BlackSky Technology Inc. Class A

Greetings. Welcome to the Black Sky Technology Third Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I'll now turn the conference over to your host, CFO Johan Brookhaysen. You may begin.

Good morning, everyone. I'd like to welcome you to the first ever Black Sky Earnings Call, Fiscal Third Quarter 2021. Today's call will include comments from our Chief Executive Officer, Brian O'Toole, followed by our Chief Financial Officer, Johan Brookhuisen, and then wrap-up comments by Brian, and we will open the call after that for a live Q&A session. A replay of this earnings call will also be available on our website. Information to access the replay is listed in today's press release, which is available at blacksky.com in the investor relations section. Before we begin, I would like to remind everyone that in today's call, we will be making forward-looking statements regarding future events and financial performance and guidance for our fiscal year 2021. These forward-looking statements are subject to known and unknown risks, assumptions, and uncertainties, including our outlook and guidance. anticipated start date, the government contract, and customer capture, our expectations regarding the impact of COVID-19, our ability to grow our business, which depends in part on the successful production, launch, commissioning, and or operation of our satellites and related ground systems, software, and analytical technologies, all of which are subject to many uncertainties, and our ability to keep pace with the technological advances in our industry and successfully compete in highly competitive markets. BlackSky cautions that these statements are not guarantees of future performance. BlackSky undertakes no obligation to revise any statements to reflect changes that occurs after this call. You should review our most recent SEC filings for a complete discussion of these factors and other risks that could cause actual results to have a material difference from these forward-looking statements and that may affect our future results or the market price of our stock. In addition, during today's call, We will refer to certain non-GAAP financial measures, including adjusted EBITDA, reconciliations of non-GAAP to GAAP measures, and certain additional information. A reconciliation of adjusted EBITDA to net loss, the most comparable GAAP measure, is included in today's earnings press release, which can be viewed and downloaded from our investor relations website. And with that, we will begin by turning the call over to our CEO, Brian O'Toole.

Thank you, Johan, and thank you for taking the time today to join us for our third quarter earnings call for fiscal year 2021 and our first as a public company. I'm pleased to report that we're continuing strong execution across all aspects of our business as we continue our mission of providing our customers a first to know advantage and leading a new era in real-time global intelligence. Achievements during the quarter include positive sales traction, expansion of our global sales force and pipeline, and progress on the expansion of our Constellation and AI-enabled SaaS platform. The third quarter marked several major milestones. Most importantly, BlackSky completed its business combination with Osprey, grossing $283 million of cash to fund our growth plan. In addition, we bolstered the ranks of our executive management team with several strategic executive hires, all with public experience. including a chief development officer, chief revenue officer, chief financial officer, and general counsel. Black Sky also completed the build out of our board of directors with the appointment of Sue Gordon and Jim Tolanen, both seasoned veterans in their respective areas of expertise. We now have a high caliber experienced team in place to help drive our aggressive growth plans. Demand remains strong in both the commercial and government sectors, for our high revisit imaging products and AI-enabled analytics. Starting with our defense and intelligence business, BlackSky was awarded several new multi-year contracts and extensions that include the expansion of our existing commercial imagery contract with the NRO, which is driven by an increase in demand from operational end users for BlackSky's high revisit imagery. Imagery deliveries under this contract increased 100% from the second to the third quarter. Demand from the U.S. government has continued to grow as BlackSky is now integrated into the day-to-day operations of the government. We also announced the award of a $30 million five-year IDIQ contract with the National Geospatial Intelligence Agency. This is for AI-enabled economic monitoring. This is a significant contract in that it reflects NGA's move to procure commercial analytic services. In September, we entered into a strategic commercial agreement with Palantir to accelerate BlackSky's solution to Palantir's customers and end users through the integration of our platforms. As part of this partnership, Palantir invested in BlackSky through a subscription agreement. We were also encouraged by the release of the final RFP from the NRO for the electro-optical commercial layer contract, with proposals now due in early December. As a reminder, this is the largest US government contract to purchase commercial satellite imagery over the next 10 years. The objective of this new procurement is to open the market for multiple suppliers to the US government. The release of the RFP is a significant milestone in that it provides good visibility into the timing of contract awards, which are expected by the spring of 2022. Internationally, we continue to support several major D&I customers, and during the quarter added several new regional accounts. We see a large market opportunity here, as we believe this is a supply-constrained market with legacy players facing aging and supply-constrained constellations. Turning to our commercial business, we are experiencing growing interest and opportunities across a range of industries and through major channel partners. These opportunities are being driven by our disruptive customer experience, which is enabling users to affordably access our data and analytics through our on-demand platform. Today, customers can log in, task our constellation, and get data and AI-derived analytics in under 90 minutes. During the quarter, we added several new commercial customers and are making progress with major enterprise opportunities for solutions and mining, financial services, transportation, and construction. Today I'm happy to announce the award of a five-year multi-million dollar sole source blanket agreement contract with NASA to provide high revisit satellite imagery in support of NASA's existing Earth observation research with the objective to advance their capabilities in predictive analytics. To spearhead our growth in our commercial business, Last week, we announced our new Chief Commercial Officer, Amy Minnick, who is a seasoned industry product and commercial markets executive. Amy brings a strong track record of bringing commercial products to market at companies such as LexisNexis, IHS, and DigitalGlobe. Moving on to the expansion of our sales pipeline and global sales capacity. Our sales pipeline continues to expand with growth being driven by strong demand from the government sector for analytics and advanced AI, as well as a broad range of commercial opportunities. To address these opportunities, we significantly expanded our global sales force. In our government business, we brought in JR Reardon as our chief revenue officer. JR is a seasoned executive in the remote sensing market and brings significant expertise in developing national security solutions. We also added Andy Stevenson, our new VP of International Sales to spearhead our international efforts. Andy brings decades of experience in this market and is working to expand our international sales team. During the quarter, we also expanded our reseller network to 13 resellers. Turning to the status of our constellation, we continue to make progress on the expansion of our high revisit satellite constellation. We have two satellites ready for launch next week with Rocket Lab. And what's exciting is that we remain on track to launch as many as four more satellites by the end of the year. The successful launch of these satellites will double our current on-orbit capacity and enable us to provide customers with hourly revisit imaging capability. In addition, we have made significant progress on our Gen 3 satellite program and remain on track to expand our constellation over the coming years. Moving on to our outlook. Despite strong operational execution, we are experiencing a delay in the start of some new contracts, the ramp of revenue from these contracts, and supply chain impacts due to COVID-19. These supply chain delays have impacted the execution schedule of some of our engineering and integration projects, and thus the recognition of revenue from these programs. As a result, we are revising our 2021 revenue forecast from 40 million to a range of 30 to 34 million. With that said, recent awards from the NRO, NGA, and NASA demonstrate that we are emerging as a partner of choice and that customers are realizing the value of our high revisit imagery, advanced analytics, and a first to know advantage. We are winning and extending multi-year contracts, which is strengthening our visibility into our out-year revenues. We believe that the investment and achievements of this quarter set Black Sky on a trajectory for long-term success. In summary, our third quarter was solid, and we are excited about the multiple growth opportunities in front of us. And we remain focused on executing on our plan. With that, I'll turn it over to Johan to provide more details on our third quarter financial results. Johan?