BlackSky Technology Inc. Class A

Greetings and welcome to the BlackSky Technology Q4 2024 Earnings Conference Call and Webcast. At this time, all participants are in listen-only mode. If anyone should require operator assistance, please press star zero on your telephone keypad. A question and answer session will follow the formal presentation. You may be placed into question queue at any time by pressing star one on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Ali Bonian, Vice President, Investor Relations. Ali, please go ahead.

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 recent activities and give a strategic update on the business. Henry will then review the company's full-year financial results and outlook for 2025. Following our prepared remarks, we will open the line for your questions. A replay of this conference call will be available from approximately 1230 p.m. Eastern Time today through March 20th. 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 plans, objectives, and expected performance, including our financial guidance for 2025, 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 service cost of sales, and cash operating expenses. A reconciliation of these non-GAAP financial measures to their most comparable GAAP 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. Beginning with slide three, I'm happy to report that the future of real-time space-based intelligence is now here with Gen 3. On February 18th, our first Gen 3 satellite, was successfully launched into orbit and within five days entered into initial imaging operations. Initial images from this advanced spacecraft are already within expected quality specifications. This significant achievement represents a profound advancement for BlackSky and our industry and marks a pivotal step forward in the evolution of our space architecture. by introducing very high resolution imaging to our high frequency monitoring constellation. This new class of satellite, with its 35 centimeter resolution and other features, such as shortwave IR imaging, improved agility, and advanced communications, will deliver image quality comparable to the best in the market. This exceptional image quality now enables us to deliver new AI-derived insights delivered at the speed of conflict, providing our customers with new and advanced forms of space-based intelligence. With this major milestone behind us, we are confident that this spacecraft will deliver the level of performance required to meet the needs of a rapidly evolving market. We are now ready to move forward with a regular cadence of launches to rapidly build out and expand the Gen 3 constellation over the coming months and years. We are on track to make this new capability available to our customers shortly, adding very high resolution imagery for best-in-class space-based intelligence. Our global customer base has been looking forward to this capability, as evidenced by the significant multi-year contracts that are already in place and new contracts that we continue to win. Moving to slide four, the speed of deployment and commissioning of the first satellite marks a new standard for the industry, reducing these operational timelines from months to days. This achievement is especially impressive for a new spacecraft of this caliber, which is a testament to Black Sky's technical expertise, architecture, space technology, and proven flight experience. The fact that we successfully moved from launch to first image in five days, even with this first vehicle, demonstrates an architectural readiness, maturity, and resilience that will serve our customers with high performance and cost-effective space-based intelligence solutions for years to come. The imagery that we are now producing is well within our expected performance specifications. One of our key strengths is our software architecture and our ability to use automation to efficiently operate our constellation. This capability was instrumental and a critical factor that enabled us to already have the vehicle in fully automated operations, which sets us up to efficiently continue additional testing and complete commissioning operations over the next 30 days. We've already begun providing sample imagery to our customers, which is ahead of our planned schedule. We will continue to improve the already exceptional imaging performance of Gen 3 as we further tune the payload and processing and ultimately lower the satellite to its final orbit. Turning to slide five. The imaging performance of the Gen 3 satellite is comparable to that of recently launched satellites from legacy providers. We are redefining the economics of space-based intelligence by producing our Gen 3 satellites at a fraction of the cost of traditional satellites, while delivering new mission-critical insights, leveraging a proliferated constellation approach to dynamic hourly monitoring and automated AI. We believe the on-orbit costs of a Gen 3 satellite are between 10% to 15% of on-orbit costs of recently launched satellites from legacy providers. These new economics represent an efficient use of capital while providing high-value solutions to our customers through a proliferated constellation. With this low-cost, high-performance model, we can eliminate the trade-off between affordability and capability allowing customers to access very high resolution, low latency data without the prohibitive expense of traditional systems. This efficiency, combined with our high frequency monitoring capability, is what's driving increased global demand for our services and giving us a significant competitive advantage in the market. Moving to slide six. With our first Gen 3 satellite now on orbit and into initial operations, we are on track to begin a regular cadence of launches of additional Gen 3 satellites. Our next Gen 3 satellite is currently in the final assembly, integration, and testing with plans to ship the satellite for launch in Q2. As we have mentioned before, we have a full production line of Gen 3 satellites underway at our production facility in Seattle and are set to significantly expand our constellation with five additional Gen 3 satellites in 2025. In addition, we are launching another Gen 3 satellite that is for a U.S. government customer. We expect to enter revenue-generating operations and begin offering greater imaging resolution to our global defense and intelligence customers by midyear. Within the next 12 months, we plan to have a fleet of at least eight Gen 3 satellites. These new satellites will integrate seamlessly into our existing constellation, global ground network, and Spectra software platform, dramatically increasing our revisit rates, reducing delivery latency, enhancing our image quality and capacity, and enabling new AI-derived insights. With each new deployment, we are scaling our ability to constantly improve the value we are bringing to our customers. Now let's move on to some recent contract wins that illustrate the ongoing demand for our imaging services as more and more customers sign long-term subscription agreements to secure our capacity now and in the future. Turning to slide seven, I'm happy to report that we recently won a seven-year contract valued at over $100 million with an existing strategic international customer. This contract is a prime example of how our mission-critical services are becoming an essential element of national and homeland security for customers worldwide. To meet their near-term and future needs for space-based intelligence, major customers are entering into long-term contracts to secure these services and guarantee their priority tasking rights in their region. This new subscription agreement guarantees the customer assured priority access to our high-resolution imagery over their region of interest for the next seven years, leveraging our entire constellation of Gen 2 and Gen 3 satellites. By securing annual capacity minimums through 2032, this contract allows the customer to lock in high-cadence monitoring services today with the flexibility to adopt new advancements as their requirements evolve over time, while providing Black Sky with good long-term revenue visibility. To secure priority access to the Constellation, the contract included an upfront prepayment of $32 million. We are excited to sign this agreement and continue to build on our long-term relationship with this important customer. Moving to slide eight, we recently announced that we won contracts totaling approximately $20 million to support India's cutting-edge Earth observation space capabilities. This is a major new customer and is our initial entry into a growing market in India. These agreements include immediate subscription-based access to our Spectra's real-time AI-powered imagery and analytic services. plus the delivery and support of a high-resolution satellite. Once operational, the dedicated satellite will work with our dynamic monitoring constellation to deliver mission-critical insights at industry-leading speeds. We are honored to be part of India's space development efforts and look forward to a long-term and growing partnership. Turning to slide nine, over the past year, we continue to make significant strides expanding our customer footprint with the U.S. government and securing major contracts with key government agencies. One of the most notable is the strong execution we continue to demonstrate supporting the NRO under the Electro-Optical Commercial Layer, or EOCL, contract. As we finish 2024, the NRO awarded us an additional extension to their subscription service to continue giving them access to our Gen 2 high-frequency imagery services through mid-2026. The contract also included some feature enhancements to the current service level agreement and interfaces to the U.S. government systems. This extension does not include access to our Gen 3 imaging services, which we expect will be added later this year as Gen 3 capacity comes online. Moving to slide 10. We were awarded a multimillion-dollar contract extension to our TACGEO contract with the U.S. Government's Defense Innovation Unit. The TACGEO program includes a dedicated Gen 3 satellite as an advanced technology demonstrator to inform future space-based tactical intelligence, surveillance, and reconnaissance, or ISR, capabilities. This contract extension expands on earlier government-funded R&D work and now includes the launch and management of a customer-owned Gen 3 satellite. This contract complements our recent announcements for customer-funded research and development projects, such as the integration of OISL or optical inter-satellite links to our Gen 3 architecture. Our portfolio of strategic R&D programs enables us to partner early with U.S. government agencies to deliver and deploy cost-effective, cutting-edge space-based intelligence solutions for a range of defense and intelligence mission needs. We believe the economics of our satellites, combined with these advanced technology programs, are highly aligned to support the government's objectives to leverage new, advanced commercial technologies under agile and fixed-priced acquisition models. Turning to slide 11. We are excited to be off to a great start to 2025. We've made great strides over the past year, achieving key financial and operational milestones, and are now well on our way toward our next phase of growth, building off several major recent achievements. First, the successful launch and deployment of our first Gen 3, very high resolution satellite marks a major technological accomplishment and a key business milestone. This next generation satellite represents a leap forward in imaging capabilities and sets us on a path for unlocking our next phase of growth. Second, in the past few months, we've secured multi-year contracts valued at over $150 million. These recent awards demonstrate ongoing demand and underscores our expanding role delivering mission-critical capabilities, supporting customers around the world. Third, in 2024, we achieved our first full year of positive adjusted EBITDA. This significant financial milestone underscores the strong operating leverage inherent in our business and demonstrates our ability to scale efficiently while driving towards sustained long-term profitability. And finally, with these major achievements, We look forward to delivering a strong year of revenues in 2025 as we forecast total revenue growth of 30% over last year. This forecast reflects the strength of our existing contracts and the continued expansion of our capabilities and service offerings. With that, I'll now turn it over to Henry to go through the full-year financial results. Henry?