Q1 Total Revenue Increases 32% Over Prior
Year Period Company Wins $30 Million in New Contracts and
Renewal Agreements
BlackSky Technology Inc. (“BlackSky” or the “Company”) (NYSE:
BKSY) announced results for the first quarter ended March 31,
2024.
First Quarter Financial
Highlights:
- Revenue of $24.2 million, up 32% from the prior year
quarter
- Imagery & software analytical services revenue grew 13%
over the prior year quarter
- Cost of sales, as a percent of revenue, related to imagery
& software analytical services improved to 19% from 23% in the
prior year quarter
“Strong execution combined with growing global demand for our
space-based intelligence solutions drove a 32% increase in first
quarter revenues versus the prior year period,” said Brian E.
O’Toole, BlackSky CEO. “We continue to demonstrate strong operating
leverage progressing toward sustainable long-term profitable
growth. During the first quarter we secured a number of new
contracts and renewals agreements totaling $30 million, from both
U.S. and international government customers. These contract wins
demonstrate how BlackSky’s advanced capabilities are relied upon
every day for critical decision making. We’re seeing strong and
growing demand for our Gen-3 imaging and analytic capabilities,
which we plan to start launching this year.”
Recent Highlights
- Won a $24 million contract with the Air Force Research
Laboratory for moving target engagement services combining
BlackSky’s data with multiple government ISR and other commercial
data sources
- Awarded a multi-million dollar contract with a defense and
intelligence customer to provide BlackSky’s advanced space-based
intelligence capabilities
- Company closed over 10 six-figure contracts and renewal
agreements
- Continued significant progress on Gen-3 satellites toward a
planned launch later this year
- Secured a $20 million commercial bank line that provides
BlackSky with additional financial flexibility to fund growth
initiatives and general corporate purposes
Financial Results
Revenues
Total revenue for the first quarter of 2024 was $24.2 million,
up $5.8 million, or 32%, from the first quarter of 2023. Imagery
and software analytical services revenue was $17.8 million in the
first 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 $6.4
million in the first quarter of 2024, up 143% over the prior year
period. The significant year-over-year increase was primarily
related to new customer wins and the execution step up of multiple
major international contracts. 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)
Cost of sales as a percent of revenue improved to 29% for the
first quarter of 2024, compared to 35% in the first quarter of
2023. Imagery and software analytical service costs as a percent of
revenue improved to 19% in the first quarter of 2024, compared to
23% in the first quarter of 2023. 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.
(1) Cost of sales is defined as imagery
and software analytical services costs and professional and
engineering services cost, less depreciation and amortization
expense.
Operating Expenses
Operating expenses for the first quarter of 2024 were $30.5
million, which included $3.1 million of non-cash stock-based
compensation expense and $11.2 million in depreciation and
amortization expenses. Operating expenses for the first quarter of
2023 were $28.8 million, which included $2.7 million in non-cash
stock-based compensation expense and $9.7 million in depreciation
and amortization expenses. Excluding the non-cash stock-based
compensation and depreciation and amortization expenses from both
years, cash operating expenses for the first quarter of 2024 were
$16.2 million, compared to cash operating expenses of $16.4 million
for the first quarter of 2023. The year-over-year decrease of $0.2
million, or 1%, was primarily driven by reductions in general
corporate costs, which more than offset investments in our
go-to-market initiatives.
Net Loss
Net loss for the first quarter of 2024 was $15.8 million,
compared to a net loss of $17.3 million in the first quarter of
2023.
Adjusted EBITDA(2)
Adjusted EBITDA for the first quarter of 2024 was $1.4 million,
compared to an Adjusted EBITDA loss of $4.1 million in the first
quarter of 2023. The $5.5 million year-over-year improvement was
primarily driven by strong operating leverage achieved through
higher revenues, improvement in gross margins, and reductions in
cash operating expenses.
(2) Non-GAAP financial measure. See
“Non-GAAP Financial Measures” below and reconciliation table at the
end of this press release.
Balance Sheet & Capital Expenditures
As of March 31, 2024, cash and cash equivalents, restricted
cash, and short-term investments totaled $35.8 million. Subsequent
to the end of the quarter, the Company entered into a commercial
bank line of $20 million bringing total liquidity to $55.8 million
on a pro forma basis. In addition, a few major customer contracts
include interim milestones for which revenue and costs have been
recognized but have not yet been billed. Therefore, the Company
anticipates receiving approximately $24 million in payments from
these contracts over the next 12 months, which would further
enhance liquidity. Capital expenditures for the first quarter of
2024 were $14.6 million.
2024 Outlook
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 the Gen-3 satellites.
Investment Community Conference Call
BlackSky will host a conference call and webcast for the
investment community this morning at 8:30 AM EDT. Senior management
will review the first 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 1-800-225-9448 or 1-203-518-9708 using
“BlackSky” as the conference ID 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
13745976. The audio replay will be available from approximately
12:30 PM EDT on May 8, 2024, through May 22, 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, severance,
income on equity method investment, investment loss on short-term
investments, and transaction costs associated with debt and equity
financings.
Adjusted EBITDA is a non-GAAP financial performance measure. It
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.
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 global demand for our products and services, 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
(unaudited)
(in thousands, except per
share amounts)
Three Months Ended March
31,
2024
2023
Revenue
Imagery & software analytical
services
$
17,833
$
15,760
Professional & engineering
services
6,403
2,637
Total revenue
24,236
18,397
Costs and expenses
Imagery & software analytical service
costs, excluding depreciation and amortization
3,445
3,699
Professional & engineering service
costs, excluding depreciation and amortization
3,588
2,779
Selling, general and administrative
18,816
18,949
Research and development
456
216
Depreciation and amortization
11,184
9,655
Total costs and expenses
37,489
35,298
Operating loss
(13,253
)
(16,901
)
(Loss) gain on derivatives
(254
)
1,531
Income on equity method investment
—
529
Interest income
400
435
Interest expense
(2,634
)
(1,853
)
Other income (expense), net
1
(943
)
Loss before income taxes
(15,740
)
(17,202
)
Income tax expense
(70
)
(113
)
Loss from continuing operations
(15,810
)
(17,315
)
Net loss
(15,810
)
(17,315
)
Other comprehensive income
—
—
Total comprehensive loss
$
(15,810
)
$
(17,315
)
Basic and diluted loss per share of common
stock:
Net loss per share of common stock
$
(0.11
)
$
(0.14
)
Weighted average common shares outstanding
- basic and diluted
143,228
124,144
BLACKSKY TECHNOLOGY
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(unaudited)
(in thousands, except par
value)
March 31, 2024
December 31, 2023
Assets
Current assets:
Cash and cash equivalents
$
14,965
$
32,815
Restricted cash
413
619
Short-term investments
20,428
19,697
Accounts receivable, net of allowance of
$252 and $151, respectively
5,582
7,071
Prepaid expenses and other current
assets
3,836
3,916
Contract assets
24,134
15,213
Total current assets
69,358
79,331
Property and equipment - net
59,883
67,116
Operating lease right of use assets -
net
4,517
1,630
Goodwill
9,393
9,393
Intangible assets - net
1,216
1,357
Satellite procurement work in process
62,106
55,976
Other assets
3,640
9,263
Total assets
$
210,113
$
224,066
Liabilities and stockholders’
equity
Current liabilities:
Accounts payable and accrued
liabilities
$
13,078
$
11,573
Amounts payable to equity method
investees
164
10,843
Contract liabilities - current
2,157
3,670
Debt - current portion
304
—
Other current liabilities
1,560
1,405
Total current liabilities
17,263
27,491
Operating lease liabilities
6,997
3,041
Derivative liabilities
15,404
15,149
Long-term debt
84,695
83,502
Other liabilities
4,041
1,724
Total liabilities
128,400
130,907
Stockholders’ equity:
Class A common stock, $0.0001 par
value-authorized, 300,000 shares; issued, 146,821 and 145,232
shares; outstanding, 144,434 shares and 142,837 shares as of March
31, 2024 and December 31, 2023, respectively.
14
14
Additional paid-in capital
696,479
692,115
Accumulated deficit
(614,780
)
(598,970
)
Total stockholders’ equity
81,713
93,159
Total liabilities and stockholders’
equity
$
210,113
$
224,066
BLACKSKY TECHNOLOGY
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
Three Months Ended March
31,
2024
2023
Cash flows from operating
activities:
Net loss
$
(15,810
)
$
(17,315
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization expense
11,184
9,655
Operating lease right of use assets
amortization
191
446
Bad debt expense
100
—
Stock-based compensation expense
3,363
3,012
Amortization of debt issuance costs and
non-cash interest expense
2,121
113
Loss (gain) on derivatives
254
(1,531
)
Non-cash interest income
(267
)
(156
)
Income on equity method investment
—
(529
)
Gain on disposal of property and
equipment
—
(22
)
Changes in operating assets and
liabilities:
Accounts receivable
1,388
(5,947
)
Contract assets - current and
long-term
(3,328
)
(591
)
Prepaid expenses and other current
assets
(195
)
462
Other assets
344
(8
)
Accounts payable and accrued
liabilities
(2,354
)
(2,966
)
Other current liabilities
447
1,732
Contract liabilities - current and
long-term
(1,239
)
(2,951
)
Other liabilities
(9
)
(6
)
Net cash used in operating activities
(3,810
)
(16,602
)
Cash flows from investing
activities:
Purchase of property and equipment
(3,297
)
(2,874
)
Satellite procurement work in process
(11,347
)
(12,926
)
Purchases of short-term investments
(9,464
)
(11,792
)
Proceeds from maturities of short-term
investments
9,000
38,110
Net cash (used in) provided by investing
activities
(15,108
)
10,518
Cash flows from financing
activities:
Proceeds from equity issuances, net of
equity issuance costs
1,298
29,432
Proceeds from options exercised
1
3
Withholding tax payments on vesting of
restricted stock units
(419
)
—
Payments for deferred financing costs
(18
)
—
Payments for deferred offering costs
—
(552
)
Payments of transaction costs related to
derivative liabilities
—
(16
)
Net cash provided by financing
activities
862
28,867
Net (decrease) increase in cash, cash
equivalents, and restricted cash
(18,056
)
22,783
Cash, cash equivalents, and restricted
cash – beginning of year
33,434
37,016
Cash, cash equivalents, and restricted
cash – end of period
$
15,378
$
59,799
BLACKSKY TECHNOLOGY
INC.
RECONCILIATION OF NET LOSS TO
ADJUSTED EBITDA
(unaudited)
(in thousands)
Three Months Ended March
31,
2024
2023
Net loss
$
(15,810
)
$
(17,315
)
Interest income
(400
)
(435
)
Interest expense
2,634
1,853
Income tax expense
70
113
Depreciation and amortization
11,184
9,655
Stock-based compensation expense
3,363
3,012
Loss (gain) on derivatives
254
(1,531
)
Severance
81
88
Income on equity method investment
—
(529
)
Transaction costs associated with debt and
equity financings
—
905
Investment loss on short-term
investments
—
55
Adjusted EBITDA
$
1,376
$
(4,129
)
BLACKSKY TECHNOLOGY
INC.
RECONCILIATION OF OPERATING
EXPENSES TO CASH OPERATING EXPENSES
(unaudited)
(in thousands)
Three Months Ended March
31,
2024
2023
Operating expenses
$
30,456
$
28,820
Stock-based compensation for selling,
general and administrative costs
(3,148
)
(2,737
)
Depreciation and amortization
(11,184
)
(9,655
)
Cash operating expenses
$
16,124
$
16,428
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version on businesswire.com: https://www.businesswire.com/news/home/20240508970785/en/
Investor Contact Aly Bonilla VP, Investor Relations
abonilla@blacksky.com 571-591-2864
Media Contact Pauly Cabellon Director, External
Communications pcabellon@blacksky.com 571-591-2865
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