DALLAS, TX -- May 9th, 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 $29.5M, ($0.6)M, and ($0.42), respectively. This compares to our/consensus estimates of $27.6M/$27.2M, $0.7M/$1.5M, and ($0.62)/($0.46). The Imagery and Software Analytical Services segment generated $16.8M in revenue, down from $17.8M in 1Q24. This decrease was primarily due to timing variability in customer project deliveries. The Professional and Engineering Services segment reported revenue of $12.7M, a significant increase from $6.4 M in 1Q24, driven largely by milestone-based progress under the Company’s commercial Earth observation contract with India. Consolidated gross margins fell to 57.4%, an increase from 77.4% in 4Q24, impacted by the transfer of a previously capitalized satellite asset sold during the quarter.
Company Updates
Contracts: The Company secured over $130M in new contracts during 1Q25, including a major seven-year international subscription agreement and multiple multi-year awards supporting both Gen-2 and Gen-3 constellations. These awards expanded BKSY’s backlog by 40% sequentially, rising from $261.0M at year-end 2024 to $366.0M by the end of 1Q25. The Company highlighted growing demand from global defense and intelligence agencies, including $20.0M worth of new customer relationships. Management emphasized the importance of these multi-year contracts for long-term revenue visibility, particularly as Gen-3 satellites are deployed and come online over the course of 2025.
Gen-3 Satellite Launch: In the quarter, The second Gen-3 satellite has been shipped and is on track for a 2Q25 launch. The Company plans to deploy a total of eight Gen-3 satellites by early 2026, with commercial availability beginning later this year.
Balance Sheet and Liquidity: BKSY ended 1Q25 with a strong liquidity position of $77.0M, comprising $20.7M in cash and equivalents, $1.2M in restricted cash, and $55.1M in short-term investments. This total includes a $32.0M prepayment received during the quarter tied to a new international defense contract. Additionally, the Company reported $39.2M in unbilled contract assets, with $32.4M expected to convert to cash over the next 12 months. Including ~$20M in available vendor financing for Gen-3 launches, BKSY’s liquidity exceeds ~$136.0, a 51% increase y/y. CapEx for the quarter totaled $8.9M, primarily related to satellite production, and are expected to rise as deployment ramps in 2025.
Guidance: BKSY reiterated its FY25 revenue guidance in a range of $125.0M to $142.0M, driven by strong multi-year sales momentum and the commercial ramp of Gen-3. The Company guided to an adjusted EBITDA range of $14.0M to $22.0M. Due to increasing high-margin imagery and analytics contributions and the scaling of Gen-3 capabilities 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 $15.39 to $18.53 with a mid-point of $16.82. Our EV/EBITDA valuation results in a range of $14.52 to $15.86 with a mid-point of $15.19.
Stonegate Capital Partners is a leading capital markets advisory firm providing investor relations, equity research, and institutional investor outreach services for public companies. Our affiliate, Stonegate Capital Markets (member FINRA) provides a full spectrum of investment banking services for public and private companies.
