BlackSky Technology Inc. Class A

Good morning, ladies and gentlemen. Welcome to Black Sky Technologies' third quarter 2024 earnings conference call. All lines have been placed in mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. To ask the questions, you may press star, then one on your touchtone phone. To withdraw your question, please press star one again. Please note this conference call is being recorded. I would now like to turn the call over to Ali Bonilla, BlackSky's Vice President of Investor Relations. Please go ahead, Ali.

Good morning, and thank you for joining us. Today, I'm joined by our Chief Executive Officer, Brian O'Toole, and our Chief Financial Officer, Henry Dubois. On today's call, Brian will provide some highlights on the quarter and give a strategic update on the business. Henry will then review the company's third quarter financial results and outlook for 2024. Following our prepared remarks, we will open the line for your questions. A replay of this conference call will be available from approximately 12.30 p.m. Eastern Time today through November 21st. 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 www.blacksky.com. In conjunction with today's call, we have posted a quarterly earnings presentation on the Investor Relations website that you may use to follow along with our prepared remarks. Before we begin, let me remind you that certain statements made during today's conference call regarding our future plan, objectives, and expected performance, including our financial guidance for 2024, are forward-looking statements. Actual results may differ materially as these statements are based on our current expectations as of today and are subject to risks and uncertainties, including those stated in our Form 10-K. We encourage you to review our press release, Form 10-K, and other recent SEC filings for a full discussion of the risks and uncertainties that pertain to these statements and that may affect future results or the market price of our stock. Black Sky assumes no obligation to update forward-looking statements except as may be required by applicable law. In addition, during today's call, we will refer to certain non-GAAP financial measures, including adjusted EBITDA, adjusted imagery and software analytical services cost of sales, and cash operating expenses. In reconciliation of these non-GAAP financial measures, to their most comparable debt measures are included in today's accompanying presentation, which can be viewed and downloaded from our investor relations website. At this point, I'll turn the call over to Brian O'Toole. Brian?

Thanks, Ali, and good morning, everyone. Thank you for joining us on today's call. Let's begin with slide three. I'm pleased to report that BlackSky delivered another strong quarter as we made great progress across many aspects of our business and continue to deliver year-over-year revenue growth. Demand for our space-based intelligence solutions has never been higher as we delivered near-record bookings, which is further expanding our customer base and strengthening BlackSky's position to achieve long-term, profitable growth. Let me share some of our recent highlights. First, We won new and follow-on contracts valued at up to $780 million. This was one of our strongest quarters for bookings in the past two years, as demand for BlackSky's space-based intelligence solutions continues to grow from government customers around the world. Second, we raised over $45 million in growth capital to fully fund our baseline Gen 3 constellation, which further strengthens our balance sheet. Third, we are excited that our first very high resolution Gen 3 satellite is completing final pre-ship testing and is expected to ship to the launch site in the next few weeks. Next, we delivered our fourth consecutive quarter of positive adjusted EBITDA driven by our high margin imagery and analytics revenue and the strong operating leverage inherent in our business model. And finally, we delivered year-to-date revenue growth of 22% as compared to last year. As we ramp revenues from new contract awards and work to close additional major contracts in the fourth quarter, we remain on track to deliver against our full-year revenue and adjusted EBITDA goals. I'd also like to mention that we are honored to have won the 2024 Leading Earth Observation Business Award by NovaSpace, formerly known as Euroconsult, at this year's World Space Business Week in Paris. This award recognizes the most forward-thinking companies and innovators shaping the future of the global space sector, and we're happy to have received this distinguished honor. This award, along with our recent highlights, continues to exemplify how Black Sky is leading a new era of space-based intelligence. I would now like to share some operational highlights from the quarter. Turning to slide four, we continue to see strong growth from U.S. defense and intelligence agencies looking for Black Sky's high-frequency imagery and advanced analytics. During the quarter, we were pleased to announce that BlackSky was awarded the LUNO-A contract, valued up to $290 million from the National Geospatial Intelligence Agency, or NGA, which is the first part of the larger LUNO program. The LUNO program is one of the government's largest contracts to procure commercial space-based analytic services and demonstrate the government's long-term interest and commitment and acquiring subscription-based monitoring and analytic services. This multi-year IDIQ contract award is a follow-on contract to the Economic Indicator Monitoring, or EIM, program, which we won back in 2021 and has successfully supported through multiple delivery orders. Through this LUNO-A contract, we will assist NGA in the monitoring and analysis of global economic and environmental activity, as well as military capability using our current Gen 2 and future Gen 3 satellite constellation. Throughout the program, we will be leveraging our advanced AI technology to automatically detect and identify objects, such as ships, aircraft, vehicles, and shipping containers, and deliver intelligence and change monitoring services over critical areas of interest. This advanced analytics capability is powered by our Multi-Int Spectra software platform, which is enabling new and innovative broad area search techniques to process a large number of images at a massive scale, utilizing data from multiple sensors and third-party sources. By combining AI-driven detection analytics With our high-frequency constellation and our proprietary broad area search capabilities, we will enable NGA to receive real-time and mission-critical insights on changes and emerging events. We're pleased to have won this award and have already received the first delivery order under the LUNAway contract. We look forward to expanding our long-term partnership with NGA as they begin to ramp up the award of new task orders in 2025. Moving to slide five. Another major contract win in the corridor was with NASA to support their Commercial Small Sat Data Acquisition Program. This multi-year IDIQ contract award is valued at up to $476 million. Under this contract, BlackSky will provide NASA with time-diverse, high-revisit satellite imaging data providing new insight in support of the agency's important research in Earth and applied science. NASA-backed researchers worldwide will be able to use black sky imagery to broaden their understanding and develop actionable scientific observations around the most critical changes taking place on Earth. Integrating black sky's advanced data into NASA's research data repository provides another valuable example where government agencies can significantly benefit from our real-time dynamic monitoring capabilities. Turning to slide six, we're also continuing to win new and expansion contracts with existing defense and intelligence customers. I'm pleased to report that we signed a $6 million contract expansion with one of our long-time international defense sector customers. With this increased subscription agreement, the customer's total annual contract value increases to nearly $18 million and validates how BlackSky's space-based intelligence solutions are relied upon every day to support mission-critical operations. We continue to win various awards for the rapid delivery of our space-based intelligence solutions through the Global Data Marketplace, or GDMP. These awards are for short-term services occurring within weeks to months that quickly translate into incremental revenue. As a reminder, the GDMP is a new online marketplace that streamlines the acquisition process for U.S. government end users looking to contract and quickly receive a broad range of commercial data and analytic services in support of various mission needs. We are seeing increasing opportunities through the GDMP and believe this can become a long-term viable sales distribution channel to a broader set of missions and end users. In addition, we were awarded contracts with multiple U.S. government customers looking to explore applications for integrating optical inter-satellite link terminals, or OISL, into our Gen 3 satellites. For those who may not know, OISL are laser-based communication relays that enable faster communication and transmission of data through satellite networks. We are currently in the process of incorporating OISL terminals into our Gen 3 design. The objective is to be compatible with both the Space Development Agency's transport layer and commercial space transport layers. Once operational, we expect delivery timelines to improve by 10 times further reducing the already low latency delivery of our imagery and analytics services that we are delivering today. This type of program validates our agile approach to space as we can rapidly deliver incremental enhancements to our space network aligned with our customers' evolving mission needs. We look forward to enhancing our Gen 3 constellation with OISL capabilities and providing government customers with real-time access to imagery, to support time-sensitive tactical ISR missions and military operations around the world. Moving on to slide seven, we're excited to announce that we recently launched a new product offering to provide automated non-Earth imaging services to meet the growing demand for Space Domain Awareness, or SDA. Space Domain Awareness missions are vital for identifying, characterizing, and tracking objects in space and understanding their operational environments. Delivering non-Earth imaging services is made possible due to the agility of our satellites, which enable us to capture images of objects in space. This capability offers additional revenue-generating opportunities at time when our satellites are either passing over the ocean or traveling across the dark side of the Earth. In response to this new service offering, we were awarded seven-figure contracts with government and commercial customers. One of these new contracts is with HEO, an Australian space company dedicated to delivering non-Earth imaging solutions at scale to government, defense, and commercial customers. Through a subscription data services contract, BlackSky will enable HEO to task and receive high-resolution non-Earth imaging services to give their customers actionable space-based intelligence about on-orbit objects of interest. Another contract we want provides non-Earth imaging services to the U.S. government to address critical needs in space situational awareness, or SSA. SSA data is critical for maintaining space safety and facilitating real-time space traffic coordination, as well as helping space operators predict and avoid collisions between objects or avoid debris that might affect operations. As part of this contract, BlackSky will integrate Gen2 satellite imagery of on-orbit spacecraft into the customer's collection of space domain awareness assets. Powered non-Earth imaging services is a new way to further monetize our constellation capacity and expand the revenue potential for high-margin imagery and analytic services. We expect this new subscription-based offering will expand over time as we are seeing increasing demand for data services to support this important mission. We are excited to bring this new and innovative offering to market to serve a broad array of SDA missions worldwide and expand our customer base. Turning to slide eight, We're excited to report that our first very high-resolution Gen 3 satellite is in the final testing phase in preparation for launch. Once final testing is complete, we will ship this first unit to Rocket Lab's launch site in New Zealand, where we have a dedicated rocket ready to go through our launch services agreement. As we narrow down the ship date, we will be working on finalizing the launch window which we expect will open three to four weeks after shipment. Expanding our constellation with our new Gen 3 satellites will provide customers with new space-based intelligence solutions powered through a first-of-its-kind platform that combines high-frequency monitoring with very high-resolution 35-centimeter imaging and real-time AI-enabled insights. There is strong demand for this capability as evidenced by the significant contracted backlog we have already secured from leading defense and intelligence customers around the world. We look forward to introducing the advanced performance of our GEN3 satellite in the first quarter of 2025. We are excited about the transformative solutions that this constellation will deliver for years to come. In delivering new mission-critical insights to our customers, while unlocking our next phase of growth. Moving to slide nine. While we remain focused on getting our first Gen 3 satellite into orbit and operations, we've also been focused on the scalable production of these satellites to support a regular launch cadence beginning next year. To that end, our Gen 3 production line is up and running. with a number of Gen 3 satellites in various stages of production that extend from securing long-lead supply chain component deliveries to the assembly and integration phases of our next units. Once we demonstrate on-orbit performance of the first satellite, we plan to begin a regular cadence of Gen 3 deployments starting in 2025. To support our Gen 3 production objectives, we've taken active steps to further optimize the Gen3 supply chain and production operations, which includes the acquisition of our partner stake in Leostella. We are excited to be able to combine the expertise of both the BlackSky and Leostella teams to drive rapid innovation on our Gen3 platform, deliver unparalleled value to our customers, and fuel growth for our business. In summary, we're pleased with the operating performance in the quarter, highlighted by the significant number of large contract wins, continued revenue growth, strong operating leverage, and the progress we made on getting Gen 3 ready for launch. I'll now turn it over to Henry to go through the quarterly financial results. Henry? Thank you, Brian, and good morning, everyone.