Q2 Total Revenue Increases 29% Over Prior
Year Period
Company Wins $40 Million in New Contracts
and Renewal Agreements
First 35cm Very High Resolution Gen-3
Satellite Planned for Launch in Q4
BlackSky Technology Inc. (“BlackSky” or the “Company”) (NYSE:
BKSY) announced results for the second quarter ended June 30,
2024.
Second Quarter Financial
Highlights:
- Revenue of $24.9 million, up 29% from the prior year
quarter
- Imagery & software analytical services revenue grew 14%
over the prior year quarter
- Imagery & software analytical services cost of sales(1), as
a percent of revenue, improved to 20% from 23% in the prior year
quarter
“BlackSky delivered another strong quarter driven by a 29%
year-over-year increase in second quarter revenue and substantial
operating leverage which led to improved margin performance,” said
Brian E. O’Toole, BlackSky CEO. “We won $40 million in new awards
and extension agreements, including the continuation of
subscription services under the EOCL contract. Our Gen-3
constellation remains on track to unlock our next phase of growth
by enabling transformative solutions our customers are demanding,
using the power of our very high resolution imagery, combined with
high-frequency monitoring and automated AI.”
Recent Highlights
- The National Reconnaissance Office extended its subscription to
our Gen-2 high-frequency imagery services under the Electro-Optical
Commercial Layer (EOCL) contract
- Won a $7 million contract renewal with an international
government customer to provide dynamic space-based imagery and
analytics monitoring services
- Continued to win task orders under the multi-year contract with
the U.S. Air Force Research Laboratory to develop and demonstrate
AI-enabled space-based moving target detection, tracking and
identification
- Awarded multiple six-figure subscription contracts in support
of various international government agencies
- In the final phases of assembly, integration, and testing on
our Gen-3 satellites and have begun mission planning preparation
for launch and commissioning operations
- Finalizing launch window for first Gen-3 satellite with Rocket
Lab
(1) Cost of sales is defined as imagery
and software analytical services costs and professional and
engineering services cost, less depreciation and amortization
expense.
Financial Results
Revenues
Total revenue for the second quarter of 2024 was $24.9 million,
up $5.6 million, or 29%, from the second quarter of 2023. Imagery
and software analytical services revenue was $17.5 million in the
second quarter of 2024, up 14% over the prior year period,
primarily driven by incremental customer orders for BlackSky’s
imagery services. Professional and engineering services revenue was
$7.5 million in the second quarter of 2024, up 87% over the prior
year period. The significant year-over-year increase was primarily
related to the execution step up of multiple major international
contracts. Professional and engineering services contracts are
milestone-based contracts that may have quarter-over-quarter
revenue variability, in contrast to the imagery and software
analytical services, which are typically recurring
subscription-based revenues.
Cost of Sales(1)
Total cost of sales as a percentage of revenue improved to 28%
for the second quarter of 2024, compared to 44% in the second
quarter of 2023. Imagery and software analytical service costs as a
percentage of revenue improved to 20% in the second quarter of
2024, compared to 23% in the second quarter of 2023, primarily
driven by greater volumes of revenue that inherently have a low
fixed-cost structure as a percentage of revenue.
Operating Expenses
Operating expenses for the second quarter of 2024 were $29.8
million, which included $2.2 million of non-cash stock-based
compensation expense and $11.3 million in depreciation and
amortization expenses. Operating expenses for the second quarter of
2023 were $30.7 million, which included $2.1 million in non-cash
stock-based compensation expense and $11.8 million in depreciation
and amortization expenses. Excluding the non-cash stock-based
compensation and depreciation and amortization expenses from both
years, cash operating expenses(2) for the second quarter of
2024 were $16.3 million, compared to cash operating expenses of
$16.8 million for the second quarter of 2023. The year-over-year
decrease of $0.5 million, or 3%, was primarily driven
by reductions in general corporate costs, which more than offset
investments in our go-to-market initiatives.
(1) Cost of sales is defined as imagery
and software analytical services costs and professional and
engineering services cost, less depreciation and amortization
expense.
(2) Non-GAAP financial measure. See
“Non-GAAP Financial Measures” below and reconciliation table at the
end of this press release.
Net Loss
Net loss for the second quarter of 2024 was $9.4 million,
compared to a net loss of $33.4 million in the second quarter of
2023.
Adjusted EBITDA(2)
Adjusted EBITDA for the second quarter of 2024 was $2.1 million,
compared to an Adjusted EBITDA loss of $5.8 million in the second
quarter of 2023. The $7.9 million year-over-year improvement was
primarily driven by strong operating leverage achieved through
higher revenues, improvement in gross margins, and reductions in
cash operating expenses.
Balance Sheet & Capital Expenditures
As of June 30, 2024, cash and cash equivalents, restricted cash,
and short-term investments totaled $42.3 million. In addition, the
Company anticipates receiving approximately $28.2 million in
payments over the next 12 months as interim milestones on a few
major customer contracts are met and expected to be billed, further
enhancing the Company’s liquidity. Capital expenditures for the
second quarter of 2024 were $12.9 million.
2024 Outlook
The Company maintains its outlook for full year 2024 revenue of
between $102 million and $118 million, and full year 2024 Adjusted
EBITDA of between $8 million and $16 million. In addition, the
Company maintains its expectations for full year 2024 capital
expenditures of between $55 million and $65 million, primarily
driven by investments in our Gen-3 satellites.
Investment Community Conference Call
BlackSky will host a conference call and webcast for the
investment community this morning at 8:30 a.m. EDT. Senior
management will review the second quarter results, discuss
BlackSky’s business, and answer questions. To access the live
webcast or the archived webcast following completion of the call,
please visit the Company’s investor relations website at
http://ir.blacksky.com and then select “News & Events” for the
link to the webcast. A presentation accompanying the webcast can
also be found on the investor relations website. To access the
conference call, participants should dial 1-800-715-9871 or
1-646-307-1963 using conference ID 5380118 or “BlackSky” at least
ten minutes prior to the start of the call. To listen to a replay
of the conference call, please dial 1-877-660-6853 or
1-201-612-7415 using access code 13748009. The audio replay will be
available from approximately 12:30 p.m. EDT on August 8, 2024,
through August 22, 2024.
(2) Non-GAAP financial measure. See
“Non-GAAP Financial Measures” below and reconciliation table at the
end of this press release.
About BlackSky
BlackSky is a real-time, space-based intelligence company that
delivers on-demand, high-frequency imagery, analytics, and
high-frequency monitoring of the most critical and strategic
locations, economic assets, and events in the world. BlackSky owns
and operates one of the industry’s most advanced, purpose-built
commercial, real-time intelligence systems that combines the power
of the BlackSky Spectra® tasking and analytics software platform
and our proprietary low earth orbit satellite constellation.
With BlackSky, customers can see, understand and anticipate
changes for a decisive strategic advantage at the tactical edge,
and act not just fast, but first. BlackSky is trusted by some of
the most demanding U.S. and international government agencies,
commercial businesses, and organizations around the world. BlackSky
is headquartered in Herndon, VA, and is publicly traded on the New
York Stock Exchange as BKSY. To learn more, visit www.blacksky.com
and follow us on X (Twitter).
Non-GAAP Financial Measures
Adjusted EBITDA is defined as net income or loss attributable to
BlackSky before interest income, interest expense, income taxes,
depreciation and amortization, as well as significant non-cash
and/or non-recurring expenses as our management believes these
items are not as useful in evaluating the Company’s core operating
performance. These items include, but are not limited to,
stock-based compensation expense, unrealized (gain) loss on certain
warrants/shares classified as derivative liabilities, litigation,
settlements, and related costs, severance, income on equity method
investment, investment loss on short-term investments, and
transaction costs associated with debt and equity financings. Cash
Operating Expenses is defined as operating expenses less
stock-based compensation expense for selling, general, and
administrative costs, and depreciation and amortization expense.
The Company believes evaluating cash operating expenses is useful
to manage expenses as it excludes non-cash items that may obscure
the underlying business performance.
Adjusted EBITDA and cash operating expenses are non-GAAP
financial performance measures. These measures should not be
considered in isolation or as an alternative to measures determined
in accordance with GAAP. Please refer to the schedule herein and
our filings with the U.S. Securities and Exchange Commission (the
“SEC”) for a reconciliation of Adjusted EBITDA to net loss and a
reconciliation of cash operating expenses to operating expenses,
the most comparable measures reported in accordance with GAAP and
for a discussion of the presentation, comparability, and use of
these financial performance measures.
Forward-Looking Statements
Certain statements and other information included in this press
release constitute forward-looking statements under applicable
securities laws. Words such as "may", "will", "could", "should",
"would", "plan", "potential", "intend", "anticipate", "believe",
"estimate", "future", "opportunity", "will likely result", or
"expect" and other words, terms, and phrases of similar meaning are
often intended to identify forward-looking statements, although not
all forward-looking statements contain these identifying words. All
statements, other than statements of historical fact, contained in
this press release, including statements as to future performance,
our guidance outlook for the year and expected capital
expenditures, our ability to sustain revenue growth, expectations
regarding global demand for our products and services, our
anticipated liquidity and cash flows, our anticipated Gen-3
satellite launch timing, and our expectations related to future
profitability on an adjusted basis, are forward-looking
statements.
Forward-looking statements are subject to various risks and
uncertainties, which could cause actual results to differ
materially from the anticipated results or expectations expressed
in this press release. As a result, although BlackSky's management
believes that the expectations and assumptions on which such
forward-looking statements are based are reasonable, undue reliance
should not be placed on the forward-looking statements because
BlackSky can give no assurance that they will prove to be correct.
The risks that could cause actual results to differ materially from
current expectations include, but are not limited to, factors such
as long and unpredictable sales cycles, customer demand, and our
ability to estimate resources for fixed-price contracts, expenses,
and other operational and liquidity needs, as well as the risk
factors discussed in our most recent Annual Report on Form 10-K and
other disclosures about BlackSky and its business included in
BlackSky's disclosure materials filed from time to time with the
SEC, which are available on the SEC's website at www.sec.gov or on
BlackSky's Investor Relations website at ir.blacksky.com.
The forward-looking statements contained in this press release
are expressly qualified in their entirety by the foregoing
cautionary statements. All such forward-looking statements are
based upon data available as of the date of this press release and
speak only as of such date. BlackSky disclaims any intention or
obligation to update or revise any forward-looking statements as a
result of new information or future events, except as may be
required under applicable securities law.
BLACKSKY TECHNOLOGY
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(unaudited)
(in thousands, except per
share amounts)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Revenue
Imagery & software analytical
services
$
17,469
$
15,328
$
35,302
$
31,088
Professional & engineering
services
7,469
3,999
13,872
6,636
Total revenue
24,938
19,327
49,174
37,724
Costs and expenses
Imagery & software analytical service
costs, excluding depreciation and amortization
3,432
3,456
6,877
7,155
Professional & engineering service
costs, excluding depreciation and amortization
3,450
5,070
7,038
7,849
Selling, general and administrative
18,214
18,768
37,030
37,717
Research and development
286
176
742
392
Depreciation and amortization
11,277
11,776
22,461
21,431
Total costs and expenses
36,659
39,246
74,148
74,544
Operating loss
(11,721
)
(19,919
)
(24,974
)
(36,820
)
Gain (loss) on derivatives
5,273
(11,098
)
5,019
(9,567
)
Income on equity method investment
—
56
—
585
Interest income
330
648
730
1,083
Interest expense
(3,029
)
(2,242
)
(5,663
)
(4,095
)
Other income (expense), net
2
(867
)
3
(1,810
)
Loss before income taxes
(9,145
)
(33,422
)
(24,885
)
(50,624
)
Income tax expense
(252
)
(9
)
(322
)
(122
)
Net loss
(9,397
)
(33,431
)
(25,207
)
(50,746
)
Other comprehensive income
—
—
—
—
Total comprehensive loss
$
(9,397
)
$
(33,431
)
$
(25,207
)
$
(50,746
)
Basic and diluted loss per share of common
stock:
Net loss per share of common stock
$
(0.06
)
$
(0.24
)
$
(0.17
)
$
(0.39
)
Weighted average common shares outstanding
- basic and diluted
145,186
137,208
144,214
130,712
BLACKSKY TECHNOLOGY
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(unaudited)
(in thousands, except par
value)
June 30, 2024
December 31, 2023
Assets
Current assets:
Cash and cash equivalents
$
25,552
$
32,815
Restricted cash
1,097
619
Short-term investments
15,680
19,697
Accounts receivable, net of allowance of
$22 and $151, respectively
8,218
7,071
Prepaid expenses and other current
assets
3,736
3,916
Contract assets
28,166
15,213
Total current assets
82,449
79,331
Property and equipment - net
52,479
67,116
Operating lease right of use assets -
net
4,220
1,630
Goodwill
9,393
9,393
Intangible assets - net
1,076
1,357
Satellite procurement work in process
71,716
55,976
Other assets
2,963
9,263
Total assets
$
224,296
$
224,066
Liabilities and stockholders’
equity
Current liabilities:
Accounts payable and accrued
liabilities
$
11,480
$
11,573
Amounts payable to equity method
investees
2,378
10,843
Contract liabilities - current
4,580
3,670
Debt - current portion
309
—
Other current liabilities
933
1,405
Total current liabilities
19,680
27,491
Operating lease liabilities
6,868
3,041
Derivative liabilities
10,130
15,149
Long-term debt - net of current
portion
108,273
83,502
Other liabilities
2,814
1,724
Total liabilities
147,765
130,907
Stockholders’ equity:
Class A common stock, $0.0001 par
value-authorized, 300,000 shares; issued, 148,910 and 145,232
shares; outstanding, 146,530 shares and 142,837 shares as of June
30, 2024 and December 31, 2023, respectively.
15
14
Additional paid-in capital
700,693
692,115
Accumulated deficit
(624,177
)
(598,970
)
Total stockholders’ equity
76,531
93,159
Total liabilities and stockholders’
equity
$
224,296
$
224,066
BLACKSKY TECHNOLOGY
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
Six Months Ended June
30,
2024
2023
Cash flows from operating
activities:
Net loss
$
(25,207
)
$
(50,746
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization expense
22,461
21,431
Operating lease right of use assets
amortization
374
613
Bad debt expense
108
15
Stock-based compensation expense
5,725
5,323
Amortization of debt issuance costs and
non-cash interest expense
4,382
189
(Gain) loss on derivatives
(5,019
)
9,567
Non-cash interest income
(495
)
(337
)
Income on equity method investment
—
(585
)
Loss (gain) on disposal of assets
46
(22
)
Changes in operating assets and
liabilities:
Accounts receivable
(1,256
)
(4,278
)
Contract assets - current and
long-term
(6,693
)
(4,101
)
Prepaid expenses and other current
assets
(94
)
1,142
Other assets
403
1,117
Accounts payable and accrued
liabilities
(1,961
)
1,015
Other current liabilities
(309
)
(1,097
)
Contract liabilities - current and
long-term
1,958
(3,491
)
Other liabilities
(25
)
8,620
Net cash used in operating activities
(5,602
)
(15,625
)
Cash flows from investing
activities:
Purchase of property and equipment
(6,576
)
(8,446
)
Satellite procurement work in process
(20,984
)
(19,925
)
Purchases of short-term investments
(13,488
)
(19,416
)
Proceeds from maturities of short-term
investments
18,000
41,110
Proceeds from sale of property and
equipment
—
22
Net cash used in investing activities
(23,048
)
(6,655
)
Cash flows from financing
activities:
Proceeds from issuance of debt
20,000
—
Proceeds from equity issuances, net of
equity issuance costs
2,947
30,074
Proceeds from options exercised and ESPP
shares purchased
157
5
Payments for debt issuance costs
(632
)
—
Withholding tax payments on vesting of
restricted stock units
(524
)
(414
)
Payments for deferred offering costs
(83
)
—
Payments of transaction costs for debt
modification
—
(561
)
Payments of transaction costs related to
derivative liabilities
—
(905
)
Net cash provided by financing
activities
21,865
28,199
Net (decrease) increase in cash, cash
equivalents, and restricted cash
(6,785
)
5,919
Cash, cash equivalents, and restricted
cash – beginning of year
33,434
37,016
Cash, cash equivalents, and restricted
cash – end of period
$
26,649
$
42,935
BLACKSKY TECHNOLOGY
INC.
RECONCILIATION OF NET LOSS TO
ADJUSTED EBITDA
(unaudited)
(in thousands)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Net loss
$
(9,397
)
$
(33,431
)
$
(25,207
)
$
(50,746
)
Interest income
(330
)
(648
)
(730
)
(1,083
)
Interest expense
3,029
2,242
5,663
4,095
Income tax expense
252
9
322
122
Depreciation and amortization
11,277
11,776
22,461
21,431
Stock-based compensation expense
2,362
2,311
5,725
5,323
(Gain) loss on derivatives
(5,273
)
11,098
(5,019
)
9,567
Litigation, settlements, and related
costs
165
—
165
—
Severance
60
111
141
199
Income on equity method investment
—
(56
)
—
(585
)
Transaction costs associated with debt and
equity financings
—
833
—
1,738
Investment loss on short-term
investments
—
—
—
55
Adjusted EBITDA
$
2,145
$
(5,755
)
$
3,521
$
(9,884
)
BLACKSKY TECHNOLOGY
INC.
RECONCILIATION OF OPERATING
EXPENSES TO CASH OPERATING EXPENSES
(unaudited)
(in thousands)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Operating expenses
$
29,777
$
30,720
$
60,233
$
59,540
Stock-based compensation for selling,
general and administrative costs
(2,222
)
(2,147
)
(5,370
)
(4,884
)
Depreciation and amortization
(11,277
)
(11,776
)
(22,461
)
(21,431
)
Cash operating expenses
$
16,278
$
16,797
$
32,402
$
33,225
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240808801313/en/
Investor Contact Aly Bonilla VP, Investor Relations
abonilla@blacksky.com 571-591-2864
Media Contact Pauly Cabellon Director, External
Communications pcabellon@blacksky.com 571-591-2865
BlackSky Technology (NYSE:BKSY)
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