# BlackSky Technology Inc.: Form 10-Q for the period ended Mar 31, 2025

- Company: [BlackSky Technology Inc.](/companies/bksy.md) (CIK 1753539)
- Form: 10-Q
- Filed: 2025-05-08
- Accepted by EDGAR: May 8, 2025, 16:23 ET
- Period: 2025-03-31
- Accession: 0001753539-25-000053
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1753539/000175353925000053/bksy-20250331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1753539/000175353925000053/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-01-01 to 2025-03-31 | $29.5m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Research and development | 3 months, 2025-01-01 to 2025-03-31 | $245.0k | us-gaap:ResearchAndDevelopmentExpense |
| Selling, general and administrative | 3 months, 2025-01-01 to 2025-03-31 | $21.4m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2025-01-01 to 2025-03-31 | −$12.0m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2025-01-01 to 2025-03-31 | $3.3m | us-gaap:InterestExpense |
| Income tax | 3 months, 2025-01-01 to 2025-03-31 | $30.0k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-01-01 to 2025-03-31 | −$12.8m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-01-01 to 2025-03-31 | −$0.42 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-01-01 to 2025-03-31 | −$0.42 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-31 | 30,814,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | $27.2m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2025-03-31 | $20.7m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-03-31 | $121.3m | us-gaap:AssetsCurrent |
| Total assets | at 2025-03-31 | $284.9m | us-gaap:Assets |
| Current liabilities | at 2025-03-31 | $32.0m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-03-31 | $196.0m | us-gaap:Liabilities |
| Long-term debt | at 2025-03-31 | $111.6m | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2025-03-31 | $3.8m | us-gaap:DebtCurrent |
| Shareholders' equity | at 2025-03-31 | $88.8m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 55,882 characters.

*The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q. As discussed in the section titled “Special Note Regarding Forward-Looking Statements,” the following discussion and analysis contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those discussed in the section titled “Risk Factors” under Part I, Item IA of our Annual Report on Form 10-K for the year ended December 31, 2024 and filed with the Securities and Exchange Commission (the “SEC”). Unless the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to “BlackSky,” “the Company,” “we,” “us” and “our” refer to the business and operations of BlackSky Holdings, Inc. (“Legacy BlackSky”) and its consolidated subsidiaries prior to the completion of its merger on September 9, 2021 with a wholly-owned subsidiary of Osprey Technology Acquisition Corp. (the “Merger”) and of BlackSky Technology Inc. and its consolidated subsidiaries, following the closing of the Merger.*

### Company Overview

BlackSky is a space-based intelligence company that delivers real-time imagery, analytics and high-frequency monitoring of the world’s most critical and strategic locations, economic assets, and events. BlackSky is trusted by many of the most demanding U.S. and international government agencies and commercial businesses around the world. We are defining a new category of space-based intelligence products and services with real-time imagery and automated analytics, delivered through an easy-to-use interface coupled with our high-revisit and low latency satellite constellation, which are designed to help customers see, understand and anticipate change for a decisive strategic advantage.

We own and operate one of the industry's leading high-performance low earth orbit (“LEO”) small satellite constellations. Our constellation is optimized to cost-efficiently capture imagery at high revisit rates where and when our customers need it. Because of its orbital configuration, our constellation is able to image certain locations on average in under 90 minutes, from dawn-to-dusk, providing our customers with insights and situational awareness over specific locations of interest throughout the day. The constellation is optimized for agility and capacity and delivers high revisit imaging and analytic products without a dependency on an individual satellite. This approach enables us to strategically deploy capacity to meet customer needs and tailor the capability over time to meet market demand. We believe that our focus on critical strategic and economic infrastructure and our proprietary artificial intelligence (“AI”)-enabled tasking methodology differentiates us from many of our competitors, who are primarily dedicated to mapping the entirety of the Earth on a routine basis. Our differentiated approach to space enables us to deliver highly targeted and valuable intelligence with a smaller constellation fleet that has the added benefit of greater operating and capital efficiencies.

BlackSky’s constellation provides unique value with the ability to collect imagery and analytics from dawn-to-dusk at a higher cadence and at lower cost than traditional providers. U.S. and allied militaries rely on our services for high-revisit monitoring of airfields, vehicle depots, troop movements, and other high-value locations to detect changes in pattern-of-life. BlackSky can distinguish landscape features such as roads and buildings, and gauge commercial activities and patterns in ship or aircraft movements, progress at construction sites, and changes in production by estimating the number of cars in a parking lot.

Our proprietary constellation can produce high and very-high resolution electro-optical imagery resolution and short-wave infrared imagery for expanded imaging capabilities in low-light or nighttime. The constellation also has advanced data communications capabilities that significantly increase the end-to-end delivery speed of intelligence products. We believe these advanced features improve our analytics and increase the value we can deliver to our customers.

Our BlackSky Spectra software platform can, among other things, process millions of observations a day from our proprietary satellite constellation and from multiple external data sources including imaging, radar and radio frequency satellites, environmental sensors, asset tracking sensors, Internet-of-Things connected devices, internet-enabled narrative sources, and a variety of geotemporal data feeds. BlackSky Spectra employs advanced, proprietary AI and machine learning (“ML”) techniques to process, analyze, and transform these data feeds into alerts, information, and insights that our customers receive, all fully automated. Customers can access BlackSky Spectra's data and analytics through easy-to-use web services or through platform APIs. The combination of our high-revisit, small satellite constellation, our BlackSky Spectra platform, and low constellation cost is transforming the market for real-time, space-based imagery and analytics.

Our operating strategy is to continue to enhance the capabilities of our satellite constellation, to increase the data processed by our BlackSky Spectra platform, and to expand our analytics offerings in order to increase the value we deliver to our customers. Our two strategic assets—our satellite constellation and our BlackSky Spectra platform—are mutually reinforcing: as we capture more information about the world’s most important strategic and economic assets and locations, our proprietary database expands and increases its utility, enabling us to better detect, understand, and predict changes that matter most to our customers. As such, we believe that our business will benefit from a natural and powerful “flywheel” effect: the more data we collect and analyze, the more valuable the insights we can deliver to our customers.

Our current customer base and end market mix are weighted towards U.S. and international defense and intelligence customers and markets. We believe there are significant opportunities to expand our imagery and software analytical services, as well as our professional and engineering service offerings, to a broad set of customers both domestically and internationally. In addition, our services and products can benefit customers in a variety of commercial markets including, but not limited to, energy and utilities, insurance, commodities, mining, manufacturing, logistics, supply chain management, agriculture, environmental monitoring, disaster and risk management, engineering and construction, and retail and consumer behavior.

We generate revenue by selling subscription-based On-Demand and Assured product and service offerings that support national security, supply chain intelligence, crisis management, critical infrastructure monitoring, economic intelligence, and others. These offerings include a variety of pricing options accessible via our subscription plan through our BlackSky Spectra software platform, plus professional and engineering services provided to customers on a project-by-project basis. We offer a range of pricing tiers that enables the customer to manage collection priorities, when during critical events they can pay a premium to prioritize their monitoring and collection requirements. At other times, customers can select lower priority collections to allow for more economical utilization. Variable and fixed price plans allow our customers to choose what matters most to them—platform licensing-levels, priority for imagery tasking, and whether to apply analytics or monitoring capabilities overtop the imaging service.

In November 2024, we acquired the remaining 50% of common units of LeoStella LLC (“LeoStella”) and LeoStella became a wholly-owned subsidiary of BlackSky. The acquisition allows us to improve control over the Gen-3 satellite supply chain and production operations. This vertical integration enables us to control our satellites through the entire design, manufacturing, and operation process and optimize performance per unit cost. LeoStella's financial results have been included in our operating results for the period following the acquisition date.

### Components of Operating Results

### Revenue

Our revenue is generated by selling imagery and software analytics services through our BlackSky Spectra platform and by providing professional and engineering services to strategic customers on a project basis.

- **Imagery and Software Analytical Services Revenue**
- ***Imagery:*** We offer our customers high-revisit, on-demand high resolution electro optical satellite imaging services. Through our BlackSky Spectra software platform, customers can directly task our proprietary satellite constellation to collect and deliver imagery over specific locations, sites, and regions that are critical to their operations. We offer customers several service level options that include annual plans for access to capacity subscriptions for on-demand tasking or multi-year assured access programs, where customers can secure priority access and imaging capacity at a premium over a region of interest on a take or pay basis.
- ***Data, Software, and Analytics:*** Our analytics services are also offered on a subscription basis and provide customers with access to our site monitoring, event monitoring and global data services. We leverage our proprietary AI and ML algorithms to analyze data coming from both our proprietary sensor network and third-party space sources in real-time to provide data, insights, and analytics for our customers. We provide services related to object, change and anomaly detection, site monitoring, and enhanced analytics through which we can detect key pattern of life changes in critical locations. These critical locations can include strategic locations and infrastructure such as ports, airports, and construction sites; retail activity; commodities stockpiles; and other sites that contain critical commodities and supply chain inventory.

We expect continued revenue growth in our offerings year over year as a result of increases in our sales orders with new customers and incremental sales orders driven by stronger customer demand with existing customers.

- **Professional and Engineering Services Revenue—**We develop and deliver advanced satellites and payload systems for specific strategic customers that desire to leverage our capabilities in mission systems engineering and operations, ground station operations, software, analytics and systems development. These systems are sold to government customers under fixed price contracts and are often sold with operating and imagery service subscriptions. We retain rights to intellectual property for developed technology of certain systems.

We also provide technology enabled professional service solutions, which are highly interrelated, to support customer-specific feature requests and to support the integration, testing, and training of our imagery and software analytical services into the customer's organizational processes and workflows. We also provide software systems engineering development services to support the integration of high volume and mass quantities of data in their operating platforms.

We expect continued meaningful contribution from our professional and engineering services revenue, which we expect will be primarily from contracts with existing U.S. and international defense and intelligence customers with whom we have contracted to perform development work prior to the implementation of their subscription service contracts.

### Costs and Expenses

Our costs and expenses are incurred from the following categories:

- Imagery and software analytical services costs primarily include third-party data and imagery, ground station service payments, internal labor to support the ground stations and space operations, and compute/storage costs to facilitate our expanding AI/ML functionality. Costs are expensed as incurred except for incremental costs to obtain a contract, which are primarily sales commissions on contracts greater than one year and are capitalized and amortized to selling, general, and administrative expenses on a systematic basis consistent with the transfer of goods and services and directly identifiable costs to fulfill a contract. Expense related to stock-based payments is classified in the unaudited condensed consolidated statements

of operations and comprehensive loss based upon the classification of each employee's cash compensation. We recognize stock-based compensation expense for those employees whose work supports the imagery and software analytical services costs we provide to customers, under imagery and software analytical service costs, excluding depreciation and amortization.

- Professional and engineering service costs primarily include the cost of internal labor for design and engineering in support of long-term development contracts for customer satellites and payload systems as well as subcontract direct materials and external labor costs to build and test specific components, such as the communications system, payload demands, and sensor integration. In addition, we recognize internal labor costs and external subcontract labor costs for our customer-centric software service solutions. We also recognize stock-based compensation expense for those employees who provide professional and engineering services support to customers, under professional and engineering service costs, excluding depreciation and amortization.

### Operating Expenses

Our operating expenses are incurred from the following categories:

- Selling, general, and administrative expense consists of salaries and benefit costs, development costs, professional fees, and other expenses which include other personnel-related costs, stock-based compensation expenses for those employees who generally support our business and operations, and occupancy costs.
- Research and development expense consists of employees’ salaries, taxes, and benefits costs incurred while researching next generation space and ground architectures in support of our long-term strategy. With our acquisition of LeoStella in November 2024, research and development expense also includes our investments in satellite design and functionality. Additionally, we employ and classify third-party vendors who fulfill our strategic projects as research and development expense. We intend to continue to invest appropriate resources in research and development efforts, as we believe that investment is critical to maintaining our competitive position.
- Depreciation expense is related to property and equipment, which mainly consist of operational satellites. Amortization expense is related to intangible assets, which mainly consist of customer relationships.

### Results of Operations for the Three Months Ended March 31, 2025 and 2024

The following table provides the components of results of operations for the three months ended March 31, 2025 and 2024:

*(dollars in thousands)*

| Revenue | Three Months Ended March 31, 2025 | 2024 | $% Change | Change |
| --- | ---: | ---: | ---: | ---: |
| Imagery & software analytical services | $16,829 | $17,833 | $(1,004) | (5.6)% |
| Professional & engineering services | 12,715 | 6,403 | 6,312 | 98.6% |
| Total revenue | 29,544 | 24,236 | 5,308 | 21.9% |
| Costs and expenses |  |  |  |  |
| Imagery & software analytical service costs, excluding depreciation and amortization | 3,818 | 3,445 | 373 | 10.8% |
| Professional & engineering service costs, excluding depreciation and amortization | 8,782 | 3,588 | 5,194 | 144.8% |
| Selling, general and administrative | 21,442 | 18,816 | 2,626 | 14.0% |
| Research and development | 245 | 456 | (211) | (46.3)% |
| Depreciation and amortization | 7,236 | 11,184 | (3,948) | (35.3)% |
| Operating loss | (11,979) | (13,253) | 1,274 | 9.6% |
| Gain (loss) on derivatives | 1,901 | (254) | 2,155 | 848.4% |
| Interest income | 573 | 400 | 173 | 43.3% |
| Interest expense | (3,343) | (2,634) | (709) | (26.9)% |
| Other income, net | 65 | 1 | 64 | NM |
| Loss before income taxes | (12,783) | (15,740) | 2,957 | 18.8% |
| Income tax expense | (30) | (70) | 40 | 57.1% |
| Net loss | $(12,813) | $(15,810) | $2,997 | 19.0% |

### Revenue

*(dollars in thousands)*

|  | Three Months Ended March 31, 2025 | 2024 | $% Change | Change |
| --- | ---: | ---: | ---: | ---: |
| Imagery & software analytical revenue | $16,829 | $17,833 | $(1,004) | (5.6)% |
| % of total revenue | 57.0% | 73.6% |  |  |
| Professional & engineering services revenue | 12,715 | 6,403 | 6,312 | 98.6% |
| % of total revenue | 43.0% | 26.4% |  |  |
| Total revenue | $29,544 | $24,236 | $5,308 | 21.9% |

### Imagery and Software Analytical Services Revenue

Imagery and software analytical services revenue decreased for the three months ended March 31, 2025 as compared to the same period in 2024, driven by the expiration of delivery orders from an existing customer.

### Professional and Engineering Services Revenue

Professional and engineering services revenue increased for the three months ended March 31, 2025, as compared to the same period in 2024, primarily due to a new contract for the delivery of one Earth observation satellite. The increase was partially offset by a decrease in revenue in two existing contracts caused by differences in the progress of revenue recognition as these long-term contracts are in various stages of completion. Professional and engineering services revenue contains estimates that can result in the recognition of revenue in a current period for performance obligations which were satisfied or partially satisfied in a prior period. For the impacts of changes in estimates on our contracts, see Note 2—“Basis of Presentation and Summary of Significant Accounting Policies” of the notes to the consolidated financial statements contained within this Quarterly Report on Form 10-Q.

### Costs and Expenses

*(dollars in thousands)*

|  | Three Months Ended March 31, 2025 | 2024 | $% Change | Change |
| --- | ---: | ---: | ---: | ---: |
| Imagery & software analytical service costs, excluding depreciation and amortization | $3,818 | $3,445 | $373 | 10.8% |
| Professional & engineering service costs, excluding depreciation and amortization | 8,782 | 3,588 | 5,194 | 144.8% |
| Total costs | $12,600 | $7,033 | $5,567 | 79.2% |

### Imagery and Software Analytical Service Costs

Imagery & software analytical service costs, excluding depreciation and amortization, increased for the three months ended March 31, 2025, as compared to the same period in 2024, due to an increase in vendor costs to fulfill revenue obligations and planned Gen-3 constellation optimization.

### Professional and Engineering Service Costs

Professional & engineering service costs, excluding depreciation and amortization, increased for the three months ended March 31, 2025 as compared to the same period in 2024, primarily due to a one-time impact of incurred work in process costs under a satellite procurement contract that began in the first quarter of 2025.

### Selling, General, and Administrative

*(dollars in thousands)*

|  | Three Months Ended March 31, 2025 | 2024 | $% Change | Change |
| --- | ---: | ---: | ---: | ---: |
| Salaries and benefit costs | $11,703 | $10,656 | $1,047 | 9.8% |
| Stock-based compensation expense | 2,757 | 3,148 | (391) | (12.4)% |
| Information technology and other administrative expenses | 2,648 | 1,983 | 665 | 33.5% |
| Selling and marketing | 920 | 666 | 254 | 38.1% |
| Professional fees | 1,995 | 1,124 | 871 | 77.5% |
| Insurance | 511 | 472 | 39 | 8.3% |
| Rent expense | 564 | 498 | 66 | 13.3% |
| Development costs | 344 | 269 | 75 | 27.9% |
| Selling, general and administrative | $21,442 | $18,816 | $2,626 | 14.0% |

Selling, general, and administrative expenses increased during the three months ended March 31, 2025 as compared to the same period in 2024. Salaries and benefit costs increased primarily due to workforce acquired in our acquisition of LeoStella in the fourth quarter of 2024. Professional fees increased as a result of transaction costs associated with finalizing the business acquisition in late 2024. Information technology and other administrative expenses increased primarily due to investments to optimize corporate business and operational systems. These increases were partially offset by a decrease in stock-based compensation that was due to the acceleration of expense for stock options that were voluntarily forfeited during the first quarter of 2024. We expect for selling, general, and administrative expenses to continue to trend higher in 2025 as compared to what was incurred in 2024 as a result of headcount increases and the ongoing integration of LeoStella into our operations.

The following is our forecast for total RSU expense as of March 31, 2025, which, in addition to the amounts recognized in selling, general, and administrative expenses, includes the portion that will be capitalized or classified in imagery and software analytical service costs and professional and engineering service costs:

*(in thousands)*

| For the years ending December 31, |  |
| --- | ---: |
| 2025 | 7,876 |
| 2026 | 7,946 |
| 2027 | 4,910 |
| 2028 | 2,572 |
| 2029 | 227 |
|  | $23,531 |

### Research and Development

*(dollars in thousands)*

|  | Three Months Ended March 31, 2025 | 2024 | $% Change | Change |
| --- | ---: | ---: | ---: | ---: |
| Research and development | $245 | $456 | $(211) | (46.3)% |

Research and development expense decreased for the three months ended March 31, 2025, as compared to the same period in 2024. The fluctuations were driven by the timing of contracts from third-party vendors who fulfill our strategic projects, the costs of which were included in research and development expense. We have continued to invest in our research and development initiatives to significantly expand our product capabilities in the future.

### Depreciation and Amortization

*(dollars in thousands)*

|  | Three Months Ended March 31, 2025 | 2024 | $% Change | Change |
| --- | ---: | ---: | ---: | ---: |
| Depreciation of satellites | $3,628 | $8,856 | $(5,228) | (59.0)% |
| Depreciation of all other property and equipment | 3,401 | 2,188 | 1,213 | 55.4% |
| Amortization | 207 | 140 | 67 | 47.9% |
| Depreciation and amortization | $7,236 | $11,184 | $(3,948) | (35.3)% |

36

Depreciation expense from satellites decreased for the three months ended March 31, 2025 as compared to the same period in 2024 as satellites launched in 2021 became fully depreciated. We expect for depreciation expense to begin to increase in the remainder of 2025 as additional Gen-3 satellites are launched and placed into service.

Depreciation expense from all other property and equipment increased for the three months ended March 31, 2025 as compared to the same period in 2024, primarily driven by the depreciation of increased asset balances for internal-use software.

Amortization expense increased for the three months ended March 31, 2025 as compared to the same period in 2024 as a result of intangible assets acquired by the Company in the fourth quarter of 2024.

### Non-Operating Expenses

*(dollars in thousands)*

|  | Three Months Ended March 31, 2025 | 2024 | $% Change | Change |
| --- | ---: | ---: | ---: | ---: |
| Gain (loss) on derivatives | $1,901 | $(254) | $2,155 | 848.4% |
| Interest income | 573 | 400 | 173 | 43.3% |
| Interest expense | (3,343) | (2,634) | (709) | (26.9)% |
| Other income, net | 65 | 1 | 64 | NM |

### Gain (loss) on derivatives

Fluctuations in our equity warrants and other equity instruments that we classify as derivative liabilities in the unaudited condensed consolidated balance sheets and measure at fair value are significantly driven by our common stock price. Fluctuations to these instruments are inversely related to changes in our common stock price, the volatility of the markets, and the duration of the equity warrants. The gains or losses recognized in the period are non-cash fair value adjustments. These instruments generated a gain during the three months ended March 31, 2025 versus a loss during the three months ended March 31, 2024.

### Interest income

Interest income increased during the three months ended March 31, 2025 as a result of higher short-term investment balances during the period as compared to the same period in 2024.

### Interest expense

Interest expense increased during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, as a result of more debt outstanding during the three months ended March 31, 2025, as compared to the same period in 2024. Our outstanding debt increased mainly due to non-cash transactions for the transfer of paid-in-kind interest in 2024 and the financing of launch invoices during the past twelve months.

### Non-GAAP Financial Measures

In addition to our results determined in accordance with GAAP, management utilizes certain non-GAAP performance measures, such as Adjusted EBITDA, for purposes of evaluating our ongoing operations and for internal planning and forecasting purposes. Our management and board of directors believe that this non-GAAP operating measure, when reviewed with our GAAP financial information, provides useful supplemental information to investors in assessing our operating performance.

#### Adjusted EBITDA

Adjusted EBITDA is defined as net income or loss attributable to us before interest income, interest expense, income tax expense or benefit, depreciation and amortization, as well as significant non-cash and/or non-recurring expenses as our management believes these items are not useful in evaluating our 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; non-recurring transaction costs; litigation, settlements, and related costs; severance; and impairment and asset disposals. We have presented Adjusted EBITDA because it is a key measure used by our management and board of directors to understand and evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe that the exclusion of certain items in calculating Adjusted EBITDA can produce a useful measure for period-to-period comparisons of our business. Accordingly, we believe that Adjusted EBITDA provides useful information in understanding and evaluating our operating results. In addition, we believe that Adjusted EBITDA provides additional information for investors to use in evaluating our ongoing operating results and trends. This non-GAAP measure provides investors with incremental information for the evaluation of our performance after isolation of certain items deemed unrelated to our core business operations.

Adjusted EBITDA is presented as a supplemental measure to our GAAP measures of performance. When evaluating Adjusted EBITDA, you should be aware that we may incur future expenses similar to those excluded when calculating this measure. In addition, our presentation of this measure should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Furthermore, our computation of Adjusted EBITDA may not be directly comparable to similarly titled measures computed by other companies, as the nature of the adjustments that other companies may include or exclude when calculating Adjusted EBITDA may differ from the adjustments reflected in our measure. Because of these limitations, Adjusted EBITDA should not be considered in isolation, nor should this measure be viewed as a substitute for the most directly comparable GAAP measure, which is net loss. We compensate for the limitations of non-GAAP measures by relying primarily on our GAAP results. You should review the reconciliation of our net loss to Adjusted EBITDA below and not rely on any single financial measure to evaluate our performance.

The table below reconciles our net loss to Adjusted EBITDA for the three months ended March 31, 2025 and 2024:

*(in thousands)*

|  | Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Net loss | $(12,813) | $(15,810) |
| Interest income | (573) | (400) |
| Interest expense | 3,343 | 2,634 |
| Income tax expense | 30 | 70 |
| Depreciation and amortization | 7,236 | 11,184 |
| Stock-based compensation expense | 2,897 | 3,363 |
| (Gain) loss on derivatives | (1,901) | 254 |
| Non-recurring transaction costs | 656 | — |
| Severance | 326 | 81 |
| Litigation, settlements, and related costs | 138 | — |
| Impairment and asset disposals | 44 | — |
| Adjusted EBITDA | $(617) | $1,376 |

### Liquidity and Capital Resources

As of March 31, 2025, our existing sources of liquidity included cash and cash equivalents and short-term investments. Our cash and cash equivalents excluding restricted cash totaled $20.7 million and $13.1 million as of March 31, 2025 and December 31, 2024, respectively, and our short-term investments totaled $55.1 million and $39.4 million as of March 31, 2025 and December 31, 2024, respectively. We have incurred year to date losses and generated negative cash flows from operations since our inception in September 2014. As of March 31, 2025, we had an accumulated deficit of $669.0 million.

Our short-term liquidity as of March 31, 2025 was comprised of the following:

*(in thousands)*

|  |  |
| --- | ---: |
| Cash and cash equivalents | $20,748 |
| Restricted cash | 1,153 |
| Short-term investments(1) | 55,076 |
|  | $76,977 |

(1) Short-term investments were included in cash flows from investing activities in the unaudited condensed consolidated statements of cash flows.

Our short-term liquidity as of March 31, 2025 was $77.0 million. We expect cash and cash equivalents and cash generated from operating activities to be sufficient to meet our working capital and capital expenditure needs for the foreseeable future. Our future long-term capital requirements will depend on many factors, including our Gen-3 satellite production needs, launch costs and increased insurance costs, as well as our growth rate, customer demand for capacity, the timing and extent of spending to support solution development efforts, the expansion of sales and marketing activities, the ongoing investments in technology infrastructure, the introduction of new and enhanced solutions, and the continuing market acceptance of our solutions.

Our equity issuances during the three months ended March 31, 2025 included an at-the-market (“ATM”) offering. We have the ability to offer and sell from time to time up to $75.0 million of newly issued shares in open trading windows at market prices through a designated broker dealer pursuant to an ATM offering program, of which we sold $5.4 million during the three months ended March 31, 2025.

We have current contract assets of $32.4 million and we anticipate receiving this amount in payments over the next 12 months as interim milestones on a few major customer contracts are met and expected to be billed, further enhancing our liquidity.

We also have a commercial bank line with Stifel Bank that provides for a $20.0 million revolving credit facility, including a $0.5 million sub-facility for the issuance of letters of credit and other ancillary banking services. The commercial bank line matures on June 30, 2026. As of March 31, 2025, we had borrowed $10.0 million in revolving loans. We may increase or decrease our borrowings at our discretion with no penalty.

The commercial bank line accrues interest at a rate equal to the greater of (A) the prime rate or (B) 6%. Interest on the loan is payable quarterly in arrears. We are required to pay an unused line fee of 0.25% per annum, payable quarterly in arrears. We may borrow, prepay, and re-borrow revolving loans, without premium or penalty. The principal amount of outstanding loans, together with accrued and unpaid interest, is due on the loan maturity date. We are also obligated to pay a fee to the lender upon the occurrence of certain change of control events or the refinancing, repayment, or termination of the commercial bank line, along with other customary fees for a loan facility of this size and type.

Additionally, we have a vendor financing agreement for multiple satellite launches providing for $27.0 million, of which a portion will be drawn down equally per satellite launch and will be repaid quarterly on a pro-rata basis across a three-year period after each successful launch milestone. Payments will accrue interest at 12.6% per annum, beginning on each launch date. As of March 31, 2025, we estimate we will repay approximately $3.8 million of short-term debt related to the vendor financing agreement in the next 12 months. We may prepay at any time until the maturity date without premium or penalty. See Note 9—“Debt and Other Financing” of the notes to the consolidated financial statements for further information on our debt and financing arrangements and Note 15 - “Commitments and Contingencies” of the notes to the consolidated financial statements for further information on our contractual obligations.

As part of certain debt arrangements, we are required to maintain the following financial covenants:

- $10.0 million of minimum cash and cash equivalents balance, measured quarterly as of the last day of each fiscal quarter.
- Adjusted EBITDA, measured quarterly as of the last day of each fiscal quarter, of not less than:
- $5.0 million for the trailing four quarter period ending as of December 31, 2024 through September 30, 2025 and
- $10.0 million for the trailing four quarter period ending as of December 31, 2025 and as of the end of each fiscal quarter thereafter.
- Quarterly minimum revenue targets agreed upon by the Company and the bank at the beginning of each year.
- Unrestricted and unencumbered cash and cash equivalents in an amount equal to at least one hundred percent of the outstanding commercial bank line at all times.

In addition, the commercial bank line contains customary affirmative and negative covenants, including covenants limiting the Company's ability to, among other things, incur debt, grant liens, pay dividends and distributions on its capital stock, make investments and acquisitions, and make capital expenditures, in each case subject to customary exceptions for a loan facility of this size and type. If the Company fails to meet the minimum cash covenant, the commercial bank line provides the Company with the ability to cure the breach with the deposit of proceeds from the issuance of capital stock or subordinated debt.

As of March 31, 2025, all debt instruments contained customary covenants and events of default. The Company was in compliance with all financial and non-financial covenants as of March 31, 2025.

From time to time, we may seek additional equity or debt financing to fund capital expenditures, strategic initiatives or investments and our ongoing operations. If we decide, or are required, to seek additional financing from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, financial condition and results of operations could be adversely affected.

### Funding Requirements

We cannot be sure our revenues will exceed expenses in the near term due to the ongoing investments we are making in sales, marketing and products to increase our market share. We expect to continue to incur capital expenditures as we procure and launch Gen-3 satellites, as well as invest in our BlackSky Spectra software platform to significantly expand our product capabilities in the future.

### Short-Term Liquidity Requirements

As of March 31, 2025, our current assets were $121.3 million, consisting primarily of short-term investments, contract assets, accounts receivable, and cash and cash equivalents.

As of March 31, 2025, our current liabilities were $32.0 million, consisting primarily of accounts payable and accrued liabilities. Accordingly, we have sufficient cash and working capital to fund our short-term liquidity requirements.

### Long-Term Liquidity Requirements

We anticipate that our most significant long-term liquidity and capital needs will relate to continued funding of operations, satellite development capital expenditures, launch capital expenditures, and ongoing investments to optimize our BlackSky Spectra software platform and corporate business and operational systems that will enable us to continue to scale the business efficiently and securely. We can manage the timing for a large part of our capital expenditures, including the design, build, and launch of our new satellites currently under development, to provide us with additional flexibility to optimize our long-term liquidity requirements. Macroeconomic conditions and credit markets could also impact the availability and/or the cost of potential future debt or equity financing.

### Cash Flow Analysis

The following table provides a summary of cash flow data for the three months ended March 31, 2025 and 2024. Our short-term liquidity at March 31, 2025 was $77.0 million. Short-term investments of $55.1 million are not classified as cash, cash equivalents, or restricted cash.

*(in thousands)*

|  | Three Months Ended March 31, 2025 | 2024 | $ Change |
| --- | ---: | ---: | ---: |
| Net cash provided by (used in) operating activities | $27,245 | $(3,810) | $31,055 |
| Net cash used in investing activities | (24,142) | (15,108) | (9,034) |
| Net cash provided by financing activities | 4,420 | 862 | 3,558 |
| Net increase (decrease) in cash, cash equivalents, and restricted cash | 7,523 | (18,056) | 25,579 |
| Cash, cash equivalents, and restricted cash – beginning of year | 14,378 | 33,434 | (19,056) |
| Cash, cash equivalents, and restricted cash – end of period | $21,901 | $15,378 | $6,523 |

### Operating activities

For the three months ended March 31, 2025, net cash provided by operating activities was $27.2 million. The significant decrease in cash used during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 was due to an increase in the net cash provided by working capital. The increase in cash provided by working capital was largely related to a cash payment for capacity for future purchase orders that was recorded as deferred revenue as of March 31, 2025 in our unaudited condensed consolidated balance sheets.

### Investing activities

The change in net cash used in investing activities was primarily due to increased purchases of short-term investments in government securities of $28.3 million during the three months ended March 31, 2025 partially offset by the redemption and maturity of $13.0 million of these types of securities during the same period. Comparatively, during the three months ended March 31, 2024, we purchased $9.5 million of short-term investments to replace maturing investments and recognized $9.0 million related to the redemption and maturity of short-term investments.

We continue to have significant cash outflows for satellite procurement and launch related services and incur labor costs for internally developed capitalized software as we add innovative new services and tools to our BlackSky Spectra software platform and our corporate business and operational systems. The total amount paid for capital expenditures decreased during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. The decrease resulted from payments to LeoStella as a third party in 2024 as compared to the internal operation costs with LeoStella consolidated as a wholly-owned subsidiary in 2025. We expect for cash outflows for satellite production to increase as we continue to build out our Gen-3 constellation.

### Financing activities

The most significant impact on the change in net cash provided by financing activities was the receipt of $5.1 million in proceeds from our equity issuances, net of equity issuance costs, in the three months ended March 31, 2025 as compared to $1.3 million in the three months ended March 31, 2024. Our equity issuances during the three months ended March 31, 2025 consisted of the sale of 0.6 million shares under our ATM offering program which resulted in $5.4 million in gross proceeds, as compared to the sale of 0.1 million shares in the three months ended March 31, 2024, which resulted in $1.4 million in gross proceeds.

### Critical Accounting Estimates

The preparation of our unaudited condensed consolidated financial statements and related notes requires management to make judgments, estimates, and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Management has based its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

For a description of our significant accounting policies, see Note 2—“Basis of Presentation and Summary of Significant Accounting Policies” of the notes to the unaudited condensed consolidated financial statements. An accounting policy is considered to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the unaudited condensed consolidated financial statements. Management believes the following critical accounting policies reflect the more significant estimates and assumptions used in the preparation of our unaudited condensed consolidated financial statements.

### Revenue Recognition

The recognition and measurement of revenue requires the use of judgments and estimates. Specifically, judgment is used in interpreting complex arrangements with nonstandard terms and conditions and determining when all criteria for revenue recognition have been met, as further discussed below.

We generate revenue from the sale of imagery, data, software, and analytics, as well as professional and engineering services.

#### Identifying the Contract with the Customer

We evidence approval of the contract with the customer with dual signatures or approved purchase orders that detail the rights of each party and define payment terms. We have never had significant collection issues on contracts with new or recurring domestic and international government customers and we consider this historical trend when assessing the collectability risk for contracts with bespoke effective terms.

#### Identifying the Performance Obligations in a Contract

We execute contracts for a single promise or multiple promises. Specifically, our firm-fixed price contracts may include multiple promises which may be accounted for as separate performance obligations if they are capable of being distinct within the context of the contract. Significant judgment is required in determining performance obligations, including if some of the customized services are highly-interrelated, and these decisions could change the amount of revenue and profit or loss recorded in each period.

#### Classification of Revenue

We classify revenue as imagery and software analytical services, and professional and engineering services in our unaudited condensed consolidated statements of operations and comprehensive loss based on the predominant attributes of the performance obligations.

#### Determination of and Allocation of Transaction Price

Each customer contract sets forth the transaction price for the products and services purchased under the arrangement. We estimate any variable consideration, and whether the transaction price is constrained, upon execution of each contract. We may adjust the transaction price over time for any estimated constraints that become probable based on service level provisions within some of our customer purchase orders. For contracts with multiple performance obligations, we evaluate whether the stated selling prices for the products or services represent their standalone selling prices. When it is necessary to allocate the transaction price to multiple performance obligations, management uses the volume adjusted list price for imagery and analytics subscriptions and the expected cost plus a reasonable profit margin to estimate the standalone selling price of each product or service, which is mostly professional services.

#### Determination of when Performance Obligations are Satisfied

Imagery and analytics revenue is recognized ratably over the subscription period based on the promise to continuously provide contractual satellite capacity for tasked imagery or software analytical services at the discretion of the customer. Professional and engineering services revenue is generated from time and materials basis contracts, cost-plus contracts, firm-fixed price service solutions contracts and firm-fixed price long-term engineering and construction contracts. Due to the long-term nature of some of our engineering and construction contracts, we recognize revenue over time using a cost-to-complete measure of progress because it best depicts the transfer of control to the customer as we incur costs on the contracts. Under this measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs to complete the performance obligation(s). The estimation of total estimated costs at completion is subject to many variables and requires significant judgment. We recognize changes in the estimation of total costs at completion on a cumulative catch-up basis in the period in which the changes are identified. Such changes in estimates can result in the recognition of revenue in a current period for performance obligations which were satisfied or partially satisfied in a prior period. If at any time, the estimate of contract profitability indicates a probable anticipated loss on the contract, we recognize the total loss as and when known.

### Equity Valuations

Equity valuations impact various amounts and accounting conclusions reflected in our unaudited condensed consolidated financial statements, including the recognition of equity-based compensation and warrant valuations. The following discussion provides additional details regarding the significant estimates, assumptions, and judgments that impacted the determination of the fair values of equity-based compensation awards, warrants, and the common stock that comprise our capital structure. The following discussion also explains why these estimates, assumptions, and judgments could be subject to uncertainties and future variability.

#### Equity-Based Compensation

We have equity and equity-based awards outstanding under our 2021 Equity Incentive Plan ("2021 Plan") and our 2014 Equity Incentive Plan ("2014 Plan"). Outstanding awards issued include stock options and restricted stock units ("RSUs"). In addition, our eligible employees are able to participate in our 2021 Employee Stock Purchase Plan ("ESPP") pursuant to purchase right offerings that are established under the ESPP.

For purposes of recognizing equity-based compensation related to RSUs and stock options granted to employees and other service providers, management estimates the grant date fair values of such awards to measure the costs to be recognized as services are received. For awards with time-based vesting conditions, we recognize compensation costs based upon the straight-line amortization of the grant date fair value of the awards over the requisite service period. When equity-based compensation awards include a performance condition, no compensation is recognized until the performance condition is deemed probable to occur; we then recognize compensation costs based on the accelerated attribution method, which accounts for awards with discrete vesting dates as if they were separate awards.

#### Stock Option and Class A Common Stock Warrant Valuations

We use the Black-Scholes option-pricing model to value all options, including options under our ESPP, and Class A common stock warrants. Estimating the fair value of stock options using the Black-Scholes option-pricing model requires the application of significant assumptions, such as the estimated term of the options, risk-free interest rates, the expected volatility of the price of our Class A common stock, and an expected dividend yield. Each of these assumptions is subjective, requires significant judgment, and is based upon management’s best estimates. If any of these assumptions were to change significantly in the future, equity-based compensation related to future awards may differ significantly, as compared with awards previously granted.

We have largely moved towards granting RSUs to the bulk of our employees, for which the grant date fair value is equal to the trading price fair value of our Class A common stock on the date of grant. For stock options, which are primarily granted to certain management employees, we use the following inputs under Black-Scholes as follows:

Expected Dividend Yield—The Black-Scholes valuation model requires an expected dividend yield as an input. The dividend yield is based on historical experience and expected future changes. We historically have not paid, and currently have no plans to pay dividends on our Class A common stock and, accordingly, have assumed no dividend yield upon valuation of our stock options.

Expected Volatility—As there was no observable volatility with respect to Legacy BlackSky Class A common stock and due to the lack of sufficient history of BlackSky Class A common stock, the expected volatility of Legacy BlackSky and BlackSky Class A common stock was estimated based upon the historical share price volatility of guideline comparable companies.

Risk-free Interest Rate—The yield on actively traded, non-inflation indexed U.S. Treasury notes was used to extrapolate an average risk-free interest rate based on the expected term of the underlying grants.

Expected Term—For options granted since 2021, as there is not a significant history of option exercises as a public company, we consider the option vesting terms and contractual period, as well as the demographics of the holders, in estimating the expected term. For options granted prior to 2021 when we were a private company, the expected term was the estimated duration to a liquidation event based on a weighted average consideration of the most likely exit prospects for that stage of development. We will continue to review our estimate in the future and adjust it, if necessary, due to changes in our historical exercises.

### Private Placement Warrants and Sponsor Shares

We have classified the Private Placement Warrants issued in October 2019 and March 2023 and the Osprey pre-merger Class B common shares that were exchanged for shares of our Class A common stock (the "Sponsor Shares") as long-term liabilities in our unaudited condensed consolidated balance sheets as of March 31, 2025 and 2024. The Private Placement Warrants issued in October 2019 and the Sponsor Shares were initially recorded at fair value on the date of the merger and the Private Placement Warrants issued in March 2023 were recorded at fair value on the date of issuance. The Private Placement Warrants were recorded at fair value using a Black-Scholes option pricing model and the Sponsor Shares were recorded at fair value using a Monte Carlo simulation model. These liabilities are re-measured to fair value at each subsequent reporting date and recorded to gain (loss) on derivatives in our unaudited condensed consolidated statements of operations and comprehensive loss. We will continue to adjust the liability for changes in fair value until the financial instruments are exercised, redeemed, cancelled or released.

The fair value models require inputs including, but not limited to, the fair value of our Class A common stock, the risk-free interest rate, expected term, expected dividend yield and expected volatility. The fair value of our Class A common stock is the closing stock price on the NYSE as of the measurement date. The risk-free interest rate assumption is determined by using U.S. Treasury rates for the same period as the expected terms of the financial instruments. The dividend yield assumption is based on the dividends expected to be paid over the expected life of the financial instruments. Expected stock volatility is based on our public warrant historical volatility. Changes in these assumptions can materially affect the estimate of the fair value of these instruments and ultimately the change in fair value.

### Business Combination

Upon acquisition of a company, we determine if the transaction is a business combination, which is accounted for using the acquisition method of accounting. Under the acquisition method, once control is obtained of a business, the assets acquired, and liabilities assumed, are recorded at fair value.

The most significant estimates and assumptions evaluated in a business combination relate to the determination of (1) the enterprise value of the acquired company using an income approach, (2) the fair values of identified intangible assets, (3) the allocation of the fair value acquired to the net assets acquired and (4) the period and pattern of amortization for intangible assets that are assigned a definite life. The enterprise value is determined based on projected cash flows attributable to the operations of the acquiree. The projected cash flows include various assumptions, including estimated revenue growth rates, operating margins, R&D expenditures, capital expenditures, royalty rates, and appropriate risk-adjusted discount rates used to discount the projected cash flows. The usage of different assumptions would result in the assignment of different fair values to the acquired identifiable intangible assets and, accordingly, could also impact the amount of purchase consideration assigned to goodwill. Similarly, changes in the planned usage of the acquired identifiable intangible assets and/or their estimated economic lives, if any, could impact the recoverability of the assets and/or amortization period and expense attributable to the assets in the future.

Measurement period adjustments are reflected at the time identified, up through the conclusion of the measurement period, which is the time at which all information for determination of the values of assets acquired and liabilities assumed is received, and is not to exceed one year from the acquisition date. We may continue to record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill.

## Controls and procedures

As filed, 2,436 characters.

### Evaluation of Disclosure Controls and Procedures

Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Quarterly Report on Form 10-Q, is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of reasonably ensuring that such information is accumulated and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. Our management evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer (our “Certifying Officers”), the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2025. Based upon that evaluation, our Certifying Officers concluded that, as of March 31, 2025, our disclosure controls and procedures were effective at a reasonable assurance level.

In designing and evaluating the disclosure controls and procedures, management recognized that controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company will be detected.

### Changes in Internal Control Over Financial Reporting

In November 2024, we acquired the remaining 50% of common units of LeoStella and LeoStella became a wholly-owned subsidiary of BlackSky. In conducting our evaluation of our internal control over financial reporting, we excluded LeoStella from our evaluation for the quarter. We are in the process of integrating LeoStella into our system of internal control over financial reporting.

Other than the acquisition above, there was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended March 31, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 593 characters.

For risk factors relating to our business, please refer to the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 and filed by us with the SEC. Any of those factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.

Filed May 8, 2025.
Source: SEC EDGAR, the filing index for accession 0001753539-25-000053. Last ingested by Listed: Nov 5, 2026, 17:07 ET. No prices; not investment advice.