BlackSky Technology Inc. Class A

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 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 November 13th. 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 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 and cash operating expenses. The 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 pleased with the strong momentum in the business as the success of Gen3 is delivering best-in-class imagery and analytics and driving significant demand toward unlocking our next phase of growth. We are gaining customer traction, growing our pipeline, and building backlog for both our imagery and analytics services and for Gen3-powered sovereign solutions. Customers around the world are recognizing Gen3's superior performance especially at a time when they are seeking to accelerate their sovereign space-based intelligence capabilities. BlackSky is well positioned to capitalize on this market opportunity by leveraging a full technology stack that includes real-time software, advanced AI, Gen3 satellites, and vertically integrated satellite production capabilities. While the quarter reflected anticipated impacts related to U.S. government budget uncertainty, we closed significant new contract awards and expect to remain on track to hit our full-year financial objectives. Strong international demand is outpacing the near-term U.S. government business. And as such, we are anticipating a strong Q4 and expect to take that momentum into 2026. now let me share some recent highlights as shown on slide four first we were awarded more than 60 million dollars in new contracts primarily with international customers as we continue to diversify our customer base and revenue mix in addition these contract wins are predominantly for the delivery of gen 3 services demonstrating the traction we are seeing for this capability around the world. We expect this momentum to continue as we move forward on the deployment of the Gen 3 constellation over the coming months. Second, we're pleased to have been awarded a contract valued at over $30 million to integrate Gen 3 high cadence tactical ISR services into a strategic international defense customer's secure environment. This contract demonstrates how BlackSky is accelerating sovereign space-based intelligence capabilities by leveraging proven commercial space technology to address their mission-critical requirements. Third, traction for our Gen 3 imagery continues to build as we expand the number of customers participating in our early access program, including a new seven-figure contract to commence delivery of Gen 3 imagery services to the U.S. government. We are starting to see contributions from Gen 3 imagery revenues and expect this trend to continue as we bring more Gen 3 capacity online. Fourth, we're seeing our AI and analytics solutions continue to gain traction across our customer base including with NGA LUNO, the Global Data Marketplace, and with major international government programs. Fifth, our Gen 3 constellation continues to expand. Our latest satellite is at the launch site, and we're excited to get this satellite launched as we move forward in our plans to have a baseline Gen 3 commercial constellation fully operational next year. And finally, Our cash balance increased more than 50% from last year, following the successful raise we completed in July, bringing our total liquidity to over $200 million. Our stronger balance sheet and cash position puts us on a clear path toward free cash flow operations. These highlights underscore how our space, software, and AI capabilities are well positioned to provide customers with mission critical intelligence that they rely on every day for their national security needs. I would now like to share some more details on the operational highlights from the quarter. Turning to slide five. As I highlighted a moment ago, we're seeing international demand for sovereign solutions continue to accelerate. And in the near term is outpacing our US government business. In fact, revenues from international customers now represent about half of our total revenues, driven by new contracts and expanded service agreements with a number of ministries of defense and organizations around the world. And we expect this trend to continue. We should also note that over 90% of our backlog is related to international contracts for Gen 3 capabilities. Countries around the world are accelerating their investments in space-based intelligence solutions in support of national security and economic development imperatives. This is driving a major shift and expansion of the market, which is being reflected in growing space-based defense budgets and sovereign investment funds. BlackSky is well positioned to capitalize on these market dynamics as our vertically integrated technology enables us to accelerate an organization's space-based intelligence capabilities, leveraging proven and mature software, AI, and satellite technologies. We are winning new contracts and building an expanded sales pipeline as demand for our Gen3-powered sovereign solutions continues to gain traction worldwide. Moving to slide six, we recently won a multi-year contract valued at over $30 million with a strategic international defense customer to integrate our Gen 3 high cadence tactical ISR services into their secure operational environment. This expanded solution will enable black sky tasking and AI-enabled analytic services to operate seamlessly within the customer's workflows, delivering a new level of fully secure and autonomous operations. The tactical ISR services being delivered under this program feature high frequency Gen 3 tasking combined with real time AI enabled detection, identification and classification of tactical objects delivered through a low latency architecture. This win marks a step forward in the operational deployment of our Gen 3 capabilities. in support of delivering secure, real-time tactical ISR solutions for 24-7 time-dominant missions. Turning to slide seven, we continue to win contracts and task orders on programs such as the Global Data Marketplace and NGA's LUNO program. In Q3, we received a seven-figure delivery order under the NGA's LUNO program bringing our total orders won this year under this contract to about $30 million. This follow-on award leverages our proprietary computer vision algorithms and AI capability to automatically detect and identify areas of change caused by human activity. Our proven AI software is very effective in identifying anomalies, detecting infrastructure changes, and delivering alerts within minutes, giving defense analysts a crucial first-to-know advantage. Moving to slide eight, we're seeing significant demand and growing traction for our Gen 3 imaging services as additional customers have signed up for early access agreements in Q3, including a new seven-figure contract with the U.S. government. The positive customer feedback we've received from early adopters confirms that Gen 3's very high-resolution imagery, combined with our AI-driven analytics, is delivering high-value intelligence at compelling performance for the class of this satellite. And we expect this momentum to continue as we build out the constellation. Turning to slide nine. We're pleased that our next Gen 3 satellite has arrived at the launch site and we anticipate its deployment in the coming weeks. Gen 3 satellites continue to move through our production line and we will continue a cadence of launches to build out our constellation in 2026. The Gen 3 satellites on orbit are performing well and generating revenue. Moving to slide 10. We believe the long-term opportunities with the U.S. government remain strong, as many agencies are seeking to leverage mature commercial space technologies to advance national capabilities, especially missions that require proven technology to support proliferated, lowered satellite constellations. We continue to make important progress across our U.S. government portfolio, including advanced R&D for capabilities like the integration of optical inter-satellite cross links into our current and next generation capabilities. Although we are experiencing near-term impacts of the fiscal year 2026 budget on the EOCL program, we are seeing congressional support to restore funding to the program. We expect to have better visibility once the final budget is approved. As the US government expands its investments in space, we see opportunities for companies like Black Sky who have proven agile space capabilities and tech stacks that can rapidly deploy technology to support cost effective government programs. In particular, there are programs such as Golden Dome where aggressive deployment schedules and nontraditional acquisition models favor proven commercial space capabilities. We have a strong track record of supporting these types of customers and feel we are well positioned as these future opportunities unfold. Turning to slide 11, we continue to make progress on our EROS initiative. Recall that EROS is a new satellite designed to provide wide area mapping, monitoring, and change detection to address an anticipated gap and these capabilities in the 2028 timeframe. We continue to work through the design phase and engage potential customers and partners on the development of this constellation. We will have more to report as we progress on this program through 2026. With that, I'll now turn it over to Henry to go through the financial results. Henry?

Thank you, Brian, and good morning, everyone. Starting with slide 13, total revenue for the first nine months of 2025 was $71.4 million, consistent with the prior year period. While we were expecting imagery and analytics revenue growth in the third quarter of 2025, our revenue was negatively impacted in August and September by approximately $4 million due to reductions made in the EEOCL contract. Our professional and engineering services revenue for the first nine months of 2025 grew to $20.8 million, a 9% increase over the same period in the prior year. Let's now turn to slide 14 and talk about cash operating expenses, which excludes stock-based compensation, depreciation, and amortization expenses. For the first nine months of 2025, cash operating expenses were $56.6 million compared to $48 million in the prior year period. The year over year increase in cash operating expenses was driven by about $9 million of overhead expenses in 2025 from the integration of Leo Stella. These costs would have been previously capitalized into our satellite assets and not included as operating expenses. Therefore, excluding the Leo Stella overhead expenses, year to date 2025 cash operating expenses would have been in line with the prior year demonstrating the discipline we have in managing our costs while still making investments in our business. Moving to slide 15. Our adjusted EBITDA for the first nine months of 2025 was a loss of $7.9 million compared to an adjusted EBITDA of $4.3 million in the prior year period. The year-over-year decrease was primarily attributable to EOCL and Leo Stella, as I've mentioned earlier. Excluding these two impacts, we would have reported a positive adjusted EBITDA of approximately $5 million for the first nine months of 2025. We remain committed to achieving adjusted EBITDA growth and margin expansion. Let's move on to our cash and liquidity position, as shown on slide 16. We ended the third quarter of 2025 with $147.6 million of cash, restricted cash, and short-term investments, which is more than double our cash balance from a year ago. This amount includes $65.9 million in net cash proceeds from a convertible node offering and $10.8 million from the exercise of warrants, both completed in July. In addition to the cash, we also have $43.4 million in unbilled contract assets, of which $36 million is anticipated to be billed and received over the next 12 months. Together with the $13.5 million of available launch financing, this brings our total liquidity position to over $200 million. This position reflects an increase of $85 million, or a 71% growth, over the position we had in the third quarter of 2024 and provides BlackSky with sufficient cash to deploy our Gen 3 constellation invest in strengthening our in-house AI capabilities, continue the design development of our EROS program, and put us on a path to positive free cash flow. Turning to slide 17, we are maintaining our guidance for full-year 2025 revenue, adjusted EBITDA, and capital expenditures. We are maintaining the current range as we are actively working to close on a number of large sales opportunities that we expect will impact the fourth quarter. In summary, We're pleased with the momentum in our business, a growing sales pipeline, our strong cash and liquidity position. We look forward to a strong fourth quarter, high visibility growth in 2026, and continuing our path to free cash flow. With that, I'll now turn it back over to Brian for some closing remarks. Brian?