DALLAS, TX -- August 8th, 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 $22.2M, ($2.8)M, and ($1.27), respectively. This compares to our/consensus estimates of $22.2M/$22.2M, ($1.5)M/($1.3)M, and ($0.48)/($0.48). Imagery and Software Analytical Services revenue increased to $18.0M, up 2.9% y/y, reflecting growing demand and early access activity related to Gen-3 imagery. Professional and Engineering Services revenue declined to $4.2M from $7.5M in 2Q24, due to timing differences in milestone-based contract recognition. Adj. EBITDA had a loss of ($2.8M) versus a $2.1M profit in the prior year, reflecting lower professional services revenue and ongoing investment in Gen-3 and AROS initiatives. Consolidated gross margins fell slightly to 71.9%, a decrease from 72.4% in 2Q24.
Company Updates:
Contracts: As of 2Q25, BKSY secured over $35.0M in new contracts, growing its total backlog to $356.0M, ~85% of which is from international customers. Key wins included a $24.0M NGA Luno A monitoring award, a multi-year Gen-2/Gen-3 contract with a new international defense customer, and a renewed early access agreement in support of Ukraine. The Company also expanded into Latin America with a Gen-2/Gen-3 On-Demand contract and advanced its Gen-3 architecture through a follow-on U.S. Navy research award focused on optical inter-satellite link (OISL) technology. These wins reinforce BKSY’s growing role as a trusted intelligence partner globally.
Gen-3 Satellite Launch: In the quarter, the Company successfully launched and commissioned its second Gen-3 satellite, which began delivering very-high resolution (35cm-class) imagery within 12 hours of launch. Multiple early access agreements have been signed with international defense and intelligence customers, highlighting growing confidence in the system’s tip-and-cue utility when integrated with Gen-2 data. The third Gen-3 satellite is in final testing and expected to ship imminently. The Company remains on schedule to deploy six Gen-3 satellites in 2025 and eight by early 2026, with commercial availability beginning in 4Q25.
Balance Sheet and Liquidity: BKSY significantly strengthened its balance sheet during the quarter, completing a $185.0M upsized convertible note offering. Proceeds were used to retire $113M in outstanding debt. We calculate pro-forma cash at $99.3M which includes cash on the 2Q25 balance sheet, proceeds from the warrant conversion, and proceeds from the debt offering. This capital raise reduces debt servicing cost and positions the Company for continued investment in Gen-3 and the AROS constellation.
Guidance: BKSY reaffirmed its FY25 revenue guidance of $105M–$130M and adjusted EBITDA of breakeven to $10M, citing short-term U.S. government budget volatility. CapEx guidance remains unchanged at $60M– $70M. The Company expects stronger 2H25 revenue driven by increased Gen-3 availability, backlog conversion, and seasonal contract timing. 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 $24.51 to $30.56 with a mid-point of $27.26. Our EV/EBITDA valuation results in a range of $22.97 to $28.18 with a mid-point of $25.58.
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