Stonegate Capital Partners Updates Coverage on BlackSky Technology, Inc. Highlighting Growth and Strategic Contracts

Stonegate Capital Partners has provided an updated coverage report on BlackSky Technology, Inc. (NYSE: BKSY), detailing the company's financial performance and strategic advancements in the second quarter of 2025. BlackSky reported revenues of $22.2M, with adjusted EBITDA and EPS at ($2.8)M and ($1.27), respectively. These figures align with Stonegate's and consensus estimates, showcasing a stable financial trajectory amidst ongoing investments in Gen-3 and AROS initiatives.

The company's Imagery and Software Analytical Services revenue saw a 2.9% year-over-year increase to $18.0M, attributed to growing demand and early access activities related to Gen-3 imagery. Conversely, Professional and Engineering Services revenue declined to $4.2M from $7.5M in 2Q24, due to timing differences in milestone-based contract recognition. Adjusted EBITDA reflected a loss of ($2.8M), a shift from a $2.1M profit in the prior year, influenced by lower professional services revenue and continued investment in technology advancements.

BlackSky's strategic contract wins in 2Q25, totaling over $35.0M, have expanded its total backlog to $356.0M, with approximately 85% originating from international customers. Notable achievements include a $24.0M NGA Luno A monitoring award and a multi-year Gen-2/Gen-3 contract with a new international defense customer. These developments, along with the successful launch of its second Gen-3 satellite, underscore BlackSky's evolving role as a trusted intelligence partner on a global scale.

The company's financial position was bolstered by a $185.0M upsized convertible note offering, which facilitated the retirement of $113M in outstanding debt. This strategic financial maneuver enhances BlackSky's liquidity, enabling sustained investment in its Gen-3 satellite constellation and AROS initiatives. With the third Gen-3 satellite in final testing and commercial availability expected by 4Q25, BlackSky is poised for significant growth in the latter half of 2025.

Stonegate's valuation analysis, utilizing a DCF Model and EV/EBITDA comp analysis, suggests a valuation range of $24.51 to $30.56, with a mid-point of $27.26. This assessment reflects confidence in BlackSky's strategic direction and its potential to capitalize on the burgeoning demand for advanced imagery and analytical services in the defense and intelligence sectors.