DALLAS, TX -- May 7th, 2026 -- BlackSky Technology, Inc. (NYSE: BKSY): Stonegate Capital Partners Updates Coverage on BlackSky Technology, Inc. (NYSE: BKSY). BKSY’s 1Q26 marked a clearer Gen-3 commercialization inflection, with accelerating sovereign contract adoption, improving in-year revenue visibility, and management raising FY26 revenue and adj. EBITDA guidance. While reported revenue remained affected by Mission Solutions timing, the more important development was the continued scaling of higher-margin Gen-3 subscription services and the operational expansion of the constellation to four satellites, enabling daily revisit rates for 35cm imagery across key regions of interest worldwide. In our view, the quarter further supports BKSY’s positioning within commercial geospatial intelligence as recurring subscription mix, backlog conversion, and operating leverage continue improving.
Financial Results: BKSY reported revenue, adj EBITDA, and EPS of $20.8M, ($5.1)M, and ($0.82), respectively. This compares to our/consensus estimates of $28.9M/$37.1M, $2.0M/$7.6M, and ($0.39)/($0.28). Space-based Intelligence & AI Services revenue increased 14% sequentially to $16.5M as Gen-3 capacity and subscription adoption continued scaling. Mission Solutions revenue declined to $2.0M from $9.8M last year, primarily reflecting the prior-year benefit from a large contract milestone, while Advanced Technology Programs revenue was $2.2M. Gross margin benefited from a greater mix of higher-margin Spacebased Intelligence & AI Services, with cost of sales declining to 35% of revenue from 43% y/y, while cash operating expenses remained flat y/y at $18.9M.
Contracts: Contract activity supported the accelerating commercialization of Gen-3 subscription services, particularly among sovereign and defense customers transitioning from pilot programs into larger recurring deployments. BKSY announced new wins valued up to $160M, including a $25M multi-year subscription contract with an international Ministry of Defense, a nearly $30M annual subscription contract with a major international defense customer, a multi-year sole-source AFRL IDIQ valued up to $99M, and additional NGA Luno awards. Management also noted that early Gen-3 pilots continue converting into larger recurring subscription awards, supporting improved revenue visibility and backlog quality.
Gen-3 Satellite Launch: The expansion to four operational Gen-3 satellites materially improves revisit capability, collection flexibility, and latency performance across customer workflows. During the quarter, BKSY successfully deployed its fourth Gen-3 satellite, which began delivering imagery within hours of launch and entered commercial operations in less than one week. The next Gen-3 satellite is ready to ship, and management remains on track to have at least eight Gen-3 satellites on orbit by FY26 year-end.
Guidance: BKSY raised its FY26 guidance, increasing revenue to $130M– $150M from $120M–$145M and adj. EBITDA to $12M–$24M from $6M–$18M. The higher outlook reflects expanding recurring Gen-3 subscription adoption and improving backlog conversion into in-year revenue, with Space-based Intelligence & AI Services expected to grow more than 50% in FY26 and approach a $100M annual run-rate. Importantly, management maintained CapEx guidance, reinforcing the incremental margin and operating leverage potential as the constellation scales.
Valuation: We use a DCF Model and EV/EBITDA comp analysis to guide our valuation. Our DCF analysis produces a valuation range of $32.47 to $39.47 with a mid-point of $35.65. Our EV/EBITDA valuation results in a range of $36.50 to $42.48 with a mid-point of $39.49.
