BlackSky Technology Reports Mixed Q3 Results While Securing $60M in New Contracts

Stonegate Capital Partners has updated its coverage of BlackSky Technology, Inc. following the company's third-quarter 2025 financial results. BlackSky reported revenue of $19.6 million, adjusted EBITDA of negative $4.5 million, and earnings per share of negative $0.44 for the quarter. These figures fell below both Stonegate and consensus estimates, which had projected revenue of $29.9 million and $28.6 million respectively, along with positive adjusted EBITDA expectations.

The company experienced an 8.6% year-over-year decline in Imagery and Software Analytical Services revenue, which decreased to $15.8 million. This reduction was primarily attributed to expected decreases in National Reconnaissance Office EOCL 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 ISR services, a new multimillion-dollar Gen 3 imagery award with a U.S. customer, and several seven-figure contracts for AI-enabled change detection and space domain awareness expansion.

The company continues to advance its satellite constellation deployment, with the third Gen-3 satellite expected to be in orbit by year-end. BlackSky maintains a steady deployment cadence and remains on track for a fully operational commercial constellation, targeting a 12-satellite constellation by the end of 2025. Management highlighted increasing demand for Gen-3 services, including high-cadence tasking and AI-enabled analytics as customers integrate these capabilities into secure, sovereign environments.

Financially, BlackSky reported 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 maintained $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, with management citing total liquidity exceeding $200 million when including unbilled receivables and remaining vendor financing.

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 supported by international demand growth, Gen 3 satellite availability, and backlog conversion. Stonegate Capital Partners' valuation analysis, utilizing both discounted cash flow and EV/EBITDA comparative methods, produced valuation ranges of $24.60 to $30.40 and $23.26 to $28.18 respectively, indicating potential upside from current trading levels.