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Introduction & Market Context
BlackSky Technology Inc. (NYSE:BKSY) presented its Q1 2025 earnings results on May 8, 2025, highlighting strong revenue growth and significant backlog expansion. The geospatial intelligence company’s stock showed a 10.41% gain in premarket trading, reaching $9.65 after closing at $8.74 the previous day. This positive market reaction comes after a challenging period that saw the stock trading well below its 52-week high of $21.92, despite maintaining impressive gross profit margins.
Quarterly Performance Highlights
BlackSky reported Q1 2025 revenue of $29.5 million, representing a 22% increase compared to the same period last year. This growth was primarily driven by professional and engineering services, which nearly doubled year-over-year to $12.7 million from $6.4 million in Q1 2024. The company attributed this increase to the sale of a previously capitalized asset under a contract supporting India.
As shown in the following chart of quarterly revenue growth:
The company was awarded over $130 million in new contracts and renewal agreements during the quarter, leading to substantial backlog growth. BlackSky’s backlog increased to $366 million, up nearly 50% compared to the prior year quarter, providing enhanced revenue visibility for future periods.
The backlog growth is illustrated in this chart:
Gen-3 Satellite Progress and Strategy
BlackSky’s growth strategy centers on its next-generation satellite constellation. The company reported that its first Gen-3 satellite is fully commissioned and exceeding performance expectations. The second very-high resolution Gen-3 satellite is being shipped and remains on track for Q2 launch, with plans to have eight Gen-3 satellites in orbit by early 2026.
The company’s satellite deployment schedule is shown here:
BlackSky emphasized the advanced capabilities of its Gen-3 satellites, which deliver very-high resolution imagery with low-latency delivery, high-frequency monitoring of critical locations, and AI-driven analytics. These capabilities are expected to unlock new applications and drive future revenue growth.
The company’s AI-powered intelligence capabilities were highlighted with specific metrics:
The presentation showcased how these advanced capabilities translate into practical applications:
Detailed Financial Analysis
Despite revenue growth, BlackSky reported a Q1 adjusted EBITDA loss of $0.6 million, down $2.0 million from the prior year quarter. However, the company noted that excluding LeoStella overhead expenses, adjusted EBITDA would have been positive at $2.0 million in Q1 2025.
The adjusted EBITDA performance is illustrated in this chart:
BlackSky’s Q1 adjusted imagery and analytics cost of sales was $3.8 million, up $0.4 million from the prior year quarter. The company attributed this modest increase to short-term investments aimed at optimizing operating efficiencies to drive improved margin performance.
The company’s cash position showed significant improvement, with a Q1 cash balance of $77.0 million, up 115% over the prior year quarter. This includes a $32 million cash prepayment for work related to a new contract awarded in Q1 with an international defense customer. BlackSky’s total liquidity position, including unbilled contract assets and vendor financing, reached $136.2 million, representing 51% year-over-year growth.
The company’s improved liquidity position is shown in this chart:
Forward-Looking Statements
BlackSky maintained its full-year 2025 guidance, projecting revenue between $125 million and $142 million, adjusted EBITDA of $14 million to $22 million, and capital expenditures of $60 million to $70 million. This guidance aligns with what was provided during the Q4 2024 earnings call, suggesting continued confidence in the company’s growth trajectory despite the Q1 adjusted EBITDA loss.
The company positioned itself "at the forefront of a new era in space-based intelligence," emphasizing that the Gen-3 constellation is setting the stage for BlackSky’s next phase of growth into 2026. Management highlighted that strategic contracts secured in Q1 are typically precursors to securing long-term subscription contracts for imagery and analytic services, which could provide more stable recurring revenue in future quarters.
While BlackSky’s presentation focused on growth and technological advancement, investors should note that the company’s stock remains volatile, currently trading at less than half of its 52-week high despite recent gains. The substantial capital expenditures planned for 2025 ($60-$70 million) may continue to pressure profitability in the near term, even as the company builds infrastructure for future growth.
Full presentation:
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