BlackSky Reports Q3 Revenue Miss Amid Government Contracting Challenges

BlackSky Technology, Inc. reported third-quarter revenue of $19.6 million with adjusted EBITDA of negative $4.5 million and earnings per share of negative $0.44, according to coverage updates from Stonegate Capital Partners. These results fell below analyst estimates of $29.9 million for revenue and $3.2 million for adjusted EBITDA, reflecting challenges in the current government contracting environment.

The company's imagery and software analytical services revenue decreased to $15.8 million, representing an 8.6% year-over-year decline. This reduction was primarily attributed to expected decreases in National Reconnaissance Office Enhanced Operationally Responsive Commercial Layer tasking and broader U.S. government budget uncertainties that affected near-term imagery orders. Professional and engineering services revenue also declined to $3.8 million from $5.2 million in the second quarter of 2024, largely due to project timing and milestone-based revenue recognition patterns.

Despite the quarterly challenges, BlackSky demonstrated significant contract momentum, securing over $60 million in new contracts during the third quarter. This growth expanded the company's total backlog to $322.7 million, with approximately 91% of this backlog coming from international customers. Key contract wins included a multi-year agreement valued at over $30 million with a strategic international defense customer for Gen 3 tactical intelligence, surveillance, and reconnaissance services. Additional wins included a new multimillion-dollar Gen 3 imagery award with a U.S. customer and a seven-figure Luno A delivery order for AI-enabled change detection capabilities.

The company continues to advance its satellite constellation development, with the third Gen-3 satellite expected to launch by year-end. BlackSky remains on track to deploy a fully operational 12-satellite commercial constellation by the end of 2025. Management highlighted rising demand for Gen-3 services, including high-cadence tasking and AI-enabled analytics as customers integrate these capabilities into secure, sovereign environments. Early access agreements for Gen-3 services continue to expand across international defense and intelligence customers.

Financially, BlackSky maintained cash, restricted cash, and short-term investments totaling $147.6 million at quarter-end, reflecting net proceeds from an upsized convertible note offering and warrant exercises. The company reported $43.4 million in unbilled contract assets, with $36.0 million expected to be billed and collected over the next twelve months. Capital expenditures totaled $15.0 million for the quarter and $33.9 million year-to-date, supporting the ongoing constellation expansion.

BlackSky maintained its full-year 2025 guidance, projecting revenue between $105 million and $130 million, adjusted EBITDA ranging from breakeven to $10 million, and capital expenditures of $60 million to $70 million. Management anticipates a stronger fourth quarter performance driven by international demand growth, Gen-3 satellite availability, and continued backlog conversion. The company's positioning in the global intelligence and surveillance market appears strengthened by its growing international contract base and advancing technological capabilities.