes in the gain on derivatives.

Adjusted EBITDA(2)

Adjusted EBITDA for the third quarter of 2024 was $0.7 million, compared to an adjusted EBITDA loss of $0.4 million in the third quarter of 2023. The $1.1 million year-over-year improvement was primarily driven by strong operating leverage achieved through higher revenues and improved gross margins.

Balance Sheet & Capital Expenditures

As of September 30, 2024, cash and cash equivalents, restricted cash, and short-term investments totaled $64.4 million. This balance includes net equity proceeds of approximately $44.6 million raised in the quarter, less a $10.0 million debt repayment on the commercial bank line, which remains available to the Company should it choose to draw on it. In addition, the Company anticipates receiving approximately $26.7 million in payments over the next 12 months as interim milestones on a few major customer contracts are met and expected to be billed, further enhancing the Company’s liquidity. Capital expenditures for the third quarter of 2024 were $13.1 million, bringing the year-to-date total capital expenditures to $40.7 million.

2024 Outlook

BlackSky is starting to ramp up revenues from recent contract awards and continues to work on a number of sizable new and expansion contracts which have some degree of uncertainty surrounding the timing of close and start of revenue recognition. As such, the Company maintains its outlook for full year 2024 revenue of between $102 million and $118 million, and full year 2024 adjusted EBITDA of between $8 million and $16 million. In addition, the Company maintains its expectations for full year 2024 capital expenditures of between $55 million and $65 million, primarily driven by investments in its Gen-3 satellites.

Investment Community Conference Call

BlackSky will host a conference call and webcast for the investment community this morning at 8:30 a.m. EST. Senior management will review the third quarter 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 1-800-715-9871 or 1-646-307-1963 using conference ID 8425999 or “BlackSky” at least ten minutes prior to 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 13749731. The audio replay will be available from approximately 12:30 p.m. EST on November 7, 2024, through November 21, 2024.

About BlackSky

BlackSky is a real-time, space-based intelligence company that delivers on-demand, high-frequency imagery, analytics, and high-frequency monitoring of the most critical and strategic locations, economic assets, and events in the world. BlackSky owns and operates one of the industry’s most advanced, purpose-built commercial, real-time intelligence systems that combines the power of the BlackSky Spectra® tasking and analytics software platform and our proprietary low earth orbit satellite constellation.

With BlackSky, customers can see, understand and anticipate changes for a decisive strategic advantage at the tactical edge, and act not just fast, but first. BlackSky is trusted by some of the most demanding U.S. and international government agencies, commercial businesses, and organizations around the world. BlackSky is headquartered in Herndon, VA, and is publicly traded on the New York Stock Exchange as BKSY. To learn more, visit www.blacksky.com and follow us on X (Twitter).

Non-GAAP Financial Measures

Adjusted EBITDA is defined as net income or loss attributable to BlackSky before interest income, interest expense, income taxes, depreciation and amortization, as well as significant non-cash and/or non-recurring expenses as our management believes these items are not as useful in evaluating the Company’s core operating performance. These items include, but are not limited to, stock-based compensation expense; unrealized (gain) loss on certain warrants/shares classified as derivative liabilities; non-recurring transaction costs; severance; litigation, settlements, and related costs; impairment losses, income on equity method investment; transaction costs associated with debt and equity financings; and investment loss on short-term investments. Cash operating expenses is defined as operating expenses less stock-based compensation expense for selling, general, and administrative costs, and depreciation and amortization expense. The Company believes evaluating cash operating expenses is useful to manage expenses as it excludes non-cash items that may obscure the underlying business performance.

Adjusted EBITDA and cash operating expenses are non-GAAP financial performance measures. These measures should not be considered in isolation or as an alternative to measures determined in accordance with GAAP. Please refer to the schedule herein and our filings with the U.S. Securities and Exchange Commission (the “SEC”) for a reconciliation of adjusted EBITDA to net loss, the most comparable measure reported in accordance with GAAP, and for a discussion of the presentation, comparability, and use of adjusted EBITDA. Please refer to the schedule herein for a reconciliation of cash operating expenses to operating expenses, the most comparable measure reported in accordance with GAAP, and this press release for a discussion of the use of cash operating expenses.

Forward-Looking Statements

Certain statements and other information included in this press release constitute forward-looking statements under applicable securities laws. Words such as "may", "will", "could", "should", "would", "plan", "potential", "intend", "anticipate", "believe", "estimate", "future", "opportunity", "will likely result", or "expect" and other words, terms, and phrases of similar meaning are often intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. All statements, other than statements of historical fact, contained in this press release, including statements as to future performance, our guidance outlook for the year and expected capital expenditures, our ability to sustain revenue growth, expectations regarding the receipt of cash from customers over the next 12 months, expectations regarding global demand for our products and services, our anticipated liquidity and cash flows, our anticipated Gen-3 satellite launch timing, and our expectations related to future profitability on an adjusted basis, are forward-looking statements.

Forward-looking statements are subject to various risks and uncertainties, which could cause actual results to differ materially from the anticipated results or expectations expressed in this press release. As a result, although BlackSky's management believes that the expectations and assumptions on which such forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because BlackSky can give no assurance that they will prove to be correct. The risks that could cause actual results to differ materially from current expectations include, but are not limited to, factors such as long and unpredictable sales cycles, customer demand, and our ability to estimate resources for fixed-price contracts, expenses, and other operational and liquidity needs, as well as the risk factors discussed in our most recent Annual Report on Form 10-K and other disclosures about BlackSky and its business included in BlackSky's disclosure materials filed from time to time with the SEC, which are available on the SEC's website at www.sec.gov or on BlackSky's Investor Relations website at ir.blacksky.com.

The forward-looking statements contained in this press release are expressly qualified in their entirety by the foregoing cautionary statements. All such forward-looking statements are based upon data available as of the date of this press release and speak only as of such date. BlackSky disclaims any intention or obligation to update or revise any forward-looking statements as a result of new information or future events, except as may be required under applicable securities law.

BLACKSKY TECHNOLOGY INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

(unaudited)

(in thousands, except per share amounts)

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Revenue

 

 

 

 

 

 

 

Imagery & software analytical services

$

17,276

 

 

$

15,264

 

 

$

52,578

 

 

$

46,352

 

Professional & engineering services

 

5,273

 

 

 

5,996

 

 

 

19,145

 

 

 

12,632

 

Total revenue

 

22,549

 

 

 

21,260

 

 

 

71,723

 

 

 

58,984

 

Costs and expenses

 

 

 

 

 

 

 

Imagery & software analytical service costs, excluding depreciation and amortization

 

3,682

 

 

 

3,479

 

 

 

10,559

 

 

 

10,634

 

Professional & engineering service costs, excluding depreciation and amortization

 

2,968

 

 

 

3,288

 

 

 

10,006

 

 

 

11,137

 

Selling, general and administrative

 

17,961

 

 

 

17,572

 

 

 

54,991

 

 

 

55,289

 

Research and development

 

43

 

 

 

133

 

 

 

785

 

 

 

525

 

Depreciation and amortization

 

11,125

 

 

 

11,304

 

 

 

33,586

 

 

 

32,735

 

Total costs and expenses

 

35,779

 

 

 

35,776

 

 

 

109,927

 

 

 

110,320

 

Operating loss

 

(13,230

)

 

 

(14,516

)

 

 

(38,204

)

 

 

(51,336

)

Gain on derivatives

 

3,574

 

 

 

17,012

 

 

 

8,593

 

 

 

7,445

 

Income on equity method investment

 

 

 

 

328

 

 

 

 

 

 

913

 

Interest income

 

257

 

 

 

519

 

 

 

987

 

 

 

1,602

 

Interest expense

 

(3,142

)

 

 

(2,532

)

 

 

(8,805

)

 

 

(6,627

)

Other (expense) income, net

 

(22

)

 

 

2

 

 

 

(19

)

 

 

(1,808

)

(Loss) income before income taxes

 

(12,563

)

 

 

813

 

 

 

(37,448

)

 

 

(49,811

)

Income tax expense

 

(28

)

 

 

(138

)

 

 

(350

)

 

 

(260

)

Net (loss) income

 

(12,591

)

 

 

675

 

 

 

(37,798

)

 

 

(50,071

)

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive (loss) income

$

(12,591

)

 

$

675

 

 

$

(37,798

)

 

$

(50,071

)

 

 

 

 

 

 

 

 

Basic and diluted (loss) income per share of common stock:

 

 

 

 

 

 

 

Net (loss) income per share of common stock

$

(0.66

)

 

$

0.04

 

 

$

(2.05

)

 

$

(3.00

)

 

 

 

 

 

 

 

 

Weighted average common shares outstanding - basic

 

19,120

 

 

 

17,360

 

 

 

18,394

 

 

 

133,465

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding - diluted

 

19,120

 

 

 

17,883

 

 

 

18,394

 

 

 

133,465

 

BLACKSKY TECHNOLOGY INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(in thousands, except par value)

 

 

September 30, 2024

 

December 31, 2023

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

56,159

 

 

$

32,815

 

Restricted cash

 

1,147

 

 

 

619

 

Short-term investments

 

7,090

 

 

 

19,697

 

Accounts receivable, net of allowance of $0 and $151, respectively

 

10,284

 

 

 

7,071

 

Prepaid expenses and other current assets

 

5,086

 

 

 

3,916

 

Contract assets

 

26,736

 

 

 

15,213

 

Total current assets

 

106,502

 

 

 

79,331

 

Property and equipment - net

 

46,945

 

 

 

67,116

 

Operating lease right of use assets - net

 

2,559

 

 

 

1,630

 

Goodwill

 

9,393

 

 

 

9,393

 

Intangible assets - net

 

936

 

 

 

1,357

 

Satellite procurement work in process

 

76,504

 

 

 

55,976

 

Other assets

 

2,616

 

 

 

9,263

 

Total assets

$

245,455

 

 

$

224,066

 

Liabilities and stockholders’ equity

 

 

 

Current liabilities:

 

 

 

Accounts payable and accrued liabilities

$

12,683

 

 

$

11,573

 

Amounts payable to equity method investees

 

 

 

 

10,843

 

Contract liabilities - current

 

4,224

 

 

 

3,670

 

Debt - current portion

 

324

 

 

 

 

Other current liabilities

 

1,523

 

 

 

1,405

 

Total current liabilities

 

18,754

 

 

 

27,491

 

Operating lease liabilities

 

7,043

 

 

 

3,041

 

Derivative liabilities

 

6,556

 

 

 

15,149

 

Long-term debt - net of current portion

 

98,427

 

 

 

83,502

 

Other liabilities

 

4,408

 

 

 

1,724

 

Total liabilities

 

135,188

 

 

 

130,907

 

Stockholders’ equity:

 

 

 

Class A common stock, $0.0001 par value-authorized, 300,000 shares; issued, 30,779 and
145,232 shares; outstanding, 30,482 shares and 142,837 shares as of September 30, 2024
and December 31, 2023, respectively.

 

3

 

 

 

2

 

Additional paid-in capital

 

747,032

 

 

 

692,127

 

Accumulated deficit

 

(636,768

)

 

 

(598,970

)

Total stockholders’ equity

 

110,267

 

 

 

93,159

 

Total liabilities and stockholders’ equity

$

245,455

 

 

$

224,066

 

BLACKSKY TECHNOLOGY INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

 

Nine Months Ended September 30,

 

 

2024

 

 

 

2023

 

Cash flows from operating activities:

 

 

 

Net loss

$

(37,798

)

 

$

(50,071

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

Depreciation and amortization expense

 

33,586

 

 

 

32,735

 

Operating lease right of use assets amortization

 

529

 

 

 

753

 

Bad debt expense

 

100

 

 

 

39

 

Stock-based compensation expense

 

8,244

 

 

 

7,725

 

Amortization of debt issuance costs and non-cash interest expense

 

6,727

 

 

 

249

 

Gain on derivatives

 

(8,593

)

 

 

(7,445

)

Non-cash interest income

 

(630

)

 

 

(551

)

Loss on impairment of assets

 

71

 

 

 

 

Loss on disposal of assets

 

44

 

 

 

127

 

Income on equity method investment

 

 

 

 

(913

)

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

(3,313

)

 

 

359

 

Contract assets - current and long-term

 

(5,133

)

 

 

(5,271

)

Prepaid expenses and other current assets

 

(1,148

)

 

 

(13

)

Other assets

 

2,525

 

 

 

1,144

 

Accounts payable and accrued liabilities

 

(967

)

 

 

834

 

Other current liabilities

 

194

 

 

 

(640

)

Contract liabilities - current and long-term

 

1,005

 

 

 

(175

)

Other liabilities

 

(10

)

 

 

5,316

 

Net cash used in operating activities

 

(4,567

)

 

 

(15,798

)

Cash flows from investing activities:

 

 

 

Purchase of property and equipment

 

(12,289

)

 

 

(12,296

)

Satellite procurement work in process

 

(28,410

)

 

 

(23,603

)

Purchases of short-term investments

 

(13,488

)

 

 

(29,167

)

Proceeds from maturities of short-term investments

 

26,725

 

 

 

50,110

 

Proceeds from sale of property and equipment

 

 

 

 

22

 

Net cash used in investing activities

 

(27,462

)

 

 

(14,934

)

Cash flows from financing activities:

 

 

 

Proceeds from equity issuances, net of equity issuance costs

 

47,343

 

 

 

30,868

 

Proceeds from issuance of debt

 

20,000

 

 

 

 

Proceeds from options exercised and ESPP shares purchased

 

157

 

 

 

9

 

Debt payments

 

(10,000

)

 

 

 

Payments for debt issuance costs

 

(632

)

 

 

 

Withholding tax payments on vesting of restricted stock units

 

(967

)

 

 

(972

)

Payments of transaction costs for debt modification

 

 

 

 

(1,311

)

Payments of transaction costs related to derivative liabilities

 

 

 

 

(905

)

Net cash provided by financing activities

 

55,901

 

 

 

27,689

 

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

23,872

 

 

 

(3,043

)

Cash, cash equivalents, and restricted cash – beginning of year

 

33,434

 

 

 

37,016

 

Cash, cash equivalents, and restricted cash – end of period

$

57,306

 

 

$

33,973

 

BLACKSKY TECHNOLOGY INC.

RECONCILIATION OF NET (LOSS) INCOME TO ADJUSTED EBITDA

(unaudited)

(in thousands)

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Net (loss) income

$

(12,591

)

 

$

675

 

 

$

(37,798

)

 

$

(50,071

)

Interest income

 

(257

)

 

 

(519

)

 

 

(987

)

 

 

(1,602

)

Interest expense

 

3,142

 

 

 

2,532

 

 

 

8,805

 

 

 

6,627

 

Income tax expense

 

28

 

 

 

138

 

 

 

350

 

 

 

260

 

Depreciation and amortization

 

11,125

 

 

 

11,304

 

 

 

33,586

 

 

 

32,735

 

Stock-based compensation expense

 

2,519

 

 

 

2,402

 

 

 

8,244

 

 

 

7,725

 

Gain on derivatives

 

(3,574

)

 

 

(17,012

)

 

 

(8,593

)

 

 

(7,445

)

Non-recurring transaction costs

 

228

 

 

 

 

 

 

228

 

 

 

 

Severance

 

78

 

 

 

363

 

 

 

219

 

 

 

562

 

Litigation, settlements, and related costs

 

(28

)

 

 

 

 

 

137

 

 

 

 

Impairment losses

 

71

 

 

 

 

 

 

71

 

 

 

 

Income on equity method investment

 

 

 

 

(328

)

 

 

 

 

 

(913

)

Transaction costs associated with debt and equity financings

 

 

 

 

 

 

 

 

 

 

1,738

 

Investment loss on short-term investments

 

 

 

 

 

 

 

 

 

 

55

 

Adjusted EBITDA

$

741

 

 

$

(445

)

 

$

4,262

 

 

$

(10,329

)

BLACKSKY TECHNOLOGY INC.

RECONCILIATION OF OPERATING EXPENSES TO CASH OPERATING EXPENSES

(unaudited)

(in thousands)

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Operating expenses

$

29,129

 

 

$

29,009

 

 

$

89,362

 

 

$

88,549

 

Stock-based compensation for selling, general and
administrative costs

 

(2,377

)

 

 

(2,265

)

 

 

(7,747

)

 

 

(7,149

)

Depreciation and amortization

 

(11,125

)

 

 

(11,304

)

 

 

(33,586

)

 

 

(32,735

)

Cash operating expenses

$

15,627

 

 

$

15,440

 

 

$

48,029

 

 

$

48,665

 

 



Contact:

Investor Contact
Aly Bonilla
VP, Investor Relations
abonilla@blacksky.com
571-591-2864

Media Contact
Pauly Cabellon
Senior Director, External Communications
pcabellon@blacksky.com
571-591-2865