Record Q4 and Full Year Revenue, up 83% and
45% Over Prior Year Respectively Won Over $265 Million in
New Multi-Year Contracts and Renewal Agreements in 2023
Quarterly Net Loss of $3.8 million with Positive Adjusted EBITDA
of $9.3 million in Q4
BlackSky Technology Inc. (“BlackSky” or the “Company”) (NYSE:
BKSY) announced results for the fourth quarter and full year ended
December 31, 2023.
Fourth Quarter Financial
Highlights:
- Revenue of $35.5 million, up 83% from the prior year
quarter
- Imagery & software analytical services revenue grew 18%
over the prior year quarter
- Cost of sales, as a percent of revenue, related to imagery
& software analytical services improved to 17% from 24% in the
prior year quarter
Full Year Financial
Highlights:
- Revenue of $94.5 million, up 45% from the prior year
- Imagery & software analytical services revenue grew 38%
over the prior year
- Cost of sales, as a percent of revenue, related to imagery
& software analytical services improved to 21% from 31% in the
prior year
“2023 was an exceptional year for BlackSky; we delivered record
revenues, our total bookings exceeded a quarter billion dollars,
and we achieved positive Adjusted EBITDA of over 9 million dollars
in Q4,” said Brian E. O’Toole, BlackSky CEO. “Our success is the
result of increasing global demand for our space-based intelligence
solutions, strong operating leverage, and disciplined execution.
The demand for our capabilities is exemplified by recent landmark
contract wins supporting the Indonesian Ministry of Defense and
expansion of a number of U.S. government contracts. These wins are
anchored by our industry leading AI and software-first approach,
which is redefining the way customers adopt space-based
intelligence. The strong execution in 2023 sets us on a path toward
long-term profitable growth and we look forward to carrying this
momentum into 2024 and beyond.”
Recent Highlights
- Won approximately $50 million in multi-year contracts to
accelerate sovereign space capabilities for the Indonesian Ministry
of Defense, leveraging Gen-3 capabilities and an immediate
subscription for imagery
- Awarded a multi-million dollar expansion contract with the
Intelligence Advanced Research Projects Activity (IARPA) to deliver
AI-based broad area search capability
- Signed a multi-million dollar contract in support of the
Department of Defense to provide dynamic monitoring services
leveraging AI for identifying moving targets and pattern-of-life
changes
- Received nearly a million dollars in orders supporting the
National Geospatial-Intelligence Agency’s (NGA) Economic Indicator
Monitoring (EIM) program
- Renewed an agreement with an existing international government
agency to continue providing BlackSky’s high resolution imagery and
AI-driven analytics
- Secured a six-figure contract with a new international
government to provide high-frequency imagery
- Ended December 31, 2023 with approximately $262 million in
backlog
- Entered into a property lease for office space located in
Herndon, VA to further streamline operating expenses
Financial Results
Revenues
Total revenue for the fourth quarter of 2023 was $35.5 million,
up $16.1 million, or 83%, from the fourth quarter of 2022. Imagery
and software analytical services revenue was $19.0 million in the
fourth quarter of 2023, up 18% over the prior year period,
primarily driven by increased demand from new and existing U.S. and
international government customers. Professional and engineering
services revenue was $16.5 million in the fourth quarter of 2023,
up 407% over the prior year period. The significant year-over-year
increase was related to progress to date on the capabilities to be
delivered under the new Indonesian contract, awarded in the fourth
quarter. Professional and engineering services contracts are
milestone-based contracts that may have quarter-over-quarter
revenue variability, in contrast to the imagery and software
analytical services, which are typically recurring
subscription-based revenues.
For the full year 2023, total revenue was $94.5 million, up
$29.1 million, or 45%, from 2022. Imagery and software analytical
services revenue was $65.4 million, up $18.0 million, or 38% over
the prior year.
Cost of Sales(1)
Cost of sales as a percent of revenue improved to 34% for the
fourth quarter of 2023, compared to 38% in the fourth quarter of
2022. Imagery and software analytical service costs as a percent of
revenue improved to 17% in the fourth quarter of 2023, compared to
24% in the fourth quarter of 2022. The year-over-year improvement
in imagery and software analytical service costs was primarily
driven by greater volumes of revenue that inherently have a low
fixed-cost structure as a percent of revenue.
For the full year 2023, cost of sales as a percent of revenue
improved to 36%, compared to 55% in 2022. Imagery and software
analytical services cost of sales, as a percent of revenue,
improved to 21%, compared to 31% in the prior year.
Operating Expenses
Operating expenses for the fourth quarter of 2023 were $28.2
million, which included $3.0 million of non-cash stock-based
compensation expense and $10.7 million in depreciation and
amortization expenses. Operating expenses for the fourth quarter of
2022 were $30.4 million, which included $3.3 million in non-cash
stock-based compensation expense and $9.5 million in depreciation
and amortization expenses. Excluding the non-cash stock-based
compensation and depreciation and amortization expenses from both
years, cash operating expenses for the fourth quarter of 2023 were
$14.5 million compared to cash operating expenses of $17.6 million
for the fourth quarter of 2022. The year-over-year decrease of $3.1
million, or 18%, was primarily driven by reductions in general
corporate costs, which more than offset investments in our
go-to-market initiatives.
For the full year 2023, operating expenses were $116.7 million,
which included $10.1 million of non-cash stock-based compensation
expense and $43.4 million in depreciation and amortization
expenses. For the full year 2022, operating expenses were $116.1
million, which included $18.1 million in non-cash stock-based
compensation expense and $35.7 million in depreciation and
amortization expenses. Excluding the non-cash stock-based
compensation and depreciation and amortization expenses from both
years, cash operating expenses in 2023 were $63.2 million,
essentially in-line with cash operating expenses of $62.3 million
in 2022.
Net Loss(2)
Net loss for the fourth quarter of 2023 was $3.8 million,
compared to a net loss of $14.8 million in the fourth quarter of
2022.
For the full year 2023, net loss was $53.9 million, compared to
a net loss of $74.2 million in 2022.
(1) Cost of sales is defined as imagery
and software analytical services costs and professional and
engineering services cost, less depreciation and amortization
expense.
(2) This represents our current estimate
of net loss for the period ended December 31, 2023, which is
subject to the completion of our financial closing procedures and
adjustments that may result from the completion of the audit of our
consolidated financial statements. As a result, this net loss
estimate may differ from the actual net loss reported in our
consolidated financial statements when they are completed and
publicly disclosed in our Annual Report on Form 10-K.
Adjusted EBITDA(3)
Adjusted EBITDA for the fourth quarter of 2023 was $9.3 million,
compared to an Adjusted EBITDA loss of $4.6 million in the fourth
quarter of 2022. The $13.9 million year-over-year improvement was
primarily driven by strong operating leverage achieved through
higher revenues, improvement in gross margins, and reductions in
operating expenses.
For the full year 2023, the Adjusted EBITDA loss was $1.1
million, compared to an Adjusted EBITDA loss of $29.5 million in
2022. The $28.4 million year-over-year improvement was primarily
driven by increased revenues and strong operating leverage in the
business.
Balance Sheet & Capital Expenditures
As of December 31, 2023, cash and cash equivalents, restricted
cash, and short-term investments totaled $53.1 million. Capital
expenditures for the fourth quarter of 2023 were $7.8 million and
for the full year 2023 totaled $43.7 million.
2024 Outlook
BlackSky expects full year 2024 revenue to be between $102
million and $118 million, full year 2024 Adjusted EBITDA to be
between $8 million and $16 million, and anticipates capital
expenditures for the full year 2024 to be between $55 million and
$65 million, primarily driven by investments in the Gen-3
satellites, which excludes vendor financed launch costs, that will
be recorded on the balance sheet.
Investment Community Conference Call
BlackSky will host a conference call and webcast for the
investment community this morning at 8:30 AM ET. Senior management
will review the results, discuss BlackSky’s business, and answer
questions. To access the live webcast or the archived webcast
following completion of the call, please visit the Company’s
investor relations website at http://ir.blacksky.com and then
select “News & Events” for the link to the webcast. A
presentation accompanying the webcast can also be found on the
investor relations website. To access the conference call,
participants should dial 1-877-589-7299 or 1-201-689-8778 at least
ten minutes prior to the start of the call. To listen to a replay
of the conference call, please dial 1-877-660-6853 or
1-201-612-7415 using access code 13744406. The audio replay will be
available from approximately 12:30 PM EST on February 28, 2024,
through March 13, 2024.
(3) Non-GAAP financial measure. See
“Non-GAAP Financial Measures” below and reconciliation table at the
end of this press release.
About BlackSky
BlackSky is a real-time, space-based intelligence company that
delivers on-demand, high-frequency imagery, analytics, and
high-frequency monitoring of the most critical and strategic
locations, economic assets, and events in the world. BlackSky owns
and operates one of the industry’s most advanced, purpose-built
commercial, real-time intelligence systems that combines the power
of the BlackSky Spectra tasking and analytics software platform and
our proprietary low earth orbit satellite constellation.
With BlackSky, customers can see, understand and anticipate
changes for a decisive strategic advantage at the tactical edge,
and act not just fast, but first. BlackSky is trusted by some of
the most demanding U.S. and international government agencies,
commercial businesses, and organizations around the world. BlackSky
is headquartered in Herndon, VA, and is publicly traded on the New
York Stock Exchange as BKSY. To learn more, visit www.blacksky.com
and follow us on X (Twitter).
Non-GAAP Financial Measures
Adjusted EBITDA is defined as net income or loss attributable to
BlackSky before interest income, interest expense, income taxes,
depreciation and amortization, as well as significant non-cash
and/or non-recurring expenses as our management believes these
items are not as useful in evaluating the Company’s core operating
performance. These items include, but are not limited to,
stock-based compensation expense, unrealized (gain) loss on certain
warrants/shares classified as derivative liabilities, severance,
impairment losses, income on equity method investment, investment
loss on short-term investments, transaction costs associated with
debt and equity financings, forgiveness of non-trade receivables,
and gain from discontinued operations, net of income taxes.
Adjusted EBITDA is a non-GAAP financial performance measure. It
should not be considered in isolation or as an alternative to
measures determined in accordance with GAAP. Please refer to the
schedule herein and our filings with the U.S. Securities and
Exchange Commission (the “SEC”) for a reconciliation of Adjusted
EBITDA to Net Loss, the most comparable measure reported in
accordance with GAAP and for a discussion of the presentation,
comparability, and use of Adjusted EBITDA.
Forward-Looking Statements
Certain statements and other information included in this press
release constitute forward-looking statements under applicable
securities laws. Words such as "may", "will", "could", "should",
"would", "plan", "potential", "intend", "anticipate", "believe",
"estimate", "future", "opportunity", "will likely result", or
"expect" and other words, terms, and phrases of similar meaning are
often intended to identify forward-looking statements, although not
all forward-looking statements contain these identifying words. All
statements, other than statements of historical fact contained in
this press release, including statements as to future performance,
our guidance outlook for the year and expected capital
expenditures, our ability to sustain revenue growth, expectations
regarding global demand for our products and services, and our
expectations related to future profitability on an adjusted basis,
are forward-looking statements.
Forward-looking statements are subject to various risks and
uncertainties, which could cause actual results to differ
materially from the anticipated results or expectations expressed
in this press release. As a result, although BlackSky's management
believes that the expectations and assumptions on which such
forward-looking statements are based are reasonable, undue reliance
should not be placed on the forward-looking statements because
BlackSky can give no assurance that they will prove to be correct.
The risks that could cause actual results to differ materially from
current expectations include, but are not limited to, factors such
as long and unpredictable sales cycles, customer demand, and our
ability to estimate resources for fixed-price contracts, expenses,
and other operational and liquidity needs, as well as the risk
factors discussed in our most recent Annual Report on Form 10-K and
other disclosures about BlackSky and its business included in
BlackSky's disclosure materials filed from time to time with the
SEC, which are available on the SEC's website at www.sec.gov or on
BlackSky's Investor Relations website at ir.blacksky.com.
The forward-looking statements contained in this press release
are expressly qualified in their entirety by the foregoing
cautionary statements. All such forward-looking statements are
based upon data available as of the date of this press release and
speak only as of such date. BlackSky disclaims any intention or
obligation to update or revise any forward-looking statements as a
result of new information or future events, except as may be
required under applicable securities law.
BLACKSKY TECHNOLOGY
INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE LOSS
(unaudited)
(in thousands, except per
share amounts)
Three Months Ended December
31,
Years Ended December
31,
2023
2022
2023
2022
Revenue
Imagery & software analytical
services
$
19,039
$
16,166
$
65,391
$
47,415
Professional & engineering
services
16,469
3,251
29,101
17,935
Total revenue
35,508
19,417
94,492
65,350
Costs and expenses
Imagery & software analytical service
costs, excluding depreciation and amortization
3,159
3,925
13,793
14,462
Professional & engineering service
costs, excluding depreciation and amortization
8,851
3,374
19,988
21,365
Selling, general and administrative
17,350
20,631
72,639
79,672
Research and development
118
290
643
739
Depreciation and amortization
10,696
9,495
43,431
35,661
Total costs and expenses
40,174
37,715
150,494
151,899
Operating loss
(4,666
)
(18,298
)
(56,002
)
(86,549
)
Gain on derivatives
234
1,183
7,679
11,812
Income on equity method investments
3,252
1,393
4,165
2,087
Interest income
461
452
2,063
1,116
Interest expense
(2,679
)
(1,670
)
(9,306
)
(5,426
)
Other income (expense), net
1
2,135
(1,807
)
2,081
Loss before income taxes
(3,397
)
(14,805
)
(53,208
)
(74,879
)
Income tax expense
(447
)
—
(707
)
—
Loss from continuing operations
(3,844
)
(14,805
)
(53,915
)
(74,879
)
Discontinued operations:
Gain from discontinued operations
—
—
—
707
Income tax (expense) benefit
—
—
—
—
Gain from discontinued operations, net of
income taxes
—
—
—
707
Net loss
(3,844
)
(14,805
)
(53,915
)
(74,172
)
Other comprehensive income
—
—
—
—
Total comprehensive loss
$
(3,844
)
$
(14,805
)
$
(53,915
)
$
(74,172
)
Basic and diluted loss per share of common
stock:
Loss from continuing operations
$
(0.03
)
$
(0.12
)
$
(0.40
)
$
(0.64
)
Gain from discontinued operations, net of
income taxes
—
—
—
0.01
Net loss per share of common stock
$
(0.03
)
$
(0.12
)
$
(0.40
)
$
(0.63
)
Weighted average common shares outstanding
- basic and diluted
141,343
119,064
135,451
117,821
BLACKSKY TECHNOLOGY
INC.
CONSOLIDATED BALANCE
SHEETS
(unaudited)
(in thousands, except par
value)
December 31, 2023
December 31, 2022
Assets
Current assets:
Cash and cash equivalents
$
32,815
$
34,181
Restricted cash
619
2,835
Short-term investments
19,697
37,982
Accounts receivable, net of allowance of
$151 and $0, respectively
7,071
3,112
Prepaid expenses and other current
assets
4,194
4,713
Contract assets
15,213
5,706
Total current assets
79,609
88,529
Property and equipment - net
67,116
71,584
Operating lease right of use assets -
net
1,630
3,586
Goodwill
9,393
9,393
Investment in equity method investees
—
5,285
Intangible assets - net
1,357
1,918
Satellite procurement work in process
55,976
50,954
Other assets
9,263
2,841
Total assets
$
224,344
$
234,090
Liabilities and stockholders’
equity
Current liabilities:
Accounts payable and accrued
liabilities
$
11,573
$
14,368
Amounts payable to equity method
investees
10,843
3,728
Contract liabilities - current
3,670
6,783
Other current liabilities
1,739
2,048
Total current liabilities
27,825
26,927
Operating lease liabilities
3,041
3,132
Derivative liabilities
15,149
5,113
Long-term debt
83,502
76,219
Other liabilities
1,724
825
Total liabilities
131,241
112,216
Stockholders’ equity:
Class A common stock, $0.0001 par
value-authorized, 300,000 shares; issued, 145,232 and 121,938
shares; outstanding, 142,837 shares and 119,508 shares as of
December 31, 2023 and December 31, 2022, respectively.
14
12
Additional paid-in capital
692,115
666,973
Accumulated deficit
(599,026
)
(545,111
)
Total stockholders’ equity
93,103
121,874
Total liabilities and stockholders’
equity
$
224,344
$
234,090
BLACKSKY TECHNOLOGY
INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(unaudited)
(in thousands)
Years Ended December
31,
2023
2022
Cash flows from operating
activities:
Net loss
$
(53,915
)
$
(74,172
)
Gain from discontinued operations, net of
income taxes
—
707
Loss from continuing operations
(53,915
)
(74,879
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization expense
43,431
35,661
Transfer of satellite procurement work in
process to engineering service costs
4,854
—
Operating lease right of use assets
amortization
883
1,640
Bad debt expense (recovery)
179
(22
)
Stock-based compensation expense
10,862
20,025
Income on equity method investment
(4,165
)
(2,087
)
Loss on disposal of property and
equipment
127
—
Loss on impairment of assets
81
—
Gain on derivatives
(7,679
)
(11,812
)
Non-cash interest expense
7,967
1,805
Non-cash interest income
(796
)
(656
)
Other, net
—
106
Changes in operating assets and
liabilities:
Accounts receivable
(4,137
)
(461
)
Contract assets - current and
long-term
(16,299
)
(5,996
)
Prepaid expenses and other current
assets
840
1,413
Other assets
1,328
(12
)
Accounts payable and accrued
liabilities
3,316
(73
)
Other current liabilities
(707
)
(1,180
)
Contract liabilities - current and
long-term
(3,053
)
(4,942
)
Other liabilities
(538
)
(2,984
)
Net cash used in operating activities
(17,421
)
(44,454
)
Cash flows from investing
activities:
Purchase of property and equipment
(15,274
)
(11,679
)
Satellite procurement work in process
(28,441
)
(32,385
)
Purchases of short-term investments
(40,078
)
(50,343
)
Proceeds from maturities of short-term
investments
59,110
13,000
Proceeds from sale of equity method
investment
9,450
—
Proceeds from sale of property and
equipment
22
—
Proceeds from equity method investment
—
804
Cash flows used in investing activities -
continuing operations
(15,211
)
(80,603
)
Cash flows used in investing activities -
discontinued operations
—
(978
)
Net cash used in investing activities
(15,211
)
(81,581
)
Cash flows from financing
activities:
Proceeds from equity issuances, net of
equity issuance costs
32,733
—
Proceeds from options exercised
10
47
Withholding tax payments on vesting of
restricted stock units
(1,410
)
(5,069
)
Payments of transaction costs for debt
modification
(1,311
)
—
Payments of transaction costs related to
derivative liabilities
(905
)
—
Payments for deferred financing costs
(67
)
—
Payments for deferred offering costs
—
(31
)
Net cash provided by (used in) financing
activities
29,050
(5,053
)
Net decrease in cash, cash equivalents,
and restricted cash
(3,582
)
(131,088
)
Cash, cash equivalents, and restricted
cash – beginning of year
37,016
168,104
Cash, cash equivalents, and restricted
cash – end of year
$
33,434
$
37,016
BLACKSKY TECHNOLOGY
INC.
RECONCILIATION OF NET LOSS TO
ADJUSTED EBITDA
(unaudited)
(in thousands)
Three Months Ended December
31,
Years Ended December
31,
2023
2022
2023
2022
Net loss
$
(3,844
)
$
(14,805
)
$
(53,915
)
$
(74,172
)
Interest income
(461
)
(452
)
(2,063
)
(1,116
)
Interest expense
2,679
1,670
9,306
5,426
Income tax expense
447
—
707
—
Depreciation and amortization
10,696
9,495
43,431
35,661
Stock-based compensation expense
3,137
3,636
10,862
20,025
Gain on derivatives
(234
)
(1,183
)
(7,679
)
(11,812
)
Income on equity method investment
(3,252
)
(1,393
)
(4,165
)
(2,087
)
Transaction costs associated with debt and
equity financings
—
—
1,738
—
Severance
28
435
590
1,196
Impairment losses
81
—
81
—
Investment loss on short-term
investments
—
—
55
—
Proceeds from earn-out payment
—
(2,000
)
—
(2,000
)
Gain from discontinued operations, net of
income taxes
—
—
—
(707
)
Forgiveness of non-trade receivables
—
—
—
106
Adjusted EBITDA
$
9,277
$
(4,597
)
$
(1,052
)
$
(29,480
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240228129284/en/
Investor Contact Aly Bonilla VP, Investor Relations
abonilla@blacksky.com 571-591-2864
Media Contact Pauly Cabellon Director, External
Communications pcabellon@blacksky.com 571-591-2865
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