DALLAS, TX -- November 7th, 2025 -- BlackSky Technology, Inc. (NYSE: BKSY): Stonegate Capital Partners updates their coverage on BlackSky Technology, Inc. (NYSE: BKSY). BKSY reported revenue, adj EBITDA, and EPS of $19.6M, ($4.5)M, and ($0.44), respectively. This compares to our/consensus estimates of $29.9M/$28.6M, $3.2M/$1.9M, and ($1.06)/($0.36). Imagery and Software Analytical Services revenue decreased to $15.8M, down 8.6% y/y, primarily due to the expected reduction in NRO EOCL tasking and broader U.S. government budget uncertainties that weighed on near-term imagery orders. Professional and Engineering Services revenue declined to $3.8M from $5.2M in 2Q24, largely due to project timing and milestone-based revenue recognition. Adj. EBITDA saw a loss of ($4.5M) versus a $0.7M profit in the prior year, driven by lower EOCL revenues and the inclusion of overhead associated with the LeoStella. Consolidated gross margins fell to 65.3%, a decrease from 70.5% in 3Q24.
Company Updates:
Contracts: As of 3Q25, BKSY secured over $60.0M in new contracts, growing its total backlog to $322.7M, ~91% of which is from international customers. Key wins included a multi-year contract valued at over $30M with a strategic international defense customer to deliver Gen 3 tactical ISR services, a new multimillion dollar Gen 3 imagery award with a U.S. customer, a seven figure Luno A delivery order for AI enabled change detection, and a seven-figure space domain awareness expansion with HEO. Early access agreements for Gen 3 continued to expand across international defense and intelligence customers. These wins reinforce BKSY’s growing role as a trusted intelligence partner globally.
Gen-3 Satellite Launch: The Company is on the cusp of launching its third Gen-3 satellite, which we expect to be in orbit by year end. BKSY remains on a steady cadence of deployments and on track for a fully operational commercial constellation, with a 12-satellite constellation expected by year end. Consequently, management highlighted rising demand for Gen-3 services, including high-cadence tasking and AI-enabled analytics as customers integrate capabilities into secure, sovereign environments.
Balance Sheet and Liquidity: Cash, restricted cash, and short-term investments totaled $147.6M at quarter end, reflecting net proceeds from an upsized convertible note offering and warrant exercises. The Company reported $43.4M of unbilled contract assets, of which $36.0M is expected to be billed and collected over the next twelve months. Capital expenditures were at $15.0M in the quarter and $33.9M year to date. Management cited total liquidity of over $200M when including unbilled receivables and remaining vendor financing.
Guidance: BKSY maintained its FY25 outlook for revenue of $105M to $130M, adjusted EBITDA of breakeven to $10M, and capital expenditures of $60M to $70M. Management expects a stronger fourth quarter supported by international demand, Gen 3 availability, and backlog conversion. We view this guidance as reasonable and have adjusted our model accordingly.
Valuation: We use a DCF Model and EV/EBITDA comp analysis to guide our valuation. Our DCF analysis produces a valuation range of $24.60 to $30.40 with a mid-point of $27.23. Our EV/EBITDA valuation results in a range of $23.26 to $28.18 with a mid-point of $25.72.
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