Blacksky Technology Inc. ((BKSY)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The recent earnings call for BlackSky Technology Inc. presented a mixed sentiment, reflecting both optimism and challenges. On the positive side, there is strong international demand for BlackSky’s Gen-3 services, and the company has successfully expanded its cash position, indicating promising growth prospects. However, the negative impact of EOCL contract reductions and increased cash operating expenses has weighed on the company’s financial performance. While the highlights show potential for growth, the lowlights reveal significant financial hurdles.
Strong International Demand
BlackSky has been awarded more than $60 million in new contracts, primarily with international customers, underscoring the strong global demand for its services. International revenues now account for about half of the company’s total revenues, driven by these new contracts and expanded service agreements.
Gen-3 Satellite Deployment
The expansion of the Gen-3 constellation is well underway, with the latest satellite ready for launch. BlackSky plans to have at least 12 Gen-3 satellites operational by the end of next year. The high-resolution imagery and AI-driven analytics provided by Gen-3 are gaining significant traction in the market.
Increased Cash Position
Following a successful capital raise, BlackSky’s cash balance has increased by more than 50% from the previous year, bringing total liquidity to over $200 million. This financial boost positions the company towards achieving free cash flow operations.
AI and Analytics Solutions Traction
BlackSky’s AI and analytics solutions are gaining momentum, highlighted by a seven-figure contract under the NGA Luno program and partnerships with major international government programs.
Impact of EOCL Contract Reductions
The company’s revenue was negatively impacted by approximately $4 million due to reductions in the EOCL contract in August and September. These reductions are expected to continue into the second quarter of next year, posing a challenge to revenue growth.
Cash Operating Expenses Increase
Cash operating expenses rose to $56.6 million from $48 million in the prior year period, primarily due to $9 million in overhead expenses from the integration of LeoStella.
Adjusted EBITDA Loss
For the first nine months of 2025, BlackSky reported an adjusted EBITDA loss of $7.9 million, compared to a positive $4.3 million in the prior year. This loss is attributed to the impacts of EOCL and LeoStella.
Forward-Looking Guidance
During the earnings call, BlackSky provided a comprehensive overview of its performance metrics and future guidance. The company announced over $60 million in new contract awards, primarily with international customers, showcasing the growing demand for their Gen-3 imagery and analytics services. BlackSky secured a $30 million contract to integrate Gen-3 high-cadence tactical ISR services into a strategic international defense customer’s secure environment. Despite a $4 million impact from EOCL contract reductions, the company reaffirmed its full-year 2025 guidance, expressing confidence in a strong Q4 and high visibility growth into 2026.
In summary, BlackSky Technology Inc.’s earnings call highlighted a dual narrative of growth and challenges. While the company is experiencing strong international demand and has bolstered its cash position, it faces financial challenges from EOCL contract reductions and increased operating expenses. The forward-looking guidance remains optimistic, with expectations for a strong finish to 2025 and continued growth into 2026.