BlackSky Technology Inc. Class A

Q4 2022 Earnings Conference Call


spk_0: good morning ladies and gentlemen and welcome to black sky technologies fourth quarter two thousand twenty two earnings conference call all lions had been placed on mute to burn any background noise after the speakers remarks that will be a question and answer session to ask a question in a press star ben one on your text on phone to withdraw your question please press start trying to please note this conference call is being recorded are now external all over the alley but it lacks guys vice president of investor relations please go ahead alley good morning and thank you for joining us today i'm joined by our chief executive officer brian rhino tool and our chief financial officer henry dubois on today's call brine will provide some highlights on the quarter and accomplishments over the last year and give a strategic update on the business
spk_1: henry will then review the company's fourth quarter and full year financial results and provide an outlet for twenty twenty three following are prepared remarks we will open the line for your question
spk_0: a replay of this conference call will be available from approximately twelve thirty pm eastern time today through march twenty first information to access the replay can be found in today's press release additionally a webcast of this earnings call will be available in the investor relations section of our website at job
spk_1: w w dot black guy dot com in conjunction with today's call we have hosted a quarterly earnings presentation on the investor relations website a you may use to follow along with are prepared remarks
spk_0: before we begin let me remind you that at a conference call includes forward looking statements including financial guidance for twenty twenty three and that actual results may differ from the expectations reflected in the statements due to factors such as long sale cycles customer demand in our ability to estimate expense operation no and liquidity needs we encourage you to review our press release and most recent se si filings for a full discussion of the risks and uncertainties that pertain to these statements and that may affect future results for the market price of our stock clocks guy seems no obligation to update forward looking statements except
spk_1: maybe required under applicable security laws
spk_0: in addition during today's call we will refer to certain non gas financial measures including adjusted ebitda adjusted imagery and software analytical services cost sales and adjusted selling general and administrative expenses a reconciliation of these non gaap financial measures to their most comparable cat measures are included in today's earnings press release and accompanying presentation which can be viewed and downloaded from is after relations website at this point of the call over to bri know to prime thanks and good morning everyone thank you for joining us on today's call
spk_1: let's begin with slide for
spk_2: what he twenty two was a foundational year
spk_0: that established black sky as a premier provider of real time global intelligence i'm pleased with the progress we've made across all aspects of our business and i'm particularly proud and we are now have preferred and trusted long term partner
spk_2: so the most important customers in the world
spk_0: like skies platform is the first of its kind capability in america and is providing these customers with you in critical real time intelligence that they never had before our world needs real time intelligence now more than ever can we continue to see strong demand for high frequency imagery monitoring in advanced analytics
spk_1: now let me highlight somebody accomplishments we've achieved to twenty twenty two for as well as some recent developments that we've announced today
spk_0: that will contribute to the strong momentum we have going into twenty twenty three first black sky you changed our space is used to deliver actionable intelligence last year we achieved a baseline satellite constellation the now provides reliable really monitoring of the most important strategic location
spk_1: economic assets and events in the war
spk_0: through our spectra ai software we have transformed the customer experience by providing on demand access to new users into the delivery of real time to a spatial information and unprecedented speeds
spk_2: frequencies and economics
spk_0: we are enabling users to gain new insights and see changes as they are happening on the ground
spk_1: he had access that information through mobile devices
spk_0: or directly into software applications that use everyday such as palin to your as ring
spk_3: second
spk_2: black sky high frequency imagery in analytic services were validated feet are now relied upon by major us and international government agencies for the mission critical operations
spk_0: due to the quality speed and reliability of our services these customers have made long term commitments through multiyear contract
spk_2: to secure capacity from our current and future constellations
spk_0: kids are grown yours use of our a i enabled analytics serve as a result we booked multiyear contract valued up to one point three billion dollars from these key customers resulting in over two hundred and fifty million dollars and recurring revenue back home this includes a new one hundred and fifty million dollar plus contract that we announce today with a major international ministry of defense just multi year subscription contract for the long term commitment for our next generation of real time monitoring and analytics services for space based tactical operations this contract wound was competitively dead and provides further validation of our vision the differentiation that we've established in the market the confidence these customers have an hour long term product strategy and the alignment of our capabilities to meet long term needs how's your more details on this important contract minute a few minutes
spk_4: fourth
spk_2: each contract wins enabled us to hit do
spk_1: revenue records both quarterly an angel
spk_0: with full year revenue reaching over sixty five million dollars he ninety two percent increase over twenty twenty one these contracts also provide strong revenue built disability for twenty twenty three and beyond
spk_1: with over sixty five percent of our forecast twenty twenty three revenues coming from contracted backlog
spk_0: this these revenues were predominantly from our high margin imagery software and analytics services which enabled us to demonstrate the operating leverage of our business model
spk_1: and twenty twenty two which he did ninety two percent incremental contribution margin from the services
spk_0: which we believe puts us on a path to achieving sas tight margins through a recurring revenue model and a high margin even up it's next week span that are salesforce and our position to capitalize on growing global demand for real time intelligent solutions
spk_2: particularly in that government defense and intelligence sector
spk_0: this strategy is paying off as governments around the world are increasing their span for space states intelligence and are now turning to black sky to meet our long term mission needs further has this market has traditionally not cyclical it's not been subject to the risks of other markets during times of economic uncertainty providing a good visibility into future opportunities
spk_2: and a strong and growing sales pipeline
spk_0: final three we announced that we secured additional capital to a private placement that will strengthen our balance sheet all of these achievements have set the stage for our next phase of growth
spk_2: and most importantly have put us on a path to achieve profitable growth and twenty twenty three moving on to slide sauce
spk_0: as i mentioned earlier and please that demand for blacks guys products and services
spk_2: twelve record revenue for the company revenues and twenty twenty two grew to sixty five point four million dollars in line with the upper end of guidance previously communicated representing an increase of ninety two percent over twenty twenty one revenues
spk_0: experienced wrong customer demand for new and existing us
spk_1: and international governments and believe this favorable trend will continue
spk_0: we saw significant revenue growth and are imagery and software analytical services which is our court does is serving customers and is the highest marginal none of our business henry will provide more details on the quarter and for your financial results later
spk_2: turning to slide six
spk_0: now i would like to provide more detail on today's announcement of our new one hundred and fifty billion dollar plus multiyear contract award with a major international defense cost of i'm pleased to announce a black guy was selected from a competitive bidding process to provide next generation space states tactical zealand services under a multiyear services agreement the services will be providing under the contract or for next generation high frequency monitoring and real time delivery of a i enabled until with this multi year subscription contract is valued at over one hundred and fifty million dollars and include significant options for about the scope of services made
spk_2: the to expand it over time this project kicks off with an additional to your development phase the head of the start of the subscription service
spk_0: we expect to recognize a few million dollars of revenue this year
spk_1: have the ramp up the initial phase of the contract in the second call
spk_0: his contract further validate our customers are bracing our vision and securing advanced access to are differentiated offering in the market for advanced dynamic monitoring and analytic services we will be able to sell those type of service to any customer by the government or commercial for proud to be partnered with this major international government customer and provide them with a tactical advantage to support their country's most critical intelligence needs moving on to our platform has shown on slide seven what's guys products and services give customers unique information and insights
spk_2: about are changing world
spk_1: we successively scaled our operations
spk_0: and are now delivering thousands of high resolution images reliable each day with a i driven analytics to customers around the world our software first strategy is now paying dividends cause on the man access to our tasking monitoring in a i enabled analytics is accelerating adoption and go to market initiatives for example or software based approach that combines high frequency imaging and real time analytics provides us with a competitive advantage he was the key factor in our capture of the economic indicator modern contract with and yeah this man alone drove over forty million dollars and bookings and twenty twenty two
spk_1: we're excited as customer increase the value of the contract stealing from thirty million to sixty million dollars and less than twelve months
spk_0: you are platform eighty eyes we are able to rapidly can agree with the machine to machine interfaces a third party platform such as talented and as we this provides users with immediate access to black guys on demand services think of this is having an easy button right in these applications that enable a user to directly task black sky satellites and receive imagery an analytics back in their software the ninety minutes or less from collection our real time software platform spectra a i it's how we are changing the customer experience
spk_2: turning to slide eight
spk_1: we also made significant advancements in our imaging constellation
spk_0: twenty twenty two which he did baseline constellation that enables us to provide reliable and dynamic orally monitoring of the most important and strategic locations economic assets and events in the world
spk_2: but this in perspective for most of you on this call
spk_0: we now have a satellite passing over your location hurry hour and through our structure and software from any mobile device or browser you can tap the constellations and imagery analytics on demand our consolation enables us to collect high resolution imagery i most locations up to fifteen times a day from dawn to dusk we all manage this unique modern capability last summer
spk_2: with the village image at night
spk_0: deliver new insights to our customers we also continued to integrate sar monitoring an analytics from third parties in our platform to further enhanced of services we are offering the customers being able to deliver twenty four seven all weather monitoring as a key strategic advantage and an important driver for the increase demand we're seeing globally
spk_5: within the next month
spk_1: plan a lot to jan two satellites to primarily replace the to initial satellites
spk_0: that were deployed and twenty eighteen and are approaching there and a voice the satellites that are being replace had been in operation for more than four years well beyond their expected mission life as majority of our current constellation was launched within the past eighteen months we believe we have sufficient capacity on orbit today to meet existing customer requirements and support our road for the next couple of years or vertically integrated approach the space has enabled us to develop a satellite production line where we are able to incorporate new technologies in our satellites over time to provide continuous improvement of around orbit capabilities we continued remain track with the production of our new gym three satellites which will include several new capabilities including improve resolution performance and shortwave infrared imaging are excited about the new capabilities and are generally satellites will bring to our customers we expect to begin launching satellites and twenty two thousand four and will provide more updates as they become available turning slide nine from a customer when perspective twenty twenty two was a big year for black sky has relied upon more and more by some of the most important demanding customers around the world to support their mission critical operations we've expanded our footprint with both us and international defense and intelligence agencies winning many multiyear agreements as well as expanding existing ones with some of our he wins shown here these long term contracts totaling up to one point three billion dollars provide us with great revenue visibility into twenty twenty three and beyond and has built a strong backlog that we will recognize in future years moving on to slide ten
spk_2: our focus on the government sector
spk_0: and particularly our investments in the growth of our international salesforce has as well positioned to capitalize on a growing defense and intelligence segment which is traditionally not cyclical and typically does not have the same level of exposure certain commercial markets during times of economic downturn further as a result of recent geo political events and the global environment many governments around the world are significantly increasing their defense banned as a function of their gdp
spk_2: with increased focus on space capabilities
spk_0: this should provide black sky was expanding total addressable marcus and strong growth opportunities over the coming years we have a long history supporting various us government agencies like the nrl
spk_2: and a nasa and others with advanced imagery in analytics to deliver mission critical intelligence and assist with their decision making capabilities
spk_1: just a few months ago congress raised to twenty twenty three spending budgets for the us space force over twenty six billion dollars can increase of thirty five percent over twenty twenty two funding levels
spk_0: a large part of this increase geared to help accelerate use of commercial space technology we believe the intelligence surveillance and reconnaissance or ios our market is undergoing a paradigm shift where by billions of dollars never once done on airborne systems are now moving to space space technology that leverage a small satellite constellations to support new and emerging missions as this shift in the market is in it's early stages really black guy is well positioned to capitalize on a growing number of new programs can we expect will require a unique capabilities as these new programs are established over the next few years moving on to slide a lot never before has the need for real time just a chance audience than so critical
spk_1: to identifying a tracking key events taking place around the world
spk_0: letter were assisting allied partners with high frequency imagery related ongoing military conflicts keeping a watchful eye in the sky onto your political events in remote locations or muttering supply chain activity at worldwide black guy is there with our unique dynamic monitoring in a i an analytics we're providing mission critical inside something governments and enterprises globally make better decisions we believe black guys well positioned to capitalize on a growing market for real time to a special intelligence is needed now more than ever in summary of side about where we are the demand we are seeing in the market and the strong momentum we have in our business
spk_1: oh now turn it over to henry to go through the quarterly and for your financial results in more detail and thank you brian and good morning everyone i'm pleased that our fourth quarter financial results for strong ending the or a high note as the let for imagery and analytics continued
spk_0: now let's discuss our fourth quarter results beginning was like thirteen we continue to see strong demand into for for imagery and analytics which drove revenue to nineteen point four million dollars another corley rectify company the sixty nine percent year over year improving queue for was primarily driven by increased demand from new and existing us image national got my customers
spk_1: immigrant analytics revenue grew to sixteen point two million dollars a one hundred ninety six percent increase over the prior year period primarily driven by greater volumes of imagery delivered to new and existing customers
spk_6: professional and engineering services revenue contribute three point three million dollars in the fourth quarter of twenty twenty two the system as a third quarter of trying to keep in mind revenue from these types of products can vary from fourth quarter to quarter depending on the projects estimated cost and percentage of completion say you're likely see some very lg overtime
spk_0: as an example a few of our existing products aren't fact coming to an end but the development work for the new international ministry of defence customer will be allies in the professional and engineering services line in advance of when their subscription contract begins
spk_2: i like to point out as we stated in our press release we reclassified professional service revenues and costs out of the imagery and analytics category and combined it with our engineering services as a project tights durations and cost structures are more aligned with engineering services
spk_0: this is only a change in the geography on the income statements and changes nine of the top line or bottom line numbers we have included a recasting a prior quarters in the appendix of our presentation for ease of comparison now trying to fly fourteen you can see that are adjusted ebitda performance continue to improve sequentially each core for out last year for the fourth quarter of twenty twenty two reported in adjusted ebitda was a four point six million dollars in improvement over the fourteen point four million dollar loss in the prior period and sequentially better than the six point six million dollar loss for boring que three last year
spk_1: the improvements are primarily driven by greater volumes of our high margin imagery and analytics revenue as strong operating leverage enable primarily by six operating costs and prudent expense management in fact our as in cost splitting stock based compensation expense
spk_0: for only up two percent year over year on revenue growth of sixty nine percent since demonstrate our strong inherent offering leverage in our business model and our focus on effective cost management now on provide provide some details on a full year financial results story was like sixteen following the strong revenue performs into for we ended twenty twenty two with revenue of sixty five point four million dollars of ninety two percent of the prior year this result is in line with the upper end of guidance we previously communicated and complete another record year of revenues for the company our significant revenue growth can be attributable to the growing number of new cluster lizard twenty twenty two and the expanding share of wallet we're experiencing with our existing customers by twenty twenty two imagery is analytics revenue which represents our core service offering grew two hundred and nine percent over twenty twenty one and we anticipate demands of will continue to be strong and twenty twenty three
spk_6: moving on to costs are total cost of sales as a percent of revenue continue to improve the more importantly we saw strong improvement in our imagery and analytics cost of sales and a non yeah faces
spk_1: as shown in flight seventeen full year twenty twenty two imagery and analytics cost of sales was thirteen point nine million dollars compared to eleven point two million in the prior year excluding stock based compensation and depreciation and amortization expenses in both ears
spk_0: this is a small increase of two point seven million dollars a year over year primarily due to the six cost structure of our business with limited marginal costs for incremental revenue deliveries
spk_2: on the other hand revenues increased significantly year over year by thirty two million dollars this small increasing cost of sales are large increase in revenue translates into high incremental contribution margins of ninety two percent for the year
spk_0: this high incremental contribution margin validates the high margin nature of our imagery and analytics business and as a prime driver for how black guy will scale of business and achieve long term profitability our full year twenty twenty two adjusted ebitda last was twenty nine point five million dollars compared to loss of forty four point four million dollars in the prior year this fourteen point nine million dollars a year over year improvement that primarily driven by see factors first demand for price and services was very strong as revenues and twenty twenty two jumped up ninety two percent over the prior year
spk_1: beckett a large part of our revenue growth came from high margin imagery and analytics which as i mentioned represented a ninety two percent incremental contribution margins and twenty twenty two helping to drive improvements a bottom line
spk_6: and third we drove strong leverage to put it cost management with averaging investments primarily me to expand our sales team software and ai technology we're very happy with the price made in adjusted ebitda i look forward to further improvements and twenty twenty three
spk_1: i want to briefly mention that are fourth quarter capital expenditures when i point seven million dollars free the told catholics expand for twenty twenty two to forty four point one million dollars this amount is less than what we previously guy to to do to costly expecting to for for the launch of to jan two satellites that was shifted into twenty twenty three
spk_0: in addition wink or less and on certain aspects of our jan three satellite about him and another corporate areas as well looking at our policy we ended twenty twenty two with seventy five million dollars of cash restrict to cast and short term investments turning to slide eighteen we announced this morning a private place and financing raising approximately twenty nine point five million dollars from a syndicate of new and existing institutional investors see a press release for specific details the purchase price of each common shares one dollar and seventy nine cents and each investor will receive an equivalent number of large with a strike price of two thousand and twenty cents which represents a fourteen percent premium or our last closing price these funds will be geared towards general cocker purposes and investments in our states and software platforms
spk_2: these additional cash proceeds strengthen our balance sheet and liquidity position to meet our needs for the foreseeable future
spk_0: in addition files and at the market or a t m facility in december though allows take advantage of options in the capital markets if and when we decide to do so now let's move on to our twenty twenty three a look as shown us like nineteen in addition to having sixty five percent of our forecasts revenue currently in that last winter anticipate strong global custard a man for our products and services to continue feeling great revenues and delivering additional offering leverage as a result we expect a for your revenue to be between ninety to ninety six million dollars which represent a forty two percent year over year growth as a point of this race strong revenue growth hi incremental contribution margins and putting cost management we anticipate achieving positive adjusted ebitda and to form twenty twenty three this would be a major accomplishment for a company and continues to demonstrate the scale ability of our business model in addition weeks the capital expenditures for twenty twenty three to be between forty and forty five million dollars roughly in line with our twenty twenty two cents
spk_2: in summary
spk_0: we're pleased with our financial performance in both the fourth quarter and full year twenty twenty two we're seeing increase interest of like guys imagery and analytics solutions worldwide and look forward to continuing the stronger match of into twenty twenty three
spk_6: but that allowed to an attack on brian for some clothes very much
spk_7: right
spk_0: thank you henry
spk_1: now i would like to spend a few minutes on one of our most important objectives for twenty twenty three
spk_0: which is to achieve positive adjusted even argue for this year as a new space companies we recognize that it's important to achieve cash flow positive operations and profitable growth
spk_1: we don't believe that growth at any cost is a viable strategy for sustainable long term success in this industry as such we have a focus plan to achieve certain financial and business objectives have put us on this path
spk_0: which are shown us slide twenty and include the following first continuing to do ever strong revenue growth with a focus on recurring revenues from our high margin imagery and analytic services second improving margin performance by capitalizing on the operating leverage of our space and software for sounds and achieving sat tight margins and operating performance third a focus on prudent cost management we are planning for only a marginal increase in overhead expenses this year with incremental growth targeted towards sales and marketing to drive further revenue growth and finally aggressive task management by aligning the timing of contacts investments
spk_1: the market driven need for capacity and pursuing other initiatives to obtain castle favorable terms on recurring multi year subscription contracts
spk_0: we believe our accomplishments and twenty twenty two have set the stage for us to achieve these did this milestones
spk_1: and put us on a path for long term sustainable profitable room
spk_0: in closing i want to thank our employees for a hard work dedication and tenacity that have gotten us here we've established black guy has a premier provider of real time just spatial intelligence and a trusted partner some of the most important customers in the world building on the successes of twenty twenty two we have strong a man i'm across all aspects of our business and look forward executing another strong year and twenty twenty three this concludes our remarks for the call and will now take your questions we all now begin to question and answer session to ask a question you may press star than one on your touchstone sauce if you're using a speakerphone to pick up your handset before pressing the keys to withdraw your questions please press star ventures at this time we will cause momentarily to assemble our roster
spk_8: our first questions come from the line of just sullivan with the benchmark company please proceed with your questions
spk_0: your mind
spk_2: my just
spk_0: you is is fight the gentry satellite the timeline for deployment evolved to didn't more custard man technology or or resource allocation driven
spk_9: you mean how is the timeline for deployment or developments
spk_10: yeah deployment and him the were like it did you say twenty twenty four for to launch
spk_9: yeah and i see as i mentioned
spk_2: you know we has sufficient capacity and orbit with our current consolation to support our growth for the next couple years those gentry satellites i will begin to pulling them as replenishment replacement satellites for the current constellation
spk_9: a line in a warning that with market demand so
spk_11: but imperil our seeing are building a strong
spk_0: a backlog of of interest in those and that capability and the out years to things like e o c l and r recently announced
spk_2: a ministry of defense contractor yes and it gets on that point yet of the hundred and fifty million win this money he talked about the long term product strategy was was attractive can you can you just outlined some of those long term capabilities that that they were jackets of
spk_0: yeah just the meet the main thing is you know we've built the differentiated capability to market with high frequency monitoring with integrated ai an analytics and ah road map over time will continue to improve the frequency and the latency hand a breath the day i enabled intelligence that we deliver in this is what attracted the customer and ultimately led to us winning that contract
spk_2: the isn't just one that's when you know as far as that sells for it's expansion and easy
spk_10: thats that about controlling costs and having i am profitability did you feel you have the skill and on the salesforce at this point
spk_12: every made significant progress last year our continuing invest in sales and marketing this year
spk_13: we're also yeah
spk_2: some of the achievements hand
spk_9: integrating with third party platforms through our software
spk_11: a p i such as as real pelletier give us the sales force multiplier and as we just really
spk_14: realize some of those integrations
spk_0: mid to late last year will start seeing interaction expect to start seeing traction on that this year it's the you've done and just
spk_2: thank you our next question it's come from the line of jason sweat with lake street please proceed with their questions
spk_15: it as thanks for your take my questions i'm just curious i know you mentioned a prepared remarks or in the i'm not cyclicality and this industry but just given the macro have you seen engagements with customers sorry get pushed to the right or have timelines remain relatively intact
spk_11: the timelines we're seeing i remain intact and factor as i mentioned in our remarks the
spk_2: the demand particularly in the the defense and intelligence sector is is
spk_1: growing very significant we were seeing a lot of
spk_2: are these organizations committing more dollars sooner tickle your own space based capabilities
spk_0: and then on a on a commercial side are also saying some pretty significant interest
spk_9: oh yeah and commodities and supply chain intelligent so we're not seeing a slowdown in demand
spk_6: okay and then just as a follow up or how should we think about corrosive margin trending this year binary on take them church i find
spk_16: i'm gross margins as you see what we take a look at the other side we have that shows the incremental gross margin
spk_6: as we've always talks when you can have normalize for i just how the period costs associated with the living revenues every incremental dollars or yields a very high gross margin so we take a look we had about forty seven million dollars or so other imagery and analytics revenue this past year against someone the neighbor about that
spk_16: thirty million or so of of of actual operating costs and period for the year
spk_17: so you you're generating that terror that ninety two percent incremental gross margin
spk_18: yeah about a seventy seven point one or seventy one percent in total gross margin for the image really analytics but as you add more dollars you almost getting that it's kind of around that ninety percent and incremental says we grow their business that's what's going to help drivers towards the as the the avatar positive in the fourth quarter as were up
spk_0: were forecasting
spk_19: l guess that's helpful thanks lock eyes thank you our next question is come from the line of scott da se with credit suisse please proceed with your question
spk_2: hagan morning brian he said saddam and sixty five percent or twenty three revenues from contract a backlog just wanted to check on the
spk_15: the coffin and of on getting the other thirty five percent on the line of sight you have to that
spk_9: and we got of for as i met you were seem really strong and growing demand or worldwide so we've got
spk_2: the sixty five million contracted and
spk_9: we got very strong visibility and the twenty twenty three revenue forecast
spk_11: could a very strong pipeline have fallen on a new opportunities
spk_2: some of the on
spk_19: a good portion of
spk_20: of the gap between the sixty five and are forecast is also follow on contracts from existing customers so we are very confident in our in our forecast this year
spk_21: got a great and then i'm in the you mention there's a development phase on on this hundred fifty nine million dollar contract he wants it is titled know what that entails how long that is on period last from his into this description period
spk_2: yeah hit it will am it will on
spk_15: commence as we said in the second quarter
spk_2: and you know there they'll be over a period of a couple years
spk_19: activities too
spk_2: develop and integrate certain capabilities with the customer and so that will continue and then they will be a commencement of the subscription services that starts in a few years
spk_22: are you are he basically building a bespoke constellation for them
spk_19: notices one hundred percent aligned with our commercial
spk_9: strategy so
spk_2: so it's going i like that they just use the app from the sas model like why that take two year as up that are they're already the third model of that it go for as customers already getting capacity from our existing constellation and ah the subscription
spk_19: increases significantly car with our gentry capability combined with the level of ai intelligence that that we're going to be delivering under the contract as we're expanding the ai analytics of our platform in over over the coming year so this is a long term strategy for this customer that's aligned with our commercial platform in the timing of our investments in both space and software
spk_11: okay great and then the last question for henry
spk_14: and if you just kind of wanted to get your sense for
spk_6: how you approach guidance in general now that you've and public for over a year now just else seems like there's often times three kinds of games to get from companies one and one case can be an aspiration of plan for southern companies can be an operational plan and for other companies it's more for promise non natural promise but it's something that they help shareholders can heavily rely on i guess i just be curious to know as you think about guidance you this year and going forward and as as as a public company cfl kind of which are those do you think your wine toward both examiner that's a good question the way we we look a kind of providing guidance is we have to pull together our budget and get work that with a board to get it approved or prior to the end of the prior year and as we look at that are that would maybe more the matter call that when aspiration without a look at stress will we want to provide to the street other things that we feel very confident
spk_23: that we will we will hit as as you know when we went through this year this past year we provide guidance of one set of numbers and that we're in august real to canada look at kind of how things were performing and provided an update we will continue to always update our our guidance as as appropriate
spk_0: we want to look as this is something that we feel that we can make a solid plans against obviously they're not promises per se their their well we're expecting to do but the unfortunate are no guarantees in life but for working to add make sure that we're giving everyone the best served as i'm from a time again okay great thank you yes thank you for our next questions come through the line of edits the with to your bank please proceed with your question
spk_6: a good morning eyes and as exit taking our our questions first gandhi and i kept race are you thinking about the detached keep going forward and know you mentioned the activity and this is still dairy do we feel confident about after private placement that this is enough for it or do you think they're still a that less they would be to our current balance sheet edison as a summer yeah thanks for the question the way we look at his i were very pleased with the cats with the as a pipe raise that we we just completed our move get gross proceeds of that twenty nine and a half million dollars from both us long term investors and institutional investors all us face there we felt that that kind of topping up the tank's a little bit made some sense
spk_0: as we had the opportunity to we do have the a t m out there we have not tapped into at this point in don't foresee tapping that the in the near future but we're we're looking as you i will always look at our our up kept table and our capital structure and makes for the were properly positions understood higher little question or the history of is it has been are few things going on get max are going private i think airbus lost a few very important satellites and invega launch
spk_2: you have the updated view and how you see kind of the competitive landscape now
spk_9: is it tighter that did you put a five which is driving some equipment of pricing such demands to just years and it really starts
spk_6: not as a now i i we believe we're still in a supply constrain market and will remain so for a while
spk_2: i'm
spk_11: if you think about is just a few companies like black sky
spk_2: and max are that
spk_9: are delivering libel operational performance and are considered trusted
spk_2: suppliers the the airbus incident was unfortunate the one thing to keep in mind is that you know
spk_8: most of the new capacity that is coming online sickly from legacy players is replacing existing capacity that aging out
spk_0: and in many many cases the satellites to sell the new salads are being deployed have less capacity than the ones they're replacing and so
spk_2: and a sense of flux guys and one of the only trusted providers of putting meaningful new capacity it into a market at a time when there's when there's growing demand and you know as for new entrants it takes years to prove both performances scale ability and takes is want to capture meaningful contracts with these types of government
spk_0: and large enterprise customers so
spk_11: we've we feel like or well position in a growing market and supply constraints
spk_0: our new capacity and unique hourly early modern capability
spk_10: combined with strong a reliable operating performance
spk_2: put us in a really strong position
spk_11: price of one foster that are the ones that be unaffected by dollar yeah you mention it was that competitive bid to we think about the others it's sort of a legacy guys are are more sort of that of emerging a million players
spk_22: i think going you think about it is we won because we have a differentiated capability that's a line with where the market's going for high frequency monitoring in real time analytics
spk_2: oh that's how we differentiate in the market customers or understanding that and committing to long term contracts because of our because of that strategy
spk_15: and and as we outlined in our remarks today you know we're we're closing and
spk_0: and building a backlog of significant multiyear agreements with these customers so i would say it's really the differentiation we've established and the confidence of customers have and the and and our long term product strategy
spk_24: the u s
spk_2: because
spk_11: thank you for our next questions come from the line of us in malawi canaccord genuity please proceed your questions
spk_2: hi good morning brought in ah my first question is just on the hundred and fifty million dollars zealand contract with the international ministry of defence ah how on this contract just given the the incorporation of of ai capabilities does this compare on overload lot and perspective to like e o c l for example
spk_17: well i think a couple things they're austin first off feel cl contractors for imagery only so ah
spk_2: and as henry has
spk_0: has outlined the imagery an analytics element of our business is the high margin element of our business plans
spk_2: the analytics and we deliver ah provide additional
spk_25: analytics off the top of our imagery provide
spk_6: additional margin performance so
spk_16: that's that's the power of our business model the operating leverage we get out of our constellation combined with our software platform so ah
spk_0: you know in both cases we're we're seeing now very high margin revenue analytics and prove that okay and then just stop the the private placement new nouns this morning does does that provide you with sufficient capital to get through full deployment of the of the next generation constellation
spk_2: i say let me take that that question i'm as we just we're discussing of in the the twenty nine point five million other gross proceeds does strengthen our balance sheet gives a sufficient capital two or two for the foreseeable future we believe that we will be in a position where would be if it are positive in the fourth quarter which would be well before that capital would be be running up a scratch so we believe that will be in a good we are in good shape to our to get our freezer
spk_0: okay and than just one more if i may just back to the geo in contracts to what degree did the short waged at with infrared instruments on the on the teacher constellation play a role helping the win this contract why they are the gostin it was it was the breadth of requirements than we were able to me not not just what we're putting in space but
spk_26: a a number of performance attributes such as a frequency and latency
spk_15: hand and the accuracy of our analytics so it's a broad set of requirements that we were able to meet in our bed and that's what contributed and drove our when
spk_27: okay fantastic thanks for the color
spk_2: exhausted
spk_11: thank you as a reminder if you would like to ask a question please press star one on your telephone keep
spk_2: our next questions come from the line of griffin boss with be rally securities please proceed with your question hi good morning thank you for taking my questions t spoke about having ammo capacity is there a utilization percentage you could give us for the current constellation other side of metric that we traditionally published
spk_26: but you know as i mentioned we deployed most of our constellation within the last twelve eighteen months
spk_14: so ah we got significant capacity available
spk_2: the on the other thing i notice you know we taken a software first approach so we can collect once and so many times
spk_26: and there's also upside as we ha ha offer analytics tom has enough so with our with our clutching kindle so
spk_2: we got a very strong operating model and and capacity we need to the had our growth plans got it okay thanks frank and are you so exciting the same economics for your gentry satellites he talked about in the past which i i think our between ten and twelve million on costs for satellite and money v shocking before about purchasing long lead items well in advance i just want and when or if you get give an update on that yeah we're i'm yeah you can assume economics that word know we achieved in the first jan are aligned and and in that range is consistent with with overseeing and we got a very good handle on the costs of these the satellites
spk_11: got a cat and then i'll sort long same lines related the callbacks guide it is any of that
spk_9: forty to forty five million for the year i that any that are indeed it could potentially be funded by government agencies
spk_2: we already have a significant amount of are indeed is funded by the government you see that in our hobbled professional services the engineering services engineering integration wine and are and our financials and that's where
spk_26: we've been very successful
spk_2: and in capturing meaningful contracts are offset that offset are indeed and so on you know that's both than and satellites and and of and and good amount and software an analytic so i'm
spk_28: it also enables us to establish long term
spk_13: or close relationships with some of these important customer so that that's been a stradivarius for many years and it's continuing to pay off
spk_2: gray really helpful thanks that and and amazon for me to you just how the understand their strategic rationale for your expo investments i believe you on thirteen a half million shares on my dad is that in assets that you aim to monetize at some point and feature are just you know any any sort of color you can you can give it i think about that business to be guy
spk_15: yeah that was an investment we made several years ago
spk_26: we've also we always believed that access to space
spk_0: is a an important aspect of them of our strategy in the markets and so are we we were involved
spk_2: in the early days with that with that company and that's a that's a that's a small omen of our they aren't you are now
spk_11: got it okay i well thanks for all my questions appreciate it as a navigator
spk_2: thank you
spk_11: thank you for our next questions come from the line of caleb henry with what the analytics safe for see with their questions
spk_2: because none a couple questions at first that he has c l a g previously forecast revenues is eighty million for at twenty twenty two and thirty six million for twenty twenty three or those forecast still on track yeah i think produced an ios yeah we're just as a reminder i we just we just started that contract last july so it's and just just about nine months and were operating really well
spk_11: for delivering thousands of images a day
spk_29: and we wrapped up
spk_0: within thirty days of the start of that contract to
spk_2: deliver their violent imagery are meeting all her performance requirements so yeah we were has we said publicly
spk_11: when reward of the contract we were awarded to initial services for two years
spk_9: that reached that are up to thirty six million dollars so
spk_2: that's our assumptions for this year
spk_0: okay
spk_6: and then i just say a question on launches you said you have an upcoming jen to launch that the last gentoo satellite launch another any other spacecraft launching this year or is it nothing until jan three starts and twenty twenty four
spk_30: are we those those we expect will be our last two juntas
spk_6: we have some spares
spk_16: we're not we're not the underside of going to launch them or not
spk_6: and then i demand as i mentioned will begin launching against reason twenty twenty four
spk_11: and well as we progress with that will will provide some more details
spk_0: tags and year than a nice bump than to for margins can you comment common where you expect imagery margins did trend and twenty twenty three and can it is it reasonable to assume like a present margins this year
spk_6: hello this is a henry and us as we were discussing on margins are really comes down to the fact that would get a very six the nature of the fixed costs structure that we have when we're delivering imagery and analytics the fact that those are all pretty much an automated process is so we've got very small incremental costs and we take
spk_16: the look at that slider i was referencing earlier you see the other forty seven million dollars of revenue against the thirteen million dollars of of cause relative to aka as compared to fifty million of revenue and eleven million of course last year
spk_31: terrorists
spk_0: i would be looking at from perspective of the se i recommend revenue will continue at that kind of that are high eighties maybe ninety the me ninety two this for the full year could be i can be extremely high level kind of in that the high eighties nineties sort of rain i incremental once we get past a fixed costs of overall when you stop
spk_1: ending that together i believe that we would be able to get out of overall margins for imagery in analytics into that seventy five percent plus of in and twenty twenty two we had about seventy one percent seventy point seven percent margins on imogene analytics when you take out of stock and depreciation cetera
spk_0: okay and they did last question i think international government is contributing and fifteen percent to overall revenue given some of the new awards and you've gotten in the system the sales team i would kind of percentage do expect that to to be going forward we don't let our guide on the kind of by those reasons but you're right we take a look at what we did and twenty twenty two are our international the contributor about seventeen and a half percent of our overall revenue

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